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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
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    File URL: https://www.ifo.de/DocDL/EconPol_PolicyBrief_84.pdf
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