Rising fuel prices: Lagarde: Europe's dependence on fossil fuels is unsustainable
The energy regime in Europe is "clearly unsustainable", the president of the European Central Bank (ECB) has warned, as the continent faces a rapid rise in fossil fuel energy prices, mainly coming from international markets.
Europe “imports around 60% of its energy, almost entirely from fossil fuels,” Christine Lagarde said in a speech in Frankfurt. “In an environment that is putting pressure on households and businesses, alternative energy sources “offer the most obvious way” to reduce the contradictions between the main objectives of European energy policy: security of supply, environmental sustainability and affordable prices,” Lagarde said.
According to the ECB’s analysis, countries with electricity generation that relies more on non-fossil sources, such as Spain and Portugal, have been more protected from rising natural gas prices. However, as she stressed, “the way we approach the transition is also important.” This means “finding the most economically efficient ways” to achieve growth and decarbonization at the same time.
Referring to the 2015 Paris climate agreement, Lagarde recalled that the goal was to limit global warming to 2°C or even 1.5°C above pre-industrial levels. However, the last decade has turned out to be "the warmest on record."
The ECB President noted that “the overall response, from governments as well as from societies as a whole, has not been in line with what the situation requires.” One reason, she said, is that “climate change, a phenomenon that imposes itself regardless of political positions, has become a partisan issue in itself.”
Finally, Lagarde said that people need "unbiased" analysis in order to "select relevant information, ignoring unnecessary noise, and help policymakers and citizens understand the signals and what is at stake."
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