Belgian central banker claims climate fight will leave EU poorer — upsets Green chief

Is the EU’s attempt to ‘confront climate change’, as some see it, with a so-called energy transition creating an economic millstone round the necks of countries in the form of high industrial energy costs? Such costs are likely to go even higher on present policy trends.
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The co-president of the Greens/EFA European parliamentary group, Philippe Lamberts, rebuked recent warnings by the head of Belgium’s central bank that the green transition will make Europe poorer, saying that anyone who does not see the transition as a matter of survival should give the floor to “more serious people”, reports Euractiv.

Talking to Euractiv on Tuesday (13 February), Lamberts challenged Pierre Wunsch’s remarks to the European Parliament’s plenary session on Tuesday that EU policymakers needed to be “more candid” about the climate transition being “a negative supply shock that will reduce [Europe’s] growth potential”.

“If we start saying that basically we cannot afford to invest for [our own] survival then I believe that we need to have a discussion with more serious people,” Lamberts rebutted. [That] Europe should engage full-on in the green transition to me cannot be questioned. It’s a matter of environmental and economic survival.”

Contesting Wunsch’s prediction that the energy transition would not make Europeans “collectively richer”, the Greens MEP said Europe’s failure to confront climate change would be tantamount to “collective suicide”.

Jean-Marc Nollet, co-president of Belgian environmental party Ecolo, echoed Lambert’s warnings.

“It is the absence of a [green] transition that will impoverish Europe and its citizens,” Nollet told Euractiv. “A society that does not invest in the transition is a society that condemns its companies. Conversely, investing means being a pioneer, relocating, and capturing the jobs of tomorrow.”

The price of inaction
Nollet added that Wunsch “should know what the scientists are telling us”, namely that “the cost of inaction is five times higher than the cost of action”.

Antoine Oger, research director at the Institute for European Environmental Policy (IEEP), said yet more daunting forecasts are set to come from a European Environmental Agency (EEA)’s report showing that the accumulated costs of inaction could prove significantly more severe – as much as “one hundred times higher than mitigation measures”.

“It is now clearly cheaper to save the planet than to ruin it.”
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Industrial woes
Wunsch’s remarks, however, channelled widespread worries around the effects the transition will yield on different sectors.

On the industrial front, he suggested that high energy prices may have made European industrial firms permanently uncompetitive compared to those in China and America.

“Before the war in Ukraine [European natural gas] was at around €20 [per MWh]. The new normal is between €30 and €50 [per MWh], and if you add to that carbon capture or the cost of blue hydrogen you need to add another €20 to €30 [per MWh].”

That compares with US natural gas at €10 per MWh, which would make European energy “about five to eight times more expensive than in the US. So yes, one might ask: Is there a future in the EU for energy-intensive firms?”

Full report here.