October 2019 – January 2020, BGI Consulting carried out the evaluation of macroeconomic, skills and social impacts of planned policies and measures foreseen in Integrated national energy and climate plan of the Republic of Lithuania. The evaluation was commissioned by the Ministry of Energy of the Republic of Lithuania.

 

In line with Regulation (EU) 2018/1999 of the European Parliament and of the Council of 11 December 2018 on the Governance of the Energy Union and Climate Action, Lithuania made a commitment, by 31 December 2019, to notify to the European Commission (hereinafter - EC) an integrated national energy and climate plan of the Republic of Lithuania (hereinafter - the Plan). The Plan includes information on Lithuania's approved policy objectives, adopted and planned policy measures that are consistent with Lithuania's commitment to contribute to the EU 2030 objectives (renewable energy, energy efficiency, greenhouse gas reduction, etc.). In this way, Lithuania makes a commitment to contribute to the EU climate and energy goals as well as the long-term goals of the Paris Agreement.

The measures of the Plan are grouped by public policy areas in which the interventions are foreseen:

• Renewable energy sources;
• Energy efficiency;
• Policy measures in the area of research, innovation and competitiveness, as foreseen in the Action Plan for the implementation of the National Energy Independence Strategy;
• Agriculture;
• Industry and industrial processes;
• Waste management;
• Transport;
• Adaptation to climate change in various public policy areas.

With an aim to achieve the policy goals and indicators set out in the Plan, it is expected to attract around EUR 14.1 billion of public and private funds. Half of the required funding (around EUR 7 billion) is planned to be attracted from the EU structural funds and other external sources, while the rest should come from the national public (almost EUR 3 billion) and private (over EUR 4 billion) funds. The funding is going to be designated for improvements in infrastructure, human capital and R&D as well as current expenditure.

 

Various methods were used in the evaluation - theory-based evaluation, analysis of scientific literature, legislation and project implementation monitoring data, 20 expert interviews with representatives of branch ministries and post-ministerial institutions, economic modelling. For the purpose of assessing the macroeconomic impact of government interventions, BGI Consulting used the HERMIN macroeconomic model, one of the three best known in Europe (alongside the QUEST and ECOMOD models).

 

Macroeconomic modelling allowed to evaluate the macroeconomic and social impacts of measures foreseen in the Plan. With an aim to evaluate macroeconomic impacts of the measures of the Plan, two scenarios were modelled: baseline scenario (which includes application of current policies and measures presented in the Plan) and scenario with planned policies and measures. It is noteworthy that the implementation of the Plan, which requires about EUR 10 billion of public funds (from national, EU structural funds and other external supranational sources) would significantly increase public debt, therefore, the attraction of required financing by borrowing is simulated in the scenario with the planned policies and measures. Macroeconomic impact evaluation of the measures of the Plan covers a period of 20 years. The results of the evaluation reveal the impact of the measures over different time periods - during the implementation of the Plan (2020-2030) and after the implementation of the Plan (2031-2040).