| Abstract: | Owing to their relative underdevelopment, the 'cohesion' countries of the European Union have been allowed to increase emissions above the 1990 base within the EU 'envelope'. However, they face daunting challenges in meeting the agreed targets, because it requires breaking the link between rising gross domestic product and rising energy consumption at a relatively early stage in the economic development cycle. This paper examines the extreme case of Ireland, which is experiencing the most rapid growth in the EU. It shows that Ireland has already reached its emissions ceiling. The best opportunities for reducing emissions lie in energy supply, industry, and the household sector. A mix of policy instruments is required. Emissions trading seems to be the most effective policy instrument for reducing greenhouse gas emissions from energy supply and large industry. Such a policy would provide a stimulus for continuous improvement, without which Ireland's limit will be breached. |
