Interaction between the EU ETS and the Renewable Energy Directive

The co-existence of the European Union's Emissions Trading Scheme (EU ETS) and other policy instruments, such as the Renewable Energy Directive (RED), can be justified for several reasons: to correct market failures, to correct policy failures, to improve the design of the system and meet multiple targets and objectives. However, there may also be risks in overlapping policies leading to ineffectiveness and cost-inefficiency.