This article was first published in August 2022. The OECD Forum Network is a space for experts and thought leaders—from around the world and all parts of society—to exchange expertise and perspectives across sectors. Opinions expressed do not necessarily represent the views of the OECD.
The fallout from the current global energy crisis is already upon us, in the form of a severe cost of living crisis. In Europe alone, partly due to the proximity to the invasion of Ukraine, up to 125 million residents face the risk of energy poverty. In the wake of COVID-19, this comes at an impossibly high price for the most vulnerable residents, some of whom have experienced extreme heat conditions in their countries.
For OECD Member countries, the answer is not to rely on the fossil fuels that have caused this crisis. Instead, we should learn the lessons of the COVID-19 pandemic, and previous energy crises, by charting a path that protects the poor from price volatility and offers meaningful access to greener and more affordable energy solutions.
There is a clear business case for investing in a recovery from the pandemic that is green and just. It can help cut bills, improve health, create jobs and reduce the geopolitical volatility associated with fossil fuels.
It is critical to develop inclusive and community-led approaches to secure a speedy and equitable energy transition.
A lack of global investment in renewable energy, insulation and retrofitting over the last few decades has pushed bills higher than they should be, and the Gordian knot of reliance on fossil fuels remains. C40 analysis shows that 55% of all gas use in cities is associated with residential heating and cooling, tying families to a costly and volatile fossil fuel. And despite the huge energy saving and jobs potential associated with insulation and retrofitting buildings, retrofit rates remain extremely low. Instead of solely focusing on energy supply, transformational change can happen by putting more effort into reducing demand in a fair and just way. For example, by insulating existing buildings and building new energy-efficient dwellings, over 900,000 jobs can be created in South African cities, 850,000 jobs in Italian cities and a staggering 13 million jobs in cities in the United States.
Across Europe and beyond, mayors are stepping up and using their agency to deliver key actions to protect vulnerable populations and tackle energy poverty in their cities. In April 2022, European mayors met with international and European trade union leaders and the International Energy Agency. They also launched the C40 Mayors Emergency Plan to Tackle the European Energy Crisis and Protect Residents.
The Emergency Plan presents a powerful alternative way of tackling the looming poverty crisis, by focusing on the three pillars of relief, which includes the provision of emergency support and energy advice services to vulnerable residents; the acceleration of retrofits for all municipal buildings, social housing and other buildings, as well as expedited deployment of clean, affordable heating and cooling systems; and joined up investment in renewable energy, with strong local supply chains and good jobs.
Barcelona is one city that is delivering innovative solutions. In 2021, the city decided to train over 250 home care workers on the topic of energy poverty and climate resilience, in order to support the city’s vulnerable residents. Warsaw is following suit, replacing coal stoves used for heating with sustainable clean alternatives such as heat pumps, which helps tackle both energy poverty and indoor air pollution. These measures also highlight the importance of mutually reinforcing climate and social policies.
In September 2021 Glasgow launched its "Greenprint for Investment" that will see 450,000 of the poorest performing homes, including 70,000 social and public housing units, upgraded at scale. The Greenprint is designed to reach vulnerable households, while supporting skills and jobs pathways that give businesses much needed long-term confidence in a multi-year pipeline of work. Meanwhile, Seoul has used funds from energy-saving measures to retrofit more than 2,000 low-income homes with solar panels to make them more energy efficient.
These mayoral-led actions show that energy poverty does not have to be the inevitable result of the crises we are facing, if the right action is taken. Cities and local governments—who are closest to communities—are piloting and scaling innovative policies that can put an end to the overreliance on fossil fuels, help the vulnerable and address multiple, overlapping crises.
Read more on the Forum Network: How can cities power up energy efficiency in buildings? by Soo-Jin Kim, Acting Head, Cities, Urban Policies and Sustainable Development, OECD
The fact is that digital and technological solutions will not always reach the most vulnerable in society. As such, it is critical to develop inclusive and community-led approaches to secure a speedy and equitable energy transition. As populations age, access to affordable and decarbonised energy is not only a climate issue but also a question of dignity, as well as an answer to their medical and social needs.
Mayor-led action is already well underway but cities need greater powers and funds to achieve results at scale, in partnership with communities, workers and business.
Now is the time for national governments and regional institutions to join forces with mayors and take the necessary steps to protect both people and planet.