Navigating the Nexus: Energy Security, Climate Mitigation, and Recovery of the European Union and Ukraine – an Overview
Due to the energy crisis exacerbated by the invasion of Ukraine and the ongoing and pressing issue of climate change, the EU is forced to balance out its energy security strategy while considering climate related issues. The past interconnection of Europe Union and Russia through the Nord Stream pipeline has made it inevitable for Europe to consider alternatives to compensate for the losses caused by the globally recognized condemnation of Russian actions. The EU has utilized the momentum to introduce new mechanism such as Repower EU and similarly has dedicated attention to relevant climate related instruments such as the Fit for 55.
With the analysis of these two initiatives, the paper brings an overview of current drivers and barriers within this newly arising connection while introducing three opportunities. Ukraine's long-term prospects lie in deeper integration with Europe, enhancing connectivity with European energy markets and collaborating with the private sector to advance renewable energy and hydrogen production. Ukraine's surplus energy generation capacity and progress in the nuclear sector attracts attention of investors and world politics. The development of renewable energy in Ukraine can help the EU become more energy independent and less vulnerable to external threats.
Nuclear energy is part of the EU's 2020/852 taxonomy classification system and can help achieve the goal of balancing energy security with the goal of climate change mitigation. The EU Joint Research Centre's technical evaluation of nuclear energy found that it produces minimal emissions and has a low fatality rate. Academic proponents argue that nuclear power fits into a strategy of ecological modernization and can help limit carbon emissions per person. Promoting nuclear energy in a similar manner would enhance European energy grid stability.
Lastly, the paper considers direct carbon pricing which can be implemented through enhancing the energy taxation directive accompanying the already existing carbon tax and cap-and-trade system. The EU Emission Trading System (EU ETS) is the oldest carbon pricing policy, targeting pollution from power, industry, and aviation sectors. However, its current rate is volatile and insufficient to incentivize transition to neutrality. The EU should establish a more comprehensive fiscal mechanism for its carbon market, to support climate ambition for 2030.
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