User:Poree S/I4CE - Institute for Climate Economics

I4CE - Institute for Climate Economics is a non-profit research organization that provides independent policy analysis on climate change mitigation and adaptation. They promote climate policies that are effective, efficient and socially-fair.

The 40 experts engage with national and local governments, the European Union, international financial institutions, civil society organizations and the media.

I4CE is a registered non-profit organisation, founded by the French National Promotional Bank Caisse des Dépôts and the French Development Agency.

Work topics
Their work covers three key transitions – energy, agriculture, forest – and adresses six economic challenges: investment, public finance, carbon pricing, development finance, financial regulation and carbon certification.

Adaptation
France and Europe, as indicated by the increasingly hot summers experienced here, are vulnerable to climate change. The more global greenhouse gas emissions fall, the easier adaptation becomes but adaptation is undoubtedly a necessity. However, it is clear that the French and European adaptation policies and the resources deployed, whether financial or human, are weak. Moreover, the French State is spending more than €50 billion a year on infrastructure, without systematically assessing its resilience to tomorrow’s climate.

I4CE studies the tangible challenges of adaptation, aiming to ensure that they are on the agenda of all public decision makers, and quantifies the funding required to adapt territories and thus reduce their vulnerability to climate crises.

Investment
Climate protection requires increased public and private investment, whether for the retrofitting of buildings, installing electric charging stations, transforming industry or adapting infrastructure to the impacts of global warming. Today’s investments determine our future emissions and vulnerability.

For many years, I4CE has been quantifying the climate investments made in France and the need for additional investments. This data feeds into macroeconomic discussions, assesses the effectiveness of the policy mix and provides a common basis for discussions on effort sharing and financing the transition. I4CE is now developing its activities on a European scale and is disseminating internationally, free of charge, the tools developed and tested in France to guide climate investments.

Public finance
In France, annual expenditure on financing climate investments and co-financing those of households and companies amounts to around €30 billion from the State and €5 billion from local authorities. This public funding is essential to enable these actors to deal with new regulations or rising energy costs. The challenge, in France as elsewhere, is to ensure that this public funding is effective, available in sufficient quantity, and more generally that all public finance is consistent with climate change mitigation and adaptation objectives.

I4CE provides figures and analyses of public financing to public decision-makers and all stakeholders, to help them align the budgets of the State, local authorities and the European Union with the climate goals. The Institute also develops budget management tools, such as the green budget, which it distributes free of charge to local authorities and internationally.

Carbon pricing
Carbon markets, carbon taxes and, more generally, taxes on energy are considered to be major levers to encourage private actors to change their behaviour and to make the necessary investments. However, this lever must be used with caution, as the Yellow Vests Protests in France served to remind us, when actors are unable to rapidly reduce their energy consumption and do not have the capacity to invest in alternatives.

I4CE provides data on carbon taxes and markets around the world and analyses how governments are using the revenues from these schemes, which now amount to $100 billion a year. The Institute also analyses energy tax exemptions for many sectors.

==== Development finance ==== International public banks, whether multilateral such as the World Bank or bilateral like the French Development Agency, are key actors in the international funding of the fight against climate change. Beyond their financial power, they have expertise in accompanying project implementation and developing the local institutional and financial ecosystem. The need for climate investment in developing countries is immense: some sources put this figure at close to 2,000 billion dollars per year. Therefore, public banks must not only increase their financing capacity but also the impact of each dollar spent.

I4CE examines how international banks are transforming themselves from within and how they are maximizing their transformational impact in the countries they serve. Through the Mainstreaming Climate in Financial Institutions initiative, which brings together more than 50 financial institutions worldwide, I4CE promotes dialogue between these public banks and the rest of the financial sector.

==== Financial regulation ==== Private finance, primarily banks, has a great deal of influence on the strategic choices of the real economy companies it finances and which operate in the fields of energy, mobility or agri-food for example. It is therefore necessary to mobilize such finance in addition to the traditional policy mix. Financial regulation has an even more important role to play here, since the limitations of voluntary commitments are becoming clear.

I4CE works closely with financial regulators and assesses financial regulatory proposals and their ability to contribute to the transition of the real economy. The Institute is involved in the European regulatory agenda and, having contributed to the reform of reporting requirements, continues to explore new regulatory proposals such as bank transition plans.

==== Carbon certification ==== How can we differentiate between projects that genuinely support the fight against climate change and those that only claim to do so? This is a challenging question, particularly in relation to agricultural and forestry projects, where quantifying stored carbon is difficult and there is intense debate over which best practices should be encouraged. A challenging question indeed, but nevertheless one that must be answered to enable the targeting of public and private funding, and to ensure that this funding is effective for the climate and, more generally, the environment.

For many years, I4CE has been developing expertise in carbon certification for agricultural and forestry projects, expertise that has led to the adoption of the Low Carbon Label by France. The Institute continues to monitor the implementation of this scheme and ensures its development and improvement. The EU is now designing its own carbon certification scheme and the Institute is working to help it adopt a system that is both ambitious and pragmatic.

Energy transition
The energy producing and consuming sectors – property, industry, transport, agriculture – must completely decarbonize within a few decades. Targets and public policies have multiplied in recent years, but implementation remains insufficient and complex. Many households, communities and businesses do not have the capacity to invest in fossil fuel alternatives, and have been hard hit by new regulations and rising energy prices.

I4CE quantifies investments and investment needs in the energy transition, assesses the effectiveness of public policies, particularly public financing, to provide policymakers and all stakeholders with the information they need. The Institute provides free access to the evaluation tools it develops.

==== Agriculture and food ==== While the French agricultural and food system is vulnerable to climate change and responsible for about a quarter of the country’s emissions, the Institute’s analyses show that its financing tends to preserve the status quo. This is particularly true of public financing, which amounts to €25 billion annually. It is necessary to make better use of this funding to help producers who are changing their agricultural practices, and also to anticipate the new emerging needs, for example to help those that lose out in the transition to invest in tomorrow’s sectors.

In addition to its work on certification and carbon storage payments for farmers I4CE analyses public financing and investment needs, and makes data freely available to provide food for thought for public decision makers and stakeholders, especially in the agricultural sectors. The Institute brings these stakeholders together in its Agriculture Climate Club.

Forestry and wood
To become carbon neutral, France and the EU must preserve carbon storage in forests, while greatly increasing carbon storage in biomaterials. Unfortunately, however, the forest carbon sink is tending to deteriorate, particularly as a result of climate change. And much work is needed to increase the proportion of harvested wood used in biomaterial production.

While much public funding is currently dedicated to forest management and the wood industry, we must ensure that it has a positive effect on both climate change mitigation and adaptation. For this reason, in addition to its work on the carbon certification of forestry projects, I4CE evaluates public policies and funding and provides food for thought for public decision makers and stakeholders, especially in the economic sectors. The Institute brings these stakeholders together in its Carbon Forest and Wood Club.

Local authorities
Local authorities are at the forefront of investing in everyday transport, electric vehicle charging infrastructure and the retrofitting of public buildings for example. According to the latest I4CE estimates, local authorities must double their climate investments, but will they have the means to do so? Much uncertainty exists, and the State and local authorities are in disagreement over their sharing of the investment effort and the contract management tools they use.

To enable them to address this challenge objectively, on the basis of a shared assessment, I4CE quantifies the climate expenditure needs of local authorities and analyses possible financing methods. The Institute is also developing tools for steering transition financing, tools that are made freely available to local authorities to help them assess their current and future climate expenditure, such as its climate budget assessment framework for local authorities.

France
The French state and its population invest €84 billion per year in the energy transition. According to I4CE figures, an additional €30 billion is needed to make this transition a success, not forgetting the transformation of the agricultural and forestry sectors and adaptation to the consequences of climate change. Invest more, but also invest better: the French State spends more than €50 billion a year on assets that are currently subject to global warming, and will be in future, without systematically assessing their resilience to tomorrow’s climate.

I4CE works closely with public policymakers and stakeholders in a trusted third-party role, providing free data on public climate investments and finance. It also assesses the effectiveness of implemented public policies, particularly the effectiveness of public financing.

Europe
With its European Green Deal and its “Fit for 55” package, the European Union continues to strengthen its climate objectives, reinforcing and extending the carbon price, while introducing regulations such as ending the sale of new petrol and diesel cars from 2035. At the same time, since 2020 there has been only a marginal increase in funding to support Member States, businesses and families in making the investments necessary for the transition, including in strategic sectors such as green technology (cleantech).

To take these discussions forward, I4CE is starting to assess the need for climate investments at the EU level. The Institute is also analysing European public funding, particularly that dedicated to innovation, where the EU budget can have a decisive impact. I4CE pursues its activities at the European level, particularly regarding financial regulation and carbon certification.

International
According to some sources, developing countries would collectively need to invest more than $2 trillion annually to reduce their greenhouse gas emissions. Unfortunately, there remains much to be done in this regard, and not many of these countries have identified which concrete investments should be made, let alone drawn up a financing plan to mobilize their own public resources, their national financial sectors, and the international development banks. ​

At the international level, in addition to its work with international development banks, I4CE contributes to the development and dissemination of transition financing management tools in developing countries that have proved their worth in France, such as the green budget and the “Landscape of climate finance”. These tools, which are available for free, show how the transition is currently financed and help plan its funding for the years ahead, based on a shared assessment and data.

Notes et références


Articles connexes

 * Finance du carbone
 * Effet de serre
 * Économie de l'environnement
 * Protocole de Kyoto
 * Fonds vert pour le climat
 * Groupe d'experts intergouvernemental sur l'évolution du climat
 * Conférence de Paris de 2015 sur le climat
 * Réchauffement climatique
 * Transition énergétique
 * Transition écologique
 * Conférence de Charm el-Cheikh de 2022 sur les changements climatiques
 * Stratégie nationale bas carbone

Liens externes

 * Site officiel
 * Agence française de développement
 * Groupe Caisse des dépôts