The EU Legal Frameworks - The Sustainability of Renewable Energy in Europe - page 7

able development. The novelty of the approach lies in the centrality of the issue of
the integration of energy policy with environmental and with the Lisbon strategy 1
for competitiveness. On 23 April 2009, it officially adopted a legislative package
called 20-20-20 climate and energy package, through which the EU is proving to
be ready to assume the global leadership to tackle climate change, to address the
challenges of energy security, making Europe a model of sustainable development
for the twenty-first century.
An important merit of the package is the introduction of legally binding targets
to be achieved by 2020:
• A reduction in GHG emissions by at least 20 % compared to 1990 levels, with
the aim of further reducing these emissions by 30 % by 2020 if other developed
countries commit themselves to comparable efforts.
• Raising the share of EU energy consumption produced from RES to 20 %.
• A 20 % improvement in the EU's energy efficiency.
The targets were set by EU leaders in March 2007, when they committed the EU to
become a highly energy-efficient, low-carbon economy, and were enacted through
the package in 2009 (Directive 2009 /28/EC). Targets are calculated with reference
to 2005 taken as the base year with respect to which they are presented increases
or reductions of shares of energy from RES and GHG emissions. The package re-
sponds to the appeal launched by the European Commission on real actions for the
transition to sustainable development.
The package includes a series of closely related major policy proposals, such as:
• The revision of the directive on the EU ETS.
• A proposal on the allocation of efforts by member states in order to reduce GHG
emissions in sectors not covered by the EU ETS (such as transport, buildings,
services, smaller industrial installations, agriculture, and food industry).
• A directive on the promotion of RES to achieve the targets for reducing GHG
emissions.
The importance of the EU ETS lies in creating a market and an artificial price for
a public good like clean air. Firms subject to the EU ETS have to face costs when
they emit CO 2 emissions: on the one hand, if a firm needs for its activities a larger
number of permits than it has available, then it must incur a cost to buy them; on
the other hand, opportunity costs increase because permits can be sold in case of
nonproduction.
The changes made by the package on the system of emissions trading shall come
into force during the period 2013-2020, and they are done in order to overcome the
problems arisen during the early years of implementation within the Kyoto Protocol.
1 The European Council on 23 and 24 March 2000 in Lisbon has launched a series of ambitious
reforms that have taken the name of the “Lisbon Strategy” for the years 2000-2010, in order to
strengthen employment, economic reform, and social cohesion in the context of knowledge-based
economy. The priority areas identified by the Lisbon Strategy are investments in knowledge and
innovation, unlocking business potential, especially of small and medium enterprises, employment
of priority categories, and energy policy for Europe.