The energy transition and fiscal policy

The aim of the Paris Agreement of 4 November 2016, meanwhile ratified by 184 countries, is to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above the pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees. In order to achieve this, a drastic energy transition 'from fossil to nonfossil' is required in order to mitigate anthropogenic emissions of greenhouse gases (hereinafter: 'GHG') by the mid of this century. In this editorial I will go into the ambitious targets the EU has set itself for reducing its GHG emissions progressively up to 2050, and make some remarks on the consequences for fiscal policy in the EU.