Esther Badiola: "There is still a lack of awareness of the impacts of climate change on the economy"
17/06/2024
During a conference of the Donostia Sustainability Forum, the economist and senior advisor of the Climate Change Office in the European Investment Bank's Operations Department explained the key role this entity is playing in the transition towards a sustainable economy.
Esther Badiola, economist and senior advisor of the Climate Change Office in the European Investment Bank's Operations Department, participated in a conference organised by the Donostia Sustainability Forum on 30th May as part of the UPV/EHU Summer Courses, in which she explained the role this institution is playing in the transition towards a sustainable economy.
During her talk, Badiola highlighted the lack of awareness of the economic impacts of climate change and the importance of adopting urgent measures. In this respect, Badiola pointed out that "there is still a lack of awareness of the impacts that climate change may have and of the expenses and economic costs involved". She also indicated that this lack of awareness is a significant obstacle in the fight against climate change and in the implementation of effective policies.
In her talk, Badiola explained that the European Investment Bank (EIB), founded in 1958, has evolved into one of the largest multilateral institutions in the world, even larger than the World Bank in terms of sustainable financing. "The EIB is managed by the member countries of the European Union, and its business model is based on financing itself on the capital markets, enabling it to lend on favourable terms with long-term maturities," she said.
The EIB's approach has changed over the years, especially since becoming the European Climate Bank in 2020. She explained that this transformation is a response to the European Green Deal, "a strategy that seeks to shift the European economy towards a more sustainable and competitive model". According to Badiola, it is urgent to reverse this model because "it is estimated that Europe could lose 10% of its GDP due to climate change by 2030".
In this regard, Badiola highlighted that since 2021, the Bank has not financed activities that are not in line with the Paris Agreement objectives. "We are no longer building ports, airports, roads and we are now more focused on the circular economy, biodiversity and nature, along with new financial products consistent with the green agenda and the economic recovery of the regions, for example, that are closely linked to fossil fuels”, she explained.
Furthermore, Badiola pointed out the difficulties in financing adaptation to climate change, a complex process that involves identifying vulnerabilities and planning investments to improve resilience. "Adaptation to climate change is quite complicated to finance, and often this resilience is conceived as a space for public budgeting, not for investment", she explained.
The EIB advisor also referred to the recent European elections. According to Badiola, although the focus of priorities may change, "the shift that the European Union has made is already established and responds to the brutal impact of climate change, estimated by insurers at €60 billion per year". Esther Badiola made it clear that climate change is not only an environmental issue, but an economic challenge that requires a change in the growth model and coordinated action at European level. "The European Green Deal is a growth strategy to change the European economy towards an economy that is not only more sustainable, but also more competitive, modern and prosperous", she concluded.
