How can households afford heating and transport in a low-carbon Europe? Today we speak with Dora Fazekas, the managing director of Cambridge Econometrics in Hungary. Their consultancy just released a scenario report with the European Climate Foundation, outlining the higher costs for households if the price of greenhouse gas emissions rise.
In this interview we cover a range of issues, such as, how understanding the different national energy practices influence how energy is produced and consumed.
We delve into an almost anthropological view of the benefits from researching and living in the same place.
Then we get into the research scenario report on transport and heating. The scenarios demonstrate the impact of rising prices for the European trading system for emissions. The future demonstrates the price of energy will go up. Households are foreseen to be struggling unless a greater political effort is made to assist those with lower incomes.
My take-away from our discussion is Europe is heading for a very expensive energy system to meet its climate change goals for 2050. The burden will fall on poorer households. The warning signs are already here for national governments and the EU, action is needed to ensure households can afford this transition.
The study provides different national comparisons and we discuss the impact in Poland and Germany. The scenarios demonstrate that coal, or even a switch to gas for heating, will be a very expensive options in the future.
In the end, we get back to the unattractive and unexciting option of energy efficiency as the way forward. Subsidies for energy poor households are needed. While the rich can afford the transition, it is those with meager incomes that cannot afford it.
Here, I want to interject the importance of this topic. The scenarios are based on data and envision a future where the poor struggle to pay for heating and all their energy usage. If the EU wants to be the enforcer of climate change goals, they also need to ensure effective policies are in place. There cannot be an opening for radical populist politicians to derail, steal, or use climate change policies as a means to undermine democracy. If the stated goal is creating a zero carbon future then ensuring affordable access to energy needs to be the priority. Focusing only on price and market mechanisms will leave too many people behind and derail the effort.