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Energy is the backbone powering our economies and has numerous benefits for society. Nevertheless, our energy consumption also has big environmental impacts. As households account for approximately 20% of CO2 emission [U.K. figures, 2020], homeowners play an important role in the success-rate of the much needed energy transition. Investments in solar panels, heat pumps and insulation are getting more and more popular. In addition, consumers are increasingly embracing innovative energy services, from smart thermostats to energy trading platforms. A recent Dutch report by the Planbureau voor de Leefomgeving showed that the intention and promise of the government – to make homes more sustainable and cost-neutral – is not achievable for many homeowners without some form of government subsidies. In addition, the U.K. government is struggling to implement regulations to effect a ‘green housing revolution’. In a situation in which consumers seem open to the idea of the new ‘green normal’ – governmental clarity about the costs and benefits of investments should be a priority to keep the fire burning.
The EU as a green geopolitical superpower
In the coming decade, the European Union wants to mobilize about €1 trillion in green investments through the EU budget to become the world’s first carbon-neutral economic block by 2050. Furthermore, the ECB financially stimulates European companies and governments to pursue sustainable objectives, becoming the first main central bank to foster green and sustainable investments through its monetary policy. Internal divisions over the European “Green Deal” are set to grow however, as Eastern European member states will likely call for more European funds to transition their coal-dependent economies towards cleaner energy sources while Southern European member states face different priorities and constraints due to their corona-stricken societies (e.g. reducing unemployment, boosting growth). Still, European institutions are committed to show that Europe can act in unison, as failing would degrade trust in the EU as an effective block for trans-national issues. Given the financial and political capital that is invested, convincing European countries to cooperate on the Green Deal will cement the EU’s position as a geopolitical superpower, and pave the way for more ambitious plans and reforms.
Prompted by emission regulations as well as mounting public demand for cuts in carbon-dioxide emissions, many companies have stepped up to the challenge of reducing carbon emission by setting goals to become a “net-zero” emitter by at least 2050. Some of the biggest corporations in each sector, including big tech companies, have promised to reduce their carbon footprints. Many are turning to offsetting in an attempt to lead the net-zero transition by, for example, investing in programs such as tree-planting, while other companies opt to purchase “carbon credits” investing in renewable energy or sustainable projects elsewhere in the world – claiming to be carbon neutral – without cutting the actual emissions from business operations. These tactics, however, are seen by many as controversial and open to (mostly unintentional) “greenwashing”. It is clear that companies still have a long way to go just to get to carbon neutrality. While every effort to reduce greenhouse gas emissions is valuable, reducing emissions is only the first step. To make meaningful impact, companies should start looking beyond net-zero.