Public consultation on the European Investment Bank Energy Lending Policy (ongoing, request for inputs/ideas, deadline 29/3)
[note: I also posted this message on the OpenMod Forum, link]
For those working on climate & energy related research: the EIB is currently requesting inputs for its financing policy related to energy infrastructure, in the context of accelerating climate change policies.
[In short] who is interested to work on a position paper in this regard? It might fall a little bit outside the purely technical ‘open energy model’ scope, but I think it would be highly interesting to contribute to the economic/institutional debate from a community like this, with both technical expertise and technology-based economic insight.
- Main background documents are (bottom of EIB consultation webpage):
- European Investment Bank. (2013). EIB and Energy: Delivering Growth, Security and Sustainability - EIB’s Screening and Assessment Criteria for Energy Projects (Energy Lending Criteria) (p. 56).
- European Investment Bank. (2019a). Energy Lending Policy: Public Consultation Meeting(Agenda). Brussels, Belgium.
- European Investment Bank. (2019b). Public consultation on the EIB Energy Lending Policy(p. 48). Luxembourg: European Investment Bank.
[Longer] Some background information:
- There is a (long-term) ongoing debate about to which extent the European Central Bank could use it’s Quantative Easing policy to direct funds for climate policy [energy infrastructure investment, climate mitigation & adaptation, …]. It is somehow split into a progressive [yes] and conservative [no] side, but it seems that the progressives are on the winning hand =) In the wider euro area ‘debt vs investment’ debate, 2013 Yannis Varoufakis and co. proposed a ‘Modest Proposal’ [tweet]. Paul de Grauwe (economist KU Leuven & LSE) also pointed regularly at the mismatch with having a EU monetary policy without a political union, in addition to the internal inconsistency of demanding climate investments and at the same time imposing fiscal rules that prohibit this [tweet]
- Currently, there are more and more (economist) voices to take control of the ECB Quantitative Easing policy and direct it towards climate policies. A summary thread of the blogpost of Paul the Grauwe - in which he argues that the ‘best’ way to circumvent the traditional non-political role of the ECB would be to create money and give it to the EIB to direct investments - on this can be found here: tweet (+ original blogpost)
- Other initiatives are steering in this direction, such as ‘Pacte Finance Climat’ (FR) and Roosevelt.be. (BE) There might be others in other countries (i would be interested to know them!), but PFC aims to be a European-wide movement to achieve this, preferably during the next elections. Some highlights of the conference of Pacte Finance Climat that took place in Paris last week 19/2 can be found here.
- Another relevant event on the EU Energy Transition (role of institutions, decarbonisation policies and new energy players) took place the same day in Bruegel (Brussels). Some highlights from the event can be found here, as well as a google doc with notes from the event.
- To know the exact numbers on how much national and multilateral investment banks invested in climate mitigation projects and renewable energy, the work of Bjarne Steffen and Tobias Schmidt from ETH [paper] is very instructive. A summary with key highlights and graphs from a webinar they gave in November last year can be found here.
- Together with the consultation, the EIB published a piece in Euractiv to defend their policy and ask for further inputs [link to article, summary tweet]
- They claim to have done a very large investment in the last years [link], but this does not seem to coincide with the conclusions of the paper of ETH [link]
- Some interesting comments under the article (from ‘Mike Parr’, who claims to have been at previous workshops in Brussels) mention that the European Commission calculated that a yearly investment of 250 to 500 billion euros until 2050 is needed until 2050 to achieve zero carbon by 2050, which is far below the current rate (If somebody has more accurate / referenced material on this, I would be glad to hear from you).
To wrap up: as this is a highly political debate, I would think that it would be very valuable if there would be some voices from the academic community (technical and economic), to argue and push for the type and scale of investments. It seems the ‘central banking community’ are asking for those type of inputs as well, as can be seen from the agenda item How Academic Research Can Help Central Banks Contribute to the Transition? during a ‘Green Finance Research Advances’ seminar that was held at Banque de France in November 2018.
I am personally not an “expert” in this field, but I am following with high interest research and articles appearing in this field, and I am also active in the ‘Pacte Finance Climat’ community, trying to establish a meaningful link between the ‘academic literature community’ and political groups and networks (mostly in Belgium, as this is my ‘origin-base’ somehow). Let me know if you are interested to join this effort, I would be happy to organize an (online) place where we could exchange thoughts and references.
In parallel with my PhD-work I created a literature folder [bibbase link] with papers related to climate finance and central bank policies, the next step is to summarise the EIB policy paper and consultation document. I also emailed the organizer of the consultation to ask if they would be happy with such a contribution, and whether the deadline of 29 March is a strict one. However, I suppose it should be possible to compile something useful by then. You can contact me at floriandierickx [at] gmail.com.