Market-based instruments - Low carbon economy in the EU


  • Progress in the transition to a resource efficient and low carbon economy has been not vigorous eneough. If the EU is to achieve its objectives for 2050, faster progress is needed. Together with a clear, effective, strong and efficient regulatory framework, consequent and predictable market-based instruments (MBIs) should play a key role in continuing to sustainably incentivise the investments needed to make this transition possible.
  • The effect of the current financial and economic crisis has put energy pricing under the spotlight because of the impact on household energy costs in the context of austerity and on industrial competitiveness of high energy prices. The importance of Market Based Instruments (MBI) is that they must both advance the transition to a resource-efficient and low carbon economy and support economic recovery. Environmental and climate policies should not be seen as a burden in the recovery from the fiscal and economic and social crisis, but rather as a part of the solution. The Committee urges the Commission to make environmental fiscal reform an integral and permanent part of the European Semester.
  • The use of MBIs in the EU at the moment is not sufficiently consistent and coherent. EU Member States do not fully exploit the opportunities the transition to a low-carbon economy can offer for the innovation and modernisation of European industry and boosting employment. We need to strengthen and enhance MBIs in a way that sends a strong and coherent signal to the markets.
  • Given the EU's objective of eliminating not justified environmentally subsidies by 2020, the Committee is concerned about the lack of sufficient activities to ensure that this goal is achieved.