Download publication

Blueprint

The great transformation: decarbonising Europe’s energy and transport systems

Economic growth in Europe will be affected by the costs of this transition from the current energy and transport system. A smooth transition towards a low-carbon energy and transport system could come at comparatively modest cost. Bruegel is contributing to this debate with this report, which is based on research that received funding from the Fuel Cell and Hydrogen Joint Undertaking.

By: , , , , , and Date: February 2, 2012 Topic: Energy & Climate

The euro-area crisis dominates the economic news. Yet, the world and Europe may face even more important challenges that will shape our lives and the lives of our children.World population is projected to increase to 9 billion or more by 2050. At the same time, current trends indicate an increase in living standards and a growing middle class around the world. These two mega-trends will have profound implications, and the way they are managed will be one of the key determinants of prosperity and peace in the decades or even centuries to come. A number of factors are important in this respect.

More people and more income will increase the global demand for energy. Choosing the right sources of this energy will be one of the determining factors of global temperature.

The continued reliance on fossil-fuel energy sources is one of the main factors behind the risk of significant global temperature increases. The internationally agreed goal of limiting the temperature rise to less than two degrees Celsius above pre-industrial levels appears increasingly illusory. Currently, fossil energy sources dominate many economic areas. For instance, our transport infrastructure is largely based on fossil fuels, and is thereby one of the main contributor of the carbon dioxide emissions that are linked to global temperature. Thinking about a decarbonisation strategy is therefore a key challenge with a global dimension.

Economic growth in Europe will be affected by the costs of this transition from the current energy and transport system. A smooth transition towards a low-carbon energy and transport system could come at comparatively modest cost. Furthermore, identifying the most economically beneficial solutions early on and becoming a global technology leader and standard setter offers vast opportunities for exports and economic growth. Hence, our decarbonisation strategy may eventually have a greater impact on long-term European growth than the current economic crisis.

Bruegel is contributing to this debate with this report, which is based on research that received funding from the Fuel Cell and Hydrogen Joint Undertaking. The authors argue carefully that to make decarbonisation growth friendly, a consistent policy approach is needed. Policy intervention appears indispensable as the energy and transport system is so based around and locked-in into an incumbent technology. Overcoming this lock-in is crucial. The report makes three main proposals. First, the scope, geographical coverage and duration of carbon pricing should be extended.

By setting a higher carbon price, incentives for developing and investing in new low-carbon technologies are created. Second, temporary consortia for new infrastructure to solve early-phase market failures could be put in place. This is discussed using the example of hydrogen vehicles. Lastly and importantly, an open and public transition model is needed so that second-best transport solutions do not get a head start that afterwards
cannot be reversed.

The technological, economic and political challenge ahead is vast. But choosing the right decarbonisaton strategy offers huge economic, environmental and societal benefits. We should not overlook this debate because of the euro crisis.

View comments
Read article Download PDF More on this topic

Book/Special report

Developing the EU long term climate strategy

To ensure that EU climate policy is in line with the goals of the Paris Agreement, and takes into account substantial recent shifts in the technical and political framework, the EU needs a new long-term climate strategy that will supersede the 2050 Roadmap that was issued in 2011.

By: Georg Zachmann and Andrei Marcu Topic: Energy & Climate Date: April 18, 2018
Read article Download PDF More on this topic

Policy Brief

Addressing Europe’s failure to clean up the transport sector

The European Union has the long-term vision to reduce its greenhouse gas emissions by 80-95 percent by 2050 compared to 1990 and it adopted in 2014 a binding 40 percent emissions reduction target to be achieved by 2030. Transport is therefore set to become the main obstacle to the achievement of the EU’s decarbonisation goals.

By: Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate Date: April 9, 2018
Read article More by this author

Opinion

EU should pay member states to get rid of coal

The European Union should act to ensure the continued transformation of its energy system, and encourage member states to overcome their dependence on coal for supplying electricity. Helping coal-mining regions with the transition should require €150 million per year – a mere 0.1% of the total EU budget – and the EU would not even need to establish a new fund to support it.

By: Simone Tagliapietra Topic: Energy & Climate, European Macroeconomics & Governance Date: December 5, 2017
Read article Download PDF More by this author

Policy Brief

Beyond coal: facilitating the transition in Europe

Europe has a dirty energy secret: coal is producing a quarter of the electricity, but three-quarters of the emissions. The EU should propose that its member countries speedily phase out coal and put in place a scheme to guarantee the social welfare of coal miners who stand to lose their jobs, making a better use of the European Globalisation Adjustment Fund (EGF)

By: Simone Tagliapietra Topic: Energy & Climate, European Macroeconomics & Governance Date: November 23, 2017
Read article Download PDF More on this topic

Policy Contribution

A new strategy for European Union-Turkey energy cooperation

In a period of stress in the relationship between the European Union and Turkey, cooperation over energy could be a bright spot, because of strong mutual interests. Fields such as renewables, energy efficiency, nuclear energy and emissions trading could make a real impact on long-term energy, climate and environmental sustainability, and on overall macroeconomic and geopolitical stability.

