eceee Press Release – European energy and climate policies are partly based on questionable assumptions, resulting in short-sighted assessments that under-value the economic benefits of energy efficiency, a new study shows. The findings by the European Council for an Energy Efficient Economy suggest that higher targets for energy efficiency in the European energy and climate policies could be more than justified. Most EU Member States use more realistic assumptions in their efficiency assessments.
Days ahead of a hearing in the European Parliament, the European Council for an Energy Efficient Economy (eceee) reveals that there is a clear economic justification for higher energy efficiency investments in Europe than originally anticipated by the European Commission. In the study Evaluating Our Future, authored by Ecofys, eceee demonstrates that EU Member States often apply lower interest rates to evaluate energy efficiency investments than the Commission’s own calculations suggest.
“The report reveals that the Commission in its impact assessments applies many times higher discount rates than individual Member States are doing in their own policy evaluation work” says lead author Dr Andreas Hermelink of Ecofys. “For households this figure is 17.5%, whereas most Member States use figures in the range of 3 to 6%.”
The high discount rates used in the studies for the Commission’s impact assessments had previously been identified as a major reason for this under-valuation of efficiency.
“The EU could have proposed a much more ambitious efficiency target if it had used lower discount rates. This reality-check suggests that Member States are ahead of the Commission when it comes to assessing the benefits of energy efficiency investments. In light of this, the EU should consider increasing its efficiency target”, said Nils Borg, Executive Director at eceee.
