How green is green enough? The changing landscape of financing a sustainable European economy
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How green is green enough? The changing landscape of financing a sustainable European economy Elia Trippel1
© Europäische Rechtsakademie (ERA) 2020
Abstract Changing narratives surrounding the climate and environmental crisis have shaped the degree of ambition in the approach of EU policy-makers towards the sustainability transition and sustainable finance. This paper presents the evolution of EU sustainable finance policies between 2015 and 2019, focusing on the EU Taxonomy, arguing that as European narratives have shifted towards highlighting the severity of the climate and environmental crises, EU sustainable finance policies have also accelerated. The paper considers the IPCC SR1.5, published in October 2018, as one catalyst for this shift in narratives and the subsequently stronger policy responses, culminating in the European Green Deal. Keywords Sustainability · Sustainable finance · Climate change · Green finance · Taxonomy
1 Introduction The year 2018 was a turning point in the EU’s perception of, and response to, the threats arising from climate change and environmental degradation. In 2018, the Intergovernmental Panel on Climate Change (IPCC) published its landmark special report on the impacts of global warming of 1.5 ◦ C above pre-industrial levels, also referred to as the SR1.5. The report recalls the aim of the Paris Agreement to hold “the increase in the global average temperature to well below 2 ◦ C above pre-industrial Disclaimer: The information and views set out in this article are those of the author and do not necessarily reflect the official opinion of the European Commission.
B E. Trippel
[email protected]
1
European Commission, Rue de la Loi 200, 1049 Brussels, Belgium
E. Trippel
levels and pursuing efforts to limit the temperature increase to 1.5 ◦ C above preindustrial levels.”1 It had been “prepared in response to an invitation from the 21st Conference of the Parties (COP21) to the United Nations Framework Convention on Climate Change in December 2015, when they reached the Paris Agreement.”2 Following its publication, mainstream media outlets began communicating on the devastating consequences of surpassing the 1.5 ◦ C target and reaching 2 ◦ C or, worse, 3 ◦ C, which is the current global trajectory, according to the IPCC. David WallaceWells sums up the conclusions drawn by analysts, commentators, social scientists, and policy-makers around the world, when describing the IPCC report as “dramatic” and “alarmist [. . . ], illustrating just how much worse climate change would be at 2 degrees of warming compared with 1.5.”3 In a nutshell, the report presented evidence that 2 ◦ C of global warming will bring higher numbers of heat-related deaths, a higher risk of food scarcity, more frequent and worse extreme weather events, higher levels of poverty, and a significant rise in the number of people facing water stress (up to 50%), compared with a 1.5 ◦ C world. It also concludes that reaching 2 ◦ C will lead to a slowdown in global economic growth, compared with 1.5 ◦ C. The r
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