If France is to meet its climate targets, it is imperative to increase public spending considerably. The French government and local authorities currently spend around €32 billion a year on climate protection. However, the Institute for Climate Economics (I4CE) estimates that an additional expenditure of 71 billion euros will be required by 2030 to close the investment gap.
A considerable budgetary effort
The I4CE figures include the investments needed to reduce greenhouse gas emissions by 55% by 2030 compared to 1990 levels, and to achieve carbon neutrality by 2050. This includes theelectrification of vehicles, the renovation of buildings, and the development of public transport and renewable energies. However, this figure could be reduced to 39 billion euros if effective reforms are implemented, such as tightening regulations and recentralizing aid.
Greening Quotas and Allocation of Funding
The study proposes specific measures to share the costs between the public and private sectors. For example, subsidies for electric cars could be replaced by greening quotas imposed on car rental companies. Similarly, a compulsory building renovation scheme could be introduced, financed by home loans.
Hadrien Hainaut, climate finance specialist at I4CE, points out that these measures are designed to shift some of the financial burden of investment onto households and businesses. This would increase the number of eco-friendly vehicles on the road and ensure faster, more efficient home renovations.
Discussion and outlook
The I4CE study is intended as a contribution to the public debate on financing the ecological transition. Benoît Leguet, Director of I4CE, points out that despite the absence of this theme from the legislative elections, the need for climate action is widely shared by the French. The aim is to share the effort fairly between all players, without relying on unrealistic financial solutions.
Major public spending will focus on building renovation, rail development and greening the car fleet. The landmark report by Jean Pisani-Ferry and Selma Mahfouz had already estimated the cost of the climate transition at around 34 billion euros per year until 2030. However, despite an announced budget increase, recent budget cuts show that adjustments will be necessary.
To achieve France’s ambitious climate goals, a substantial financial effort is required, involving both the public and private sectors. The solutions proposed by I4CE offer viable ways of distributing these costs in a balanced and efficient way, thus ensuring a sustainable ecological transition.
