Factors influencing the climate policy in the European Union: the case of Estonia

Abstract

The analysis of the Estonian case shows that climate policy in the European Union can not be considered independently. The test of three hypotheses has shown interconnections with other related issues that must be taken into account.

Firstly, the high dependency on imported fuels is a weakness that could serve supplying countries in a context of foreign policy. It is not in the interest of the Union to reach ecological goals by increasing its exposure to a foreign control of the energy supply.

Secondly, a climate policy could weaken the stability of the energy supply. A weak energy supply could lead to energy shortages that are harmful for the economy and society. Therefore, a special consideration on the maintenance of an acceptable level of security has to regulate the climate policy measures.

Thirdly, a climate policy can have an important impact on the energy price. When planning the implementation of such a policy, one has to evaluate the consequences of the measures on the prices that will have to be paid by the end-users.

The above mentioned considerations are not computable and therefore, equilibrium models that are often used for forecasting do not take them into account. The assumption of rationality of these models is necessary to allow the representation of the evolution of an economic system but because of it, the effect of important factors such as mentioned in the present thesis can not be represented.

Equilibrium models are often used in the field of climate policy forecasting and policy impact analysis (see section 1.1.2). It is therefore important to be aware of the limits of these models and to consider more information than only their results.