Reframing energy savings: economic viability of demand

Extended abstract 3-287-26

Low-demand scenarios based on ambitious energy savings through sufficiency and efficiency are shown to enhance energy security, resilience to supply shocks, and affordability for households. Yet despite their strategic advantages in the current geopolitical context, they face persistent opposition. Energy savings are often framed as economically regressive and politically risky—sufficiency especially remains controversial, while even efficiency targets are attacked as "caps on growth." As the EU develops its post-2030 Energy Union and implements the 2040 climate target, challenging this narrative is critical.

This paper presents original macroeconomic analysis comparing the impacts of a low demand pathway for the EU (based on the CLEVER scenario) against a continuation of current trends. Using the ThreeME-EU27 macroeconometric CGE model—a neo-Keynesian framework integrating top-down and bottom-up energy-economy dynamics—we assess GDP, employment, trade balance, household income, investments and system costs. The paper discusses methodological advances in capturing sufficiency assumptions within macroeconomic modelling.

Results challenge prevailing assumptions: slightly slower consumption of households and investments are offset by improved trade balance and reduced energy system costs; GDP continues growing under the low-demand scenario, albeit marginally slower than baseline, and CO₂ emissions fall sharply. These findings suggest that reorienting policy from supply expansion toward demand-side solutions, while reinforcing sovereignty and climate goals, is economically viable.

As EU institutions enter a new policy cycle, this research demonstrates how energy savings—including sufficiency measures—can foster a positive economic pathway, strengthening their role as central pillars of the 2040 agenda.

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