IDEAS home Printed from https://ideas.repec.org/p/ces/econpb/_84.html

Energy Crisis Relief as Implicit Insurance: Fossil Import Dependence and Policy Design

Author

Listed:
  • Timothé Beaufils
  • Ulrich Eydam
  • Maik Heinemann
  • Matthias Kalkuhl
  • Nikolaj Moretti
  • Andreas Peichl
  • Philipp M. Richter
  • Joschka Wanner

Abstract

Key MessagesEuropean economies rely heavily on fossil fuel imports and are exposed to global price shocksRelief measures face a trilemma: targeting, incentives, and feasibility rarely alignRelief measures can function as taxpayerfinanced implicit insurance against energy crisesBased on recent crisis responses, relief implies EU-wide permanent subsidies of around EUR18/tCO₂ (gas) and EUR 10/tCO₂ (oil)Such implicit subsidies weaken incentives to reduce fossil dependence and increase vulnerability to future crises

Suggested Citation

  • Timothé Beaufils & Ulrich Eydam & Maik Heinemann & Matthias Kalkuhl & Nikolaj Moretti & Andreas Peichl & Philipp M. Richter & Joschka Wanner, 2026. "Energy Crisis Relief as Implicit Insurance: Fossil Import Dependence and Policy Design," EconPol Policy Brief 84, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    • Handle: RePEc:ces:econpb:_84
    as

    Download full text from publisher

    File URL: https://www.ifo.de/DocDL/EconPol_PolicyBrief_84.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Martin C. Hänsel & Maximilian Kellner & Max Franks & Friedemann Gruner & Matthias Kalkuhl & Felix Knopp & Ottmar Edenhofer, 2025. "Lessons Learned from the German Double Whammy: The Importance of Price Incentives and Targeted Compensation for the Design of Energy and Climate Policy," Review of Environmental Economics and Policy, University of Chicago Press, vol. 19(1), pages 131-137.
    2. Blanz, Alkis & Eydam, Ulrich & Heinemann, Maik & Kalkuhl, Matthias & Moretti, Nikolaj, 2026. "Fiscal policy and energy price shocks," Energy Policy, Elsevier, vol. 212(C).
    3. Simone Emiliozzi & Fabrizio Ferriani & Andrea Gazzani, 2025. "The European Energy Crisis and the Consequences for the Global Natural Gas Market," The Energy Journal, , vol. 46(1), pages 119-145, January.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Agrell, Per J. & Dehaybe, Henri & Rodriguez, Manuel Herrera, 2025. "Balancing supply security and decarbonization: Optimizing Germany’s LNG port infrastructure under the European Green Deal," Energy Policy, Elsevier, vol. 198(C).
    2. Olmez Turan, Merve & Gilbert, Ben & Flamand, Tulay, 2025. "How good are weather shocks for identifying energy elasticities? A LASSO-IV approach to European natural gas demand," Journal of Commodity Markets, Elsevier, vol. 39(C).
    3. Wade, Brendan & Carthy, Philip & Farrell, Niall, 2026. "Price elasticity of residential natural gas demand: Evidence from population microdata in Ireland," Papers WP824, Economic and Social Research Institute (ESRI).
    4. Alessandri, Piergiorgio & Gazzani, Andrea, 2025. "Natural gas and the macroeconomy: Not all energy shocks are alike," Journal of Monetary Economics, Elsevier, vol. 151(C).
    5. Saif-Alyousfi, Abdulazeez Y.H., 2026. "The nonlinear impacts of energy price shocks on bank diversification: Evidence from G7 economies," Research in International Business and Finance, Elsevier, vol. 82(C).
    6. Nikou, Vasilis, 2025. "From exit to exposure: Gas import shocks and macroeconomic asymmetries in the wake of Europe's coal phaseout," Energy, Elsevier, vol. 335(C).
    7. Marco Taboga, 2024. "The potential macroeconomic relevance of critical materials: some preliminary evidence," Questioni di Economia e Finanza (Occasional Papers) 897, Bank of Italy, Economic Research and International Relations Area.
    8. Michał Rubaszek & Karol Szafranek, 2025. "The European energy crisis and the US natural gas market dynamics: a structural VAR investigation," International Economics and Economic Policy, Springer, vol. 22(1), pages 1-22, February.
    9. Candila, Vincenzo & Petrella, Lea & Andreani, Mila, 2025. "Mixed-frequency Quantile Regression Forests for Value-at-Risk forecasting," Energy Economics, Elsevier, vol. 149(C).
    10. Theodore Tsekeris, 2025. "Transformations in the European Gas Supply Network Due to the Russia–Ukraine Conflict," Energies, MDPI, vol. 18(7), pages 1-21, March.
    11. Drăcea Raluca-Mihaela & Cristea Simona Mirela & Nimerenco Ina & Teodor Cristian, 2025. "Interactions and Shocks in Energy Markets – Empirical Evidence from VAR Modeling," Proceedings of the International Conference on Business Excellence, Paradigm, vol. 19(1), pages 5149-5171.
    12. Tiziano Balaconi & Aldo Glielmo & Marco Taboga, 2025. "Natural-gas storage modelling by deep reinforcement learning," Papers 2511.02646, arXiv.org.
    13. Balthazar de Vaulchier & Lionel Fontagné & Yu Zheng, 2026. "What if? Revisiting the Macroeconomic Impact of the Energy Crisis with Peak-load Electricity," Working Papers 2026-03, CEPII research center.
    14. Edvard Avdevičius & Amra Jahic & Detlef Schulz, 2025. "Detailed Forecast for the Development of Electric Trucks and Tractor Units and Their Power Demand in Hamburg by 2050," Energies, MDPI, vol. 18(14), pages 1-28, July.
    15. Zhangying Li & O-Chia Chuang & Rangan Gupta, 2026. "The Shifting Dynamics of Energy Supply Shocks: Natural Gas as the New Driver of European Stock Market Volatility," Working Papers 202609, University of Pretoria, Department of Economics.
    16. Ghelasi, Paul & Ziel, Florian, 2025. "From day-ahead to mid and long-term horizons with econometric electricity price forecasting models," Renewable and Sustainable Energy Reviews, Elsevier, vol. 217(C).
    17. Fabrizio Ferriani & Andrea Gazzani, 2026. "Powering the digital economy: the global expansion of data centres and its energy implications," Questioni di Economia e Finanza (Occasional Papers) 1014, Bank of Italy, Economic Research and International Relations Area.
    18. Adolfsen, J.F. & Lappe, M.-S. & Manu, A-S. & Rößler, D. & Schupp, F. & Stalla-Bourdillon, A., 2026. "Gas market shocks: Tracing the effect on Euro Area inflation expectations," Journal of Macroeconomics, Elsevier, vol. 88(C).

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ces:econpb:_84. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Klaus Wohlrabe (email available below). General contact details of provider: https://edirc.repec.org/data/ifooode.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.