The Euro crisis and the imposition of austerity measures have led many European governments to severely cut public spending. At the same time, environmental issues facing communities, countries and the world have been worsening and growing in scope and urgency for decades. While Europe’s 2020 strategy called for generating ‘green growth’, tackling both crises at the same time, other voices questioned the availability of funds to worry about the environment in times of recession and austerity. Energy, as the fundamental source of economic production and largest emitter of greenhouse gases must be considered to stand as the critical linchpin between the economy and the environment.
The paper analyses energy policy in two major European economies, Germany and the UK, in the years following the beginning of the crisis in 2008 and uses Schaffrin et al.’s (2015) six policy intensity indicators. This index enables a robust and comprehensive assessment of a state's performance across vital indicators, including policy scope, integration and budgeting.
Both Germany and the UK have done reasonably well economically over the course of the crisis, with austerity being implemented in December 2008 and June 2010 respectively. Germany, although exceeding EU government debt requirements, has shown good progress in its energy transition compared to other European states, however also struggles with rising electricity prices that are a significant burden on its essential export sector that makes up around 45% of the German GDP. The UK’s progress in implementing its energy transition has been sluggish, while the country also experienced a high governmental deficit and government debt. However renewable energy policies of the past years have been called insufficient to reach the UK’s 2020 targets.
The paper identifies and compares the economic and political factors surrounding the construction and implementation of austerity measures in the two countries and their impact on energy transitions. It thereby outlines the dynamics between the immediate need for economic growth and the political willingness to make such growth more sustainable, and subsequently shows that austerity and green growth may not be mutually exclusive.
