Metrics that inflate the cost of the energy transition are under attack
Put garbage into an economic model and garbage comes out. By using a discount rate that inflates the cost of the energy transition, the EU’s executive body is undermining the bloc’s new and more ambitious carbon reduction goal. Behind the scenes, however, method may lie in the madness. Officials working on legislative updates are suspected of holding a negotiating trump card up their sleeves
A 10% discount rate is increasingly being seen as too conservative a metric for dictating the scale and speed of the energy transition
OUT OF STEP The discount rate used to assess the cost of EU clean energy legislation is several times higher than that adopted by member country governments for their own models
PRECEDENT The EU Commission has once before lowered its discount rate during talks to win parliamentary and government approval for legislation to facilitate clean energy investment
KEY QUOTE The European Commission must not shoot itself in the foot now by artificially inflating costs ...
Try FORESIGHT - 30 days for €29
Related articles
A fair and just energy transition
Coal-reliant regions around the world have been generally resistant to the energy transition and regulators have tended to defend the status quo. But they are slowly starting to realise that clear plans and financial support for disrupted societies are more important
Clamping down on financial greenwashing in the EU
Sébastien Godinot, Economist with the WWF European Policy Office, welcomes new European laws that will make it much clearer which investments are genuinely sustainable and help shift funding from fossil fuels to clean energies
Central banks swept up in climate action debate
Many believe the ECB and other central banks should bring climate considerations into the rulebook governing what they support and how
Electricity markets need fixing
IEA boss Fatih Birol discusses the need and the tools for bettering the business case for renewable energy. Special report part 3/3
EU ETS revenues can help unlock the clean energy transition
A recent World Bank study reveals global carbon revenues are rising sharply, but only around 42% are used for environmental projects. It shows European and American citizens prefer their governments to spend carbon revenues on low-carbon initiatives, so why is political will lagging behind asks Susanne Dyrbøl from Rockwool Group
EU Green Deal in a time of pandemic
The European Green Deal sets a clear, sustainable path for Europe to move forward from the economic and social impacts of Covid-19, speed up the energy transition and create jobs, says Julian Popov, Fellow at the European Climate Foundation and former Bulgarian Minister of the Environment
Industry pushes for electrification of EU energy agenda
“Electrification is the most efficient way of decarbonising”