Investment Institute
Macroeconomics

Europe’s path to net zero


Key points

  • The European Union has been a global leader on climate action and policies. With its European Green Deal, it has committed to reducing greenhouse gas emissions by at least 55% by 2030 from 1990 levels and reaching carbon neutrality in 2050. These ambitions are shaping policy, legislation and investments decisions
  • A successful transition to carbon neutrality requires an overhaul of European energy production and consumption. Some sectors – such as power and transport – look set to make the quickest progress, while some countries’ decarbonisation efforts will have to be supported
  • The transition cost is massive, estimated at €3.5tn over the coming decade. The private sector is expected to contribute two-thirds of this total, with the European Union facilitating investment through legislation and supporting instruments, including taxonomy and its green bond standards. A revision of carbon pricing – its most powerful tool – is due this summer
  • Around €600bn has already been earmarked in public funding from the European Union’s long-term budget and Next Generation deal. At least that amount again is envisioned for total public commitment, estimated at 35% of total funding. We present a preliminary assessment of public spending plans to date
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    This document is for informational purposes only and does not constitute investment research or financial analysis relating to transactions in financial instruments as per MIF Directive (2014/65/EU), nor does it constitute on the part of AXA Investment Managers or its affiliated companies an offer to buy or sell any investments, products or services, and should not be considered as solicitation or investment, legal or tax advice, a recommendation for an investment strategy or a personalized recommendation to buy or sell securities. 

    It has been established on the basis of data, projections, forecasts, anticipations and hypothesis which are subjective. Its analysis and conclusions are the expression of an opinion, based on available data at a specific date. 
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