Serbia produces the "dirtiest" electricity in Europe: Coal is still the pillar of energy

According to the latest data for 2024, Serbia has overtaken Poland and now produces the "dirtiest" electricity in Europe.

The measure in question is the so-called carbon intensity of energy, ie: how much carbon dioxide a country emits for each kilowatt-hour of electricity produced, writes Dr. Dejan Molnar for the Klima 101 portal.

In the case of Serbia, that figure is around 670 grams of CO₂. By comparison, a large number of countries Of the European Union, from Italy and Germany to Austria and the Netherlands, emit between 100 and 300 g CO₂ for every kilowatt-hour of electricity, while for countries whose energy is based primarily on "clean" sources, such as Norway, Iceland and Albania, that figure is below 30 g CO₂/kWh.

In other words, these countries produce on average more than 20 times cleaner electricity than Serbia.

It is not only an environmental problem, but also an economic one. Due to the strong reliance of our energy industry on coal, Serbia has one of the highest CO₂ emissions per unit of gross domestic product (GDP) in Europe. What economic theory and economic history tell us: can we separate economic growth from our dependence on fossil fuels?

The relationship between economic growth and CO2 emissions exists, but it is not linear

From a historical perspective, fossil fuels have been, and still are to a significant extent, a pillar of economic growth. In this sense, there is an assumption of a strong positive correlation between GDP growth and CO₂ emissions.

Moreover, the issue of the relationship between economic growth and carbon dioxide emissions is becoming one of the key ones in the domain of contemporary economic and global climate policy. Recently, more and more scientific research has been conducted which examines the "interdependence" between economic growth and the level of pollution (measured by the amount of emitted CO₂).

As a co-author, I participated in one such research, in which we analyzed data for EU-15 and CEE-11 countries in the period from 1995 to 2023.

Our goal was to test the hypothesis about the presence of the so-called ecological Kuznets hypothesis, i.e. EKC hypothesis (Ecological Kuznets Curve). Namely, this hypothesis suggests that emissions of harmful gases increase in the early stages of economic development, but that after reaching a certain level of per capita income, economic growth does not necessarily cause more pollution.

On the contrary, the level of emissions in developed countries is beginning to decline, thanks to technological progress, more efficient use of resources and a greater share of renewable energy sources in the energy mix.

The results we reached confirmed that. The long-term relationship between GDP growth and CO₂ emissions exists – but it is not linear. This means that in countries that are economically more advanced, with a more developed institutional framework, a better energy policy and a high level of environmental awareness, GDP growth in more mature development stages is accompanied by a decrease in CO₂ emissions. On the other hand, in less developed countries that mainly relied on fossil fuels, economic growth contributed to greater pollution.

It follows that economic growth is not a problem in itself, but the way in which it is achieved.

Europe has reduced the so-called carbon intensity by 40 percent since the beginning of the 21st century

This insight is reinforced by current global data.

According to data from the World Bank and the International Energy Agency (IEA), global carbon intensity has decreased by more than 30 percent since 2000.

This is the result of the transition to renewable sources, the growth of energy efficiency and the digitization of the service sector. Europe has the lowest carbon intensity in the world: CO₂ emissions per unit of GDP have decreased by more than 40 percent since 2000.

The leaders are the Scandinavian countries, Germany and France, thanks to a high share of renewable sources and nuclear energy, as well as effective decarbonization policies. The US and Canada have seen strong declines in carbon intensity – by more than 35 percent since 2000, but still remain above the European average due to large differences between federal states and sectoral dependence on oil and gas.

China has also seen relative progress: although overall emissions are rising, carbon intensity has fallen by around 25 percent, thanks to huge investments in solar and wind power. However, it is still above the global average, as the economy is still heavily reliant on coal-fired power.

These declines in carbon intensity did not prevent economic growth. For example, the European Union during the period 1990-2018. reduced emissions of harmful gases (mainly CO2) by 23 percent, with a simultaneous GDP growth of as much as 61 percent.

For Serbia, "green growth" is not only a possibility, but also an obligation

Is it time to redefine the measures of economic success?

Instead of "chasing" for high GDP growth rates without considering the environmental consequences, it is necessary to strive for sustainable development. This implies the integration and internalization of ecological criteria in all sectors of the economy, as well as in all economic calculations, that is, insisting on more efficient energy consumption, changes (greening) in the transport, construction, and industry sectors.

Carbon intensity (CO₂ emissions per unit of GDP) is becoming the new measure of progress – it measures not just how much an economy grows, but how it grows. Countries that manage to reduce emissions per unit of GDP open up space for "healthier" growth, better competitiveness and a smaller ecological, i.e. carbon footprint.

When it comes to Serbia, such a separation of economic growth and emissions has not (yet) happened. But it becomes not only possible, but also an obligation.

Namely, the European Union is introducing mechanisms such as the carbon tax, which means that products from countries that do not respect environmental standards will be more expensive on the European market. For Serbia, which aspires to join the EU and has a high dependence on exports, it is a question of the long-term competitiveness of our economy.

In addition, reducing carbon intensity opens up access to European Union funds intended to encourage the green transition (such as the "Green Climate Fund" and the "Instrument for Pre-Accession Assistance - IPA III").

This could enable the co-financing of large infrastructural and energy projects, which would represent a significant fiscal relief and a catalyst for the modernization of the economy.

The key challenge for Serbia is twofold: on the one hand, it is necessary to modernize the energy mix, by switching from coal to renewable sources, while on the other hand, administrative capacities and strategies in the field of environmental protection need to be strengthened. Although some progress has already been made, progress is still slow. Stronger political will is needed, as well as investments in "green" infrastructure, education and inspection supervision.

Reducing carbon intensity must also be our national priority - not only for climate goals, but also for economic survival in an environment where pollution is increasingly taxed. Therefore, Serbia and the Western Balkan region must significantly speed up energy reforms if they want to become part of the "green European system".

Source: Air Conditioning 101