What Does Transforming the Energy System in Europe Really Mean?

How to implement the energy plan announced in the Green Deal while up to 30 million citizens within the EU are at risk of energy poverty? Here are some recommendations that emerged from a group of scientists who worked on the report “A systemic approach to the energy transition in Europe”. 

By Emiliano Campisi | YPA Italy

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The EU is leading the way: one of the Commission’s six priorities is the European Green Deal, an action plan aiming to reach net-zero greenhouse gas emissions in Europe by 2050. The plan also aims to make the EU’s economies sustainable by turning climate and environmental challenges into opportunities making them more modern, resource-efficient and competitive. As part of this pledge, the Commission has tabled the ‘Fit for 55’ package that aims at reducing greenhouse gas emissions by at least 55 % by 2030. Achieving this while maintaining economic competitiveness should ensure that Europe leads the way in achieving a sustainable future for all, in fostering diversity across an EU that is united through common goals, and in catalysing the global transformation toward a clean planet for all.

But how can this be put into practice, when energy prices are visibly increasing and, consequently, up to 30 million citizens within the EU are at risk of energy poverty? 

Some recommendations arose from a panel of scientist who worked on the report “A systemic approach to energy transition in Europe”, delivered in June 2021:

– designing EU energy policy clearly aimed towards achieving climate neutrality and sustainability, without leaving anyone behind by redistributing the additional revenue created by energy taxation and carbon pricing to support low-income groups and promote sustainable energy systems;

– developing flexible, efficient, and resilient EU energy systems for delivering clean, accessible, and affordable energy services by integrating decarbonised energy sources, electrifying and using green and blue hydrogen, which will need to be the principal energy resource for heavy industry, power generation and storage;

– recognising the roles of all actors and stakeholders in creating an inclusive and participatory environment that incentivises and supports low-carbon energy choices; and  

– supporting a coordinated combination of policies, measures and instruments, including carbon pricing as a driving force, to shape an effective, consistent and just regulatory system, making a clear political commitment and undertaking supporting actions to steadily move towards very high carbon (and other greenhouse gas) prices to cover all social and environmental costs.

This energy transition will be time effective only if the global efforts will go in the same direction, as we did during the Covid-19 pandemic crisis, by working all together towards one objective: surviving!

Technological advancement and focused public policies are essential, but there is also the need for the widespread adoption of these climate neutral energy sources by most of the people, who turn to be consumers in this paradigm. So, in parallel with technological improvement there is the need also of a behavioural change, in terms of choices. Therefore, how behavioural science and economics can help accelerate the net zero carbon target? 

Consumers choose products and services if these are attractive to them, if they are consumer responsive and if they cost less than the alternative. The so-called Green Premium (the additional cost of choosing a clean technology over one that emits a greater amount of greenhouse gases) need to be close to zero for a product to be attractive and, thus, to be chosen. The majority of these alternatives are not so attractive yet. Take electric vehicles, for example: not only they cost more but the time spent on recharging them is higher and time consuming in comparison to a combustion engine. Another example is the choice to install a heat pump, which  is very impactful on the house compared to the traditional heat system.

But as we go through the energy transition all these alternatives are going to be better. Again, the role of the institutions is crucial to nudge consumers towards the right choice. As Patricia Espinosa, Executive President of the UNFCCC said during the opening ceremony: “The transition that we need is beyond the scope, scale and speed of anything humanity has accomplished in the past, it is a daunting task, but humanity is a species defined by its ingenuity. More than 200 years ago the world was completely transformed by the industrial revolution. It was an era driven by the technology and innovation of their day but also one with their residual impact of greater economic and social division, environmental damage, and climate change. We can and must learn the lesson of history. Let our future era define the prosperity of the many rather than the short term gains of the few. Let Glasgow be the starting point of this new age of resilience”.

If we take a  look at the photo to the right, who would have imagined such a rapid change in such a small period of time? Humans are unpredictable and hope is not lost, but we must act now.