How Do You Fight Energy Poverty?
Over 54 million people, or 11% of Europe's population, cannot afford to heat or cool their homes properly and suffer the consequences in terms of adverse effects on health and quality of life. Energy poverty is increasingly a burning issue.
Due to the lingering effects of the economic crisis, energy poverty has become a major challenge for policymakers at the level of member states, and of the whole EU. According to the European Commission, only a third of EU countries have given legal recognition to energy poverty, and even fewer of them have accurately measured the extent of the phenomenon.
The causes of energy poverty at the European level are mainly related to the rising cost of electricity and gas (in 2008-2012, they rose by 4% and 3%, respectively) and the growing burden of energy bills over the disposable income of households. In the Mediterranean countries, the inability to pay for air conditioning can cause critical health conditions during temperature peaks due to global warming.
The EU countries most affected by energy poverty are Bulgaria and Lithuania, closely followed by Greece, Poland, Romania, Hungary, and Italy. As reported by Eurostat, with reference to 2011 data, 23.2% of Italians live in homes that are in a state of poor maintenance, while 18% are unable able to heat their homes properly.
A hot topic: the energy union
Greater policy coordination could address the increasing severity of energy poverty in Europe. The issue squarely falls within the reach of the Energy Union, which is the EU coordination strategy for integrating energy policies and energy networks - with the triple aim of energy security, market liberalization and environmental sustainability - approved in February 2015 by the European Commission. The two keys for addressing the problem are energy efficiency, which lowers the energy bill for households, and families, and the liberalization of electricity and gas markets, which, by leading to greater competition among energy suppliers, brings price benefits for consumers in the medium period.
The energy and environmental policies promoted by the European Commission, under the 2020 energy and climate package and the Energy Union, constitute the framework for implementing a policy mix that combines regulatory intervention, market competition, and various government agencies.
However, especially in Italy, commitment to fight energy poverty is still too weak. As highlighted by the Bank of Italy in a recent report, the issue has been addressed mainly through social welfare policies directed at those who are in a situation of fuel poverty (for example through the electricity or gas bonus for low-income families), but what's lacking is a policy able to effectively and permanently lower energy prices and provide sufficient incentives for energy efficiency and conservation. Since public finances are in a parlous state, these are likely to be the sources for policy innovation.