In France, interactions between climate and energy policies can potentially occur through the National Low-Carbon Strategy (NLCS), which aims at supporting the country’s transition towards a sustainable, low-carbon economy. The NLCS interacts with climate and environmental policy making at different levels. On the one hand, the strategy is designed within the context of EU climate policies, while on the other hand, it may have an impact on policy making at regional and local levels in France. Therefore, the case study analyses three types of policy interactions of the National Low-Carbon Strategy with: (1) energy efficiency and renewable energy objectives in France; (2) the EU ETS; and (3) governance at local levels.
In this case study on policy interactions in the French power sector, the following conclusions can be drawn:
- Energy efficiency and renewable energy stimulation policies implemented by the French government in the electricity sector are unlikely to have a significant impact on the EU ETS. This moderate policy interaction is mainly due to the relatively low GHG emissions of the French electricity companies covered by the ETS. As a result, French-level policies implemented in the national electricity sector are likely to have a minor impact on the EU ETS.
- The EU ETS impacts energy efficiency improvements in France through the use of auctioning revenues. This policy interaction can be relatively strong in France, as the French government uses 90% of ETS auction revenues to finance energy efficiency in the residential sector through the French National Housing Agency.
- The EU ETS allowance price can be a complementary policy but is not enough for large deployment of renewable energy in France. As a result, the French government invests in renewable energy technology deployment through subsidy scheme amounting €14 billion between 2005 and 2011 (growing to €20 billion by 2020). As a result, the result of solar and wind energy in total energy production has increased from 1 to 5% (between 2008 and 2015). In order to further support renewable energy deployment, the French government has announced a carbon floor price for on electricity generation. However, the effect of the latter policy interaction remains uncertain.