Enhanced flexibility in the EU's 2030 effort sharing agreement: issues and options - Final report

The sectors which are not covered by the European carbon market account for around 60% of the EU's GHG emissions. The European Council has set a target to reduce emissions in these sectors by -30% vs. 2005 levels by 2030. Given the way this target is allocated, there is a risk that EU Member States may fail to achieve their national goals by reducing abatement domestically, while others will undertake too little abatement and avoid needing to begin a low-carbon transition in these sectors. This paper therefore proposes a new design for a European financing mechanism to catalyse action in low-income Member States while ensuring that all Member States comply with the EU targets. (authors)