High energy prices. Russia fights back?

High energy prices this summer have hit individuals and economies hard, the world over. The European Union (EU) faces gas and electricity prices that are especially soaring. By way of a response, there has even been an unexpected switch from gas to coal for power generation.

The authors of this paper have identified this situation as a series of retaliatory acts (i) by the free market where prices are governed by the supply-demand balance; (ii) by natural gas, whose share of the energy mix is not falling fast enough to offset the decline of domestic production and reduce emissions, (iii) by Russia who uses gas as a weapon to achieve geopolitical goals in Ukraine and to score points against the European Union; and (iv) by the energy transition, which requires much more investment in energy efficiency and renewable generation if it is to reach climate neutrality by 2050.

The authors recommend a number of steps that national and EU decision-makers can take, not only to address these four retaliatory acts but also to turn them into opportunities to create a future that is in line with their climate objectives.