Analysis of greenhouse gas emission trends and drivers
Quantitative econometric analysis
This second report of the AA on “Analysis of greenhouse gas emission trends and drivers” for DG CLIMA contains the quantitative econometric analysis at Member State level with interpretation of the results and recommendations of policy‐relevance. This report describes the systematic econometrics approach, with which the relationship between potential drivers and emissions for any country is tested and quantified. This approach is based on cause‐effect econometric models that allow to (A) ascertain if a certain driver has proved historically to be a significant cause of emissions, (B) (in case... of significance) measure quantitatively the impact of the driver on emissions, (C) provide measures of the uncertainty associated with this relation. The uncertainty analysis allows a derivation of uncertainty bands for emissions predictions based on given scenarios on the future development of the drivers. The feasibility of this cause‐effect econometric model is demonstrated on two pilot case studies, selected from the non‐ETS sectors of road transport (TS) and household (residential) energy consumption (HS). Policy‐relevant conclusions are: The drivers of OECD‐EU MS emissions show strongly country‐specific dynamics and are different for different types of vehicles and fuel (petrol or diesel) in the case of road transport and for different fuels in the case of the residential sector. For TS: the fuel price can be shown to be a significant driver only in a few EU MS. It is recommended to collect data of fuel consumption per vehicle type for each EU‐27 Member State in a consistent, harmonised way. In the future, these time series data with more informational content and variation will allow an econometric analysis with VAR in levels, with the possibility of cointegration between emissions and potential drivers. For HS: price and quantities of energy sources (electricity, natural gas and oil) appear to be less associated than in TS, possibly reflecting e.g. higher costs in switching from one heating system to another one using a different type of energy. We find significant price elasticities and income effects for a selected number of countries. Better (and more) data is needed to address the relevant policy questions in this sector.
- Corporate author(s): Directorate-General for Climate Action (European Commission) , Institute for Environment and Sustainability Themes: Environment policy and protection of the environment, Environmental research
- Subject: atmospheric pollution, EU environmental policy, greenhouse gas, quantitative analysis, reduction of gas emissions, research report