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.

Read about event More on this topic
 

Past Event

Past Event

On gains, losses, and trade-offs: the case of Border Carbon Adjustment

How will the border carbon adjustment be implemented and what will be the implications?

Speakers: Gabriel Felbermayr, André Sapir and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: March 5, 2020
Read article More on this topic More by this author
 

Opinion

Europe’s Apollo 11 will not be about the moon

The European Green Deal has an ambitious double target to “reconcile the economy with the planet” and to become Europe’s “new growth strategy”.

By: Simone Tagliapietra Topic: Energy & Climate Date: December 13, 2019
Read article More on this topic
 

Opinion

Four pillars to make or break the European Green Deal

The recipe for a successful European Green Deal is as simple as it is breath-taking: to intelligently promote deep decarbonisation by accompanying the economic and industrial transformation this necessarily implies, and by ensuring the social inclusiveness of the overall process.

By: Simone Tagliapietra, Grégory Claeys and Georg Zachmann Topic: Energy & Climate Date: November 14, 2019
Read article Download PDF
 

Policy Contribution

How to make the European Green Deal work

Ursula von der Leyen has proposed a European Green Deal that would make Europe climate neutral by 2050. With this Policy Contribution, the authors provide a first analysis on how to make this initiative work.

By: Grégory Claeys, Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate, European Macroeconomics & Governance Date: November 5, 2019
Read article More on this topic More by this author
 

Blog Post

Demystifying carbon border adjustment for Europe’s green deal

From carbon leakage to “green protectionism”, the European Green Deal envisioned by the incoming Commission has many critics. But some adjustments to the deal could make domestic manufacturers more carbon efficient while simultaneously encouraging foreign producers to become more environmentally friendly.

By: Guntram B. Wolff Topic: Energy & Climate Date: October 31, 2019
Read article More on this topic More by this author
 

Opinion

Coming soon: a massive laboratory for ‘Green New Deals’

Green New Deals’ are not going to turn countries into ‘hermit nations’,but they are not going to turn countries into economic paradises either. They simply are tools to achieve something more basic: ensure that climate change does not compromise our life in this planet. And this already looks like a good reason for them to be well worth our time.

By: Simone Tagliapietra Topic: Energy & Climate Date: October 1, 2019
Read article More by this author
 

Blog Post

Questions to the First Executive Vice President-designate Timmermans

For the first time ever, a large economy will cut a path to climate neutrality by 2050 – a milestone that scientists consider to be the only sensible way to protect the world from the more dramatic impacts of climate change.

By: Simone Tagliapietra Topic: Energy & Climate, European Macroeconomics & Governance Date: September 25, 2019
Read article More on this topic More by this author
 

Opinion

The EU needs a bold climate strategy

Scientists report that global temperature increases must be limited to below 1.5 degrees Celsius. With global greenhouse gas emissions continuing to increase and rising temperatures driving up the frequency of extreme weather events, the world needs a greater commitment to climate policy.

By: Guntram B. Wolff Topic: Energy & Climate Date: July 19, 2019
Read article More on this topic More by this author
 

Opinion

Von der Leyen’s Green Deal isn’t just a plan for the environment

Ursula von der Leyen's proposal of a European Green Deal is ambitious and urgent. Not only does it aim to reduce the continent's emissions, but it also has the potential to grow the EU's economy and transform the bloc's politics.

By: Simone Tagliapietra Topic: Energy & Climate Date: July 18, 2019
Read article More on this topic More by this author
 

Podcast

Podcast

Deep Focus: Energy transition in the next EU institutional cycle

Bruegel fellow Simone Tagliapietra speaks to Sean Gibson in this instalment of 'The Sound of Economics', on the matter of the European energy transition and how the EU should proceed in the new institutional cycle.

By: The Sound of Economics Topic: Energy & Climate Date: July 10, 2019
Read article Download PDF More on this topic
 

Policy Brief

The European Union energy transition: key priorities for the next five years

The new members of the European Parliament and European Commission who start their mandates in 2019 should put in place major policy elements to unleash the energy transition. It is becoming economically and technically feasible, with most of the necessary technologies now available and technology costs declining. The cost of the transition would be similar to that of maintaining the existing system, if appropriate policies and regulations are put in place.

By: Simone Tagliapietra, Georg Zachmann, Ottmar Edenhofer, Jean-Michel Glachant, Pedro Linares and Andreas Loeschel Topic: Energy & Climate Date: July 9, 2019
Read article More on this topic More by this author
 

Opinion

Faut-il s’endetter pour le climat?

Jean Pisani-Ferry, soutient qu’il ne faut pas s’interdire de financer une partie du coût de la transition écologique par l’endettement.

By: Jean Pisani-Ferry Topic: Energy & Climate Date: July 2, 2019
Load more posts