Agora EnergiewendeSep 17, 2024
NEW 📰 #Investments in line with the EU's expected 2040 emission reduction goal of 90% would grow Europe's economy by 2% through 2040. We analysed the #macroeconomic impacts of #climate policy for the EU & its five biggest member states: France, Germany, Italy, Poland and Spain. 1/x
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All of them can expect economic growth as a result of #investments into climate neutrality, with Poland’s GDP projected to increase by around 5% compared to baseline levels. 2/x
Show threadAgora EnergiewendeSep 17, 2024
At the same time, the bloc's recently agreed fiscal rules will pose a challenge for climate investment in Italy & Spain, two countries that are among the EU’s biggest emitters. This underscores the need for flexibility in national & EU fiscal rules & the importance of continued EU climate funding that does not weigh on national debt levels. 3/x
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Another finding: Governments cannot rely on #carbonpricing revenues alone to cover the #publicfunding needs for climate investments. While these revenues will rise significantly following the latest reform, they will be offset in the 2030s by the erosion of the fossil fuel tax base. 4/x
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Building on these findings, our second new report outlines ways for public funding to help unlock the necessary #privateinvestments and overcome the looming ‘climate funding cliff’ in the EU. 5/x
Sep 17, 2024 at 9:14amWeb
Show threadAgora EnergiewendeSep 17, 2024

Our key recommendations:

📅 Better & more granular information about national #investment needs would significantly increase the impact of EU #climate funding. National climate investment needs assessments and investment plans should be made mandatory under the EU energy governance rules. 6/x

Show threadAgora EnergiewendeSep 17, 2024
💰 An off-budget mechanism to frontload national revenues from upcoming #carbonmarket for 🏘 and 🚗 (ETS2) could unlock 36 billion € before 2028. This would allow for early investments into these sectors, accelerating the deployment of clean solutions & keeping prices under the system in check. 7/x
Show threadAgora EnergiewendeSep 17, 2024
⚡ Governments should also use existing flexibilities for an early replenishment of the InvestEU Fund. This way, they could leverage around 245 billion € in additional investments which should be used in particular to support EU cleantech manufacturing. 8/x
Show threadAgora EnergiewendeSep 17, 2024
💸 Finally, to ensure continuity of EU #climatefunding, the next budget should establish a 260-billion-euro fund to support the implementation of the #GreenDeal. This fund could be financed through a balanced mix of new own resources such as a methane fee or financial transaction tax. 9/x
Show threadAgora EnergiewendeSep 17, 2024

Download both publications on our website:

Our new study “EU climate policy between economic opportunities and fiscal risks” 🔗 https://bit.ly/3zmI4dB

Our new impulse paper “Investing in the Green Deal” 🔗 https://bit.ly/3B7BXKS 10/x

EU ­climate policy between economic ­opportunities and fiscal risks

Assessing the macroeconomic impacts of Europe’s transition to climate neutrality