Can renewable energies with learning-by-doing compete with forest sequestration to cost-effectively meet the EU carbon target for 2050?

Renewable energies have great potential to contribute to CO2 emission reductions by substituting for fossil fuels. This study examines whether renewable energies with learning-by-doing technical change can compete with forest sequestration to cost-effectively achieve the EU carbon target for 2050. Cost-effective abatement solutions are obtained from a dynamic, partial equilibrium model that accounts for three kinds of mitigation options: renewable energies and abatement in the forest and fossil fuel sectors. The results show a net present cost of reaching the target of approximately 286 billion Euros and a carbon price of 364 Euro/ton CO2 in 2050. Furthermore, the stock of renewables in 2050 can deliver twice as much as the current electricity production from renewables, which implies a contribution of 8.7% to meeting the emissions target. However, the cost per unit emissions reduction is at least fifteen-fold higher for renewables than for forest sequestration. Hence, the results indicate that renewables are unable to compete with forest sequestration unless they receive continued government support