EU election time: climate policy and finance challenges under scrutiny
This weekend, citizens across the EU head to the polls. Many expect a swing to the right, in stark contrast to the “green wave” of 2019. In Brussels, leaders are looking ahead to a five-year mandate dominated by questions of security and competitiveness. In these turbulent times, what is the future of Europe’s flagship climate package, the Green Deal? The Green Deal and the Fit for 55 package gave us the regulatory framework – but implementation requires investment. I4CE‘s flagship EU Climate Investment Deficit report shows that climate spending must double to make the 2030 target achievable.
However, investing in Europe’s decarbonisation should be seen as a cornerstone to achieving competitiveness and security. The EU’s competitiveness in part depends on developing a robust cleantech manufacturing base, and better use should be made of the tools the EU already has, as we explore in this report on the Innovation Fund. Furthermore, Europe’s long-term security demands a defence against military threats, but also the impacts of climate change. I4CE’s work on how best to finance adaptation, as well as on how to better integrate prudential transition plans into financial regulation to ensure the financing of an orderly transition at EU level sets the tone for policymakers in this next mandate.
Finally, to ensure an equitable transition, Member States will need to support the poorest as they retrofit housing and transition away from combustion engines. I4CE‘s research in the French context demonstrates the scale of the challenge, which will only be greater in countries facing higher rates of energy poverty. We are about to embark on a new five-year mandate – and one where the European Union stands at a critical juncture. Ensuring European security, competitiveness and decarbonisation requires public action, at the EU-level and by Member States. I4CE, through its analysis across sectors and geographies, is ready to support policymakers in facing these challenges, and regaining the trust of voters who are increasingly disillusioned. To do so however, requires a Europe that is willing to act – a Europe that invests.
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A Europe that acts and invests – what does it take ? See our latest reports on the EU policy agenda for financing a just climate transition, with assessments of the state of play across the main policy areas and recommendations for the EU next mandate.
Europe’s 406Bn euros climate investments deficit
I4CE‘s first European Climate Investment Deficit report analyses investments in 22 sectors of the EU27 economy that are critical for the EU to deliver its 2030 climate and energy security objectives. Climate investments in the EU grew by 9% in 2022, reaching €407Bn in those 22 sectors, contributing to reducing GHG emissions in the years to come. Still, investments must double for the EU to hit its 2030 climate targets. This report provides granular and transparent evidence to support informed decisions by EU citizens and policymakers, before and after the 9 June 2024 EU elections.
From denial to acceptance: Europe next step in the cleantech race
The EU Innovation Fund is Europe’s largest fund for climate innovation. It has a key role to play in European climate action, energy security, technological leadership and competitiveness. To unleash the full potential of European cleantech, greater public support is needed to help more companies and projects cross the so-called “valleys of death” that are inherent to cleantech innovation and scale-up. I4CE‘s paper «The sharpest tool in the box» proposes five ways in which the Fund’s impact can be improved to meet European cleantech ambitions.
Failing to plan is planning to fail: Prudential transition plans and European Banking Authority consultation
The recent adoption of the Capital Requirements Directive saw climate change included and a requirement for banks to draw up prudential transition plans under the supervision of European Central Bank. It represents a major opportunity but a lot will depend on the implementation. The European Banking Authority (EBA) is clarifying how the banks should frame these prudential transition plans. In its response to the public consultation, I4CE recommends that the EBA should strengthen the guidelines prudential transition plan.
EU certification framework: the devil is in the details
Following the adoption of the EU’s Carbon Removals Certification Framework (CRCF), there are high hopes for improving and harmonizing carbon measurement to certify projects in a sector where there is a great deal of uncertainty. I4CE works with its European partners in several EU funded projects (INFORMA, CREDIBLE, CLIMATE FARM DEMO) to improve forestry and agriculture monitoring and scale-up funding for climate-positive projects.
Putting social equity at the heart of the transition
Unprecedented inflation rates and a cost-of-living crisis across Europe have challenged climate action in several aspects. Reduced purchasing power, combined with higher costs -particularly for home energy retrofits- and increased financing costs, undermine the ability of households to undertake the investments required for the transition. In this context, to what extent are low carbon solutions accessible to households? Read I4CE’s report on the situation in France, which highlights that all economic players must have the means to take part in the transition.
Adaptation: credible pathways is the next essential step
As the European Union gradually steps up its action in favor of adaptation, I4CE‘s study has provided initial estimates of the costs of adaptation for some of the main economic sectors in France: building, land transport infrastructure and agricultural crop production. Over and above the need for immediate action that we had quantified in 2022, these results open the debate on the major choices of adaptation that still need to be made. Determining the costs of adaptation means first asking: what level of service do we want to maintain at all costs? What are we prepared to transform? What are we prepared to give up?
