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According to IEA (2018), there is a huge gap between the first-best social optimal utilization of Carbon Capture and Storage (CCS) technologies to lower global C[O.sub.2] emissions and the current, negligible diffusion of this technology. This calls for a financial support mechanism for CCS. We study to what extent promotion of CCS in Europe should be through subsidizing development and production of CCS technologies--an upstream subsidy--or by subsidising the purchasers of CCS technologies--a downstream subsidy. This question is examined theoretically in a stylized model and numerically by using a new approach that integrates strategic trade policy with an economic model of the European energy markets. The theory model suggests that upstream subsidies should clearly be preferred, and this is confirmed by the numerical simulations. For the European power market, the numerical simulations suggest that subsidies to CCS coal power should exceed subsidies to CCS gas power. Keywords: Carbon capture and storage (CCS), Electricity, Strategic trade policy, Upstream subsidy, Downstream subsidy, Profit shifting, Cournot, 1. INTRODUCTION According to IEA (2018), there is a huge gap between the first-best social optimal utilization of Carbon Capture and Storage (CCS) technologies to lower global C[O.sub.2] emissions and [...]

In 2018, an agreement between the key EU institutions--the Commission, the European Parliament, and the European Council--was reached after a long-lasting discourse over the 2030 EU climate and energy policy package. This paper offers a comprehensive assessment of the EU package, with its three main targets: lower greenhouse gas emissions, higher renewable share in final energy consumption, and improved energy efficiency. We find that the renewable and energy efficiency targets have been set so high that the derived emissions reduction (50 percent) exceeds the EU climate target (40 percent). Hence, there is no need for an EU climate policy, for example, to use carbon prices to reach the EU climate goals. It is, however, not cost-efficient to achieve the climate target by imposing the three EU targets. We demonstrate that a cost-efficient policy that obtains a 50 percent GHG emissions reduction would increase annual welfare (relative to the Reference scenario) by an amount corresponding to 0.6 percent of GDP in Europe. Keywords: Climate policy, Renewables, Energy efficiency, Energy modeling, EU 2030, 1. INTRODUCTION In 2018, an agreement between the key EU institutions--the Commission, the European Parliament, and the European Council--was reached after a long-lasting discourse over the 2030 EU climate and [...]

This paper examines the Norwegian policy to reduce emissions in the short term and the strategies proposed to promote technology switching and facilitate Norway's transition to a climate-neutral society by 2050. Relying on European tradable emissions permits and domestic emission taxation is not regarded as sufficient to meet the ambitious long-term target of becoming a low-carbon society by 2050. The key policy recommendations from our analysis are: First of all, Norway should carefully reconsider the goals and policies in place aimed at sectors already covered by the EU ETS. Second, although subsidising electric vehicles has been a good policy in the past, the time may have come to gradually phase out these supports. Finally, establishing new 'green' industries in Norway should be based on sound economic principles. [ABSTRACT FROM AUTHOR]