Exploring New Scenarios for the Progressive Integration of Neighboring States into the EU ETS beyond 2050

PROJECT DESCRIPTION

BACKGROUND

One of the most important challenges of our time is the need to reduce greenhouse gas emissions (GHGs) and mitigate climate change. In response, the European Union (EU) has adopted the goal of net zero emissions by 2050. The climate policy commitments are delivered in the ‘Fit for 55 package’ and accompanying measures for the transport, building, agriculture and energy sectors. 

 

The EU Emissions Trading System (EU ETS) will remain a flagship EU climate policy measure and, to increase its impact, a reform of the EU ETS is underway. The system will be strengthened through its extension to the maritime sector and the gradual reduction of the free allowances allocated to airlines. Extension of the EU ETS to other sectors including agriculture, road transport and waste management is also being considered.

 

Nevertheless, even the most ambitious actions taken by the EU and its Member States alone will not be sufficient to mitigate climate change. Therefore, it is important to disseminate knowledge about the EU’s climate protection instruments and the benefits of using them among stakeholders in third countries. This should be particularly important for countries aspiring to join the EU, such as Ukraine, Turkey and Balkan states. This will enable them to adapt their legal and administrative systems to the requirements of EU climate legislation and increase the effectiveness of their actions aimed at reducing GHG emissions.

 

The LIFE ENSPIRE project will build on the results of previous LIFE projects - LIFE Climate CAKE PL and LIFE VIIEW 2050 - implemented by the same beneficiary.

OBJECTIVES

LIFE ENSPIRE will provide an assessment of the potential impacts of the evolving EU ETS until 2050 and beyond on the EU and selected EU neighbourhood countries in the context of achieving net zero GHGs. To do this, the project aims to develop and examine scenarios that illustrate the benefits of enhanced international cooperation of the EU with its neighbours (most importantly Ukraine, the Balkans and Turkey) while recognising the challenges associated with achieving net zero emissions.  

 

In particular, the project will use a macroeconomic computer model (d-Place general equilibrium model) to model the costs and benefits resulting from the implementation of the EU climate policy goals at the national level. The policy measures that can effectively address these challenges will also be developed within the project.

 

The project’s specific objectives are to:

 

• develop and provide high-quality, relevant and accessible information and data to the European Commission, European and public administration, policymakers, NGOs, private actors and the public in the EU neighbouring countries, based on sectoral and macroeconomic modelling analyses
• build wider, stronger and long-lasting international networks of experts to exchange and disseminate high-quality information and data on the assessment of the EU ETS
• create political support for the EU ETS and other carbon pricing mechanisms, including the Carbon Border Adjustment Mechanism (CBAM)
• raise environmental awareness of the public in neighbouring countries through the wide dissemination of high-quality information and data and replication of the project outcomes, leading to a better understanding of the shaping mechanisms of the EU ETS, the evolution of the system, and promote of other carbon pricing policies and markets

RESULTS

The project’s expected results are:

 

• preparation of climate policy development scenarios for 3 countries neighbouring the EU
• 3 assessments of the costs and benefits of implementing EU’s climate protection instruments in these countries
• publication of 4 reports of the results
• cooperation in the development of EU climate policy and its extension to EU neighbouring countries with at least 5 institutions and 10 experts from these countries
• preparation of at least 1 policy analysis using analytical tools developed within the LIFE ENSPIRE project
• organisation of workshops and conferences in various EU and EU neighbouring countries to present the project results
• analyses of: 
  • the impact of EU climate policy on macroeconomic indicators of the EU and Member States until 2070
  • the possibilities of developing emission trading systems in EU neighbouring countries and the prospects of their connection with the EU ETS
  • the effects of implementing the CBAM