Cambridge Econometrics contributed scenario modelling analysis to a study exploring the potential impacts of extending the EU ETS to include emissions from the road transport and building sectors.

Commissioned by Directorate-General for Climate Change and led by ICF in partnership with Milieu, Eclareon, Ecologic, Enerdata and Fraunhofer, the study contributed evidence towards the EU Commissions' assessment of various options for an ETS extension. 

The study included:

• Recommendations on the general architecture of such an extension.
• An analysis on the interactions between the options for the extension and the regulatory climate and energy framework.
• A more radical extension of the  ETS to all GHG emissions from the extraction and use of fossil fuels.  

Approach

Cambridge Econometrics' contribution focused on:

1. The understanding and assessment of how energy is used within the road transport and building sectors.
2. Which levels of GHG emissions results from the consumption of fossil fuels.
3. How the sectors may react to price signals, including a carbon price.
4. Which abatement potentials can be expected in the two sectors, along with the associated costs and potential barriers.