Foundation calls for bailout fund for the climate
German foundation World Future Council (WFC) says the current state of the global energy industry is like the financial industry on the eve of the global crisis in 2008. The group called for a bailout fund to absorb losses suffered because of the transition to a low-carbon energy system, Mischa Erhardt reports for public news broadcast ZDF heute. At the World Economic Forum in Davos, Switzerland, WCF chief economist Matthias Kroll said “a major problem of our time is that the fossil energy industry holds many assets that are threatened by the necessary quick exit from the fossil business”. This means the assets would become devaluated as the global transition to renewable energy sources advances, leading to “systemic risks” for the economy. Kroll proposes that these “toxic” fossil assets are bundled and bought by public institutions such as central banks, and that the profits be used for investments in renewables to make progress towards achieving the Paris Climate Agreement’s goal of limiting global warming to below two degrees Celsius. Carsten Brzeski, chief economist at Dutch bank ING-Diba, warned that “bundling crap does not turn it into gold”, adding that institutions such as the European Central Bank did not exist to save private companies.
Find the article in German here.
See the CLEW article Private climate finance under scrutiny on eve of Paris summit for background on climate protection and Germany’s financial system.