Can Europe afford trillions of euros for its ‘net zero’ energy transition? In a word, no

Spending money on the aim of manipulating the global climate is proving extremely expensive, with no sign of any positive results. It’s noted here that ‘the implementation remains dependent on over a trillion euros in investments every single year between now and 2030—and Europeans are already angry enough with their rising cost of living.’
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Summary:
— A new report estimates the EU’s green transition could cost €1.3 trillion annually until 2030 and €1.54 trillion annually until 2050.
— The high cost of the transition may require higher taxes, subsidies, and potentially national green investment strategies.
–Concerns exist about public support for the transition due to rising living costs and potential harm to businesses’ competitiveness.
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Climate finance is a white-hot topic right now, says OilPrice.com.

The COP2 delegates failed to agree on a generous enough deal for the transition in developing countries; in the U.S., project Veritas revealed that the EPA was funneling billions into climate activist organizations ahead of Trump’s presidency to ensure continued pressure on the government; and in the EU, a think tank put a price tag on the transition.

The EU cannot afford it.

Bruegel, the Brussels-based energy outlet, published a policy brief this week focusing on what the EU needs to get to its stated goals of net zero and how much it would cost.

It appears that, for these goals to be hit, the bloc would need to spend 1.3 trillion euros, or about $1.4 trillion, every year until 2030. After that, the price for the transition jumps to 1.54 trillion annually and stays this much until 2050.

The impressive amount of money that needs to be spent on the transition is divided into three categories by Bruegel: energy supply, energy demand, and transport. It may also be an underestimation by the EU itself—because it does not include all the costs associated with the transition, omitting, for instance, financing costs that could be quite significant in their own right.

As Bruegel points out, “the cost of financing investment will be significant for cash-constrained agents, and public finances will need to step in with de-risking instruments to facilitate private investment.”

What this means is that the European Union will need to step up subsidies in all of its transition directions in order to motivate private investors to join it in funding the transition.

That could be a tough job given the current context in transition technologies, which is one with subdued demand despite the strong government support in the form of subsidies.

Full article here.