Gael Giraud, building the case for investment in the ecological transition

Building the case for investment in the ecological transition

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Gaël Giraud

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Chief Economist| AFD Senior Researcher | CNRS Professor| ENPC Director | Chair Energy and Prosperity

19/09/2018

Post-Growth Conference

“Currently, the EU is not on track to deliver the €11.2 trillion required to meet its 2030 energy policy targets.

The latest estimates put the annual investment gap at around €177 billion p.a. between 2021 and 2030, totalling €1.77 trillion.

“Financing a Sustainable Economy. Interim Report” High-Level Expert Group on Sustainable Finance, July 2017

We will not do more (ecology) with less (means) Transitioning to a low-carbon economy… industrial reconversion “stranded assets" energy shift thermic renovation of buildings R&D in substitutes for minerals Green mobility Hydrogen…. … calls for more investment: professional and social support measures : 2 million jobs created in Europe by 2030 according to ILO targeted compensation (social acceptability)

Encouraging green investments (over brown)

Triple win  Reduce greenhouse gas emissions  Limit our energy dependency  Improve our balance of trade Example: Indonesia.

Financing transition Levers of financing? o Carbon pricing: Stern-Stiglitz report, Macron speech (March 2018: €44 euros in 2018 to €84 in 2022 in France) o FTT: Canfin-Grandjean report (2015) o Public guarantee o Green bonus-malus (“Basel IV”) o European tax on profits: Monti report (2017) o Green Quantitative Easing by ECB

Financing transition Isolate, from the budget deficit, public funds allocated to a green investment programme

How?

“institutions such as the European Stability Mechanism and / or the EIB could issue bonds that would in turn be acquired by the European Central Bank, as part of its Quantitative easing.

Also the national debts of the euro zone states would not increase.

Another possibility, devised by the European Commission in early 2016, is to exclude from the debt target the debt issued in return for participating in the European recovery plan.�

(OFCE, 2016)

Thank you for your attention @GaelGi raud_AFD afd.fr