In the latest issue of our Energy Journal, which is focused on the unstable markets veering towards an interconnected future, we have asked for the opinion of Sara Moarif, head of the Environment and Climate Change Unit at the IEA. “The current crisis has also highlighted the importance of energy security and diversification in Europe. Existing environmental and climate policies will improve energy security and there is no reason to discontinue them”.
Below, you can find the first part of the interview. The second part will follow in two weeks time.
Sara Moarif has been Head of the Environment and Climate Change Unit at the IEA since late 2019. In this role, she oversees a range of internal and external work on energy and environment policy issues, from carbon pricing systems in the power sector to the climate resilience of energy systems, along with IEA participation in the OECD-IEA Climate Change Expert Group and parts of the IEA’s international climate-related engagement.
In your opinion, could the Ukrainian crisis slow down the energy transition towards decarbonization?
At this point in time, it is difficult to gauge the overall impact of the current crisis on the energy transition; this will likely vary by country and region, and the near- and medium-term effects could be very different. While some near-term actions may go against energy transition objectives, the present crisis also highlights the need to accelerate the equitable transition to clean energy. High fuel prices can spur investment and in - novation away from fossil-fuel use. This happened following the oil-price shocks of the 1970s (the first of which led to the creation of the IEA in 1974) and sparked a surge of in - vestment in nuclear power along with a much greater push towards energy efficiency.
However, there is a distinction between oil and natural gas. High oil prices can reduce driving, make public transit use more attractive, and render alternatives such as electric vehicles more cost effective. High natural gas prices can make electrification more attractive (e.g. use of heat pumps), but in practice has led to fuel switching from gas to coal for electricity generation (as happened in Czechia). High fuel prices impose costs on consumers in an inequitable way and require the development of alternatives to fossil-fuel use, e.g. modern, reliable public transit networks, or better insulated homes.
When imposed, reduced fuel use can have a negative impact on low-income households risking of a backlash against policies that support the energy transitions. The impact of the crisis on energy prices and food prices will have a disproportionate impact on less well-off and more vulnerable households. In some countries, governments will be able to manage these impacts. In others, such as those in sub-Saharan Africa, they may be much more difficult to recover from.
In the current crisis scenario, several countries (e.g. Germany, Italy) have decided to increase the energy production from fossil fuels, even from coal. In your opinion, in this time is an update of environmental policies necessary or can we continue along the path already undertaken?
The possibility of restarting decommissioned coal plants is being discussed in Italy, while Germany is moving hard-coal power plants scheduled for retirement into a security reserve, and France is allowing coal-fired plants burn more coal. We see these are short-term measures, an immediate response to a sudden and unexpected crisis.
Today’s environmental policies aimed at mitigating greenhouse gas emissions and climate impacts have been developed over many years and have a clear long-term focus. While the current crisis might lead to short-term changes, there is no reason that it should impact these overarching policies.
The current crisis has also highlighted the importance of energy security and diversification in Europe. Existing environmental and climate policies will improve energy security and there is no reason to discontinue them. They can of course be strengthened, but with longer-term objectives in mind, not in response to an immediate shock.
The discussion around reopening coal plants is a sign that energy sources have not been significantly diversified; as the IEA Executive Director Fatih Birol has stated, the clean energy transition will help increase energy security, not decrease it. As such, making decisions that will significantly slow down the clean energy transition is against the interests of governments in Europe and elsewhere.
Renewable electricity prices continue to be lower and more stable than those of fossil fuels; investment in domestic clean energy production and greater energy efficiency both contribute to reducing the EU’s energy import bill and dependence on non-EU fuel suppliers. The current crisis is not a sign that more renewable energy is not helpful; indeed, the cri - sis would be much worse if there were fewer renewables in Europe. IEA’s 10-Point Plan to Reduce the EU’s Reliance on Russian Natural Gas and 10-Point Plan to Cut Oil Use both contain practical measures that will accelerate energy efficiency and renewable deployment, also lowering GHG emissions.
Reductions of pump prices or freezing of taxes are unlikely to have a lasting impact on decarbonization, given they are currently planned as temporary respite measures. Energy prices are already very high, and a small, temporary reduction in these prices is unlikely to have major impacts on the pace of policies intended to reduce oil use. This is of course, not the same as having artificially low fuel prices in the long run, which could lead to less efficient, more fuel-intensive transport systems. As such, given that the need to decarbonize energy systems will not change with this crisis, any measures that will lead to changes that will have a negative impact in a five-year time period and beyond are unwise from a public policy perspective.