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Economic Policy Committee

Working Group on Energy and Climate Change


In light of the ongoing implementation of the EU energy and climate change package and their implications for the international climate negotiations the EPC has decided to renew the mandate of the Energy and Climate Change working group for one year.

This group should focus on internal EU issues related to the economic aspects of energy and climate change. Outstanding international climate finance issues will continue to be dealt with by the Joint EFC-EPC Working Group (JWG). Every effort will be made to ensure that these two groups do not run at the same time. Meeting schedules for the two groups will be confirmed by the EPC in January 2011 (or whenever a new mandate for the JWG is taken up).

Main tasks

The working group will support the EPC in providing economic analysis in the context of the implementation of the EU energy and climate package and its contribution to the goals of the Europe 2020 strategy. The main objective is to share and examine evidence on the economic implications of achieving the EU’s energy and climate change ambitions and to share best practice on cost-effective instruments for delivering these objectives. Specific issues to be addressed should include:

Macroeconomic impacts of 2020 greenhouse gas reduction targets

Following up on the Commission's Communication, "Analysis of options to move beyond 20% greenhouse gas emissions reductions and assessing the risk of carbon leakage", the working group should identify and analyse both the aggregate and country-level macroeconomic and public finance implications of such a move. The group should also analyse the cost-effectiveness of instruments to meet the greenhouse gas reduction targets.

The group may consider principles to help evaluate the economic implications under different scenarios covering costs, mitigation potentials, innovation and technology pathways, distributional effects, policy instruments, auctioning levels, carbon prices, etc. The group could also examine the possible carbon leakage implications of a move to 30% EU greenhouse gas emission reduction target for 2020.

The working group could further examine the impact of the crisis on earlier cost estimates of the original climate and energy package and other possible differences between earlier cost projections and more recent estimates, including the decreased availability of financial resources for investment.

Green growth

Based on material from the Commission, the OECD, and other relevant sources, the working group should examine and assess policies needed at both the EU and MS level to ensure sustainable economic growth in the future including taking account of international competition and trade relations. The working group may consider different definitions of green growth and principles by which to assess related policies.

Transition to a low-carbon economy

Building on inter alia 2010/11 Commission policy documents on longer-term goals ('decarbonisation') for climate, energy and transport policies, the working group should focus on analysing structural policies with a view to highlighting those that can provide the most cost-effective means to achieving a low-carbon economy at the EU and Member State levels. The group should focus on particular issues of interest to finance and economics ministries which could include price aspects of a well functioning market for carbon emissions, energy security in the context of energy prices, changes in the energy mix and diversity of supply considerations, and the macroeconomic effects of a move to more integrated and liberalised energy markets, in the context of a transition to a low carbon economy.


Membership will consist of two reimbursed experts per Member State.

Milestones and Working Practices

The Working Group will follow the working practices set out in the 5 November 2009 report by the Chairman of the EPC on "Streamlining of EPC work – Restructuring of EPC Working Groups", in particular with regard to reporting back regularly to the EPC and the development of projects plans to be approved by the EPC. It is agreed that the ECCWG remains a time-limited working group.