“The national and European energy and climate policies are well on the way to completing the energy transition and achieving the ambitious climate protection targets. They have created the framework conditions that, for example, make climate-damaging fossil fuels more expensive and give carbon-free renewable energies a competitive advantage: an EU-wide emissions trading system which caps a large proportion of the carbon emissions caused by industry has been in place since 2005. And in other sectors, too – especially transportation and construction – all the EU countries have set emissions reduction targets, which in Germany, for example, are implemented via a national emissions trading system.

However, democratic policies depend on such reform projects being accepted by the different groups in society – because the latter’s short- and medium-term interests may clash with the longer-term interest in effective climate protection. After all, in the short term higher prices for fossil fuels put a bigger burden on those who have so far relied mainly on fossil fuels to cover their energy demands or for production. It is therefore important to redistribute the additional revenues from carbon taxes or carbon emissions trading among households in the form of a fixed per capita payment, from which low-income groups in particular would benefit.

The current energy crisis triggered by the Ukraine war highlights this: on the one hand, most citizens are realizing that the massive expansion of renewables is a desirable goal, not only to promote climate protection but also to decrease our dependence on fossil fuel imports. On the other hand, the loss of Russian gas supplies has led to a dramatic increase in gas and electricity prices in the short term, placing a heavy burden on households and industry and forcing politicians to resort to expensive temporary relief measures such as the gas price brake.

Therefore, if too much of a good thing comes too quickly – higher prices for gas and electricity, which will ultimately accelerate the energy transition – this poses major problems for society.”

Prof. Dr Christoph Böhringer is Professor of Economic Policy at the University of Oldenburg. His research focuses on the impact of economic policies on climate protection.