Strategic Perspectives, a prominent think-tank founded by Linda Kalcher and Neil Makaroff, recently released a groundbreaking report that delves into the potential socio-economic impacts of achieving the European Union's ambitious climate target for 2030. This comprehensive analysis sheds light on the transformative changes that can occur if governments implement the necessary legislation to achieve a net emission reduction of at least 55 percent by the target year.
Leveraging data provided by Cambridge Econometrics, Strategic Perspectives examined the effects of the European Green Deal on various aspects, including energy security, electricity prices, job creation, and investment requirements. The findings of their research paint a vivid picture of the European economy in 2030, illustrating significant shifts driven by European laws. Key projections indicate that renewable sources, such as wind and solar power, will account for 55 percent of total electricity consumption.
Additionally, an estimated 58 million heat pumps will be installed, approximately 29 million electric passenger cars will grace European roads, gas consumption will witness a substantial decline of at least 31 percent across the EU (equivalent to Germany's yearly gas consumption prior to the Russian war in Ukraine), and coal will gradually phase out due to its lack of cost competitiveness.
In the midst of a cost-of-living crisis that has gripped Europe, the swift adoption of climate-friendly solutions presents a ray of hope. By embracing these sustainable measures, energy bills can be slashed, and the vulnerability of low- and middle-income households can be reduced.
According to the analysis, European households, on average, are expected to witness a decline in their energy and fuel expenditure from 8.6 percent of their budget in 2022 to 6.1 percent in 2030. Furthermore, average electricity prices are forecasted to decrease by seven percent by that same year.
This remarkable transformation is set to unfold at an unprecedented pace and scale, resulting in the creation of at least 447,000 net jobs within a few short years. Linda Kalcher, the Executive Director of Strategic Perspectives, highlights the positive implications of materializing the European Green Deal: “Turning the European Green Deal into reality will bring greater energy security and economic prosperity. Solar and wind energy will be deployed over three times faster than in the last 20 years. This will reduce electricity prices for industry, improving its competitiveness.”
Neil Makaroff, Director of Strategic Perspectives, emphasizes the role of the European Green Deal in mitigating the high cost-of-living: “The European Green Deal acts as a shield against the high cost-of-living. With its green laws, Europe is protecting the wallets of households and businesses as they provide all the solutions to cut energy bills and move away from gas, oil, and coal, which are the main drivers of high inflation.”
According to Strategic Perspectives, by 2030, coal will no longer be cost-competitive and will be phased out, resulting in a significant reduction of coal imports by 73 percent. Gas and oil consumption are also projected to decline by 31 percent and 34 percent, respectively, in comparison to 2019 levels. Conversely, successful and timely implementation of the proposed laws will lead to a doubling of renewable energy capacity compared to 2021, making renewables the primary source of electricity in Europe.
This year has already witnessed record-breaking renewable energy generation, which played a crucial role in helping the EU navigate a turbulent winter, alleviating concerns about a resurgence of coal and reducing the demand for gas. In 2022, wind and solar power accounted for a record fifth of EU electricity, surpassing fossil gas for the first time and maintaining an edge over coal power. Coal generation decreased by 11 percent (equivalent to a reduction of 27 TWh), and out of the 18 EU countries still reliant on coal for power, 15 recorded a decline in coal generation during the winter of 2022 compared to the previous year.
As the world marches forward in the fight against climate change, the findings of Strategic Perspectives' report offer a glimpse into a future where sustainable practices not only protect the environment but also drive economic prosperity and improve the lives of individuals and businesses alike. The European Union's commitment to these bold climate targets sets the stage for a greener and more sustainable Europe, serving as an inspiration for nations around the globe.
