EU faces trillion Euro climate change bill
28 March 2007
The European Union will need Euro1.1 trillion to meet its ambitious climate change goals by 2020 but the European Investment Bank is hoping to help it to find the money - including finance for new nuclear plants.
EU member states recently agreed new 2020 targets for carbon dioxide emissions and renewable energy. A new report by global management consulting firm McKinsey finds that, while those targets are economically and technically feasible, an immense political effort will be needed. The annual cost of €60-80 billion ($80-107 billion), calculated by McKinsey, is based on a "balanced, sensible application of the most easily accessible technology." The report recommends making a start by reducing energy use, for example by insulating buildings, rather than more expensive projects such as carbon dioxide sequestration or the construction of CO2-free coal power stations.
The report does not focus solely on carbon dioxide emissions from energy. It recommends that Europe's forestry industry should take its share of the burden, and could lower its carbon dioxide emissions share by 7 billion tonnes by 2030 through improved management.
On a global level, the McKinsey report says it is possible for carbon dioxide levels [sic] to be reduced by 27 billion tonnes by 2030, a figure at which scientists suggest global warming might be curbed, although the greatest challenges would be faced by developing countries.
Speaking to Members of the European Parliament about European Investment Bank (EIB) contribution to the EU's new energy policy, bank president Philippe Maystadt noted that the bank plans to relax lending rules to give money to projects such as carbon sequestration, and has earmarked €800 million of lending per year for renewable energy projects in the period 2007-1020. Maystadt also noted that the bank is happy to make loans for new nuclear power stations.
Further information
European Investment Bank
McKinsey
WNA's Climate change information papers
WNN: EU sets carbon and renewables targets, backs nuclear