Enigin Update - Banks Needed to Support Europe's Low-Carbon Economy
WITH EUROPE suffering with high levels of public sector debt the banking sector will be needed to support Europe’s €2.9 trillion transition to a low-carbon economy.
These are the findings of a new report, Carbon Capital, released today from Accenture and Barclays which gauges that the cost of developing, acquiring and implementing commercially-viable low-carbon technologies will be around €2.9 trillion, enabling Europe to meet its target of an 83 percent cut in emissions, based on 1990 levels, by 2020.
Managing Director of Sustainability Services at Accenture, Peter Lacy stated: “High public sector debt and maturing technology now mean that private sector capital, primarily intermediated by banks, must be provided to accelerate the investment we need to meet our 2020 goals.”
Although public sector funding may be harder to tap into in the future, long-term government policies and investments will remain critical.
The report pinpoints that this will create an unprecedented demand for private capital of around €1.65 trillion. Much of which will be in the form of debt financing of low-carbon technology assets and asset leasing for energy efficiency technologies and adoption of microgeneration.
Transferring debt into low-carbon technology, asset-backed securities, or green bonds, may well provide some of the capital needed and new products for pension funds, individuals and other institutional investors.
Rupesh Madlani of Barclays Capital said: “Banks in Europe are facing the challenge of capital lending constraints, uncertain carbon markets and myriad local policies. The low carbon transition presents a major opportunity for innovation in financial products and services.”
The recommendation in the report is for banks and asset managers to work with investors and borrowers in developing suitable products and create dedicated low-carbon technology investment funds.
The banking sector will also need to work with the energy efficiency and microgeneration equipment sector in supporting such a capital-intensive, fragmented market, hence making it easier for more businesses and organisations to acquire the needed technology and advice.
The report does put the ball into the court of governments and policy-makers, who will need to commit to long-term plans and incentives for low-carbon technologies and set standards for investments.
Enigin Distributors across Europe are enjoying ever increasing interest and demand for energy saving technology and solutions from Enigin - solutions that reduce energy demand, reduce greenhouse gas emissions and ever rising energy costs.
Picture by Open Democracy
