A report by a sustainability thinktank has called for the UK’s Green Investment Bank initiative to be rolled out across the rest of Europe.
And the report, by non-profit European organisation E3G, also states that there is no point in Europe pushing for a 30% cut in emissions if it continues to import fossil fuels from China and India.
In ‘Building a sustainable and low carbon European Recovery’, E3G argues that “different instruments” are needed to drive investment.
“Given the tight financial constraints on European companies, merely raising carbon prices will not efficiently and effectively drive new investment,” it states. “Shifting from the status quo will require additional policy instruments which give stronger investment incentives, and new financial mechanisms to manage risk and help leverage new private investment into low carbon markets and technologies.”
The report highlights some areas where this is being enacted already: the European Investment Bank has issued Green Bonds to raise funds for low carbon investment, and German bank KfW, which specialises in sustainable investment, is financing home energy efficiency retrofits.
And the UK’s Green Investment Bank is hailed as a success story, with E3G claiming that it “implements significant power market reform to drive low carbon investment”.
The thinktank stresses that the Green Investment Bank model “will need to be rapidly expanded across the EU to deliver a 30% target”.
The report offers a stark choice. “Europe can choose to invest in clean energy and energy efficiency at home to fuel the recovery, or continue to see increasing amounts of money flow out of the EU to import fossil fuel and energy technology, lowering growth and worsening trade balances.
“There is no point raising the EU target to 30% if we meet it merely through purchasing cheap emissions reduction credits from China and India. An economically sensible shift to 30% will need to prioritise investment in domestic European energy efficiency in homes, power stations and factories, and in the infrastructure and innovation needed to sustain reductions beyond 2020 and maintain European companies’ competitive edge in the low carbon race.”
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