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131. Transitioning to the clean energy grid: A deep dive into the levelized cost of electricity

Author:
Ken Berlin and Frank Willey
Publication Date:
08-2023
Content Type:
Policy Brief
Institution:
Atlantic Council
Abstract:
The climate crisis requires the world to transition rapidly from fossil fuel-based to renewable-based electricity generation. Studies of the levelized cost of electricity (LCOE)—the average price at which a power plant must sell each megawatt-hour of electricity to recover its costs—show that renewable electricity generation is well-positioned to meet energy transition goals because it is cost-competitive. LCOE suggests that on-shore wind and solar generation are the cheapest power options in the United States and for two-thirds of the world population. But LCOE does not tell the full story.
Topic:
Electricity, Energy, and Energy Transition
Political Geography:
North America and United States of America

132. Recessions, the energy mix and environmental policy

Author:
Pragyan Deb, Davide Furceri, Jonathan Ostry, and Nour Tawk
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
Bruegel
Abstract:
How do severe recessions, such as those brought about by the Global Financial Crisis or the COVID-19 pandemic, affect the composition of energy generation between green and dirty sources? Does creative destruction during recessions result in a sustained greening of the energy mix? The empirical analysis presented in this paper highlights that recessions and crises result in permanent, albeit small, increases in energy efficiency and in the share of renewables in total electricity. These effects are larger, however, when complemented with strong environmental policies – both market-based measures such as taxes on pollutants, trading schemes and feed-in-tariffs, and non-market measures such as emission and fuel standards and R&D investment and subsidies – that incentivise and hasten the transition towards renewable sources of energy.
Topic:
Environment, Financial Crisis, Electricity, Renewable Energy, Energy, and Recession
Political Geography:
Global Focus

133. Corking Russian Gas: Global Economic and Political Ramifications

Author:
Scott Semet
Publication Date:
08-2023
Content Type:
Policy Brief
Institution:
The Cato Institute
Abstract:
Awarm winter in 2022–2023, a purposive decline in consumption that caused the economy to cool, and frantic efforts to attract supplies of liquefied natural gas (LNG) obscured Europe’s enduring reliance on cheap Russian gas for economic growth. European winters will not always be warm, and there is not enough LNG to replace Russian gas in the short term. Efforts to wean Europe from Russian gas permanently defy economic logic. Should policymakers choose to do so, it would carry costs not only for Europe but also for the United States and the rest of the world.
Topic:
Gas, Economic Growth, Imports, Energy, and Regional Politics
Political Geography:
Russia, Europe, and United States of America

134. Navigating climate change challenges amidst ambitious green policies in the Gulf countries

Author:
FARAS
Publication Date:
12-2023
Content Type:
Policy Brief
Institution:
Future for Advanced Research and Studies (FARAS)
Abstract:
The United Arab Emirates is hosting COP28 in Expo City Dubai from November 30 to December 12, 2023, the largest yearly gathering dedicated to tackling the phenomena of climate change, an urgent global crisis that transcends national borders and necessitates resolute international cooperation to prevent the harm it causes. Undoubtedly, the UAE's hosting of the conference, which has a long track record of efforts in combatting the effects of climate change and investing in clean energy, will provide momentum for Gulf states to lead climate action efforts at the regional and international levels. However, it is untrue that the issue of climate change has risen to the top of the Gulf states' priority list solely because of the COP28 summit. This has received much attention for over a decade because Gulf nations are among the countries most affected by climate change, so they must be at the forefront of countries fighting to prevent it.
Topic:
Climate Change, International Cooperation, Crisis Management, Energy, and Conference of the Parties (COP)
Political Geography:
Middle East, United Arab Emirates, and Gulf Nations

