“Investing in favor of the climate will contribute to emerging from the crisis” Institute of Economics for the Climate – Paris April 2020

When the exceptional Covid-19 health crisis that is hitting the whole world is no more than ancient history, the government will have to initiate recovery plans in order to put the country and the economic machine back on the right track. The most profitable – and the most relevant – investments would then be those in favor of the climate.

According to a study by the Institute of Economics for the Climate, which lists the major projects that the public authorities will have to tackle when the pandemic has receded. The Institute of Economics for the Climate association, founded by the Caisse des dépôts and the French Development Agency, draws up an observation: “Faced with a health crisis leading to a global economic shock, public authorities are faced with a triple requirement: mobilize the health system to save lives, safeguard the economy to preserve income and jobs, and negotiate a way out of the crisis. towards a more resilient society. Climate action, beyond the health emergency phase, can contribute effectively to the requirements of economic dynamics and resilience for our society.” And to list the public policies and the investments necessary for seven sectors of activity concerned by the National Low Carbon Strategy (SNBC).

Overall, the study recommends devoting 7 billion euros of public money each year within these seven sectors, which should, in the long term, make it possible to generate an additional 19 billion per year. In concrete terms, the objectives of the SNBC must be maintained while at the same time carrying out a battery of specific measures: investing public money, particularly in public buildings and transport infrastructure, and making public co-financing, based on subsidies and aid loans. Making energy renovation work compulsory by targeting it and spreading it over time is another recommendation, with the introduction of financial tools allowing projects to start even in the absence of cash, following the principle of “zero remains dependent”. Finally, technical support for these tools must be provided to households, businesses and local authorities.

Where to find these 7 billion euros a year?

The envelope of 7 billion euros to be released each year would consist of the following financing:
– first of all, the State would devote 4.3 billion per year to the climate, including €1.3 billion to remunerate producers of renewable electricity and €3.3 billion to co-finance households, businesses and communities that carry out environmental investments themselves.
Local authorities would increase their investments and co-financing by €2.1 billion per year, through subsidies, energy saving certificates (CEE) or loans from public and commercial banks.
Energy suppliers , within the framework of the CEE , would increase their contribution in the sectors concerned by €1.3 billion, due to an increase in the volume and price of certificates.
– Public banks would release €2.3 billion per year in new commitments for companies, project companies and local authorities.
Public infrastructure and network management companies , such as SNCF Réseau and RATP, would increase their annual investments by 600 million euros. – Commercial banks would offer more subsidized loans to project companies and households, all for €1.2 billion.

Renovation of the building: maintain existing aid and develop new ones, while switching to “global renovation” with training for professionals at stake.

In detail for the seven sectors of activity, public investments should be increased from €1.9 billion per year currently to €2.1 billion per year for the energy renovation of private housing . This would make it possible to reach €16.1 billion in total investment each year, according to the Institute of Economics for the Climate. A release of money which must be accompanied by the maintenance of public aid for renovation “by unitary gesture” , such as the replacement of equipment or the insulation of part of the building. In addition, “proportional” aid for energy savings could be created, in parallel with an extension of the repayment period for zero-rate Eco-loans. The study also proposes to “strengthen and[de] maintain support systems over time” , and “develop integrated offers offering complete renovations” . The idea would also be to phase renovation obligations over time, targeting real estate transactions in particular; the medium-term objective being to “switch fully towards global renovation, financed mainly by the Eco-PTZ” , and to “train building professionals in global renovation” .
Same recommendation for the renovation of tertiary buildings , where public funding should be increased from €500 million/year to €1.3 billion/year, to ultimately generate €2.9 billion/year of cumulative investment. In this sector, it is recommended to “introduce direct aid to compensate for the drop in energy prices” , which could take the form of “a tax credit of up to 15% of the cost of the work” . In addition, a tertiary renovation decree applying to more than 60% of the stock should be adopted by 2022, with a target of reducing consumption set at -60% between 2019 and 2050. What is more, maintaining the Local Investment Support Fund (FSIL/DSIL) for local authorities would be necessary, but targeting it “on the costs of the pre-project phase (audit, studies)” . The other recommendations would consist of “doubling the value of the CEE subsidy” , “offering 40-year subsidized loans for the renovation of community buildings” , and finally setting up “an investment subsidy for the connection of buildings to heat networks” .

Renewable energies: maintain the pace of PPE calls for tenders, give greater importance to local authorities and citizens in projects, shorten administrative deadlines.

A sector that also interests us: that of energy, and more specifically that of the production of renewable electricity . With public funding currently amounting to €1.6 billion/year, the aim would be to raise it to €2.3 billion/year, in an attempt to reach €7.9 billion/year of overall investment. For this sector, the Institute calls for maintaining the pace of calls for tenders provided for in the PPE and for “securing the funding dedicated to the remuneration of projects already completed” . However, it would also be a question of “involving communities and citizens more in setting up and financing projects” . A shortening of administrative delays, particularly for offshore wind power, should also be considered, as well as calls for tenders “based on a census of unused artificial land” . The final recommendation in this area would be to maintain the involvement of the European Investment Bank (EIB) and BPI France in the financing of renewable electricity projects at their current level.

Obviously, for the moment the health crisis linked to the virus which affects the whole world is not yet resolved, however the economic crisis which is particularly linked to it is already making its effects felt… Several ideas are submitted in order to rethink our society, our economic model as well as our way of life. We will have to learn lessons from the current context !

If you want to read the whole study, it’s here !
And if you’re looking to contact us, it’s not here !

Source: www.batiactu.com