For the energy transition to happen in Europe, investment in the various energy sectors needs to rise to 2.5 percent to 3 percent of gross domestic product (GDP) a year until 2050, or roughly 1.5 percent of GDP above business-as-usual, Trend reports citing the European investment Bank (EIB).
A majority of that investment, 60-65 percent, is needed to rehabilitate buildings, improve industrial processes and integrate new transport technologies, while 35-40 percent would go to reinforcing energy infrastructure, building plants using renewable energy sources and creating new energy-storage facilities as well as factories producing carbon-free hydrogen and synthetic fuels, according to EIB estimates.
"To mobilize private investment, the public sector must play a catalytic role by sending the right price signals, ensuring regulation is conducive to investment, setting standards, and spreading information through tools like energy audits. Not least, governments need to provide clear signals on the path ahead, ending policy uncertainty and giving businesses the confidence to invest."
The costs of climate change will hit the poor hardest, according to EIB.
"Energy costs eat up an increasing share of disposable income for many lower income households, which will have a tough time paying for the home renovations or energy efficiency measures necessary to make Europe carbon-neutral. Government policies should lighten the burden and actively protect the most vulnerable people. Failing to do this could erode public support for the energy transition."
In 2018, the European Commission adopted a strategic, long-term vision for climate change set out in the report A Clean Planet for all. The strategy confirms Europe’s commitment to lead global climate action and presents cost-effective ways to achieve a net zero contribution to greenhouse gas emissions by 2050 through a socially fair transition.
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