Spiralling Energy Costs Threaten Climate Change Goals

This case explores the social, political and economic dilemmas faced by Ursula von der Leyen, president of the European Commission and a passionate supporter of measures to limit climate change at a time of great upheaval in global energy markets. Holding fast to her climate goals and a commitment to shield from soaring oil and gas bills, she is not afraid to enforce tough global sanctions against Russian President Vladimir Putin when Gazprom, the state-controlled gas monopoly, cuts off supplies of natural gas in September 2022. The case reveals the lengths to which von der Leyen goes, from solidarity measures such as a windfall tax on energy companies, to setting dynamic price limits on natural gas in the global energy markets in an effort to protect vulnerable people as winter approaches. Meanwhile, her commitment to renewable energy is undermined by some EU member states as the coal industry ramps up production in response to gas shortages.

The case explores the inequalities caused by a sudden increase in natural gas prices across the European Union from the perspective of Ursula von der Leyen, president of the European Commission. Instructors can teach the case from various angles as students follow the high-level public policy-maker in her quest to protect vulnerable people from sudden price hikes in natural gas. This means she has to resort to solidarity instruments, however blunt, targeting the energy giants and electricity suppliers to fund support measures to maintain the safey net underpinning the EU’s social fabric. At the same time, she has to incentivize member states to adopt renewable energy and cut fossil fuel consumption to achieve Europe’s climate change goals.