The investment landscape has changed following 2015’s historic Paris climate change deal, which demands climate action further and faster than anything previously agreed. For the European Union (EU) a reasonable working assumption is that a near zero-emission economy must be delivered by 2050.
It's estimated that €200bn in annual infrastructure investment will be required to transition to a low carbon economy in the next decade. Yet Europe is seeing a clean energy investment downturn. As austerity policies continue and bank debt availability shrinks new diverse sources of private capital are needed to support Europe's low carbon transition.
Two major EU initiatives – the Energy Union and the Capital Markets Union – hold the key to reversing the downward trend in clean energy investment. The Energy Union can and must deliver the climate-resilient infrastructure pipeline that institutional investors seek in order to ‘shift the trillions’ and tackle dangerous climate change. The Capital Markets Union must deliver the tools and institutional arrangements required to ensure investors can deploy capital, confident in the knowledge that their investments will remain productive throughout their expected economic lifespan through being resilient to climate risk.
The 'Clean Energy Lift-off: Capitalising Europe’s Energy Union' [1.6Mb PDF] discussion paper explores how these two Union initiatives can align to deliver European low carbon transition targets.