François Villeroy de Galhau: Europe in motion for climate transition - snapshot, video and scenario of the risks

Speech by Mr François Villeroy de Galhau, Governor of the Bank of France and Chair of the Board of Directors of the Bank for International Settlements, at the 7th annual Sustainability Week, London, 22 March 2022.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Ladies and Gentlemen,

It is a pleasure to be with you today, despite the war in Ukraine that is clouding our minds. In this era of urgency, we have to cope with multiple crises at the same time. And the latest IPCC report, despite being widely overshadowed, reminds us of another burning priority, and how much this Sustainability Week is welcome. It would be tempting these days to prioritise emergency over sustainability. But as the famous detective fiction writer Raymond Chandler wrote in the Big Sleep: "There is no trap so deadly as the trap you set for yourself". To avoid the lethal trap of short termism, let me propose today two simple remedies: (I) Europe must remain in pole position to achieve net zero emissions, and (II) we need to elaborate further on the macroeconomics of climate and how it is interfering with the current energy crisis.  

I. Europe must remain in pole position to achieve net zero emissions

The European Union has committed to ambitious carbon-cutting targets, with the aim of reducing its 1990 emissions levels by 55% by 2030, and of reaching net zero by 2050. The Eurosystem is largely contributing to this momentum, with the view to implementing its actions in line with progress on EU policy and initiatives – and I must stress here that the Banque de France has often been a driving force. Our actions are two-pronged, as shown by the axis in this quadrant.