Insufficient financing is slowing down the transition towards climate neutrality and forest carbon sinks need to be enhanced to trap more carbon dioxide, new report says.
EU countries are going in the “wrong direction” in their efforts to slash carbon dioxide levels, as natural carbon sinks keep disappearing and lack of investment in climate is jeopardising progress, according to a report published today (July 2).
While climate ambition remains on track based on EU countries’ stated aims, the European Climate Neutrality Observatory (ECNO) considers “urgent” the adoption of measures to invest in natural carbon dioxide removal by encouraging a greater mix in tree species.
“There is an urgent need to further expand sustainable forest practices and promote restoration, reforestation, and sustainable management,” the report said.
Nick Evans, research fellow at Ecologic and an ECNO expert, said evidence also points to “crucial weaknesses” in the national level implementation of transition financing.
The climate investment gap amounted to €406bn in 2022, according to the report, translating to 50% of investment missing for the transition to meet the climate goals.
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ECNO considers that without a “turn-around on finance” the climate transition “could fail” and its fellow researchers estimated investments need to double to meet the climate target of reducing net greenhouse gas emissions by at least 55% by 2030.
“A strong policy push is needed to redirect financial flows towards transition financing, including progressively phasing out fossil fuel subsidies, and to close the investment gap,” the report recommended.
While private investment in clean technologies has increased, investment in critical areas needs to be accelerated to speed up the transition, ECNO warned, particularly in energy-efficient building renovations, installing electric heat pumps, expanding wind and solar power, enhancing the electricity grid, ramping up rail and public transport, as well as zero-emissions passenger vehicles and respective recharging stations.
Clara Calipel, research fellow at the Institute for Climate Economics and ECNO expert, said the report’s data shows fossil fuel subsidies almost tripled between 2021 and 2022 to reach €190bn amid the fossil energy crisis, a sum that could be used instead to promote the uptake of clean technologies and push the green transition.
But Eike Karola Velten, lead author of the ECNO report and senior fellow at the Ecologic Institute, is confident the coming years will see further advancement of green policies in the transition across economy and society.
“We are glad to see signs that the Commission and other key bodies are recognising the need and value for more comprehensive monitoring, to ensure the implementation of Europe’s climate transition can be tracked and steered with focused, fact-based insights,” said Velten, while urging caution against complacency “in this critical decade of action”.
Member states had until Sunday (June 30) to deliver their final energy and climate plans, a deadline that was respected only by Denmark, Finland, the Netherlands and Sweden, a European Commission spokesperson said on July 1.
“The Commission is strongly urging other member states to deliver their energy and climate plans. The timely submission of these plans will help trigger the necessary investments to meet our 2030 targets,” the spokesperson added.