Carbon leakage across our economies is detrimental
We need to chase it from our business model, says EUCO President Michel at the Leaders' Summit on ClimateEuropost , Brussels
If we want to be at peace with nature, we need to chase carbon from our business model, said President Michel on Thursday, at the Leaders' Summit on Climate, hosted by US President Joe Biden.
Together with EC President Ursula von der Leyen, they are among the 40 world leaders taking part at the summit that continues on Friday.
President Michel highlighted the EU's leadership in fighting climate change and its binding target of 55% emissions reduction by 2030. He also stressed the need for a global approach to carbon pricing and urged all developed countries to scale up their contributions to climate finance.
A global approach to carbon pricing is paramount to promoting green investment, he urged.
“We need to be more determined in the field of climate finance. We decided collectively to mobilise at least 100 billion dollars a year, for climate financing.”
The EUCO President outlined that the EU and its Member States remain the largest contributor of public climate finance to developing countries. We urge all developed countries to scale up their contributions, he said adding that this would send a strong signal in the run up to COP 26.
“This is why our EU budget and recovery package will dedicate around €600bn to powering our green transition. Transition to a low carbon economy requires massive investment, which far exceeds public investment capacity alone.”
Saying that “the green transition is our prosperity strategy”, Michel pointed out that 30% of EU’s recovery package will be funded through green bonds. Since finance is global, green finance must also be global. We want to cooperate and orientate the private sector.
Green finance was born in Europe, and today, our currency — the euro — is by far the leading currency when it comes to green bonds, said as well Michel. He specified that the EU will soon establish a European Green Bond Standard.
“But we need to create the right global regulatory framework. Let’s provide greater certainty for private investors, everywhere in the world,” he urged.
He recalled that in 2019, the EU set up the International Platform on Sustainable Finance. Today, the Platform represents 55% of global greenhouse gas emissions, and we encourage more countries to join, he said.
The EUCO President called on setting the right incentives at the global level, as carbon leakage across our economies is detrimental.
He explained that the EU intends to introduce a carbon border adjustment mechanism to ensure a level playing field and we are ready to work with all our partners on carbon pricing.
“We want to be a strong and loyal partner. And we are ready. Ready to join forces with all global partners. Ready to take our collective responsibility for the well-being of our people and of our planet.”