Greece 193
efficiency- oriented policy framework aimed at promoting this pathway. This
focus can, to a large extent, be attributed to the sum of legislative mistakes made
when designing the financial support mechanisms of the past. This refers to the
pace of renewable energy penetration into the power generation mix, causing an
equally high pressure of liquidity demands for compensating producers, based on
the design of the FIT mechanism. Coupled with delays in relevant payments,
these liquidity gaps created a large deficit in the Renewable Energy Sources
Fund. Further legislative advances in an effort to reduce the deficit mostly
revolved around tariff cuts and heavy taxation (Dusonchet and Telaretti, 2015),
and eventually managed to freeze licensing applications and connection requests
at the cost of solar power development and of public trust in the policy
framework.
This case is an illustrative example of the life cycle of a barrier and the interplay between its implementation and consequential nature. Poor policy designs
of the past, after giving rise to a large deficit in the renewables fund that in turn
led to an ever- changing policy framework, eventually developed mistrust of the
government for its ability to vote and retract policies and mechanisms. This is
now largely considered as a significant implementation risk to any relevant
action in the future. At the same time, the knowledge of such a consequential
risk among policymakers and relevant stakeholder groups creates cognitive barriers to introducing mechanisms that can potentially allow such a risk to manifest. In other words, the perception and consideration of the consequential risk
of developing a deficit in a support fund may also act as an implementation risk,
hindering the design of appropriate support mechanisms.
Another risk that evidently concerns the stakeholders is potential implications for poverty as a by- product of climate and energy efficiency actions.
Although an adverse economic environment is considered one of the main
exogenous barriers to realising a low- carbon transition, stakeholders are largely
worried about the possibility of such a transition further impoverishing Greek
households. For example, according to an expert coming from the private- sector
energy industry, well- funded yet poorly designed infrastructure and building renovation projects may lead to widening inequalities – the opposite result to that
intended. Funding programmes and financial support must be strictly prioritised
and planned in the long term in order for the transition to boost the economy,
instead of aggravating the existing crisis. Furthermore, a stakeholder working in
the banking sector acknowledged that, so far, financial incentives aimed at the
residential sector primarily targeted lower- income households. These enabled
them to apply for loans at a low interest rate, yet the loans became hard to pay
in a time of recession. A similar approach may overburden the middle class and
further impoverish the working class.
Finally, two consequential risks arose during the discussions on employment
and investments. Some stakeholders mentioned the possibility of a low- carbon
transition having negative implications for employment, especially with regard to
the energy transformations brought about by further development of the solar
power sector, e.g. in the fossil- fuel extraction and transformation sector. The
efficiency- oriented policy framework aimed at promoting this pathway. This
focus can, to a large extent, be attributed to the sum of legislative mistakes made
when designing the financial support mechanisms of the past. This refers to the
pace of renewable energy penetration into the power generation mix, causing an
equally high pressure of liquidity demands for compensating producers, based on
the design of the FIT mechanism. Coupled with delays in relevant payments,
these liquidity gaps created a large deficit in the Renewable Energy Sources
Fund. Further legislative advances in an effort to reduce the deficit mostly
revolved around tariff cuts and heavy taxation (Dusonchet and Telaretti, 2015),
and eventually managed to freeze licensing applications and connection requests
at the cost of solar power development and of public trust in the policy
framework.
This case is an illustrative example of the life cycle of a barrier and the interplay between its implementation and consequential nature. Poor policy designs
of the past, after giving rise to a large deficit in the renewables fund that in turn
led to an ever- changing policy framework, eventually developed mistrust of the
government for its ability to vote and retract policies and mechanisms. This is
now largely considered as a significant implementation risk to any relevant
action in the future. At the same time, the knowledge of such a consequential
risk among policymakers and relevant stakeholder groups creates cognitive barriers to introducing mechanisms that can potentially allow such a risk to manifest. In other words, the perception and consideration of the consequential risk
of developing a deficit in a support fund may also act as an implementation risk,
hindering the design of appropriate support mechanisms.
Another risk that evidently concerns the stakeholders is potential implications for poverty as a by- product of climate and energy efficiency actions.
Although an adverse economic environment is considered one of the main
exogenous barriers to realising a low- carbon transition, stakeholders are largely
worried about the possibility of such a transition further impoverishing Greek
households. For example, according to an expert coming from the private- sector
energy industry, well- funded yet poorly designed infrastructure and building renovation projects may lead to widening inequalities – the opposite result to that
intended. Funding programmes and financial support must be strictly prioritised
and planned in the long term in order for the transition to boost the economy,
instead of aggravating the existing crisis. Furthermore, a stakeholder working in
the banking sector acknowledged that, so far, financial incentives aimed at the
residential sector primarily targeted lower- income households. These enabled
them to apply for loans at a low interest rate, yet the loans became hard to pay
in a time of recession. A similar approach may overburden the middle class and
further impoverish the working class.
Finally, two consequential risks arose during the discussions on employment
and investments. Some stakeholders mentioned the possibility of a low- carbon
transition having negative implications for employment, especially with regard to
the energy transformations brought about by further development of the solar
power sector, e.g. in the fossil- fuel extraction and transformation sector. The