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Abstract
In this paper, we use a computable general equilibrium model (WIATEC) to study the potential impact of implementing Europe’s 20-20-20 climate policy. The results show that the economic costs of implementing the policy are only moderate and within the range of recent empirical evidence. Furthermore, they also indicate that there is a possibility that the existing allocations to the Europena sectors participating in the EU Emissions Trading Scheme (EU ETS) are on the low side, and therefore, there are still rooms for movement in the future.