Energy | Policy Brief
Between crises and decarbonisation : realigning EU climate and energy policy for the new ‘state of the world'
12 July 2022
BY: TUBIANA Laurence, Jean-Michel Glachant, BECK Thorsten Harald Leopold, Ronnie Belmans, COLOMBIER Michel, Leigh Hancher, Andris Piebalgs, Nicolò Rossetto, RÜDINGER Andreas, RUNGE-METZGER Artur
The Russian invasion of Ukraine in February 2022 compounded an already difficult policy landscape characterised by rising energy prices, international supply chains’ disruptions, growing greenhouse gas emissions and exacerbating geopolitical tensions. This combination of crises ushers in a new ‘state of the world’, where energy security is a much more pressing concern, and calls for an intervention in the short term to address the social and economic consequences of the surge in the cost of energy. In this context, support must be targeted and mute efficient price signals in energy markets to the minimum possible extent. In the medium and longer term, the transition towards a low-carbon economy must be accelerated, duly considering the significant efforts needed for a major reorganisation of the energy supply to European citizens and firms. The scale of the acceleration required questions the ability of the EU and its Member States to make it happen. Ensuring the feasibility of the investments in new infrastructures, the procurement of sufficient raw materials and manufactured components, and the deployment of a skilled and abundant workforce is fundamental. The acceleration of the transition questions the adequacy of the existing European electricity market design as well, which must be carefully assessed and possibly amended in order to be future-proof. It questions, finally, the existing European governance for energy, which must evolve to support a long-term collaborative decision-making process and deal with a multi-vector and highly integrated energy system at multiple levels. This policy paper, which summaries a joint research initiative between the FSR and the European Climate Foundation, addresses these issues in three sections: 1) what are the key characteristics of the new state of the world? 2) what are the policy priorities in the near and longer term? 3) what are the process and governance to make it work?
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