The New EU Climate and Energy Proposal: What are the Consequences for the Economy and Energy Markets?

On October 24th, the European Council approved the new climate and energy targets that would lead the EU action through to 2030. While these policies mark progress towards the EU’s long-term decarbonization objective, there are some contradictions to consider. Most notably, although the 20-20-20 package was in place, in the last few years the energy mix of some EU countries showed an increased reliance on fossil fuels. In addition, total emissions in Europe declined, but mainly because the economic crisis reduced energy demand in many EU Member States. The new European framework therefore comes at a critical time particularly because the 2030 policy commitments should be able to cope with this contradictions and actually promote investment into low-carbon sources. The article will explore these issues by discussing what would be the consequences of these targets into the energy market and the economy