Europe has long been a global climate leader – the first major economy to commit to net-zero and a driver of clean-technology innovation and standards. Yet, today that leadership is being tested. China’s dominance in cleantech manufacturing, supply chains, and deployment and the U.S. Inflation Reduction Act have reshaped global markets, exposing the scale of Europe’s challenge in matching fiscal firepower and policy coordination. 

At home, a new consensus is forming: Europe’s climate, competitiveness and security goals must advance together. An ambitious cleantech agenda is now essential – not only for decarbonisation, but to sustain Europe’s competitiveness, industrial strength, strategic autonomy and economic resilience. 

Achieving this requires focus. With limited fiscal capacity and a fragmented policy landscape, the EU needs to prioritise and channel its resources where they deliver the greatest leverage. Climate innovation “Made in Europe” matters not only for Europe, but for global decarbonisation: with its market size and regulatory reach, Europe is uniquely positioned to drive climate innovation, set standards, drive costs down, and diffuse clean technologies worldwide. As a leader in climate innovation, scale-up and deployment, the EU can accelerate global transitions while renewing its own industrial leadership. 

Objectives and partners

In this project, I4CE works to help the EU sharpen and strengthen its clean industrial policy. The project produces research to position Europe as a leader in climate innovation and to encourage policies that reinforce strategic cleantech manufacturing. It aims to equip policymakers with evidence needed to make informed industrial policy choices and challenge entrenched approaches. This work is carried out through both original I4CE research and through collaboration with other think tanks, NGOs and cleantech industry associations – particularly in I4CE‘s role as co-chair of the Innovation Hub, a coalition dedicated to strengthening Europe’s role as climate innovator.  

This project is funded by 

L’article EU Cleantech Industrial Policy est apparu en premier sur I4CE.

L’article Finance ClimAct est apparu en premier sur I4CE.

Even if the impacts of climate change are already experienced, the investment of human and financial resources in anticipating its consequences is still too rarely made. The habits and practices inherited from a climate considered to be stable and controlled are not questioned, even on the critical scale of local planning.

In particular, there is a lack of common understanding between funders, companies and local authorities in a position to propose and implement adaptation actions on what it means to contribute to adaptation. Many technological or organizational solutions already exist as proofs of concept. However, those who implement them have difficulties in demonstrating their added value proposition. For their part, funders find it difficult to identify ways to engage in adaptation aligned with their mandates.

Objectives :

The FINADAPTER project aims at better understanding this lack of incentives – both on the demand and supply sides of adaptation projects – in order to unlock adaptation at the subnational level.

Central to the project is the assumption that Public financial institutions (PFIs) can play a crucial role in adaptation. Those institutions assume a mission of general interest, have a mandate that allow them to think long term. They can often draw on resources, which allow them to bear a greater share of risk. The actions they finance can significantly shape the capacity of the territories in which they intervene to deal with the consequences of climate change. These institutions have financial intervention capacities but also expertise and influence capacities to offer. Through their action, they can be a driving force behind the emergence of  adaptation projects and investment opportunities.

FINADAPTER is aimed both at the public financial institutions themselves and at those who give them a mandate and their counterparts (companies and local authorities but also potential co-financers).

The final objectives are to achieve:

• A better shared, interoperable and operationalizable understanding of what to invest in to contribute to the adaptation;
• A description and a solid analysis of the structural and institutional barriers to the emergence of a pipe of adaptation projects – beyond one-shot experiences;
• Recommendations on potential evolutions in the role of PFIs to better take adaptation objectives into account.

Partners :

Project conducted in partnership with TEC part of Rambol and with the support of ADEME in the framework of the Call for projects ClimFi: Finance and Climate.

Period :

Fall 2019-Spring 2021

L’article FINADAPTER: Financing resilience at local scale est apparu en premier sur I4CE.

The French recovery plan and its consequences for the climate have been the subject of much debate. It should allow France to catch up on some of its investments in sustainable mobility, building renovation and decarbonated energy production. For I4CE, it is necessary to anticipate what will follow the end of the French recovery plan in 2022, and its associated European funding, to prepare a post-recovery plan. The need for public climate financing will not have disappeared by then. Today’s political decision makers therefore have a responsibility to anticipate the post-recession period. There is a need to develop a Public Finance Climate Strategy to ensure that France has the budgetary and fiscal means to achieve its ambition against climate change. As for future presidential candidates, they can and should already ask themselves: What will my first climate budget be? 

