Is Spain's economy prepared for climate change?

Climate Change

Stop the effects of climate change it is of vital importance for the future of our future generations and for the guarantee of the maintenance of natural resources and biodiversity.

However, actions to curb climate change, such as reducing greenhouse gas emissions, are costly. It requires a prior budget and preparation. Is Spain economically prepared to contribute to reducing the effects of climate change?

Paris Agreement

Hundreds of countries around the world, contributors to the emissions of the gases that cause climate change, have ratified the Paris Agreement. This determination by countries to stabilize global CO2 emissions implies various changes in the global financial system. These changes make governments and businesses have to adjust their budgets. What about the Spanish economy?

This is one of the questions that experts in the field of climate change try to answer. In a discussion forum held in Madrid by lto AFI business school and the French Institute for Sustainable Development and International Relations (Iddri), LLAMADA "Climate risk management and sustainable financing", They have dealt with issues of this nature.

The ratification of the Paris Agreement has meant "A before and after" in the economic implications that governments will have in the fight against climate change. These implications include companies with many carbon-intensive financial assets. To do this, they must define risk maps that various sectors will face as the energy transition to renewables progresses. That is, investors are beginning to question whether the investments that are economically profitable today, based on the exploitation and extraction of fossil fuels, will be so in a future where renewable energies will prevail.

This approach to energy transition, the fight against climate change and decarbonisation, makes it possible to carry out analyzes of the possible climate risks associated with investments to institutions and corporations. For example, you have to perform extensive analysis on the profitability of extracting undiscovered fossil fuels or companies that are developing their activities in areas that are more susceptible to being affected by natural disasters caused by climate change.

Climate change adaptation

Reforms in the global financial system

The Financial Stability Board It is the body promoted by the G20 to reform the global financial system. Due to the changes and implications of the effects of climate change, they have been forced to place the financial implications to combat it among the focus of their priorities.

To deal with these financial changes, it has created a working group that is in charge of preparing a report that will guide the countries on the financial implications of the increased effects of climate change.

Reforms and guidelines will be carried out during the months from now until June so that companies and corporations can shape their changes in the financial system. The document to be presented at the G20 summit in June in Germany will be a tool that helps in advising decision-making on the risks and opportunities presented by global warming, and as well as the most convenient goals that must be chosen to carry out these analyzes.

What happens in Spain?

In Spain, awareness of climate change and global warming does not have much influence on investments. Today the Bank of Spain does not know how many assets it has associated with assets that work with coal. That is why it does not have any strategy to help develop actions if the danger thresholds due to the effects of climate change are exceeded. They also do not know the vulnerability of infrastructures to the increase in natural disasters.

In short, Spain is, as always, behind the rest of the countries. To this day, he does not know the risk that climate change can pose to our economy.


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