Solving the energy crisis for EU households: from short-term fixes to long-term solutions

The Think2030 Dialogue Sweden is one of several activities within the Think2030 platform, created by the Institute for European Environmental Policy (IEEP) in 2018 to provide science-policy solutions for a more sustainable Europe.

As part of the Think2030 Dialogue Sweden, the Institute for Sustainable Development and International Relations (IDDRI) and Basque Center for Climate Change (BC3) organized a session titled “Energy transitions and the cost of living: how to strike the right balance between short term fixes and long-term solutions to the energy crisis?” and this session brief summarizes the key take-aways from this session. 

Session panellists shared insights on various measures that were taken within EU in response to the energy crisis and pointed to the necessity to adapt short-term measures to more tailored long-term policies as an approach to address the distributional impact of the energy transition. The main priority is to transition away from fossil fuels, which are at the root of the energy crisis and climate crisis and which could be a wise strategy from a geopolitical perspective. The amount of energy saved during this year surpassed expectations, but these savings need to be complemented by measures to accelerate a just transition. Several policy recommendations emerged during the panel discussion.

Key Messages 

• The EU government’s responses to the energy crisis so far have been costly for public budgets and in many cases not efficient enough from a holistic perspective that combines economic, environmental and social contexts. This should lead to a revision towards more long-term action to accelerate the transition away from fossil fuels in building and transport for households, once energy prices start to decline.
  
• The energy crisis following Russia’s invasion of Ukraine is also a heritage of past policy decisions and existing socio-economic inequalities. It is important to tackle the underlying causes of households’ energy vulnerability and inequalities, rather than just fall back on energy subsidies or handing out compensations.
• Energy savings are key to more secure, sustainable and affordable energy for households and to the level achieved in 2022. Accelerating the uptake of building renovation, “clean mobility” and shifts to other modes of transport relies on an increase in available finance and support for skills and industrial capacities development.
• Material and energy efficiency should be central in the design of green industrial policies across Europe, as they have a strong potential to decrease supply-demand tensions on energy and resource markets and facilitate just access to affordable transport and energy services.