Going Beyond the Omnibus: How the EU’s Climate Policy Can Be Simplified

Bragt på epicenternetwork.eu d. 7. januar 2026

Skrevet af Line Andersen

EU climate policy has expanded into a complex system of overlapping instruments, sector-specific targets, and national obligations that raise costs without delivering additional emissions reductions. This paper argues that the growing regulatory layering undermines both cost-effectiveness and European competitiveness, while offering little environmental benefit under a binding emissions cap.

Drawing on established economic principles, it shows that uniform pricing of greenhouse gas emissions remains the most efficient way to achieve climate targets. The EU Emissions Trading System (ETS), particularly once ETS2 is implemented, already provides a strong foundation for such an approach.

However, parallel regulations such as the Effort Sharing Regulation and sector-specific measures, including bans, quotas, and efficiency mandates, create costly double regulation and distort abatement decisions.

The paper recommends merging ETS and ETS2 into a single, economy-wide system covering all sectors, including agriculture, and abolishing overlapping national targets and sector-specific climate rules. A simplified framework centred on uniform carbon pricing would lower transition costs, improve policy coherence, and strengthen the EU’s economic resilience while remaining consistent with long-term climate objectives.

The main findings of the briefing include:

• The paper argues that EU climate policy has become overly complex and costly, undermining competitiveness without delivering additional emissions reductions. It calls for simplification centred on cost-effectiveness rather than layered regulation.
• Its core finding is that a single, comprehensive emissions pricing system is the most efficient way to reduce greenhouse gas emissions. Uniform carbon pricing ensures that emissions are cut where it is cheapest to do so across the economy.
• The EU Emissions Trading System (ETS) already provides a strong foundation for cost effective climate policy, especially once ETS2 is implemented. However, overlapping rules such as the Effort Sharing Regulation (ESR) create double regulation that raises costs without lowering total emissions.
• Sector-specific targets and bans, including those on internal combustion engines, renewable energy quotas, and energy efficiency mandates, are shown to undermine cost-effectiveness. Under a binding ETS cap, these measures shift emissions rather than reduce them, while increasing the cost of the transition.
• The paper recommends merging ETS and ETS2 into a single system and extending coverage to all sectors, including agriculture. This would ensure a uniform carbon price across the entire EU economy.
• It further recommends abolishing overlapping member state obligations under the ESR and scrapping sector-specific climate regulations altogether. Removing these would simplify policy, lower costs, and improve EU competitiveness.