Werner Hoyer, president of the European Investment Bank, has written an article for the World Economic Forum’s annual meeting, arguing that Europe is well poised to lead the green economy. John Dyer reports.
Europe failed to embrace technology that led American tech companies like Amazon, Facebook and Google to dominate the digital world, wrote European Investment Bank President Werner Hoyer in an article for the World Economic Forum’s Annual Meeting in Davos, Switzerland from January 22 to 25.
Now, Hoyer argued, the world is on the precipice of a new economic revolution that Europe could lead: fighting climate change.
More confidence needed
But Europeans need to become more confident, he warned, if they want to gain from adhering to the 2016 Paris Agreement that aims to stop temperatures from increasing more than 1.5 Celsius at best and 2 degrees Celsius at a minimum – the numbers scientists say are necessary to avoid environmental catastrophe.
“Europeans are less optimistic than Americans about the role climate action can play in economic growth and job creation,” he wrote, noting that only 21 per cent of Europeans believe fighting climate change can produce jobs.
In contrast, 26 per cent of Americans expect climate change to benefit the economy. That means they might be more likely to invest and adopt new technology, behaviours and other measures to curb greenhouse gas emissions that are causing extreme weather events, raising sea levels and polluting the air.
Green investments of vital importance
Meanwhile, jobs in renewable energy have increase by 45 per cent worldwide compared to a total increase in jobs of only 5 per cent in Europe.
Europe needs to take advantage of the trend, Hoyer said. “The lesson here is that it is not only for the sake of the climate that we must invest now in renewable energy and energy efficiency,” he wrote. “It is also economically vital for Europe.”
A low-carbon economy could generate as much as €23 trillion in Europe in around 10 years, he added.
European Investment Bank invests in climate action
Hoyer is putting his money where his mouth is.
The European Investment Bank is investing $100 billion in climate action over a five-year period ending next year, he said. He hoped it would help spark a renaissance that would reinvigorate Europe’s economy.
“When we back projects, we mitigate the risk for private investors just enough that they feel secure in joining this new wave of green finance,” he said.
Those investments are part of a trend that is already making Europe a centre of renewable energy. Green energy jobs have doubled since 2000 while other employment has increased by only 7 per cent, said Hoyer.
Regulations and governments are helping
The European Union adopted 29 climate-friendly laws in 2018. The Americans adopted eight while the Chinese enacted only four.
Last year, the EU embarked on a plan to become the world’s first climate neutral economy by 2050, too. The bloc’s efforts include energy efficiency, more renewables and better carbon capture and storage, CNBC reported.
Markets are also helping. Competition is reducing the cost of renewable energies, for example, wrote Nandita Parshad, managing director for energy and natural resources at the European Bank for Reconstruction and Development, in another World Economic Forum essay.
Parshad’s bank is seeking for the world to double the use of electricity for vehicles, heating and businesses that now use carbon-based fuels while generating more than 70 per cent of that electricity from wind, solar and other green sources. In the past, that vision would have needed subsidies. But that time is coming to an end.
Renewables cost-competitive with fossil
“Renewables are now cost-competitive with fossil fuels in many parts of the world, even taking into account the subsidies that continue to prop up power generation from fossil fuels,” wrote Parshad.
In Jordan, for example, competition has cut renewable energy prices by 85 per cent. They are now cheaper than natural gas.
Hoyer believed Europe could learn from those sentiments.
“We have made the right policy decisions in Europe. We must not risk losing economic momentum,” wrote Hoyer. “The action we take to save our planet will build a sustainable environment for our children and grandchildren. It will also provide them with jobs and prosperity.”