On track but too slow? The dynamics of EU decarbonization

Abstract

Despite the strong commitment of European countries to achieve net-zero emissions by 2050, the extent to which key policies and drivers jointly shape emissions dynamics remains insufficiently investigated. The study suggests that the interaction among circular economy, energy transition, emissions trading systems, carbon tax, and digitalization policies creates structural constraints on CO 2 emissions in the European countries. Using annual data from 2000 to 2023, the analysis integrates exploratory causal discovery, time-varying dependence modeling, and machine learning methods to unravel system-level causal structure, dynamic connectedness, and future emission trajectories. The results indicate that resource productivity emerges as a central transmission channel within the system, linking upstream factors (material footprint) and digitalization to downstream emission outcomes. Lagged disequilibrium shocks propagate through resource use as a mediating channel. Time-varying copula models indicate significant heterogeneity and evolving dependence among key factors, highlighting the dynamic nature of policy and relationships over time. Forecasting results, based on a Support Vector Regression model under the European Union's 2030 climate policy framework, indicate a persistently declining emission trajectory, but at a pace insufficient to meet the EU's 2030 target. Sensitivity analysis suggests that this gap does not primarily reflect a policy failure, but the structural limitations in how policy interactions translate into decarbonization outcomes. These findings highlight the need to improve the effectiveness of policy instruments by strengthening resource productivity and accelerating progress toward the targets.