Throughout 2021 and until the presidential election, I4CE will publish a series of studies, called ‘Your Budget for the Climate’, to provide insights and data to (future) candidates.

All the publications from the collection can be found on this page, as well as older but still relevant studies on the financing of the transition: 

• What will be your climate budget be? In this article, Benoît Leguet, Director of I4CE, explains why we need to anticipate the post-recovery plan and prepare for the post-2022 period. He also provides significant commentary on the State’s current budget relating to climate and its needs for the future. Only available in French

• Climate: a look back at 10 years of government spending. Climate-friendly spending has doubled over the past 10 years, from 15 billion euros to 30 billion euros per year and is divided between three key sectors: building renovation, mobility and low-carbon energy production. To learn more about this spending, the financing instruments used, the reforms of recent years and the challenges for tomorrow, I4CE invites you to dive into the figures and analyses of its latest report.

• Financing climate action: Having a clear idea of the investments needed for the climate is good. Knowing who is going to finance what, what is going to be paid by households, companies, local authorities or the State, is better. In this study published in 2020, I4CE proposes a financing plan for the fight against climate change, backed by a series of non-financial measures. This plan will require an additional ten billion euros of public funds each year, double that after 2022. Do you not agree with this plan? You will find many elements that you can use.

• The budgetary challenges of adaptation: Financing the fight against climate change also means financing the adaptation of our economy and our territories. In this study, I4CE looks back at the 28 billion euros that the State officially invests each year in adaptation, and identifies several budgetary challenges, starting with preserving the capacity for action of the main public operators.

• Landscape of climate finance: In this latest edition of the Landscape, you will find updated I4CE data on investments made in France. These include building renovation, decarbonised energy production and low-carbon mobility, as well as data on investments relating to ‘fossil’.  Above all, you will have access to the latest I4CE assessments on the investment gap required to reach the objectives that France has set. 

L’article What will your climate budget be? est apparu en premier sur I4CE.

Context :

The transition to a low-carbon economy requires an unprecedented redirection of financial flows towards sustainable investments. The project aims to promote a strategic vision of the investment and a finance challenge raised by climate action. Its activities will focus on Poland and will be supported by experiences from Germany and France.

The main objective is to support the exchange of experiences between policymakers, experts, business community and civil society to improve assessment and design of domestic climate finance investment environments as well as to raise the awareness regarding the financial tools available to achieve climate policy objectives and foster the transition towards the low-emission economy. Promotion of best practices in assessment of current investment levels and supporting an increase in sustainable financial flows will be linked with an exploration of the potential of forward-looking analysis and production of investment plans as a part of national climate strategies.

Project Webpage

Project timeline:

• October 2018 – first workshop for the Polish stakeholders in Warsaw
• February 2019 – policy paper on the role of tracking climate finance in low-emission transition
• March 2019 – methodological seminar in Berlin
• June 2019 – second workshop for the Polish stakeholders in Warsaw
• November 2019 – webinar on different funding models for the energy transition
• December 2019 – policy paper on the next steps for implementing the climate finance landscape approach in Poland
• December 2019 – webinar on the progress of climate investment in in the CEE countries
• June 2020 – Webinar: Climate finance tracking and the design of recovery packages: from global practice to the Polish context
• July 2020 – RES investments in Poland reach record high in 2019 – WiseEuropa report
• December 2020 : Mainstreaming Climate Finance Discussions – notes from webinars and recommendations

For more information on the EUKI: www.euki.de

Period :

2018-2020

Partners:

• I4CE
• Wise Europa
• NewClimate Institute

Funder :

L’article Landscape of Climate Finance: Promoting debate on climate finance flows in Central Europe est apparu en premier sur I4CE.

The financing of the transition to a low-carbon economy will require require a broad range of financial actors and the use of a variety of financial instruments. I4CE is working to better understand how different financial institutions and instruments are currently supporting these financial flows and investments, as well as looking at how this can be scaled up moving forward.

