EU Scenarios for a Sustainable RES Strategy - The Sustainability of Renewable Energy in Europe - page 122

the power sector. According to the reference case, the share of RES in 2030 would
amount to 25 % of the energy final consumption. The RES should cover the power
sector in relation to the gross final energy consumption by an amount equal to 68 %,
transport for 17 %, and heating for 15 %. Under the scenario, 40 % target of GHG
emissions with RES share of consumption at the EU level equal to 30 % in 2030
would decrease the share of coal in primary energy consumption dramatically in fa-
vor of RES and partially of nuclear industry. The cost of reducing 40 % GHG emis-
sions with the target of 30 % RES in the gross final energy consumption increases
by 36 % compared to the sole objective of GHG, that is equivalent to an extra 0.1 %
of GDP (€ 12 billion). The report notes that this cost is mainly due to a mismatch
between RES potential and EU member countries' goals considering a scenario that
extends the burden sharing from 2020 to 2030.

5.4 Our Proposal for a New Policy Strategy

Given the target to 2030 of 27 % RES in final energy consumption proposed by the
2030 framework for climate and energy policies, effort in terms of cost to reach the
overall target is different among EU countries as their starting point is different:
all EU member states increased their share of RES in total consumption heteroge-
neously. It is a crucial issue for the EU to figure out the best strategy for allocating
RES' objectives in terms of quantity to be reached at minimum costs and then to
ensure participation. The relationship between costs of achieving RES objectives
and the RES target is nonlinear. There exists costs' differences among EU countries
given their relative price (LCOE) of production and then some of them would pay
less, while other countries would have to pay more to reach the RES target. This is-
sue is really crucial in addressing the true spirit of cooperation among EU members
countries.
It is conceivable that countries with higher costs would try to reduce their RES
allocation, but this will increase the cost for the whole EU. So they can try to nego-
tiate some compensation. This is not extravagant, if all countries behave honestly.
The strategies planned by governments imply different costs that may be prohibi-
tive if the other EU countries do not make comparable efforts. Indeed, EU countries
might try to behave as free riders not participating in EU RES agreement, thus
imposing lower costs on the domestic economy at the expense of other countries.
For instance, Nordhaus ( 2009 ) highlights the problem of coordination among
countries that undermines the achievement of the objectives of the 2020 climate
and energy package. Every country wishes to stimulate new activities, new invest-
ment, more jobs in their own territory, using an appropriate mix of local taxation
and subsidies, in collaboration with other instruments of command and control.
However, countries may have an incentive to behave as a free rider, or to impose
costs that are borne as little as possible on its economy, enjoying the benefits created
by other countries (Barrett 1994 ). More generally, many environmental problems
are concerned by the fact that when many countries are involved in international