The financial system needs to be “re-engineered” to encourage more investment in low-carbon technologies, a senior European Commission official told an audience at a Friends of Europe debate on 25 April.
“This is not just about money,” said Ugo Bassi, Director for Financial Markets at the European Commission. “This is something that requires also a change of culture.”
At the Café Crossfire event Bassi added that an interim report from the EU high-level group on sustainable finance, due in July, may recommend reforms to fiduciary duties, disclosures and even capital requirements to make green investments more attractive.
Ingrid Holmes, Director at Third Generation Environmentalism (E3G) and Member of the EU High Level Group on Sustainable Finance, said the EU should use its “soft power” to push the climate agenda, especially since the bloc has fallen behind China when it comes to per capita investment in renewables.
According to the International Energy Agency, investment in clean energy needs to triple to keep global warming below a maximum of 2°C, the target set in the 2015 Paris agreement.
EU estimates put the extra money required at €1 trillion a year, a figure that Mark Lewis, Managing Director and Head of European Utilities at Barclays, says will be easier to reach if governments “significantly” hike carbon prices to deter investment in fossil fuels.
But Anders Marvik, Vice-President for EU Affairs at Statoil, said there was no “political will” to do so and a lack of “sufficient projects for us to bid on”, a view shared by Michael Wilkins, Managing Director at global ratings agency S&P and a Member of the G20 Task Force on Climate-related Financial Disclosures.
“We need to tap into the infrastructure asset appetite that’s out there,” said Wilkins.
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