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Working papers from the Economics Department of the OECD that cover the full range of the Department’s work including the economic situation, policy analysis and projections; fiscal policy, public expenditure and taxation; and structural issues including ageing, growth and productivity, migration, environment, human capital, housing, trade and investment, labour markets, regulatory reform, competition, health, and other issues.
The views expressed in these papers are those of the author(s) and do not necessarily reflect those of the OECD or of the governments of its member countries.
Climate Change Policies in Poland
Minimising Abatement Costs
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- Balázs Égert
- 24 Apr 2012
- Bibliographic information
Poland is on track to meet its international greenhouse-gas emissions commitments. However, it will need to cut emissions significantly in the future, if the European Commission’s proposal on the Low Carbon Roadmap is adopted. Policies should ensure that the country’s substantial reduction potential, mainly linked to the energy sector’s high emissions intensity, and implying overall abatement costs above the EU-average, is realised in a least-cost fashion by imposing an economy-wide single carbon price. This stands in contrast with current explicit and implicit carbon prices, which vary widely across different sectors of the economy. Crucial to least-cost abatement is also a high responsiveness to the EU-ETS carbon price signal. While Poland has made good progress in complying with EU regulations related to the energy sector, the large share of public ownership and the lack of effective separation between electricity producers and distributors may blur the price signal for investment decisions in generation capacity. The isolation of the Polish electricity market implies a need for more investment in low-emission technologies in Poland to achieve a given emissions-reduction target, whereas a deeper integration with neighbouring electricity markets would spread the burden more efficiently across countries. The cost-efficiency advantage of uniform support to renewables via green certificates should be retained to minimise abatement costs. Government policies aimed at a higher share of nuclear power and natural gas from shale formations need to take fully into account tail risks and the short- and long-term environmental costs of the use of the former and fully consider environmental risks related to extraction of the latter. Energy efficiency policies can help to address market failure but should not be allowed to distort relative carbon prices. This Working Paper relates to the 2012 OECD Economic Review of Poland (www.oecd.org/eco/surveys/Poland).
- global warming, abatement cost, nuclear power, carbon price, environmental policies, negative externalities, renewables, GHG emissions
- JEL Classification:
- H23: Public Economics / Taxation, Subsidies, and Revenue / Externalities ; Redistributive Effects ; Environmental Taxes and Subsidies
- Q41: Agricultural and Natural Resource Economics ; Environmental and Ecological Economics / Energy / Demand and Supply ; Prices
- Q42: Agricultural and Natural Resource Economics ; Environmental and Ecological Economics / Energy / Alternative Energy Sources
- Q48: Agricultural and Natural Resource Economics ; Environmental and Ecological Economics / Energy / Government Policy
- Q52: Agricultural and Natural Resource Economics ; Environmental and Ecological Economics / Environmental Economics / Pollution Control Adoption and Costs ; Distributional Effects ; Employment Effects
- Q53: Agricultural and Natural Resource Economics ; Environmental and Ecological Economics / Environmental Economics / Air Pollution ; Water Pollution ; Noise ; Hazardous Waste ; Solid Waste ; Recycling
- Q54: Agricultural and Natural Resource Economics ; Environmental and Ecological Economics / Environmental Economics / Climate ; Natural Disasters and Their Management ; Global Warming
- Q58: Agricultural and Natural Resource Economics ; Environmental and Ecological Economics / Environmental Economics / Government Policy