Europe’s only possible response for a winter without gas.

 Column by Francesco Grillo published on the Italian newspaper Il Messaggero and Il Gazzettino.

War in Ukraine seems to put us into a corner. It seems to force us to make an impossible choice between three vital goals: to avoid - in the next couple of months - a recession that can lead to the closure of thousands of businesses crushed by bills, to get rid - in the medium term - of the threat of tyrants we have financed for years by buying their fuel; and to reach by 2030 the European objective of a 55% reduction in carbon dioxide emissions compared to 1990. The question to which Italians candidate parties are seeking an answer is this: is there any ideas that is going to safeguard all three needs at once? Is there a solution that can be applied without being forced to make a choice that would lead us inexorably to collapse on two of three side?

We don’t have to go far to find an answer. There are companies that have prepared for the perfect storm by making a choice to which we should devote all our political, technological, and financial resources. Sweden, Denmark, Finland, Austria, Portugal itself and Switzerland outside the European Union, indicate a path that has no alternative.

The latest economic forecasts of the OECD in Paris were published in July in a document called "the price of war". Europe pays to the conflict a slowdown of almost two points and a half. This ghost is called stagflation (inflation plus recession) that we met in 1973 when Arab countries cut off oil supplies to those who had supported Israel in the war between Sinai and Golan. In such a gloomy picture, there are some “happy islands”: Austria, Portugal and Switzerland pay to the energy crisis only half point. In Lisbon the GDP growth is still 5.3% and in Zurich inflation is just over 2%. The situation is slightly worse for Finland and Sweden, but only because they are used to exporting to Russia. The ability to resist crises also means greater political independence. Sweden and Finland ask for NATO membership just as Russia tries to crush Ukraine and blackmail Germany. Austria and Switzerland defend a neutrality enshrined in Constitutions and Treaties that allows these countries to be the seat of some of the most important international organizations.

There is an additional factor that these European countries have in common and that partly explains the miracle of their resilience: the leadership in the development of renewable energy. The forementioned six countries are – in the Oxford University number – are among the ten countries of the world with the highest share of energy coming from sources that are not subject to exhaustion: Sweden is at 51% and Portugal covers one third of its demand. Germany, France, and Italy are below 20%, as evidenced by the chart accompanying the article.

The data on the composition of renewable energy is also interesting: in Portugal, Denmark – but also Germany and Spain – wind energy and photovoltaics are valued more than hydroelectric. Finally, countries that have already converted to renewables benefit from the advantages of a clean environment: it is not only thanks to the tax benefits that Portugal hosts many pensioners, while the entire Po Valley is levelled red in the monitoring of air quality.

The war in Ukraine urges for a transformation of the entire production, distribution and consumption of energy. But how much does it really cost to achieve it in a country like Italy? ENEL Foundation has recently calculated the value of a plan divided into three components: one is the reduction of the consumed amount of energy per euro of CDP produces; two is increasing the share of energy delivered through electrical technologies; three is the increasing of the weight of renewable (especially photovoltaic and wind energy) on the mix used to produce electricity. To each step corresponds, however, impressive innovation trends.

This plan can make us reach Portugal and Spain in 2030 but its flaw is in its costs: it could cost as much as five RRPs (1,056 billion EURO) in the next eight years. However, the real news is that the benefits of such ambitious transformation would be far greater than the costs: each euro spent would produce a return (of EUR 1.64) higher than that the returns provided for by the PNRR (1.2 at best), creating 2.6 million jobs. It will be, as for the PNRR, equally necessary to remove the regulatory constraints that are the bottleneck of much less demanding investments, and that distances us from countries that benefit from a smaller size and complexity.

The three crises that can trigger the perfect storm - war, inflation and drought - put Europe at a more definitive crossroads than we have answered with NEXT GENERATION EU. There is the need to replaced mild transitions in courageous transformations, to spend more but with more focused investments and a much clearer return. On these grounds we can build a strategy that in the Stability Pact is regulated by criteria that are differing from those that we will continue to use to manage old and less "good" debts. A similar logic can also be applied to draw an emergency response to which it is useful to dedicate a separate reflection. We must use the energy of crisis to enter firmly into a radically new world.