Emily Holbrook
(Credit: Pixabay)
Even with the global pandemic that is covid-19, the EU is confident that its climate ambitions will remain intact. That’s according to a new report by S&P Global Ratings.
The report states that the overall goal of achieving carbon neutrality by 2050 across the EU remains intact despite the pandemic, although there may well be some short-term delays to specific policy actions toward achieving this.
Key takeaways from the report include:
- There are some concerns that development of stronger long-term climate policy could be postponed in favor of short-term economic stimulus. Some EU members, such as Poland and the Czech Republic, are pushing for delays to the EU’s commitment to achieving its goal of carbon neutrality by 2050.
- What’s more, some sectors, such as automotive and aviation, have demanded a delay in the implementation of new environmental policies that would potentially pose additional cost and delay to their recovery.
- Current policymaking, however, is still progressing. The European Commission (EC)'s temporary framework for measures to support the economy during the covid-19 outbreak, stresses that new policies should keep in mind the importance of the EU objectives for green and digital transitions. The EU is also on track with its Green Deal legislative roadmap, and has revealed an updated EU green taxonomy.
- While the EU and many members have updated their carbon targets significantly of late, the covid-19 crisis may reduce the focus on the energy transition in the short-term. However, with many oil companies such as Repsol and Equinor already shifting their focus to renewable energy to diversify portfolios and meet the expectations of shareholders, S&P believes investments in renewables may not have slowed down massively as yet, but have instead been delayed by a few months.
- All things considered, S&P Global Ratings believes that the overall goal of achieving carbon neutrality by 2050 across the EU remains intact despite the pandemic — with the EC still planning on realizing the 2030 emissions reductions target.
While the EU remains confident among the pandemic, other areas and sectors are not so optimistic. Covid-19 has caused a drastic downturn in sustainable lending. That’s according to a recent report by Refinitiv. The report notes that despite the positive momentum behind sustainable lending throughout 2019, ESG financing has become a bit of a concern. And earlier this month, economists at The Brattle Group released an assessment on the impacts through early April 2020 of covid-19 on the electric and natural gas industries. Among the findings, the authors note that through the end of March 2020, relative to the depth of impact on other sectors, such as healthcare and employment, there has been a lagging visible effect on the utility industry’s market conditions, partly due to the essentiality of the industry.
