The 2015 Paris Agreement has set an unprecedented worldwide agreement to tackle greenhouse gas emissions to limit the rate of global warming (mitigation), as well as at the same time to take measures that help prepare for current and future climate change impacts (adaptation). Both of these elements require unparalleled redirection of investments. Recognizing this, the Paris agreement has set the global objective to ‘make all financial flows consistent with a pathway towards low-emissions, climate-resilient development’. This objective was also confirmed by the 2016 climate change conference in Marrakesh.
In Europe, the ‘clean energy package’, proposed November 2016 by the European Commission, confirms the EU’s commitment to a low-carbon and climate-resilient transition and states that investments of €177 billion are needed annually from 2021 onward to achieve the European goals. As stated by the European Environment Agency’s Executive Director, Hans Bruyninckx, “Europe needs to invest substantially in climate change mitigation and adaptation. The finance sector can and will play an instrumental role in supporting Europe’s transition towards a low- carbon, climate-resilient society. Public sector investments will not be enough for financing the transition but can help mobilize and leverage private capital, which is indispensable for redirecting investment at the scale needed.”
Given this important role of climate finance in making the necessary transition happen in Europe, the European Environment Agency (EEA) is working towards assessing the connections between current and future actions for mitigation and adaptation on the one hand, and the finance and fiscal systems on the other. A greater understanding of these connections is a prerequisite for removing barriers to climate finance and redirecting funds to support low-carbon climate-resilient transition.
As part of this effort, Trinomics is currently implementing an assignment which will mark an important step towards defining the current knowledge and data gaps around domestic investment needs and existing investment volumes in Member States. By gathering such consolidated overview of existing (and missing) climate finance knowledge and data at Member State and EU levels, a gap analysis can be carried out in order to define the most urgent needs and next steps in terms of closing the data gaps, harmonizing reporting methodologies, and in the end directing sufficient amounts of public and private finance towards the transition to a low-carbon, climate-resilient economy by 2050.