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Aleksandar Macura, Programme Director At The RES Foundation

Costly Missed Development Opportunities

A society that poorly utilises its energy and resources, and that destroys the environment excessively, faces numerous direct and indirect costs. Serbia has behind it an entire series of missed opportunities that cost a lot, but ahead of us there are also ample opportunities to make a thoughtful and measured turnaround

It seems that in Serbia we currently have a collection of varying public policies, some of which benefit energy efficiency, while others represent the opposite. What is good news is that there is lots of room, with the assistance that Serbia and the rest of the Western Balkans receive from the European Union under the scope of the Green Agenda, to implement energy transition in an intelligent, considered and gradual way. We spoke with Aleksandar Macura, programme director at the RES Foundation, about how to better manage this transition and show more knowledge on the road to the improved utilisation of natural resources and environmental protection.

The IMF mission that visited Serbia recently highlighted the energy sector as one of the priorities that the Government of Serbia should work on in the period ahead. Do you see this as good news connected to energy efficiency and greater concern for the environment, or as a financial and political issue?

Energy efficiency and care for the environment are issues that are hugely important to financial stability. A society that poorly utilises its energy and resources, and that destroys the environment excessively, faces numerous direct and indirect costs. The costs of missed development opportunities are huge, as are the health costs of environmental pollution. The inefficient use of energy also threatens energy security and renders you vulnerable in times of crisis, which makes it more difficult to make political decisions that yield the greatest development benefits. The link between energy efficiency, the state of the environment, finance and politics is essential and crucial. We hope that this will finally be recognised in an appropriate way, even if that comes with the help of the IMF, which does not necessarily have to consider all the noted benefits.

Among the many challenges that Serbia faces in the field of environmental protection, where is the key knot to tackle in order to start unravelling the ball of string that leads to the use of sustainable energy sources?

This question isn’t easy to answer. I like to believe that the first step on that journey is to launch an urgent and all-encompassing battle against energy impoverishment through the implementing of reasonable energy efficiency measures, primarily on the side of heating over a million households.

The more efficient utilisation of energy will allow us to more easily finance the essential energy transition in energy production and to share those costs in such a way that it does not endanger health, lives and development opportunities.

Unlike in previous years, when pollution of the environment wasn’t a major topic, data on air pollution is today viewed almost as often as the weather forecast. Has this growing interest among citizens, and the fact that a large number of people die as a consequence of air pollution in Serbia, created pressure on public policymakers to address this topic more seriously?

I think the positive answer to this question is unequivocal. Interest among citizens has created pressure and we are now watching how a response to that pressure is arising, slowly and not quite brilliantly. It nonetheless seems to be emerging, in which case it can also be improved upon.

When it comes to citizens who drive used cars that don’t satisfy European standards and those that have solid fuel burners, To what extent, and how, should the state help them to pollute less? Does the state actually do so, and if not why? How does policy in the area of energy prices impact on the kind of message that citizens receive?

The state has begun appearing as a participant in the financing of private investments for improving energy efficiency. Major financial resources are planned for this purpose, in my opinion completely unjustifiably, for subsidies related to vehicles. Over the last three years, significant funds have been channelled through multiple different support schemes to subsidise energy efficiency in private houses and residential buildings. For now, not one of these schemes has “hit the mark” among those who have the most inefficient appliances, given that the co-financing required to participate in these programmes simply isn’t available to almost a million households. In the city of Užice and the municipality of Priboj, decision-makers were more attentive and allocated a smaller part of the available funds for 100% subsidies for better heating devices for the poorest residents.

The link between energy efficiency, the state of the environment, finance and politics is essential and crucial. We hope that this will finally be recognised in an appropriate way

That is an example that should be followed. It is necessary to urgently allocate significantly greater funds for 100% subsidies for the improvement of energy efficiency for the most vulnerable. This intervention must be very well devised, as it isn’t easy to help the poorest with the money of poor taxpayers. That chain of assistance can break quickly under the weight of ignorance. It is particularly problematic when the money of taxpayers helps those who aren’t the poorest.

As for the policy in the area of energy prices, suffice to say that the Energy Agency announced to the citizens of the Republic of Serbia, in October 2021 and October 2022, that heating with natural gas is the cheapest in our country, in the midst of the energy crisis and the war in Ukraine. That’s abnormal and I’m not capable of finding another word that’s good enough to describe the message sent by such a pricing policy.

This year was the first time that we had a serious encounter with Serbian prosumers. How many of them could there be if the state had an appropriate incentive policy? There could be very many of them. The state has really done a lot in this area in the previous period, but it missed out on communicating in an appropriate way and received a worse solar image than it deserves. Increasing electricity prices will be incentive enough. It is essential to make it impossible to use non-existent obstacles on the network management side as an excuse and to eliminate the obstacles that really exist. And for us to learn to calmly differentiate between them.

Lastly, to what extent is Serbia able and capable of taking advantage of the fact that the European Union has shifted the deadline for achieving the goals of the green deal from 2045 to 2030 and included Western Balkan countries in its support measures?

We, at the RES Foundation, have just completed our analysis of the assistance in this area that the EU has been providing to the Western Balkans since 2014, and we noted that huge room exists to improve the directing of this assistance among all stakeholders. In order for Serbia to utilise this postponing of deadlines and support, it must first have the desire to do so. It is possible to utilise this relationship in such a way that the Republic of Serbia improves the sustainability of its energy sources significantly, and without losing supply security and maintaining the reasonable availability of energy. The preconditions for us to reach that are much better management and a lot of knowledge.

INCENTIVES

It is necessary to allocate significantly greater funds for subsidies to improve energy efficiency for the most vulnerable. This step must be very well devised in order to yield good results

PRESSURE

Interest in air pollution levels among citizens has created pressure on public policymakers and we are now watching how a response to that pressure is arising, slowly and not quite brilliantly

FAILURES

It isn’t easy to help the poorest with the money of poor taxpayers, but it’s particularly problematic when the money of taxpayers helps those who aren’t the poorest