Applying belt and braces to EU energy policy

New proposed rules to save energy are encroaching on the Emissions Trading Scheme. David Buchan examines the growing tension inherent in Europe’s belt and braces approach of trying to combine increasing regulation of energy efficiency and renewables with the market mechanism of the ETS. The simple solution would be to reduce the supply of ETS carbon allowances in line with the regulation-induced drop in carbon demand. But the politics of doing this are proving impossible.

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