The major transitions – climate, energy, ecological, agri-food, digital, labor, demographic, migration, socio-cultural – will profoundly mark the coming decades until 2050, the year of carbon neutrality.
The roadmap for carbon neutrality 2050 (RNC), the national energy and climate plan 2030 (PNEC) and now, also, the legal regime of the national electricity system (DL nº 15/2022 of 14 January) are already there.
Due to the importance they have in the reorganization of the economy, the volume of investments that they will mobilize in the next decade, the central place they will occupy in the public policies of Portugal 2030, the enormous impact they will have on the territories, we are facing a profound transformation of the economy and of Portuguese society.
The matter is serious and cannot be treated lightly, although we all know that in such a wide horizon of time anything can happen, even the biggest imponderables.
And the imponderable happened. On February 24, war broke out between Ukraine and Russia, followed by sanctions applied by the West and, now, the stagflation of the European economy lurks at all times. We are apparently at an impasse. The war generated a shortage of oil and gas and a sharp rise in fuel prices, which puts the European decarbonization program as it had been conceived in the context of the energy transition into question.
It is therefore a good time for some reflections on the subject.
As we know, the main concern is focused on global warming and, therefore, on the decarbonization of the economy with targets for 2030 and 2050, the year of supposed carbon neutrality. This decarbonization will be accelerated by the digital transition and will take place in all sectors of activity: in the electrical production system, in the building stock, in the transport system, in industrial processes, in the economy of waste, in sustainable agricultural practices, in the reinforcement of capacity of kidnapping the national forest, in the decarbonization of public administration and cities.
The RNC 2050 and the PNEC 2030 cover a wide range of sectors that cross the entire Portuguese economy. From prevention to mitigation and adaptation to transformation, here is a whole program of action for the next decade and a complex of public policies that are difficult to manage.
We also know that decarbonization will be mostly accessible through the new economy of the digital age: in the smart city, in the smart energy grid, in the circular economy, in the economy of biodiversity and environmental services, in the green economy and food, in the blue economy, in economics of housing and bioconstruction, in the economics of health and primary care, and in the economics of civil protection and biosecurity, among the most relevant. Smart grids will take care of these sectors and the dematerialization of processes and procedures will save a lot of energy.
We also know that the decarbonization of the economy requires a new structure of costs and benefits of context that it is necessary to anticipate to the zero moment of the RNC and the PNEC. If the new context cost and benefit structure is not accompanied by an appropriate incentive system and a new tax expenditure structure, no one can guarantee the success of this great enterprise.
Indeed, the decarbonization of the economy implies a new generation of public investments in the territory, above all, its adequate digital coverage to process a large volume of data. The arrhythmia of innovation and investment in so many sectors that should be connected to produce good results will inevitably cause a dissipation effect of the decarbonization process itself, which must be taken into account from the first moment.
For this very reason, it is necessary to take care of the just transition, the effects of territorial agglomeration, new territorial asymmetries, business concentration and the effects of social exclusion as a result of carbon neutrality and energy and climate plans.
If in each NUTS II region we don't take care of the balance of these various external effects and we don't have an attack level to program and repair them in time, we will surely have many serious problems ahead.
Finally, we know that the decarbonisation of the economy, in its broadest sense, is a complex of policy measures that takes place at various levels. On the supply side, it includes the production and storage of energy from renewable sources, wholesale distribution and retail marketing, decentralized production and distribution of local energy communities, control and regulation of the distribution of income generated within the new value chains, good benchmarking practices in terms of sustainability and governance, a just transition policy for territorial cohesion and an adequate policy of incentives in the field of circular economy.
On the demand side, we talk about efficiency and saving of resources and consumption in all sectors, of a better organization of cities, of a correct policy of just transition with regard to the way we use the territory's resources - soils, water, winds, sun exposure, forest cover, mineral riches.
Furthermore, the balance between emissions and carbon capture depends, as we know, on good soil quality and good forest cover.
Having arrived here, we ask, will Portugal, despite the financial resources made available by the PRR and the PT2030, have enough entrepreneurial, technological and human capital to take advantage of the natural conditions of its territory and capitalize on them in the form of solar, wind, water and and maritime?
Will hydrogen be the answer to the challenges of storage and will the country be able to integrate the battery value chains in the European Union? And will the interconnections of the Iberian market to the rest of the European Union, with a view to greater stabilization of energy prices within the framework of a single energy market, be completed in this decade?
These are the great questions that the effects of the war do not make clearly visible. First of all, in these major transitions there is a high risk of dissipation and entropy that has to do with the discontinuation or reduction of programmed investments and the disconnection of planned policy measures.
Those who lose out are generally the micro and small projects that are part of a medium and long-term line of coherence and that, in this context, do not find the most appropriate context benefits and network economies.
War is a huge problem and a great opportunity, especially in terms of energy transition and decarbonisation. For the Iberian Peninsula, it is a great opportunity to link the Iberian electricity market to the single European energy market.
For Portugal, a preliminary balance appears to be positive: greater complementarity between the territory's renewable resources (sun, water, wind, biomass, sea), a greater balance between emissions and carbon sequestration, more competitive renewable production costs and attraction of electro-intensive industries, greater participation in value chains with interconnection to European networks, a fair transition with reduced context costs, greater number of local communities with decentralized energy production, greater efficiency and reduction of energy consumption, an appreciation of the strategy of hydrogen, a new structure of financial benefits for the energy transition.
It remains to be seen, however, what the war still has in store for us from here to there.
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