Reader’s guide
This report provides recommendations for climate policy reform options for Lithuania. It offers concrete policy recommendations by 2030 to include in the country’s updated National Energy and Climate Plan (NECP), and sets out potential policy pathways for reaching net-zero emissions by 2050. It assesses the current policy landscape and identifies key areas requiring increased policy ambition. The report provides an overview of policy options and assesses them using various cost-benefit analyses. These include:
a macro-economic modelling exercise assessing the socio-economic impacts of broad policy mixes, both to 2030 and 2050, including an assessment of the adequacy of existing and planned policies;
an analysis of the current carbon pricing landscape in Lithuania and options for reform;
a review of the financial requirements of meeting the updated climate targets and recommendations on how to fulfil them;
a targeted assessment of socio-economic impacts of the transition to net-zero and distributional policy options to mitigate them;
an assessment of technology and innovation needs to meet long-term climate policy targets by 2050.
As a result, the report provides targeted policy recommendations, including insights on the financial impacts and socio-economic effects of identified policy mixes, and on options for mitigating possible adverse effects.
The report focuses primarily on four sectors: energy, transport, industry, and agriculture and forestry. It is structured as follows:
Chapter 1 describes the economic context in Lithuania and provides an up-to-date account of greenhouse gas emissions trends, identifying key areas for climate policy action. It draws on recently published assessments such as the OECD’s Economic Surveys: Lithuania 2022 (OECD, 2022[1]), 2021 Environmental Performance Review of Lithuania (OECD, 2021[2]), and the IEA’s 2021 Energy Policy Review (IEA, 2021[3]).
Chapter 2 takes stock of the current climate policy landscape, assessing policies implemented and planned under Lithuania’s current NECP and their adequacy in achieving the targets set out in the NCCMA. This includes both an assessment of the general economy-wide policy landscape, and of sectoral measures for transport, industry, energy and agriculture and forestry. The chapter also provides good-practice examples of climate policies from other OECD countries.
Chapter 3 explores potential policy mix scenarios, detailing the results of a modelling exercise that assesses the socio-economic impacts of various policy mixes for achieving the 2030 and 2050 GHG emissions reduction targets.
Chapter 4 assesses the current carbon pricing landscape and provides recommendations for future carbon pricing reforms.
Chapter 5 focusses on the financial needs of decarbonisation pathways, providing insights into how these needs can be met through public and private financial arrangements.
Chapter 6 assesses the socio-economic impact of chosen policy mixes on households and explores means to balance them.
Chapter 7 details the results of the modelling of policy pathways beyond 2030 to reach net-zero GHG emissions by 2050 and the role of innovation and technology diffusion in enabling net-zero policy pathways.
The concluding chapter brings all these assessments together, offering main takeaways from the analyses and recommendations for policy reforms to achieve Lithuania’s climate policy targets in an efficient, cost-effective, and socially equitable manner.
References
[3] IEA (2021), Lithuania 2021 Energy Policy Review, IEA Energy Policy Reviews, OECD Publishing, Paris, https://doi.org/10.1787/db346bb1-en.
[1] OECD (2022), OECD Economic Surveys: Lithuania 2022, OECD Publishing, Paris, https://doi.org/10.1787/0829329f-en.
[2] OECD (2021), OECD Environmental Performance Reviews: Lithuania 2021, OECD Environmental Performance Reviews, OECD Publishing, Paris, https://doi.org/10.1787/48d82b17-en.