Bruno Liebhaberg, CERRE’s Director General, participated in a panel discussion during the stakeholder event organised by the European Commission on the EU’s vision for a modern, clean and competitive economy.
Robust and consistent regulation:
A necessary condition for decarbonisation to benefit citizens
Promoting cost-efficient solutions for the sake of all citizens
The 80-95% decarbonisation targets by 2050 are ambitious but they are necessary if we are to preserve a liveable planet for future generations. There is no doubt, however, that this journey towards a low-carbon economy will be costly. We, therefore, have an obligation to make sure that it will be as cost-efficient as possible and fair for all citizens.
We don’t have a common EU tax on carbon, but we have the ETS – a system based on the “polluter pays principle”, which sends out a common European signal on the price of carbon. Despite its revision, the ETS system is not yet functioning in an efficient way. This is due to the allocation of too many free allowances and to overlaps with a number of other European, national and local-level policies and tools. Those overlaps are often confusing and result in unnecessary extra costs for European citizens.
Work should be done to further synchronise policies and widen our low-carbon policy toolbox to include carbon schemes which deliver large-scale savings, efficiently and affordably, because such savings are crucial to gain consumers’ support.
Enhancing consumers’ engagement in favour of low carbon choices
If we are going to stand a chance of reaching the ambitious decarbonisation targets, we need to make it easy for all citizens to engage and make the right choice. Policy and regulatory initiatives must privilege the “3 I”: information, incentives, and individuals.
- Information: the EU should promote clear and easy to understand visual labelling schemes which show in a simple way the energy efficiency of products. The provision of such prior information improve consumers’ understanding, influence their buying decisions and even their willingness to engage actively to benefit from the most socially optimal offerings;
- clear incentives/price signals, and
- individuals: the possibility for individual citizens to be actively engaged and, as such, become a part of the solution is essential. Smart communication and transaction tools make this feasible and easy, but again, these tools need to be guided by efficient regulation that protects, inform and engage all citizens, including vulnerable and / or digitally illiterate consumers.
Stimulating diversity in decarbonisation solutions and innovative investments
We are only at the beginning of the decarbonisation journey and we already know that there is no single “magic solution” that will solve all problems. Therefore, we cannot shut the door on good current and future opportunities that can bring EU citizens cost-efficient decarbonisation.
Electrification combined with decarbonisation of the electricity sector will certainly be a big part of the solution. But there are many other options out there that need to be explored and, if appropriate, stimulated by a conducive regulatory environment: natural gas with an increasing share of green gases, coupled with carbon capture and storage solutions, hydrogen, power to gas, small scale CHPs, as well as many others we haven’t even explored yet.
Europe will only be able to stay at the top of innovation and the leader in the fight for climate change if it develops and adopts a regulatory framework that further allows innovation and stimulates related investments. And that will also benefit citizens.
To achieve our difficult but crucial journey towards a low-carbon economy and to ensure that it is beneficial to citizens, we must have a regulatory framework, which is evidence-based, strong and coherent. Otherwise, we run a very high risk of leaving citizens behind and therefore jeopardising any chance of reaching our targets.
My dream is that when we meet here again in 2030, we can celebrate the great achievements and significant progress in our journey towards decarbonisation which will have been achieved with the support of good, timely regulation. My dream is that, in particular, we will have seen by then:
- a myriad of innovative investments,
- a high level of consumer engagement,
- enhanced access to quality energy services at reasonable prices for Europeans,
- and a significantly lower number of vulnerable consumers on the road to decarbonisation.
