BC3. Basque centre for climate change – Klima aldaketa ikergai

The EU wants to transform itself to a low-carbon economy by mid-century. This transformation process will require an overhaul of the European economy, affecting a range of sectors – not only power generation, industry and transport, but also agriculture, construction or finance. Governing this transformation process is a huge challenge – stimulating the necessary innovations, ensuring public support, encouraging the needed investments, creating the right infrastructure, and avoiding lock-in into old, carbon-intensive technologies.

To manage this transformation, a range of policy instruments is required. The existing mix of climate policy instruments needs to be scaled up drastically to initiate the necessary changes.  But as the scale and scope of instruments increases, it becomes more important to understand and to manage their interaction, as do constraints on the political, legal and administrative feasibility. Policy solutions that have worked well in an economic niche are not necessarily suited to guide economic development on a broad scale; instruments that have co-existed well on a small scale may conflict when scaled up to an economywide level. To evaluate their efficiency and effectiveness, policy instruments cannot be viewed in isolation; understanding and managing their interaction becomes key.