Energy in Crisis - The Impact of Austerity on Energy Transitions in Germany and the UK

Jan-Justus Andreas

The Euro crisis has led many European governments to introduce austerity measures. Simultaneously, environmental issues have been growing in scope and urgency for decades. While Europe's 2020 strategy promoted 'green growth', other voices questioned the availability of funds to worry about the environment. Energy stands as the critical linchpin between the economy and the environment. The paper analyses energy policy in two major European economies, Germany and the UK, in the years following 2008, using Schaffrin et al.'s (2015) six policy intensity indicators that enable a robust and comprehensive assessment of states' policy performance, including scope, integration and budgeting. Germany and the UK have done reasonably well economically over the course of the crisis, with austerity beginning in December 2008 and June 2010 respectively. Germany has shown good progress in its energy transition compared to other European states, however struggles with rising electricity prices that burden its export sector that makes up 45% of its GDP. The UK's advance in its energy transition has been sluggish, with energy policies of the past identified as insufficient to reach its renewable targets. The paper identifies and compares the economic and political factors surrounding the implementation of austerity in the two countries and its impact on energy transitions. It outlines the dynamics between the immediate need for economic growth and the political willingness to improve sustainability.

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