The orderly transition to the low carbon, climate-resilient economy that Europe is aiming for is also an investment challenge that depends on a substantial redirection of finance flows towards more sustainable investments. Meeting this challenge and harvesting the associated opportunities requires an improved knowledge base in terms of clear investment information at EU and national levels. Assessing the state-of-play of climate finance tracking in Europe, a recent European Environment Agency (EEA) study indicates that few European countries have translated their national climate and energy objectives into corresponding investment needs and plans.
The main findings of the briefing are the following:
- The European Union (EU) has estimates of investments needed to achieve climate mitigation and energy policy targets but there is not a comprehensive information base to allow complementary bottom-up national assessments of estimated total investment needs.
- There is a lack of available information at country level regarding the financing of climate and energy targets, including answers to questions such as:
- How much money is needed to achieve domestic energy and climate targets?
- How will this be financed nationally and at the EU level?
- What sources of finance and which financial instruments are available?
- Comprehensive domestic climate finance information (investment needs and plans) is available in only a limited number of countries. These examples serve as valuable benchmarks for other countries.
- The lack of publicly available information from private sources of finance is particularly important given that private sector capital is needed to close the largest share of the remaining financing gap.
- Countries should develop national capital raising/investment plans with clear information on investment needs and priorities to attract private finance.