The energy transition is widely recognized as both essential and costly, which is understandable given the significant upfront capital investments it requires. However, framing the discussion primarily around affordability risks overshadowing its importance by placing it in competition with other national priorities, such as boosting economic competitiveness or increasing defense spending.
This paper aims to challenge the common perception that, while the energy transition may be "good for the world," it is inherently expensive or even unaffordable. The analysis draws on data from the Dutch energy production costs modeled by the 'Energietransitie Integraal Kostenbeeld' (EIK) program, comparing the current policy trajectory with two net-zero scenarios. Additionally, the study incorporates carefully monetized external benefits, including improvements in health, security, climate outcomes, and macroeconomic effects.
When these external benefits are accounted for, the financial case for the energy transition changes dramatically. Net-zero scenarios deliver greater economic value compared to the current energy system once these broader impacts are included. Over the transition period (2026–2050), the energy transition effectively pays for itself. Beyond 2050, the accumulated benefits further strengthen the case for transitioning to a sustainable energy system.
That said, the energy transition is not "free" for everyone. It requires thousands of stakeholders—households, businesses, investors, network operators, and public institutions—to make investment decisions that align with the transition's goals. Policymakers must ensure that these stakeholders are incentivized appropriately to act. Addressing this challenge is complex, but it becomes more manageable when people understand that the energy transition offers tangible financial and societal benefits.
You can download the paper here.