Trésor-Info - Publications de la direction générale du Trésor - Ecological-transition

How Much Investment Is Required To Reach France’s Decarbonisation Targets For 2030?

2024-04-04T00:00:00+02:00

A large-scale redirection of investment flows towards decarbonisation items is required for France to achieve its climate targets. Many estimates of the additional low-carbon investment needs have been made, ranging from €55 billion to €130 billion per year from now to 2030 (an additional two to five percentage points of GDP). Comparing these estimates is particularly challenging given the wide range of definitions, methods and scopes used.

Theoretically, minimising the costs of decarbonisation should be based on a comprehensive analysis of the abatement costs of each intervention across the entire economy. In practice, the investment needs are calculated by sector.

When applying a consistent methodology across sectors, the gross additional investment needs in low-carbon items (compared to 2021) are estimated at approximately €110 billion per year by 2030.

When deducting the lower investments in (i) carbon-emitting alternatives (e.g. only factoring in the additional cost of an electric vehicle compared to an internal combustion engine vehicle), and (ii) newbuilds, assuming reduced land take, the net additional investment needs would drop to €63 billion per year (see Chart opposite). This net requirement could be further reduced by the reduction of other fossil fuel investments (e.g. lower demand for new internal combustion engine vehicles) and by energy bill savings.

These estimates are subject to considerable uncertainties. In addition, the share of the effort between public and private economic agents is not addressed in this paper, as it will depend on the set of public policies implemented.

Un 14 juillet placé sous le thème de la durabilité en Irlande

2023-08-03T00:00:00+02:00

A l'occasion de la soirée de la fête nationale tenue à la Résidence de France à Dublin, la durabilité et le savoir-faire français sur la croissance durable ont été mis à l'honneur. Les sponsors de l’événement (dont notamment Alstom, Decathlon, Neoen et Veolia) ont pu illustrer la durabilité de leurs activités via une multitude d’animations. La réception a ainsi été l’occasion de mettre en avant les réussites de la collaboration franco-irlandaise en matière de durabilité dans de nombreux secteurs : allant de l’échange d’énergies renouvelables par l'intermédiaire de la future interconnexion électrique ("Celtic Interconnector"), aux solutions innovantes pour réduire les émissions du secteur agro-alimentaire, à la gestion de l'eau et des déchets, en passant par le développement de transports durables grâce à l'élaboration d'un moteur nouvelle génération pour le futur DART+ 100% électrique.

A Carbon Border Adjustment Mechanism for the European Union

2021-03-23T00:00:00+01:00

To achieve carbon neutrality by 2050, the European Union (EU) recently raised its greenhouse gas emissions reduction target for 2030 and plans to strengthen its climate policy instruments, starting with its carbon pricing policy via the Emissions Trading System (EU ETS).

As a result, the divergence with third countries level of carbon pricing (see graph) is expected to widen, posing an increased risk of carbon leakage for the EU. This phenomenon occurs when emissions in third countries increase after a country or region adopts more ambitious climate policies. This undermines the effectiveness of climate policies.

Ex ante modelling estimate carbon leakage to be in the range of 5-30%: in other words, for every 10 tonnes of emission reductions in the country or region implementing more ambitious climate policies, emissions in the rest of the world increase by 0.5-3 tonnes. Whilst it has proven difficult to detect carbon leakage empirically at EU level, in part because of low carbon prices in the past, more recent data suggest that carbon leakage is already taking place.

In June 2021, the European Commission will put forward its proposal for an EU carbon border adjustment mechanism (CBAM). Under this mechanism, EU carbon pricing would apply to imported goods in the same way as for emission-intensive goods produced in the EU. The aim is to tackle carbon leakage more effectively than existing instruments, within a framework compatible with World Trade Organisation (WTO) rules.

The EU CBAM must address a number of legal, technical, economic and political challenges. France has put forward proposals on how to tackle these challenges, favouring a gradual approach based on a system of allowances that mirrors the EU ETS and which accounts for the climate policies and levels of development in third countries.