Liebensteiner M, Kimani A (2026)
Publication Type: Journal article
Publication year: 2026
Book Volume: 241
Pages Range: 107397
Article Number: 107397
DOI: 10.1016/j.jebo.2025.107397
The gas price explosion during the 2021/22 European energy crisis prompted a shift from gas- to coal-fired electricity production. Empirical evidence on the environmental and health consequences of such a fuel-price shock – as opposed to policy reforms – is scarce. We fill this gap by quantifying how gas price surges reorder coal-gas marginal costs and, in turn, affect emissions and health outcomes. Using daily data (2015–2023) for six EU countries with substantial gas-to-coal switching potential, we estimate a control-function model (2SRI) to obtain causal effects of days on which gas is more expensive than coal. During the 510 days of the 2021/22 gas price surge when coal was cheaper, coal-fired generation rose by 23 %, driving a 10 % increase in CO2, 19 % in PM2.5, 10 % in NOx, and 24 % in SO2. We also report illustrative health implications by mapping our primary results to standard literature-based damage factors; the resulting figures are not observed health outcomes but order-of-magnitude indicators. All figures are computed relative to a model-based counterfactual in which gas remained the cheaper option and represent short-term effects that disregard longer-term structural adjustments. The results highlight the substantial welfare costs of fuel price shock-induced switching and inform the design of policies that internalize these externalities. We also discuss how these results should be interpreted within the EU ETS and the resulting “waterbed effect”.
APA:
Liebensteiner, M., & Kimani, A. (2026). Environmental and health costs of Europe’s shift from gas to coal amidst the energy crisis. Journal of Economic Behavior & Organization, 241, 107397. https://doi.org/10.1016/j.jebo.2025.107397
MLA:
Liebensteiner, Mario, and Alex Kimani. "Environmental and health costs of Europe’s shift from gas to coal amidst the energy crisis." Journal of Economic Behavior & Organization 241 (2026): 107397.
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