Networking for Energy Efficiency Experiences of the Polish Network "Energie - Cities"

Panel: Panel 1: Policy (incentives, normative measures, policy mixes to achive CO_2 reduction)

Authors:
Adam Gula, PNEC, Poland
Maria Stankiewicz, PNEC, Poland

Abstract

As was the case with all former communist countries, the Polish economy of the four post war decades was characterised by a wasteful use of energy.

Emphasis on the development of energy-intensive industries led to an accellerrated depletion of domestic energy resources, high atmospheric and water pollution, and, last but not least, put a severe strain on the Polish economy as a whole.

In 1989, Poland was the first country in the former Soviet blok to embark on radical political and economic reforms. The economy was in shambles and the first post-communist government had a difficult task curbing rampant inflation, strengthening domestic currency, introducing anti-monopoly controls, and eliminating the most drastic price distortions, especially those of energy. The implementation of the programme brought a substantial initial success: inflation was reduced, the budget was balanced and real interest rates became positive. At the same time, the price Poland had to pay for this success was a GDP decline by 12% in 1990, unemployment, an unknown phenomenon during the previous 45 years and a drastic decrease in real incomes (by 20-30%), to which a sharp increase of energy prices contributed dominantly. Polish people were ready to agree to this painful transformation, which was possible due to the popular support of new political forces derived from the „Solidarity” opposition movement. This patience seems to have paid off. Now the Polish economy, after having recovered from the recession, is growing at ca. 5% per year and inflation has been reduced to 7% or less, as anticipated in 1999. Those trends have a firm basis which is rooted in the well developed and still growing private sector and in the well established democracy, expressed in the increased independence and decision-making role of the democratically elected local authorities.