The Czech economy is very carbon-intensive and has among the highest greenhouse gas emissions per unit of GDP in the OECD. Getting on the path towards net zero will require rapid emission reductions over the coming decades. Coal still makes up close to one third of the energy supply and the government has pledged to phase it out by 2033, which will require a swift expansion in the use of renewable energy sources as well as increased energy efficiency. This can be achieved by adopting a comprehensive policy package that includes widely applied carbon pricing, incentives to raise energy efficiency, spending on renewable energy and cutting red tape hindering green investments. Compensating policies and adjustment support will be essential to mitigate the socio-economic impacts of climate policies and to increase public support. Active labour market policies including higher spending on re-training for the unemployed is key to facilitate the green transition.
