ABSTRACT
European climate policy is on its way to implementing the policy instruments required to achieve the ambitious abatement goals that were announced in 2007, namely to reduce greenhouse gas emissions by 20 percent by 2020 (compared to those for 1990), regardless of comparable action by the main trading partners. If trading partners engage in comparable efforts, abatement can be increased to 30 percent. However, this policy is embedded in the firm European position that all developed countries should reduce their greenhouse gas emissions by 60–80 percent by 2050, compared to 1990 levels (COM 2008a). This obviously extends beyond the direct scope of European policy and can therefore not be accomplished by political action within the EU-27. On the other hand, it makes sense to relate regional long-term goals to the action taken by the main trading partners – as the European Union explicitly intends to do for the period up to 2020 – for at least two reasons: first, in order to avoid being the loser in the prisoner's dilemma game by providing too much of the costly public good of climate protection; and second, in order to avoid global inefficiencies by forcing one region to incur high costs of emission abatement while comparable investments could have achieved substantially more abatement in other, less ambitious emission-constrained regions.
