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10 months ago

War, Peace and the Green Economy

  • Text
  • Green economy
  • Peace
  • War
  • Ukraine
  • China
  • Africa
  • Europe
This magazine is about the world’s collective and potentially transformational journey towards a green economy. It is also about taking you, the reader, on what we hope is an equally fascinating ”green voyage” across some key parts of Europe as well as to Africa and China.

WHAT’S HAPPENING IN

WHAT’S HAPPENING IN THE EU WAR, PEACE AND THE GREEN ECONOMY fooling ourselves,” he said, because the taxonomy must be “a credible standard” to fulfil its goal. Natural gas has been tentatively identified by Brussels as a transition fuel until renewables and storage capacity can operate at a sufficient scale, but many have questioned the financial reasons for including it in the green taxonomy. Overall, investment in fossil fuels does well in financial markets — with gas projects gaining a significant increase in profitability in recent years. And experts argue that actually excluding gas projects from the EU taxonomy would not have created a risk of underinvestment in gas generation as a transition energy source. Conversely, an analysis from the international EDHEC Business School found that its inclusion in the financial guideline may create price distortions and an incentive to limit future investments in renewables. Investments for a gas-fired power plant are estimated to take more than a decade to be amortised, and gas plans tend to operate an average of 25 to 30 years in Europe. This raises concerns among experts about the taxonomy leading to a delay in the transition away from fossil fuels. Ursula Woodburn from the UK’s cross-sector group of business leaders, CLG Europe, said that this transition is supported by many businesses who see the benefits it offers. The war in Ukraine shows how geopolitical tensions can cause “massive disruption” in an energy system based on fossil fuels, she warns. “The EU should rapidly transition away from fossil fuels, fossil-fuel investments and subsidies to deliver climate stability,” she added. The decision to include gas and nuclear in the taxonomy was slammed as the outcome of a both lengthy and highly-politicised process. But the European Commission has also come under fire for looking at this tool purely through a domestic prism — despite its impact beyond EU borders. ◄ Politico A5 ad - 210x148mm.pdf 1 16/03/2022 14:17 Dutch MEP Bas Eickhout “The whole idea of creating a EU ‘gold standard’ is gone” Source: European Parliament finance rules may lead to further greenwashing in financial markets. University College Dublin professor Andreas Hoepner, who has been one of those leading academic opposition on the taxonomy, describes it as probably “the biggest greenwash ever.” The proposal, he said, ignores rigorous scientific analysis and weakens the credibility of the whole EU sustainable finance agenda. And it may even lead to an increase in emissions incompatible with the Fit-for-55 package and the EU’s climate targets. The rules were meant to create common standards for classifying taxonomy-aligned economic activities as environmentally sustainable. But Laurence Tubiana, one of the key architects of the 2015 Paris Agreement, EU member states were already split over the role of gas and nuclear in the energy transition and, thus, in green finance — even before the war in Ukraine. has warned that investors may go elsewhere to seek more “more reliable science-based criteria” to classify their investments. “The whole idea of creating a ‘gold standard’ is gone” with gas and nuclear power included in the EU taxonomy, Dutch MEP Bas Eickhout told EUobserver in an interview. With the credibility of the whole taxonomy hanging by a thread, Eickhout warned of the impact on green bonds, given that funds raised from these bonds could be used for gas and nuclear projects. The transition towards net-zero emissions will require massive investment, but not enough money is currently going into projects delivering climate neutrality, he said. “If we now lower the standard in order to mobilise the money, then we are still C M Y CM MY CY CMY K 13

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