Climate Change Policies , Energy Security and Carbon Dependency Trade-offs for the European Union in the Longer Term

Abstract Energy policy in the European Union (EU) faces two major\nchallenges. The first challenge is posed by EUs commitment to reduce\ngreenhouse gas emissions to the atmosphere in the context of the\ninternational agreement on climate change. The second challenge is\nto keep ensuring European security of energy supply, while its dependency\non external sources of energy is projected to increase. In this paper,\ntwo long-term alternative climate change policy scenarios for Europe\nare examined. In the first scenario, EU reduces carbon dioxide emissions\nby domestic measures; in the second scenario EU maximizes cooperation\nwith the countries of the former Soviet Union (FSU). Impacts on carbon\nflows between the EU and FSU and on the external energy dependency\nof the EU are assessed with an applied general equilibrium model,\nGTAP-E, whose set of energy commodities is expanded with combustible\nbiomass as a renewable and carbon-neutral energy commodity. The results\nshow that there is a trade-off between economic efficiency, energy\nsecurity and carbon dependency for the EU. The FSU would unambiguously\nprefer cooperation.