In Europe we have heard the warnings about climate change. We know that if our industrial, energy, transportation and food systems do not change, we are in danger of a catastrophic increase in temperature of more than 3 ° C this century.
Towards the end of 2020 (the warmest year on record in Europe) in the European Union, we made the collective decision to achieve by 2030 a reduction in our greenhouse gas (GHG) emissions of at least 55% compared to the 1990 levels. Now the European Commission is putting this commitment into practice with concrete policies, and the European Investment Bank has put its financial power at the service of the initiative.
This decade is a watershed moment for the planet. To face the immediate challenges that await us, the two organizations we represent are calling on governments, international institutions and investors to participate in a historic event that will take place on March 24, 2021: “Investing in climate action” .
The event will bring together world leaders who will share their plans for the implementation of the necessary policies at the national level and for international coordination. And it will seek to help investors and business leaders better understand the policy environment in which they will operate for at least the next 10 years.
Climate action demands broad structural changes and huge levels of investment around the world. In Europe alone, meeting the new emissions reduction target set for 2030 will require an additional annual investment of the order of € 350 billion ($ 417 billion). But this figure is nothing compared to the costs of inaction.
To make it possible to meet this investment demand, the EIB (the world’s largest multilateral lender) will assume the role of “EU climate bank” and will align all its activities with the objectives stipulated in the Paris Agreement. Among other things, the EIB has committed to supporting € 1 trillion investments in climate action and environmental sustainability over the next decade.
But financing alone is not enough. We also need a roadmap, and that is why the European Commission introduced the European Green Deal in December 2019, a new European growth strategy that seeks to guide a transition to a more competitive economy with better use of resources to transform the economy. EU in a more just and prosperous society. Ultimately, the goal is to reach a net zero GHG emission in 2050.
But as the EU accounts for less than 10% of global emissions, Europe’s actions alone will not be enough to curb global warming. To ensure that the global increase in temperatures does not move away from 1.5 ° C, we have to support decarbonisation efforts beyond our borders. That is why we need a global green deal.
To this end, we have set ourselves three investment priorities. First of all, we have to ensure universal adoption of the most advanced clean technologies. Despite the progress made in the use of renewable energy sources, 40% of the electricity the world consumes is still generated with coal, the most polluting energy source. Economic development brings with it a greater demand for electricity and, therefore, the responsibility to adopt eco-technological solutions and decarbonise power generation.
Europe is now ready to invest in a wide variety of projects, including green electrification programs in Africa, industrial decarbonization in Asia, implementation of battery systems in Latin America, and so on. And we have experience to share when it comes to climate adaptation, as well as flood control technologies, advanced weather forecasting tools and resilient infrastructure. The EIB has the financial means and knowledge to support climate adaptation initiatives, and will use its resources to facilitate the best use of private investment in this critical issue.
Our second priority is to maximize investment in advanced green technologies. A research and development process in the area is not only necessary, but it is also a huge opportunity to open markets. Several countries that account for half of the world’s GHG emissions have already adopted net zero emission targets, and others will surely follow suit. To meet their goals, they will all need European investments and technologies. Clean hydrogen, offshore renewable energy generation and the field of energy storage can become great opportunities for European exports.
Finally, we have to adopt the idea of “circular economy”. Today we extract more from the planet than it can give us, and the effects of this excess will become more and more evident and destructive with each passing year. It is urgent to reduce the environmental and carbon footprint of the goods we consume.
To do this, we have to invest in circular technologies that allow the reuse of resources, instead of producing or importing new goods all the time and extracting more and more raw materials. The circular economy has enormous potential not only to reduce dependency on scarce resources, but also to create jobs. Europe is living proof that the green deal is not just an environmental policy, but also an economic and geopolitical necessity.
Five years ago, 196 countries joined in the signing of the Paris Agreement, by which they pledged to keep the average increase in global temperatures below 2 ° C (or better yet, 1.5 ° C) compared to the pre-industrial levels. That commitment has not yet been translated into sufficient action. It’s time to set bigger goals and accelerate progress. That is the message we will convey to the world on March 24 at the Invest in Climate Action event.
We all have to come together (not just governments but also companies, cities, financial institutions and civil society) to tackle the climate challenge. Europe has the tools, skills and knowledge to lead by example. We have to turn our environmental leadership into market leadership and realize a global green deal.
Let’s get to work right now.
Ursula von der Leyen She is the President of the European Commission. Werner Hoyer he is the president of the European Investment Bank.
Copyright: Project Syndicate, 2021. www.project-syndicate.org
Eddie is an Australian news reporter with over 9 years in the industry and has published on Forbes and tech crunch.