Sustainability and climate

What policies are needed for energy transition? What are the costs and benefits of wind power and other forms of renewable energy?

Energy transition means increasing the share of renewable energy and promoting energy efficiency. Following the signing of the Paris Climate Agreement in 2016, many countries, including the Netherlands, have committed to significantly reducing greenhouse gas emissions. Dutch targets are set in the Climate Act, which aims to reduce emissions by 55% by 2030 and net zero emissions by 2050, with the goal for negative emissions thereafter. The 2019 Climate Accord specifies policies and measures to achieve these goals, supported by additional measures.

SEO conducts extensive and diverse research on the effectiveness of energy transition policies and related subsidy programs. SEO also examines the energy transition through local, national and international initiatives aimed at increasing the share of renewable energy and energy efficiency. In recent years we have carried out assignments for provinces, ministries, energy companies, grid managers and environmental organizations. Provinces and municipalities are increasingly interested in the effects of energy transition policies.

SEO examines the social costs and benefits of climate policy and investments in sustainability mainly through social cost-benefit analysis (SCBA). This is a scientific method for determining the effects of interventions on welfare. SEO conducts SCBAs for numerous clients. For example, energy regions substantiate their choices in the regional energy strategy by conducting or commissioning a SCBA.

How do we get from the current market for transport to a system of sustainable mobility?

Mobility and transport are essential in our economy and access to mobility is a public interest. Mobility and transport are also characterised by negative externalities, with greenhouse gas emissions being the most important and well-known example. The extent of external effects depends on many factors, including the mode of transport and distance. Sustainable mobility is all about greening mobility and transport. From the economic perspective, this means a better balance between the social benefits and costs of transport and mobility.

SEO has extensive experience in research on sustainable mobility across and between all modes of transport for both passengers and freight. In this respect, SEO stands out for its expertise on aviation and the application of self-driving vehicles. Our research focuses on how the market, in combination with policy instruments, can develop in such a way that transport and mobility remain possible with a reduced ecological footprint. For this, we look at consumer behaviour, the (price) behaviour of suppliers, international policy coordination and innovation. For instance, we investigate which factors are decisive for consumers to choose greener modes of transport, what the true price of passenger and cargo transport is and we analyse the overall impact of policy measures through evaluation studies and SCBAs.

Which financing instruments are most effective to promote investments in climate adaptation and mitigation?

Financing measures aimed at minimising the damages produced by floods, droughts, sea level rise (climate adaptation), as well as measures aimed at mitigating climate change (climate mitigation) is increasingly playing a role in policy making. For example, various funds have been established to support projects not only in the Netherlands, but also developing countries, that are suffering disproportionately from the effects of climate change. Examples include the Multiyear Climate Fund 2024 program, the provincial energy funds or the Dutch Fund for Climate Development (DFCD).  A number of climate funds increasingly foresee a role for private involvement and, in addition to subsidies, financing instruments such as (quasi-)equity, loans,  guarantees, or green bonds.

How to best distribute the costs and benefits of climate policies?

The issue of climate justice is increasingly playing an important role in the public debate. For example, emission reduction policies typically affect certain businesses or sectors more than others, while the costs and benefits of fossil fuel subsidies are also distributed unequally among different groups in society. This unequal distribution concerns not only financial or economic effects, but also broad welfare effects on the environment, health, or well-being.

SEO has a wide range of economic methods to identify and quantify the welfare effects of climate measures for different social groups and sectors. In our studies, we answer questions such as: What are the costs and benefits of different climate measures? How are these costs and benefits distributed in society? How much – and how – should polluters pay for their emissions? And how can a social climate fund ensure that costs are distributed more fairly?