Macroeconomic costs and financial needs of the EU post-Covid transition to carbon neutrality

This chapter addresses the investment and financial aspect of the climate change problem. Using different sources and different approaches, the annual additional investments needed to achieve the -55% 2030 EU target (and net zero emissions in 2050) are estimated at around EUR 90-100 billion for the whole EU. It is hoped that half of these investments will come from private sources. Moreover, The second part of this chapter addresses the following questions: 1) Are investments and policies to achieve climate targets going to reduce the short-term positive macroeconomic impact of recovery packages? 2) What is the macroeconomic cost of the EU transition to carbon neutrality? 3) What are the transition risks, and their economic impact, induced by an ambitious climate policy in the EU?