135. Charting a Green and Competitive Future for Europe

Author:
Lila Djait
Publication Date:
12-2023
Content Type:
Policy Brief
Institution:
EGMONT - The Royal Institute for International Relations
Abstract:
The Egmont Royal Institute for International Relations, with support of the Belgian Ministry of Foreign Affairs and in collaboration with the Representation of the European Commission in Belgium, has organised a series of three foresight workshops and three working dinners. Each session was dedicated to a key strategic challenge, providing a vital platform for dialogue and expert insight sharing among decision-makers from EU institutions, the Belgian administration, and civil society. Far from being just a theoretical exchange, the discussions were a targeted effort to further develop strategic long-term thinking, with a vision extending over the next 5 to 10 years. The inaugural session, focused on ‘Charting a Green and Competitive Future for Europe’, addressed a pressing issue of our times. In 2023, the World Economic Forum Global Risks Report propelled climate change to the pinnacle, categorizing it as the greatest risk, and underscored its entangled nature with diverse social, economic, and political dynamics. Recognizing its critical importance, the Commission has placed this theme at the heart of several Strategic Foresight Reports. These reports, among numerous other efforts, reflect the EU’s commitment to navigating the delicate balance between ecological sustainability and citizens’ wellbeing, with economic growth in the twin transition. This theme’s relevance stems from its central role in shaping the future transformation of our society and economy, highlighting the EU’s proactive approach in addressing these interconnected challenges.
Topic:
International Relations, Climate Change, European Union, Strategic Competition, and Energy
Political Geography:
Europe

136. Scaling Up Renewable Energy and Energy Efficiency to Maximise the Socioeconomic Impact ‒ The Case for Household Applications in Jordan

Author:
Diana Athamneh and Dina El-Heyari
Publication Date:
02-2023
Content Type:
Working Paper
Institution:
IEMed/EuroMeSCo
Abstract:
This policy paper examines the interlinkeages between Jordan’s social and economic development goals and the clean energy and sustainable energy goals. The concept of this report is presented with a focus on Jordan by outlining and analyzing the programs that were put in place where applications for renewable energy (RE) and energy efficiency (EE) were set for households (HHs) in Jordan and scaled up locally and regionally. This is done in order to maximise the socio-economic impact while at the same time achieving the planned development for vulnerable groups. What is the interlinkage between Jordan’s clean energy ambitions and plans for social and economic development? What economic and social impacts do Jordan’s RE efforts have on low-income HHs, local communities, and vulnerable groups? How can Community Based Organisations (CBOs) support the implementation of policy actions and related programmes towards energy transition and social justice? This paper provides an overarching analysis, formulates policy recommendations, and proposes actions towards social justice, equity and inclusivity through a sustainable development approach and energy transition.
Topic:
Climate Change, Economic Development, Sustainability, Energy, and Social Development
Political Geography:
Middle East and Jordan

137. Towards a Renewed Euro-Mediterranean Cooperation on Sustainable Agri-Food Systems for Food Security in the Region

Author:
Marko Lovec, Desirée A.L Quagliarotti, Tommaso Emiliani, and Ines Gasmi
Publication Date:
05-2023
Content Type:
Policy Brief
Institution:
IEMed/EuroMeSCo
Abstract:
This joint Policy Study discusses the vulnerabilities of the Mediterranean agri-food system exposed by the food and energy price spikes caused by the war in Ukraine and the implications for human security in the region. The Middle East and North African (MENA) region, as the world’s largest food importer, faces challenges on both the demand and supply sides, including population growth, urbanisation, dietary changes, macroeconomic constraints, scarcity of natural resources, and climate change impacts. Rural populations and farmers often experience food insecurity, while European countries are not immune to high food prices and their socioeconomic consequences. Existing policies focused on international trade and production have failed to address the complex interplay between food, environment, and society. The concept of food sovereignty provides valuable insights for developing context-specific strategies to foster resilient agricultural and food systems. The proposed ‘Euro-Mediterranean blueprint for sustainable agricultural and food systems‘ outlines six pillars, including agroecological transition, support for traditional agricultural systems, initiatives targeting the agri-food chain, promotion of blue foods strategy, participatory policy-making, and macroregional cooperation. The authors emphasise the need for enhanced regional cooperation in agriculture, particularly in the context of changing geopolitics and the disruptive impacts of the COVID-19 pandemic and the Russian invasion of Ukraine. They suggest various avenues for collaboration, such as involving Southern Mediterranean countries in European Union initiatives, increasing climate funding for agriculture and food, reengaging in regional trade negotiations, fostering partnerships in research and innovation, and promoting unifying narratives. The limitations of the EU’s Common Agricultural Policy (CAP) in driving transformative strategies in the Euro-Mediterranean region are discussed in the study, along with recommendations for targeted CAP payments aligned with climate and biodiversity objectives, conditionalities on trade, and support for sustainable practices. The role of climate and digital agendas in agriculture is highlighted, particularly the challenges and compromises associated with implementing Climate Smart Agriculture (CSA) in the region. The authors emphasise the need for context-driven, climate-smart ideas and solutions, improved water management, policy coordination, strengthened institutions, enhanced access to funding, and increased national investments in climate-friendly agriculture.
Topic:
Agriculture, Food Security, Sustainability, and Energy
Political Geography:
Europe, Middle East, North Africa, and Mediterranean

