Timmermans: ‘we can’t solve energy crisis at expense of climate crisis’
The European green Deal vice-president was one of a number of speakers at PRI conference to highlight the need to end new fossil fuel investments.
Speakers at the UN PRI’s in-person event in Barcelona have doubled down on the need for an end to new fossil fuel investments in light of both the energy and the climate crisis.
Speaking at a panel on the topic of “driving net zero in an insecure world”, Frans Timmermans, executive vice-president for the European Green Deal, said: “The era of cheap fossil fuels in Europe is over and will not come back. We know we cannot solve the energy crisis at the expense of the climate crisis.”
Timmermans claimed that Europe’s regulatory regime was on the “road to a green, sustainable future” and financial flows must follow suit. “Between now and 2030, an extra €520bn per year will be needed for the green transition in the EU alone,” he said.
Guenther Thallinger, a board member at Allianz and chair of the UN-convened Net-Zero Asset Owner Alliance, reminded the audience of the financial services giant’s policy from 1 January 2023, which includes no new funding for projects in exploration and development of new oil and new gas fields, or construction of new midstream infrastructure related to oil.
The green generation
Thallinger also highlighted the increased significance of the climate crisis for the younger generation: “Picture yourself [as a financial professional] in three to five years’ time. You are at a recruitment event, and trying to get top talent, but the candidates ask you what have you been doing on sustainability? What is your work on the 1.5 degrees goal? This talent is more likely to join you if you have more convincing stories, and convincing stories need to start now”, he said.
The generational divide was also framed in the discussion on US politics, in particular the Democrat Party’s surprisingly strong performance in the recent midterm elections.
Sue Reid, senior finance advisor at Global Optimism, said: “The majority of the US public has long supported ambitious climate action. Political leadership has been lagging behind but what we've just seen with the recent midterm elections is a breath of fresh air. Young voters have turned out in a much higher percentage than in the past, motivated to a very large degree by concern about lack of sufficient action on climate change."
In August this year, President Joe Biden signed the landmark Inflation Reduction Act (IRA) into law, regarded as a significant step in advancing the nation’s climate change agenda. Wendy Cromwell, a PRI board member and vice chair at Wellington Management, insisted that the act is a “big deal” and involved “$400bn and incentives to promote and intensify and accelerate the energy transition”.
The UN PRI panel debate also looked at emerging markets and how net-zero action was needed in light of ongoing climate instability. Reid pointed to the so-called “Bridgetown Initiative”, which is currently being advanced by the Prime Minister of Barbados, Mia Mottley.
The initiative entails specific measures for addressing chronic and acute debt distress in emerging markets in developing countries, and outlines the need for scaling investment and modifying systems to enable mitigation and resilience in response to climate disruption.
Referencing the recent catastrophic floods in Pakistan, Cromwell said: “[The floods] wiped out 50 years of development finance. We need to have adaptation investments in order to secure on an ongoing basis the climate mitigation investments.”