Europe told to rethink energy regulation

The Centre on Regulation in Europe (CERRE) has suggested that the European Commission should prioritise expanding the scope of the European Emissions Trading System (ETS) to drive decarbonisation.

In a wide-ranging dossier, the CERRE made a series of recommendations for improved regulation of the digital, energy and mobility sectors. It noted that rising inequality, the growing impact of climate change and the increasing pace of digitalisation had heavily impacted life and societies, adding that a perceived lack of action to address them had “undermined belief” in the European institutions.

Increasing the scope of the EU ETS to include sectors such as transport and agriculture was one such recommendation, with the CERRE calling for at least 85% coverage of all emitting sectors. It added that Europe should foresee linking the EU ETS with similar schemes around the world in a bid to accelerate global decarbonisation. Among its other recommendations, the CERRE called for the creation of a European Observatory, tasked with monitoring the distribution effects of current and future regulation that will enact the energy and climate transition.

With regards to decarbonised transport, the CERRE said that EU policies should focus on achieving greater modal shift by utilising market-based incentives and price along with a focus on technological change to lower vehicle emissions. It added that mobility policies should be devised in a way that “fairly and efficiently” internalises external costs – including pollution.