2023-12-05 16:03:00
Bercy wants to show that it is going green. Pointed out by environmental associations and NGOs, the Ministry of the Economy and Finance redoubled its efforts this Tuesday, December 5 to welcome with great fanfare the co-founder of Microsoft Bill Gates, a slew of ministers, pundits of the French administration, renowned economists and stakeholders in the ecological transition.
In the middle of COP28, Bruno Le Maire outlined the major ambitions of France in the decades to come. “France must become the first green economy in Europe in 2040”, he declared in the preamble to the third edition of the Bercy meetings on the theme of “Growth and climate”.
« Ecology is not a political choice. It’s a human obligation […] It can thwart our freedom and sometimes contravenes our habits. However, it is with these habits of consumption and production that we must break. Ecology necessarily brings a rupture », he continued in the Pierre Mendès France conference center, which was crowded for the occasion.
During his speech, he castigated ” denial “ on the acceleration of climate change. But also “catastrophism which often borders on inaction”. The tenant of Bercy pleaded for “voluntarism”. Responsible for the country’s budget, Bruno Le Maire also mentioned ” the costs ” of this rupture for “public finances”, “private interests” et ” households “. Currently under the surveillance of rating agencies, the executive continues to want to give guarantees of “budgetary seriousness”. But its strategy for restoring public finances might well come up once morest the dizzying needs for investment in the ecological transition.
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110 billion euros of investments from 2030
At the request of Bruno Le Maire, the powerful Directorate General of the Treasury (DGT) submitted to the government this Tuesday, December 5, a particularly documented interim report. Focused on the economic issues of the transition to carbon neutrality, this preparatory work aims in particular to assess the amount of investments necessary to successfully achieve France’s objectives by 2050.
As a result, economists at the Ministry of Finance estimate additional investment needs at 110 billion euros gross per year from 2030. Without going into details, the General Directorate of the Treasury (DGT) explains that these investments will make it possible to make energy savings.
The details of this report should be made public in a working document to be published next year. At the same time, investments in fossil fuel sectors are expected to decline. “ The rise of electric vehicles and sobriety efforts would, for example, reduce brown investments in thermal vehicles by around 37 billion euros per year in 2030. », underline the rapporteurs.
In the end, the balance might be around 75 billion euros. This amount is relatively “consistent” with the figures from the Pisani Mahfouz report. Last spring, the two economists estimated the amount of investments necessary for the transition at 66 billion euros.
Climate emergency: Jean Pisani-Ferry recommends investing 70 billion euros by 2030
“It will be necessary to make a lot of investments in a short time”
Invited to debate with the chief economist of the International Monetary Fund (IMF) Pierre -Olivier Gourinchas, economist Jean Pisani-Ferry said ” optimistic “ on costs.
“There is no reason to think that the cost of renewable energies in the long term will be higher than the cost of fossil fuels”did he declare. “As we are very late, we will have to make a lot of investment in a very short time”, he warned. Emmanuel Macron’s former advisor did not rule out short-term difficulties. “There will be losses in production capacity and capital”.
In addition to job destruction and factory closures, the expert also sounded the alarm on “natural capital”. “Today, this capital is seriously threatened”, at-il having you. « We talk regarding water, forests, biodiversity. Our measure of prosperity by GDP is not adequate because it is not corrected for environmental damage. France will need a dashboard ».
“We must not implement austerity programs” (Pierre-Olivier Gourinchas, IMF)
Eight points of GDP lost in a world at +3°C
The damage from global warming to +3°C on France might increase the bill to a stratospheric level. Bercy economists particularly mention a cost of 8 points of gross domestic product (GDP), or more than 210 billion euros in a dark scenario.
The experts, who cite the Network of Central Banks and Supervisors (a network of central banks and financial supervisors on a global scale), take into account capital destruction linked to extreme weather events and productivity losses linked to extreme heat .
Added to this are the costs in terms of human health which are still difficult to quantify. “It is possible that the damage will be higher than these estimates”underlines Bercy. “Today, we know how to measure economic activity well. But we do not know how to properly measure the damage to the environment”, regretted Jean Pisani Ferry at the conclusion of his intervention. It remains to be seen whether it will be heard by Bercy.
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