Sources of conflicts in climate policy within the EU: An economic analysis

This report is a part of a study of the potential for the EU to take on leadership in the climate negotiations. The aim of this part is to sort out factors that may explain the different economic interests in cutting CO2-emissions within the EU. It is based on the idea that interests occur as a result of different perception of the cost of emission cuts among stakeholders. Sector-based comparisons of France, Germany, Italy, the Netherlands, Spain and United Kingdom indicate that the conflicts resulting from an announcement of emission cuts are likely to be moderate in Germany, the Netherlands and United Kingdom, while the possibility for conflicts in France, Italy and Spain are significantly higher. The explanation can to a large extent be found by the possibilities for reducing emissions in the electricity sector. The differences facing the different countries when it comes to emission cuts might explain why the EU has not succeeded in implementing common measures across the member countries. To prepare for a common policy, a co-ordination of the electricity market should be given priority. Meanwhile, the differentiation of targets agreed upon after Kyoto clearly contributes to mitigate conflicts. On the other hand, new conflicts may occur as a result. The present analysis points out that Italy has got very strict targets compared with the other countries, while the targets for the Netherlands and Spain are moderate. The project has been financed by the EU and by the Norwegian Research Council.