European Central Bank (ECB) Executive Board member and Supervisory Board Vice-Chair Frank Elderson urged predictable climate policy Oct. 19, saying uncertainty can delay investments needed to protect Europe’s economy.
Speaking at the Green Swan conference in Manila, Elderson linked flood protection and water management to Europe’s ability to withstand environmental shocks. He also called for cleaner energy to reduce reliance on imported fossil fuels. “The transition requires certainty for long-term planning,” he said.
A European Commission calculation cited in an ECB study puts the additional green investment needed to meet the European Union’s 2030 target at €477 billion a year through 2030. Elderson argued that uncertainty over future rules can hold up projects requiring large upfront commitments.
Banks said climate considerations tightened credit standards for high-emitting firms without credible transition plans during the 12 months through the second quarter of 2026. Green firms and companies making progress in their transition saw an easing effect instead, the ECB’s July lending survey found. Banks also said uncertainty about future climate regulation dampened demand for related corporate loans.
Environmental risks add another cost. In an ECB study’s modeled drought with a 100-year return period, surface-water scarcity could put up to 24% of euro area output at risk. That figure describes economic activity exposed in the scenario, not an expected loss of output.
Elderson said electrification and renewable power could reduce Europe’s exposure to fossil-fuel price swings. The International Renewable Energy Agency found that 91% of renewable power projects commissioned worldwide in 2024 were cheaper than new fossil-fuel alternatives. It identified grid connections and financing costs as barriers.
Eurostat reported annual euro area inflation of 3.8% in September, up from 3.2% in August, with energy contributing 1.71 percentage points to the September rate. Those figures do not measure the effect of climate events on inflation. Eurostat’s next flash inflation estimate is scheduled for Nov. 4, followed by its next full inflation release Nov. 18.
