Abstract
Many pleas for abolishing fossil subsidies fail to recognize the existence of the European Emissions Trading System: that system ensures that we meet agreed CO2 targets even before 2040. Fossil fuel subsidies do nothing to change that, while abolishing them could even lead to more overall greenhouse emissions and harm the competitive position of Dutch companies.
In brief:
- Many of the companies that receive fossil subsidies (will) be covered by the trading system
- The emissions ceiling will drop sharply from 2024, meaning that companies will probably have to be climate neutral before 2040
- Fairness considerations may well be a reason to phase out fossil subsidies, provided all the pros and cons are taken into account.
By Machiel Mulder, Johannes Bollen, Jos Cozijnsen, Sjak Lomme, Frans Rooijers, Jan Paul van
Soest & Edwin Woerdman.
See paper below
This paper is an English translation an of article that was originally published in Dutch:
- Mulder, M., J. Bollen, J. Cozijnsen, S. Lomme, F. Rooijers, J.P. van Soest & E. Woerdman,
‘Europees emissiesysteem bepaalt halen CO2-doelen, fossiele subsidies secundair’, Economisch Sociale Berichten (ESB, 9 October 2023) and - Naschrift:’Aanscherping emissiehandelssysteem is de échte no-brainer in het debat over fossiele subsidies’ (ESB, 21 november 2023)