138. Synchronized: The Impact of the War on Ukraine's Energy Landscape

Author:
Thomas Laffitte and Ihor Moshenets
Publication Date:
12-2023
Content Type:
Special Report
Institution:
Foreign Policy Research Institute (FPRI)
Abstract:
Before Russia’s full-scale invasion in 2022, Ukraine was able to generate substantial revenues from the transit costs of Russian hydrocarbons destined for the European market. Despite the war, Russian oil (and some gas) continues to flow to Europe via Ukraine, and the latter continues to receive transit fees. In the field of hydrocarbons, although Ukraine is far from having hydrocarbon reserves equivalent to those of Russia, it has several assets to offer Europeans, including particularly large storage capacities. Fortunately, these storage facilities are located in the western part of the country, away from much of the fighting. Thanks to the successful synchronization of the Ukrainian and the EU power grids, the electricity trade continues. It has become a field of increased cooperation between Kyiv and Brussels, offering a potential blueprint for other sectors with a view to future integration. Despite the immense destruction caused by the Russian army, which specifically targeted the country’s energy infrastructure, Ukraine has shown extraordinary resilience. Ukraine can export electricity to its European partners, creating a profitable situation for both parties and good promises for the future. While the debate continues in Europe regarding the role of nuclear energy in the energy transition, it is already clear that in this domain, North American actors have the upper hand in Ukraine. Decisions made in Brussels on the exact contours of the energy transition will have a major influence on energy policy decisions made in Ukraine. The country has significant potential to produce decarbonized and renewable electricity.
Topic:
Armed Conflict, Nuclear Energy, Energy, Russia-Ukraine War, and Energy Transition
Political Geography:
Europe, Eurasia, and Ukraine

139. Energy, Inflation and Market Power: Excess Pass-Through in France

Author:
Axelle Arquie and Malte Thie
Publication Date:
10-2023
Content Type:
Working Paper
Institution:
Centre d'Etudes Prospectives et d'Informations Internationales (CEPII)
Abstract:
We explore how, in the French manufacturing sector, producer prices vary with market power during a severe episode of energy price hikes (between January 2020 and December 2022). Our work provides micro-level empirical evidence in favor of a role for firms' market power in explaining inflation. Using a rich dataset on French manufacturing firms' balance sheets, we first estimate markups at the firm-level, and aggregate them at the sectoral level. We then study the response of the producer price index (PPI) to a change in spot energy prices, depending on average market power within sectors. We show that in sectors with higher markups, prices increase relatively more: in the least competitive sector, firms pass through over 115% of the energy shock, implying an excess pass-through of more than 15 percentage points. In addition, we analyze in greater detail the mechanisms that might be behind our results: we discard the possibility that the pricing behavior might be driven by a "liquidity buffer rationale", implying that the excess pass-through we identify is detrimental to consumers.
Topic:
Markets, Inflation, Manufacturing, Energy, and Markups
Political Geography:
Europe and France

140. MENA and the Global Energy Conundrum

Author:
Rabah Arezki and Adnan Mazarei
Publication Date:
01-2023
Content Type:
Policy Brief
Institution:
Center for Global Development (CGD)
Abstract:
The Middle East and North Africa region (MENA) is addicted to fossil fuels, but so too is the rest of the world economy. Solutions to the energy transition have thus to be found in a coordinated global shift in both the supply and demand for fossil fuels and clean(er) energy, where multilateral institutions can play an important role. These institutions could help bolster international technology transfers to MENA, as well as scale up investment and trade in clean energy to facilitate the global energy transition. Given the potential in MENA for solar power, the region could remain a global hub, this time for clean energy.
Topic:
Climate Finance, Economy, Fossil Fuels, Energy, and Green Transition
Political Geography:
Middle East and North Africa