Our work to date has focused on public financial institutions have an important role to play at national level in financing a transition to a low-carbon economy. Often key players in low-carbon infrastructure projects, these institutions can facilitate the involvement of private players in the financing of sustainable transport, energy efficiency and renewable energy projects.  Actions has been concentrated in three principal areas: the use of traditional and innovative approaches to link low-carbon projects with finance through enhancing access to capital; facilitating risk reduction and sharing; improving the capacity of market actors; and shaping broader market practices and conditions.

I4CE is also exploring the role of different financial instruments and their contribution to a low-carbon, resilient economy. This work looks at two principal areas: how to can individual instruments scale up and support increased end climate-consistent investment. Secondly, how can the environmental integrity of these instruments be ensured. To date, the principal areas of focus are green bonds and green credit lines.

Partners: 

OCDE; AFD; CDC; BID

Period :

Since 2012

L’article Financial Institutions, instruments and the transition to a low-carbon, resilient economy est apparu en premier sur I4CE.

A new framework for climate and energy policies is being built for the period 2021-2030, and comes with major stakes:

• The alignment of climate and energy policies on long term ambition
• The interactions between emissions reduction targets, renewable energy targets and energy efficiency targets
• The articulation between the EU ETS and other policy instruments
• The conciliation between climate ambition on one side and economic, social and political acceptance on the other

In an effort to help prepare stakeholders for the implementation of the 2030 climate and energy framework, we are inviting public and private decision makers to explore these issues together in the COPEC program.

Following the success of the first “COordination of EU Policies on Energy and CO2 with the EU ETS by 2030” (COPEC I) research program which ended with the publication of the report “Exploring the revision of the EU ETS by 2030” in November 2015, I4CE and Enerdata, in partnership with IFPEN, are launching COPEC II in 2017-2018 with the aim of analyzing the success criteria of the EU ETS reform in articulation with the other pieces of the climate and energy package.

The COPEC II research program consist of:

• A kick-off meeting to define scenarios and methodologies

• Four thematic workshops (from April to November 2017) which will explore the following issues:

• 1. Measures to deal with carbon leakages concerns in the EU ETS
  2. The EU ETS reform to reflect long-term ambition and establish a carbon price signal
  3. Interactions between the EU ETS and EE policies taking into account the Effort Sharing Regulation (ESR)
  4. Interactions between the EU ETS and RES policies

• A report on the EU ETS delivered to partners and sponsors in September 2017. Find the policy brief published on 13th September 2017.

• A report on interactions delivered to partners and sponsors in January, 2018

• Events to promote results of the program and contribute to the European and international debate

L’article COPEC II: what role for the EU ETS in the EU 2030 Climate and Energy package? est apparu en premier sur I4CE.

Three steps to understand the implications of the EU ETS reform on free allocation

I4CE has built a simulation tool to estimate the EU ETS free allocation in Phase IV (2021-2030) according to different parameters discussed in the current trilogue negotiations between the EU Parliament, the EU Council and the EU Commission. Trilogue negotiations started in April 2017 and a compromise was reached on November 9th 2017.

In the debates on the post-2020 EU ETS reform, the issue of carbon leakage and of the competitiveness of EU industries has been calling particular attention.

Free allocation in the EU ETS: positions in the trilogue differ on some elements

The current approach of freely allocating allowances to industrial sectors deemed to be exposed to carbon leakage will go on, and along with the emissions cap, the free allocation cap will decrease.

In this context, industries are worried that a cross-sectoral correction factor (CSCF) might need to be triggered, to adjust the total free allocation to the free allocation cap. Such a factor would reduce uniformly free allocation in all sectors, a concern for those most exposed to carbon leakage.

Will a cross-sectoral correction factor (CSCF) be necessary in Phase IV?

