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Enabling Green Transition in the Balkans

Political reluctance to pursue green transition across the region is driven by project duration, fear of consequences and ideological barriers. However, with strong leadership, public investments and inclusive planning, this can become an opportunity

It’s easy to feel despondent when thinking about the green transition in the Balkans. The energy required to generate one dollar of GDP is significantly higher here than in EU countries—for instance, Serbia’s energy consumption is nearly double that of Austria’s. The situation with CO2 emissions per unit of GDP is similarly alarming, with emissions in Bosnia and Herzegovina, for example, three times higher than in Austria. The primary culprit? Fossil fuels, of course. Their share in the region’s energy mix hovers at around 80%, with Albania being the notable exception where that share falls below 60%.

The heavy reliance on cars also contributes to this issue, as does the electricity sector’s dependence on coal. Only Albania, Croatia and Montenegro generate their electricity predominantly from renewables. Despite the vast untapped potential of renewable energy, most countries in the Balkans are net importers of electricity—with Albania and Bosnia and Herzegovina standing out as the exceptions. The region is blessed with natural resources, boasting mighty rivers, an abundance of sunshine and strong winds. And yet, the exploitation of these gifts has been markedly unsuccessful.

NOT EVERYTHING IS SO GLOOMY

Upon closer inspection, though, the situation in the Balkans doesn’t look entirely bleak. CO2 emissions per capita in the region are actually much lower than in EU countries. All Balkan nations are better that Austria in this regard, with some – like Albania – boasting emissions four times lower than Austria’s. This can certainly be attributed to the lower level of economic activity in the region, but still, on the whole, the average Balkan resident has a smaller environmental footprint than the average EU citizen.

Moreover, the region also performs pretty well in the realm of environmental taxes. Serbia, for instance, collects almost twice as much in environmental taxes as Austria, with the majority of other Balkan countries also surpassing that Alpine nation in this respect. Furthermore, the Balkan region is home to notable green transition success stories. Albania stands out, as it generates all its electricity from renewables and operates as a net energy exporter, achieving the lowest CO2 emissions per capita anywhere in Europe. Montenegro declared itself the world’s first ecological state as far back as 1991, including this in its constitution long before the green transition became a mainstream topic in the Western world. Not just that, the country also expanded its renewable energy capacity in recent years, developing several wind farms.

WHAT IS TO BE DONE?

The stories of Albania and Montenegro shed light on what is to be done to make green transition work in the region. The hydropower plants that provide the majority of electricity for these countries and are responsible for their favourable standings in terms of the green agenda were built 40 to 60 years ago during “dark communist times”. If such feats were achievable back then, with the comparatively rudimentary technology of the era, why should we not be capable of similar accomplishments today, with the advancements the world has since witnessed?

Every country in the Balkans possesses the capacity to construct several large hydroelectric plants, which could replace a significant portion of the energy currently generated from coal. With some areas receiving 20- 30% more sunlight than Austria annually, the potential for solar energy production is also substantial. All countries can also invest in public transport and railways, thereby reducing the use of cars.

The Balkan region is rich in natural resources like rivers, sunlight and wind, but their exploitation has been largely unsuccessful

This potential must be utilised in such a way that it benefits everyone, not just a small group of people. Natural resources like rivers, sunshine and wind belong to everyone, and must not be exploited for the profits of a few. The key role in the green transformation must thus be played by the governments, not by the private sector. While there’s room for public-private partnerships, they must be designed in a fair way, protecting the public interest and preventing the privatisation of public goods.

And, again, there is a good example in the region from which everybody can learn. Serbia has led the way in Europe on public investments as a percentage of GDP for several years, with figures reaching as high as 7%. While most of these investments have not been green, that can easily be changed. And if Serbia is able to do it, why wouldn’t others follow suit?

THE MISSING INGREDIENT: POLITICAL WILL

Returning to the complex world of realpolitik, one can’t help but wonder —if the rationale is so straightforward, why isn’t there a bigger push towards renewable energy and green transition in the region? I see three main reasons that drive back political will.

The first is the inherently long-term nature of energy projects. These projects take years to complete, meaning that the politicians who initiate them are unlikely to be in office to witness their completion. As a result, their successors, potentially from opposing parties, might reap the benefits and rewards. This dynamic creates a significant disincentive for politicians to commit to substantial energy projects.

The second reason is fear of the green transition. Politicians are afraid that transitioning away from fossil fuels could lead to adverse outcomes: the closure of existing thermal power plants leading to widespread job losses, increased taxation to meet EU standards, and the potential for green investments to disproportionately benefit foreign companies and other countries. These concerns are valid, but not inevitable. With governments taking a strong lead, robust public investment, inclusive planning that engages citizens and workers, and the active participation of domestic companies, the green transition can be turned from a threat into an opportunity.

The third barrier is ideological. There’s a discernible reluctance among some right-leaning politicians and parties to embrace the green transition, often rooted in scepticism towards environmentalism or outright denial of climate change. The discourse can sometimes parallel that of conspiracy theories. Yet, even those who are sceptical about the severity of climate change or the necessity of a green transition might be persuaded by viewing it as an economic opportunity. All relevant studies have found that the green transition increases GDP. By investing in green projects, you are not only solving environmental problems, you are also bringing economic development.

WHAT ABOUT REGIONAL COOPERATION?

Finally, we must understand collectively that the green transition provides an opportunity for the Balkan countries to improve their relations and further regional cooperation. Given the substantial financial and technical demands of energy projects, collaboration among nations could prove beneficial. Joint efforts can lead to shared energy resources that are particularly useful in situations where a country’s energy surplus can mitigate another’s deficit. The nature of energy, in terms of transcending national boundaries, should serve as a reminder to politicians of the triviality of the issues they constantly raise.

Politicians, business leaders, academics, pundits and journalists must all acknowledge that, despite our borders, past conflicts and the myriad differences that divide us, we all share the same planet. Should aliens visit us, our squabbles would seem incomprehensible to them. Yes, our problems will disappear if we destroy the planet, but that would also mean us disappearing. Our disputes sometimes seem like arguing about which TV channel to watch as our house burns around us.

POTENTIAL

Each Balkan country has the potential to build large hydroelectric plants, thus offering a viable alternative to coalbased energy generation.

FEARS

Politicians fear shifting from fossil fuels due to potential plant closures, job losses, higher taxes and foreign dominance in green investments, but these concerns aren’t inevitable.

INTEREST

Governments should lead the green transformation, prioritising public interest over private profit and ensuring fair public-private partnerships to prevent the privatisation of public goods.

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