By: Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate Date: October 24, 2017
Read about event More on this topic

Past Event

Past Event

EU-Turkey energy and climate dialogues

This event is part of the joint Bruegel-IPC initiative European Neighbourhood Energy and Climate Dialogues. This is a closed door event, open only to Bruegel's members and a group of experts.

Speakers: Dirk Buschle, Ahmet Evin, Myriam Ferran, Philipp Godron, Daniel Grütjen, Sohbet Karbuz, Susanne Nies, Mehmet Oguctu, Megan Richards, John Roberts, Umit Sahin, Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: October 20, 2017
Read article More on this topic More by this author

Blog Post

We need a broader, greener EU-Turkey energy partnership

Energy is a vital part of the EU’s increasingly strained relationship with Turkey. It’s also one of the areas where there is still a lot of potential to find positive synergies. However, the EU’s strategy is too focussed on oil and gas. We need a broader and more sustainable approach to EU-Turkey energy relations.

By: Simone Tagliapietra Topic: Energy & Climate Date: October 19, 2017
Read article More on this topic

Blog Post

Reinforcing the EU energy industry transformation: stronger policies needed

The European energy system is being transformed by three major forces, decarbonisation, digitalisation and decentralisation. Decarbonisation is changing the European energy mix, while innovation in digital technologies is enabling disruptive change in the way energy systems are operated.

By: Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate Date: September 21, 2017
Read about event

Past Event

Past Event

Bruegel Annual Meetings 2017

The Annual Meetings are Bruegel’s flagship event. They offer a mixture of large public debates and small private sessions about key issues in European and global economics. In a series of high-level discussions, Bruegel’s scholars, members and stakeholders will address the economic policy challenges facing Europe.

Speakers: Carlos Sallé Alonso, José Antonio Álvarez Álvarez, Agnès Bénassy-Quéré, Pervenche Béres, Matthias Buck, Grégory Claeys, Zsolt Darvas, Jean Luc Demarty, Maria Demertzis, Anna Ekström, Lowri Evans, Ferdinando Giugliano, Sandro Gozi, Peter Grünenfelder, Reiner Hoffmann, Levin Holle, Kate Kalutkiewicz, Steffen Kampeter, Peter Kažimír, Emmanuel Lagarrigue, Matti Maasikas, Steven Maijoor, Reza Moghadam, Nathalie Moll, James Murray, Johan Van Overtveldt, Julia Reinaud, André Sapir, Dirk Schoenmaker, Mateusz Szczurek, Marianne Thyssen, Jean-Claude Trichet, Reinhilde Veugelers, Nicolas Véron, Ida Wolden Bache, Liviu Voinea, Guntram B. Wolff and Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance, Finance & Financial Regulation, Global Economics & Governance, Innovation & Competition Policy Location: Square - Brussels Meeting Centre Date: September 7, 2017
Read article More on this topic

Blog Post

Low carbon technology exports: the race is still open

A country’s relative strength in exporting a certain product is likely to persist. But it is easier to gain a comparative advantage in exporting low carbon products. When it comes to R+D, strength in a certain technological field is much less linked to past specialisation. This also holds for low carbon technologies. Finally, our preliminary findings are consistent with the view that R+D can help a country specialise in clean technology exports. However, we are not yet able to show that policy action supporting R+D in clean technologies is a sensible way to develop a comparative export advantage in these sectors.

By: Georg Zachmann and Enrico Nano Topic: Innovation & Competition Policy Date: August 24, 2017
Read article Download PDF More on this topic

Book/Special report

Towards EU-MENA Shared Prosperity

Endowed with half of the world’s known oil and gas reserves, the Middle East and North Africa (MENA) region has become a cornerstone of the global energy architecture. This architecture is currently undergoing a structural transformation, prompted by two different forces: decarbonisation policies and low-carbon technology advancements. This book seeks to address the following research question: are MENA oil-exporting countries equipped to prosper in times of global decarbonisation?

By: Simone Tagliapietra, Abdelhak Bassou, Marion Jansen, Yassine Msadfa, Mario Filadoro and Larabi Jaidi Topic: Energy & Climate Date: August 17, 2017
Read article More on this topic

Blog Post

Building positive incentives: the potential of coalitions for sustainable finance

We need to move towards more sustainable, long-term thinking in the corporate and financial worlds. Coalitions of willing actors could play a role in driving this process. But what makes for an effective coalition, and how can this be measured? The authors assess existing coalitions for sustainable finance and business, and argue that well-functioning coalitions can positively reinforce social and government action.

By: Enrico Nano and Dirk Schoenmaker Topic: Finance & Financial Regulation Date: July 18, 2017
Load more posts