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Combating climate change is good for GDP !

An OECD 1 report published on May 23 this year shows that integrating action on climate change into growth policy can have a positive economic effect. Running to more than 300 pages, Investing in Climate, « Investing in Climate, investing in Growth » details measures that could boost GDP in the G20 countries by 1% between now and 2021, and 2.8% by 2050. For its part, the ENGIE Group is absolutely committed to the energy transition and is basing its forward growth on a low-carbon future.

ENGIE is committed to combating climate change, and has set itself the target of achieving a 20% reduction in the volume of CO2 emissions per kilowatt hour of power and associated heat generated by the end of 2020 (compared with 2012). The Group industrial strategy is consciously and determinedly aligned with the global challenges posed by the energy transition.

Facilitating the energy transition does not put the brakes on growth... quite the opposite, in fact. That is the key message to emerge from the OECD report. After eliminating costs related to the damaging effects of climate change (flooding, storms, etc.), the net boost to GDP in 2050 would be close to 5%, according to the OECD.

Immediate action required

But that figure is dependent on taking action immediately! The report makes it clear that taking action after 2025 would lead to an average 2% fall in global GDP after 10 years: a more radical adjustment would then be needed, accompanied by the introduction of stricter emergency climate measures, which really would disturb the economy. Added to which, fossil fuel infrastructures would become obsolete very quickly and depreciate to extremely low levels of value.

Amongst the measures recommended, the OECD advocates strengthening climate change reduction policies, with specific emphasis on carbon taxes, the removal of subsidies for fossil fuels, the intensification of research and the use of public-sector contracting to stimulate more innovative low-carbon solutions. The organization also recommends the introduction of new initiatives to 'green' the financial system, as France did recently with its launch of the first sovereign green bond.

The ENGIE Group has already called for the introduction of more responsible funding mechanisms. Its first €2.5 billion Green Bond issue in 2014 enabled the Group to launch 77 renewables, energy efficiency and natural resource protection projects. A second issue at the start of 2017 raised a further €1.5 billion.

Investing substantially in low-carbon infrastructures

The choices made over the next 10 to 15 years will be decisive. The report stresses the need for investment in infrastructures. The OECD estimates that between now and 2030, the G20 countries will need to invest €5,600 billion per year in transportation, energy, water and telecoms; a level of investment that will need to rise by 10% in order to target this investment on low-emission, climate-friendly infrastructures. But the bottom line is that the savings made as a result of moving away from fossil fuels would go a long way to offsetting this additional cost. It would also contain the rise in global temperature to below 2 degrees...

ENGIE: committed to combating climate change

ENGIE is putting its expertise to work for the benefit of the energy revolution via an enormous transformational change plan adopted in 2016. This plan includes investment of €16 billion in renewables, developing the uses and applications of gas, and evolving new energy efficiency solutions. The Group has made the irrevocable choice of withdrawing from fossil fuels (coal and fuel oil) in favor of investing in low-carbon, decentralized energy generation.

In total, renewables account for 19.5% of total ENGIE energy generating capacity, with a target to achieve 25% by the end of 2020. Today, 58% of the electricity sold by ENGIE to its customers is generated using natural gas; a key resource in the energy transition. In terms of energy efficiency, the Group offers a comprehensive range of energy services. It also offers green and smart mobility solutions built around digital technologies, alternative fuels and low-impact transportation.

 [1] Organisation for Economic Co-operation and Development

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