Tariff reduction on renewables inputs for European decarbonization

Posted by Lars Winkel Olsen on August 15, 2018 | No comments

Professor Rodrigo Zeidan, teaching at New York University Shanghai/China and Svetlana Fedoseeva researcher at Institute for Agricultural Policy and Market Research, University of Giessen, Giessen, Germany  has written this interesting article about how lifting European Union import tariffs on some inputs used to produce renewable energy could lessen Europe’s carbon footprint. Please find the summary and link to full article below.

The authors of this article propose the liberalization of tariffs on selected inputs for renewables, which should shift energy use from fossil fuels towards green energy, helping Europe meet the Sustainable Development Goals. In the EU, both trade liberalization and a push for renewable energy are part of the recent mission statement of the European Commission (Trade for All).

The European Commission legislates on trade matters and represents the EU’s interests on behalf of its member states. The European Commission also exercises its authority on trade policy without major constraints; in 2017, it reduced the minimum import prices for Chinese solar panels sold in Europe, and in 2018, it published a list of US products for potential re-balancing tariff increases as a response to the American threat of imposing higher tariffs on European exports.

Following the business-as-usual scenario, and burning fossil fuels at the current rate, would lead to devastating effects on the entire ecosystem. Setting a universal CO2 cap might be the best option to reduce the CO2 concentration, but this remains unfeasible in the near future. Therefore, all alternative measures to promote the transition from fossil fuels to renewables should be considered. Eliminating the import tariffs for renewable inputs is a potentially low-hanging fruit option for policymakers. It can speed up the energy transition to greener technologies, shifting market forces towards reducing, instead of increasing, CO2 emissions as European economies recover from weak economic activity. More importantly, this policy change should improve the likelihood that Europe meets the Paris Agreement targets and the Sustainable Development Goals.

External link to summary;
External link to full article available here;
 

 

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