An assessment of the use of economic instruments to foster climate neutrality in Malta

Abstract

This study addresses one main research question: To what degree is Malta’s performance in terms of using economic instruments to achieve climate-neutrality in the transport and energy sector? A qualitative approach is used to collect data and then analyse the data collected. The research analysed the Budget documents of the past five years (2017, 2018, 2019, 2020, 2021) to collect the data, thus a document-based study approach was adopted. The study focused on the use of economic instruments in the transport and energy sector to foster climate neutrality. All related data were collected and recorded for the purpose of thematic analysis and then Multi Criteria Analysis (MCA). The main findings of this research study were categorised into four main themes. These are: (1) Energy Efficiency, (2) Sustainable Modes of Transport, (3) Moving Towards Vehicle Electrification, and (4) Green Investment. Measures announced throughout the years were listed under one of each theme and the researcher concluded that: 1. The Government of Malta makes use only of three economic instruments: Grants/Subsidies, TAX Credits and Green Bonds 2. The Government of Malta is not making the best use of economic instruments to foster climate neutrality in the transport and energy sectors. 3. The Government of Malta can be more ambitious in incentivising the general public and explore other measures that can be taken on board to fight climate change Through MCA, the researcher used the three factors: effectiveness (economic aspect), sufficiency (environmental aspect) and equity (social aspect) to analyse further the findings of this research study. All measures have positive effects on the environment, economy and society if they are applied and managed well. The researcher can conclude that the measures announced, and the economic instruments used are all in line to achieve climate neutrality in the transport and energy sectors. The Researcher also established a number of recommendations based on the findings of this study