In a landmark move amid energy volatility, the EU adopts AggregateEU for joint gas procurement. This brief, written by SITE researchers Chloé Le Coq and Elena Paltseva, evaluates challenges in gas market dynamics following the energy crisis, addressing design issues of this innovative mechanism.

Throughout 2022, the reduction in Russian gas imports to the EU and the resilience of European energy markets have been subject of significant public discourse and policy-making. Of particular concern has been the EU’s ability to maintain its environmental goals. In this policy brief, researchers from SITE and the University of Pennsylvania aim to reevaluate the consequences from the loss of Russian gas and the EU’s response to it on greenhouse gas emissions in the region.

Against the background of fast rising gasoline and diesel prices in 2022, a number of European countries have reduced fuel tax rates, often in the form of temporary “gas tax holidays”. In this policy brief, SITE researchers Julius Andersson and Celina Tippmann, analyse the tax incidence by comparing the gasoline price development in Sweden to that in Denmark, where the fuel tax rate remained unchanged.

The concern of Russian gas supply disruption and its implications has never been as serious. Chloé Le Coq, Professor at the University of Paris II Panthéon-Assas (CRED) and a Research Fellow at the Stockholm Institute of Transition Economics (SITE), discusses how nudging energy consumers to lower their demand may support the plans of the European Commission (EC).

SITE and NES (New Economic School) researchers investigate how multinational firms manage their relationships with governments under the threat of expropriation. Exploring micro data from the oil and gas industry worldwide, they show that the multinationals delay investment, production and tax payments by more than five years in countries with weak institutions relative to countries with strong ones. These findings are consistent with the theory suggesting that delaying rents to the government in absence of formal enforcement could decrease the risk of expropriation.

Policymakers in Europe are currently faced with the difficult task of reducing our reliance on Russian oil and gas without worsening the situation for firms and households that are struggling with high energy prices. The two options available are either to substitute fossil fuel imports from Russia with imports from other countries and cut energy tax rates to reduce the impacts on firms and household budgets, or to reduce our reliance on fossil fuels entirely by investing heavily in low-carbon energy production.

"Carbon Taxes and CO2 Emissions: Sweden as a Case Study" written by Julius Andersson, Assistant Professor at Stockholm Institute of Transition Economics (SITE), has won the 2022 AEJ: Economic Policy Best Paper Award.

The world is currently experiencing what can be labelled as a global energy crisis, with surging prices for oil, coal, and natural gas. For households in Sweden and abroad, this translates into higher gasoline and diesel prices at the pump as well as increased electricity and heating costs. In this policy brief, Julius Andersson, Assistant Professor at SITE, together with Celina Tippmann, Research Assistant at SITE, put the current gasoline price in Sweden into a historical context and answer two related questions: are Swedish households paying more today for gasoline than ever before? And should policymakers respond by reducing gasoline taxes?

In a recently published op-ed, Torbjörn Becker, Director of the Stockholm Institute of Transition Economics, discusses why Russia must be forced to pay a higher price for its war in Ukraine. Sanctions should be directed at oil and gas exports, and it is also time to increase the pressure on the banking system. Frozen Russian assets in the West could later become a good basis for Ukraine's reconstruction.

Can oil and gas sanctions and EU’s plans to reduce dependence on Russian energy affect EU transition to renewables? Elena Paltseva, Associate Professor at the Stockholm Institute of Transition Economics (SITE), shares her insights and discusses the current European growth strategy.