Energy and climate - financing the energy shift to stop climate change

With a focus on EU Structural and Cohesion Funds, the European Investment Bank, and the European Bank for Reconstruction and Development, Bankwatch challenges these institutions to finance more than a few green showcase projects, but to support solutions for decarbonising the energy sector.

Energy efficiency and innovation

There is enormous potential to reduce energy consumption, particularly in central and eastern Europe:

• in the EU, energy consumption could be reduced by 44% as soon as 2030 through efficiency measures.
• This number might be even bigger for non-EU countries of the former eastern block where energy intensity is very high and energy efficiency measure lack financial support.

While the technical solutions are readily available (thermal insulation of buildings, efficient appliances, energy improvements in industrial production), energy saving measures are economically (and politically) less attractive and funding is hard to come by.

It is international financial institutions and governments who should step in to promote energy efficiency as the first priority in energy policy and funding.

Renewable energy sources and smart grids

Promoting renewable energy promises to bring energy security, create new jobs and break the spell of our fossil fuel addiction.

Nevertheless, international financial institutions still invest billions in unsustainable energy production and do too little to facilitate renewable energy:

• the lending of both the European Bank for Reconstruction (pdf) and the European Investment Bank (pdf) has not only lacked clear commitment to green energy, but has even seen a growth in fossil fuel projects in recent years
• EU funding (pdf) still is far away from fulfilling its potential to inspire a change in EU member states' energy policy

To increase renewable energy production and its distribution and regulation through smart electricity grids, financial support as well as a new set of policies will be necessary.

Bankwatch calls on the IFIs, the EU and its member states to respond to this necessity and eventually help consumers to gain more control over the energy system and their energy consumption.