Climate and Energy: A Perfect Match? An Analysis of the Potential Impacts of the EU Emissions Trading System (EUETS) on European Energy Security

Abstract: Energy security and climate change are prime political concerns in the European Union. The main instrument to combat climate change through reducing greenhouse gas emissions in the EU is the EUETS, a cap and trade system. This thesis investigates in a case study the question of how the EUETS potentially impacts European energy security. In order to analyze potential impacts, this study operationalizes theories of institutional interaction and of energy security. Using a literature review method, the energy security impacts of the five main climate mitigation options that operators under the EUETS have, are analyzed: switch to natural gas, switch to renewables, switch to nuclear, energy efficiency improvements and carbon capture. The analysis shows that the potential impact on European energy security is different for each option. The EUETS as a whole therefore has a potentially mixed impact on energy security. More research is needed in order to assess the actual rather than only the potential impacts of the EUETS on energy security. For such research to be feasible, governments must begin to collect and publish data on emissions abatement under the EUETS, so that researchers can observe what operators actually do to reduce their emissions.