Three years in, the European Green Deal remains unfulfilled as a long-term vision for decarbonising Europe by 2050, says Esmeralda Colombo at EIEE. To inject new momentum, in this week’s speech at the World Economic Forum in Davos, EC President Ursula von der Leyen sketched out a Green Deal Industrial Plan to subsidise the cleantech industry and compete with the rest of the world, notably the US, and the EU Sovereignty Fund to equalise the … [Read more...]
2023 lookahead for Sustainable Finance: EU Taxonomy, ESG ratings, corporate disclosure laws, Europe’s “IRA”
What will be the big issues for sustainable finance in 2023? Luca Bonaccorsi at Transport & Environment points at four. Firstly, the EU Taxonomy defines what counts as “green” investment. There has been much criticism of the inclusion of gas, and critics will continue publishing their analyses of what is truly sustainable and what is greenwash. Next, ESG ratings have also been severely criticised. They are an investor’s main tool for capital … [Read more...]
Doubling clean energy investments from “natural” redirection of existing spend on infrastructure, buildings, fossils +more
Annual investments in clean energy stand at $1.4tn, now greater than investments in fossil fuels ($1tn). But that needs to double by 2030. This steep climb will be made easier by the natural cycle of global investment, as well as the cost-benefits of abandoning fossil fuels for renewables and greater efficiencies, says Stephen Peake at The Open University. Each year, around a quarter of our GDP is anyway spent on new machinery, buildings and … [Read more...]
COP 27: “Loss & Damage” can become the fourth pillar of climate action, along with mitigation, adaptation and finance
COP27 saw two major outcomes on the finance front: the creation of a “Loss and Damage” fund and a call to reform international financial institutions. It made fewer, if any, advances to reduce emissions, and narrowly missed sending a global call to phase down oil and gas consumption. But funding the emissions reductions of developing and vulnerable nations was a gap that had to be filled, and so this is a big step forward, explains Lola Vallejo … [Read more...]
EC Consultation: ESG ratings need regulation to fix inconsistencies and bias
There are multiple problems with ESG ratings and that’s why they need to be properly regulated, says Hazel James Ilango at IEEFA. Different ratings agencies have different methodologies that are difficult to compare. They can lack transparency and be biased due to industry, geographical location or company size. As for a company’s impact on the planet and society, it can be overrated or underrated due to the aggregation of Environmental, Social … [Read more...]
Imagine it’s 2030 and net-zero is on track. How did we do it?
Imagine it’s 2030. The energy transition is on track and net-zero goals are entrenched across the global economy. How did we get there? Tim Buckley at IEEFA imagines it for us and sends us a postcard from the future. Writing in the past tense, he flags actual events and policies happening today to “remember” the major changes that took place to achieve it. Weather-related disasters compelled governments to act, recognising – apart from the … [Read more...]
Climate Finance: the loopholes that are causing greenwashing
How do you know when an investment is truly “green”? Whether companies and fund managers monitor themselves or are externally policed, the correct rules need to be identified. And then it gets harder. Clearly defining and then measuring carbon footprints is a bigger challenge, explains Meredith Fowlie at UC Berkeley’s Energy Institute at Haas. She draws parallels with food nutrition labelling rules. But whereas counting the calories in a food … [Read more...]
New rules for EU green bonds to raise €350bn/yr, but no decision on nuclear and gas
The EU needs €350bn/year from private investors to fill the Green Deal’s funding gap. The rules for the new green bonds that companies can issue to raise money are supposed to set a “gold standard”, ensure there’s no greenwashing, and make Europe the best place to invest your money sustainably. Benjamin Wehrmann at CLEW summarises the new strategy that was presented on 6th July, and has gathered reactions. Particular attention is paid to … [Read more...]
Financial incentives for Grid Modernisation: the problem with guaranteed returns on investment
Grid modernisation is going to be very expensive. What’s the best way to pay for it? The financial incentives governments put in place now will determine what investments get made, how cost-effectively it’s done, and who ultimately pays. Meredith Fowlie at UC Berkeley’s Energy Institute at Haas explains that a common method is for a government to give some sort of guaranteed return on investment for the new asset. But it’s far from ideal. … [Read more...]
EU Taxonomy: 5 principles for avoiding unintended consequences
The EU Taxonomy is a classification system that defines a list of environmentally sustainable economic activities. If your activity is on the list you should see green finance flow your way. Hence the heated debate over what is “green”. It’s of vital interest to sectors like gas and nuclear (it’s green compared to the coal it replaces) as it will have a major effect on the cost of capital and therefore the future of the sector. Indeed, any … [Read more...]
Wide variations in National Energy and Climate Plans: how can the EU seriously budget for emissions reductions?
The EU has big and growing ambitions for emissions reductions by 2030: down 40% below 1990 levels, increasing the share of renewables to 32% of final energy consumption and improving energy efficiency by 32.5% above business-as-usual. These targets will be further revised as the more ambitious goal of cutting emissions by 55% by 2030 becomes legally binding. This means the EU as well as individual nations must estimate the cost of meeting these … [Read more...]
The Energy Charter Treaty makes the transition easier. Don’t scrap it, reform it
Energy and climate experts as well as national and EU parliamentarians are lining up to press their governments to withdraw from the Energy Charter Treaty (ECT) if insufficient progress is made in its modernisation. Their main argument is that it gives protection to fossil investments in a world where policies are changing in order to constrain or phase them out. Here, Frank Umbach at EUCERS sternly warns against abandoning the ECT. The treaty … [Read more...]
The energy transition needs some of the $12tn global Covid stimulus. But much less than you think
Governments worldwide have committed over $12tn to recover from the Covid-19 pandemic, spent over the next 5 years. Current estimates say the energy transition needs $1.4tn/year globally between 2020 and 2024 to get us on the path to meet the 1.5oC Paris goal. Clearly, there is an opportunity here. Although support for healthcare systems and the overall economy are the stated priority of governments, much of that $12tn is still not committed. … [Read more...]
Renewables shares outperformed fossil fuels over 10 years. Have investors noticed?
Shares in listed renewables firms are outperforming their fossil fuel equivalents, both in terms of returns and volatility. But although investment is rising, they’re still not getting enough to meet our 2050 targets, says the IEA. Why? In this article summarising the first of a series of reports they look at the 5 and 10 year record of the two verticals. In all the three territories analysed – the U.S., the U.K., and Germany/France - renewables … [Read more...]
Dutch-Spanish startup navigates coronavirus fallout while also guiding utilities into the digital age
In late summer 2015 at a research university in Belgium, an Italian graduate student new to campus attended a welcome event hosted by engineering department faculty. Sampling beer brewed by an electrical engineering student association, Simone Accornero mingled with a dozen other new classmates in his program at KU Leuven. Accornero began chatting with an engineering master’s student who had just arrived from Poland. “We hit it off,” Accornero … [Read more...]