A number of parameters influence either the free allocation cap or the calculation of the bottom-up preliminary free allocation and thus determine whether a CSCF will be necessary. In particular:

• The free allocation cap depends on the total EU ETS cap, which decreases annually by a rate fixed by the linear reduction factor (LRF).
• In Phase IV, the share of free allowances will be a fixed proportion of the total amount of allowances. In the negotiations, the possibility to increase this share up to a given percentage to avoid triggering the CSCF is being debated.
• Phase IV will be divided in two sub-periods for the calculation of free allocation: 2021-2025 and 2026-2030. Preliminary free allocation at the level of an installation under the EU ETS will be calculated as the product of activity levels (depending on growth rates in the industry) in the relevant years for each sub-period (2013-2017 for the first sub-period and 2018-2022 for the second sub-period) multiplied by the applicable benchmarks.
• Benchmark values for each sector and sub-sector are reference values of carbon intensity (either by product, or for heat production or fuel consumption), and correspond to the average carbon intensity of the 10% most efficient installations. Benchmark values were established based on 2007-2008 data and will be decreased by an annual rate in Phase IV to reflect the improved carbon intensity of the different products.
• Installations in sectors which are not deemed to be exposed to carbon leakage will only receive a proportion of this benchmark-based allocation.

Find here a table summarizing the positions of the EU Commission, the EU Parliament and the EU Council, as well as the compromise deal achieved in trilogue negotiations on parameters which will have an influence on free allocation.

Find here a graph with our projections for free allocation in Phase IV of the EU ETS according to the compromise reached on November 9th.

STEP 1 | Estimate the amount of free allocation and identify the impact of a selection of parameters by moving the slider below to change their value:

[i4ce_simulator]

* Other parameters have an influence on free allocation, such as the amount of allowances from the free allocation share which will be used to supply some funds/reserves (innovation fund, new entrant reserve, a fund to compensate for indirect costs…). In this simulation, it is assumed that in total 400 million allowances are taken from the free allocation budget. The eligibility criterion to carbon leakage list also has a great importance. Here, the default value of 0.2 for the product of trade intensity by carbon intensity is used. Besides, the Parliament’s position is to only apply the CSCF to least-exposed sectors. In this simulation, the CSCF applies indifferently to all sectors.

If you have any comment or question on this simulation tool, please do not hesitate to contact us. 

Find more information on free allocation in Phase IV of the EU ETS in COPEC I (2015) and COPEC II (2017) projects, and look out for the I4CE publication on the EU ETS reform!

L’article Free allocation for industry in the EU ETS by 2030 : a simulation tool est apparu en premier sur I4CE.

The European project 3fP “Finance fit for Paris” is developed jointly by the Frankfurt School – UNEP Collaborating Centre for Climate & Sustainable Energy Finance (FS-UNEP Centre) and WWF Germany, supported by the European Climate Foundation. This project aims to analyse the compatibility between the regulatory frameworks of financial actors and the Paris Agreement. The analysis focuses on three dimensions: transparency and reporting; supervision and financial stability; and the enabling environment for the development of green finance.

For France, the evaluation is co-executed by I4CE and the FS-UNEP Centre. The 3fP-Tracker site (www.3fp-tracker.com) currently includes assessments for the regulatory frameworks of the EU, France, the Netherlands and Germany. Spain and Italy will be the next countries to be analysed.

These assessments will be updated annually to take into account changes in the various regulations and practices of the financial markets.

L’article 3fP “finance fit for Paris” est apparu en premier sur I4CE.

The Climathon is a global initiative launched by Climate KIC, in which more than 110 cities on 6 continents will participate. It is a challenge initiated by regions engaged in climate action.

75% of EU citizens live in urban areas, and 70% of greenhouse gas emissions that are responsible for climate change derive from cities. No doubt remains regarding the reality of the climate emergency, a fact confirmed by the 8th October IPCC Report on the consequences of a 1.5°C rise in global temperatures.

While the 2015 Paris Agreement represents one of the most important milestones in recent years in terms of global awareness, it is no longer only a matter of taking action at the governmental level, but also at the local scale and closer to the everyday lives of citizens.

Climathons are organized in this spirit, to challenge collective thinking on environmental issues. But also to foster the emergence of innovations designed to address the specific climate challenges faced by communities; and thus improve the lives of inhabitants while promoting more efficient and virtuous urban policies.

Each participant city defines a specific issue according to its local challenges. Experts, entrepreneurs, elected officials and citizens will work together on these issues to co-create new climate change adaptation strategies. In the same vein as a hackathon, participants will be divided into teams to think through, create and present their projects to a local jury.

Consult the Climathon archives

L’article Climathon est apparu en premier sur I4CE.