The Covid-19 crisis has presented Europe with a once-in-a-generation opportunity to launch a new era of economic growth.
If the private sector and governments across the European Union work together on bold, innovative policies in the near term, they can address not only the current crisis but also foster steady business investment and the creation of good jobs well into the future.
The EU is moving forward with €750 billion ($888 billion) of new stimulus spending as part of its Next Generation EU initiative, over one-third of which is earmarked for projects related to climate change, including research into low-carbon solutions.
As this funding makes its way into the real economy, it will broaden understanding of how climate-related investments can positively affect the communities where we live and the businesses where we work.
Commissioned by Breakthrough Energy, a network of climate-oriented entities and initiatives backed by the philanthropist Bill Gates, the report identifies 55 low-carbon, real-world projects across Europe that are ripe for investment.
Each project is geared toward scaling up new technologies and business models that will help Europe achieve net-zero greenhouse-gas emissions by 2050, and all sit within one of five crucial sectors: energy, industry, buildings, transport, and agriculture.
Moreover, each project is currently at a different level of maturity, representing the full spectrum of the innovation cycle, from early-stage demonstration to late-stage deployment, which helps diversify risk. Together, these projects have the potential to reinvigorate and transform Europe’s economy.
According to our report, developing and deploying these projects can create a €12.9 trillion market opportunity, support 12.7 million jobs, and help the EU achieve its ambitious emissions-reduction goals by the middle of this century.
To have such an outsize impact, each project requires its own mix of private-sector creativity and capital investment, in addition to public funding and an appropriately aligned policy framework from the EU and its 27 member states.
What do these innovative projects look like, and what policies are needed to support them? Consider floating offshore wind. Europe’s nearshore shallow seas are already crowded with wind turbines.
But until recently, it has been much too expensive to develop wind farms in the deep water where 80 per cent of Europe’s offshore wind-generating potential is found.
By building 100 large-scale floating wind farms by 2030 in the Baltic and North Seas and in the Atlantic Ocean, we can begin to unlock this vast potential and rapidly scale up renewable energy production in countries like Portugal, Sweden, and Estonia.
On the policy front, programs like Horizon Europe, the EU’s primary funding vehicle for research and innovation, can accelerate advances in blade design, and ultimately drive down costs for turbines that don’t need to be permanently fixed onto the seabed.
Another promising investment area is in “Agriculture 4.0.” In Europe’s agriculture sector, the rate of uptake of digital technologies currently lags behind what’s happening in other major industries, owing to margin constraints on farm equipment and a relative lack of investment capacity.
If farmers, tech companies, universities, and others work together to identify best practices for farming technologies – such as satellite imaging, robotics, and blockchain – they could create a €10 billion market by 2050 that would also help drive down emissions.
By bringing agriculture fully into the digital age, we can make the sector more appealing for a younger generation of farmers who want to maximise efficiencies in how we grow our fruits and vegetables, raise our livestock, and manage arable land and forests.
Finally, there are many opportunities in the renovation of public buildings. Schools, hospitals, and other public facilities are vital to any community, but in Europe, they tend to be among the oldest and least energy-efficient forms of infrastructure. All told, buildings in Europe account for 40 per cent of EU energy consumption.
Aided by new digital-modeling techniques, renovating public buildings across Europe with cutting-edge materials like aerogel insulation and vacuum-glazed windows (which improve insulation while increasing penetration of natural light) could slash carbon dioxide emissions, reduce public energy costs, and support 660,000 local jobs.
Policy measures to help increase EU-wide renovation rates to at least 3 per cent annually include the just-announced Renovation Wave, investments in workforce development, and measures to decarbonise the construction industry’s value chains.
Even with all their potential, these three investment areas barely scratch the surface of what is possible in Europe. Other projects on our list include giga-factories to manufacture lithium-ion batteries, new forms of urban mobility like shared autonomous vehicles, insect proteins to lower livestock emissions, and “green hydrogen” to cut emissions at Europe’s roughly 500 steel plants.
We know that achieving a low-carbon future demands innovation. Identifying these projects now lays down the latest marker on our path to net-zero emissions by 2050, and to establishing Europe as the global leader in the climate technology markets that the world will increasingly rely on.
As the EU recovery money allocated to fight climate change starts flowing into the economy, we must ensure that political and industry leaders at all levels focus on commonsense, coordinated policymaking that promotes and adequately supports low-carbon research and innovation.
Developing and scaling up new technologies is hard. More to the point, it takes time, which is a resource that we can no longer spare.
Ann Mettler, Senior Director for Breakthrough Energy, was head of the European Political Strategy Centre, the in-house think tank of the European Commission. Cyril Garcia, CEO of Capgemini Invent, is a member of the Capgemini Group Executive Board.
Copyright: Project Syndicate, 2020.