Climate action can address the cost of living crisis

The document asserts that the current cost of living crisis is driven by fossil fuel price volatility, particularly natural gas, rather than the costs of net-zero policies. It identifies that poorer households are disproportionately affected by energy poverty and argues that short-term government subsidies are insufficient. The briefing proposes that expanding renewable energy capacity, implementing building energy efficiency retrofits, installing heat pumps, and electrifying transport can lower energy bills, reduce market volatility, and enhance energy security.

• The current energy crisis is primarily driven by natural gas market volatility and fossil fuel price increases, not by the costs of renewable energy or clean energy policies.
• Renewable energy generation lowers wholesale electricity prices through the 'Merit Order Effect,' where low-cost renewables displace expensive gas generation. An IMF study from 2014-21 found that every 1% increase in renewables reduced wholesale prices by 0.6%.
• Energy efficiency measures in buildings are a low-cost, rapid way to reduce demand. Ambitious housing retrofit policies in Europe could pay for themselves in under two years, and switching to efficient thermostats could save EU citizens up to EUR 12 billion.
• Renewables are significantly cheaper than fossil fuels; new onshore wind and solar projects are 40% cheaper than new coal and gas-fired plants. Rystad Energy estimates that building new solar PV in Europe is 10 times cheaper than operating gas-fired power stations in the long term.
• Heat pumps provide a cost-effective alternative to gas boilers. In the UK, they could save households up to 27% on heating bills, while US and European households could save USD 300 and USD 900 annually, respectively, given high gas prices.
• Transport electrification and reduced car use can lower costs and emissions. EVs remain cheaper to run than combustion engines when using home chargers. In Germany, a €9 monthly regional transport ticket in 2022 reduced CO2 emissions by 1.8Mt and local air pollution by 7%.
• Low-income households are disproportionately impacted by the energy crisis due to a higher share of income spent on energy and a lack of capital to invest in efficiency upgrades or renewable technologies.

APA

Team, Z. (2023). Climate action can address the cost of living crisis. Zero Carbon Analytics. https://zerocarbon-analytics.org/insights/briefings/climate-action-can-address-the-cost-of-living-crisis/

Chicago

Team, ZCA. Climate action can address the cost of living crisis. Zero Carbon Analytics, 2023. https://zerocarbon-analytics.org/insights/briefings/climate-action-can-address-the-cost-of-living-crisis/.

Wikipedia

{{cite report |last1=Team |first1=ZCA |title=Climate action can address the cost of living crisis |publisher=Zero Carbon Analytics |date=15 February 2023 |url=https://zerocarbon-analytics.org/insights/briefings/climate-action-can-address-the-cost-of-living-crisis/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{team2023climate, author = {Team, ZCA}, title = {{Climate action can address the cost of living crisis}}, institution = {Zero Carbon Analytics}, year = {2023}, month = feb, url = {https://zerocarbon-analytics.org/insights/briefings/climate-action-can-address-the-cost-of-living-crisis/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }