ECB President Lagarde: COP31 summit in Antalya is a great opportunity to turn goals into action

In Lagarde's article titled "A warning from Europe's hot summer" published on the ECB's official website, the economic and social effects of extreme weather events on the continent were evaluated.

Emphasizing that the heat waves, droughts and forest fires that affected Europe this summer are serious warnings, Lagarde stated that although the economic effects seem limited for now, the cost of climate change is increasing.

Lagarde reminded that more than 30 thousand additional deaths were recorded in the summer months, and 400 thousand hectares of land burned in Spain and France, and pointed out that low water levels in the Rhine and Danube rivers disrupted shipping routes and the cooling processes of nuclear power plants.

Stating that Europe is warming at twice the rate of the global average, Lagarde noted that the short-term picture does not fully reflect the risks and that three-quarters of the businesses in the Eurozone are directly dependent on the services provided by nature.

Lagarde stated that data showed that economic activities were 1.5 percent lower two years after heat waves and 3 percent lower four years after drought.

Lagarde also noted that inadequate flood protection puts 12 percent of the Eurozone's economic production at risk, and pointed out that only a quarter of disaster losses are insured.

Energy shock and three priorities for Europe

Stating that the war-related energy shock in the Middle East combined with summer heat, Lagarde stated that wholesale electricity prices reacted less than previous crises, thanks to renewable energy investments.

On the other hand, Lagarde stated that the drought created price pressure by limiting hydroelectric and nuclear capacity, and stated that only solar energy performed better than normal in the process.

Stating that most of the necessary investments should come from the private sector, Lagarde listed three priority steps for Europe to combat the climate crisis.

In this context, Lagarde emphasized that, first, proactive steps should be taken against climate risks and financial protection should be provided and the scope of climate insurance based on public-private partnerships should be expanded at the EU level, and in the second step, she touched upon the importance of increasing infrastructure investments.

Stating that network modernization and storage capacities need to be improved, Lagarde pointed out that every 1 euro invested in the network provides more than 2 euros in savings in system costs.

Finally, Lagarde called for ease of connection and noted that common EU rules that will make it easier for companies to include the energy they produce in the system should be put into effect quickly.

Lagarde emphasized that the COP31 summit in Antalya, which will start next week, is a historic opportunity to turn the vision into action and that Europe should use the opportunities it has today for the sake of future generations.