Europe is not alone in taking action to price carbon and promote low-carbon energy, and Europe’s competitiveness is not dependent on its energy prices. The report explores the transition to a secure, affordable low-carbon economy which requires action on three broad pillars of policy: measures to enhance energy efficiency; research and development of low carbon technologies, particularly for renewable energy; and proper carbon pricing, to ensure that the costs of environmental damage are reflected in market signals, and to enhance the value of investment in the other two pillars. The conclusion is that Europe should remain a part of the leading pack. This not only would increase its international credibility in the field of global climate protection, but also would also lead to economic advantages.