Keynote speech by Fabio Panetta, Member of the Executive Board of the ECB, at the European Payments Council’s 20th anniversary conference | Frankfurt am Main, 16 June 2022 |

Let me warmly congratulate you on the 20-year anniversary of the European Payments Council (EPC).[1] Your organisation has been key to the transformation of Europe’s payment system into one of the most efficient in the world, seizing the opportunities offered by the Single Market and the introduction of the euro. Estimates suggest that Europeans pay far less for payment services than Americans do.[2] And Europe has been a pioneer in establishing instant payments settled in risk-free central bank money on a continental scale.
These results were achieved thanks to the combined efforts of the public and private sectors.
Public institutions laid the foundations for these improvements. They brought stakeholders together to steer progress, first in the Single Euro Payments Area Council and now in the Euro Retail Payments Board (ERPB), which I have the privilege of chairing. They also introduced legislation where necessary, for instance to cap interchange fees for card payments and to limit the costs of cross-border transactions. And they broadened market access and competition.[3]
The private sector played a key role, too, by fostering innovation and efficiency. And the EPC helped make that possible. By bringing payment service providers (PSPs) together in creating and managing the Single Euro Payments Area (SEPA), you greatly contributed to the integration of European payments.
The progress that has been made is remarkable. And we can now all make credit transfers and set up direct debits[4] seamlessly across Europe. By ensuring the smooth functioning of European payments, SEPA has facilitated trade across the continent, supporting economic growth[5], and has strengthened the stability of the financial system. This has helped unlock the potential of the Single Market and bolstered confidence in the euro.[6]
We are now facing the challenge of digitalisation.
To stay at the technological frontier and satisfy consumers’ demand for immediacy while preserving our sovereignty, Europe must promote digital innovation and efficiency in a way that corresponds to our societal preferences and objectives. We should roll out instant payments and make them the new normal. And we must build a truly European market with unified solutions for card and mobile payments, which are becoming increasingly popular among consumers.
The Eurosystem is leading multiple initiatives here. Above all, we are closely cooperating with the European Commission and European legislators on our retail payments strategy and the digital euro project, both of which seek to foster innovation, safety and strategic autonomy in European payments.
Today I will look back at the progress made in the last two decades and outline the remaining steps that need to be taken to overcome fragmentation on the customer-facing side of payment services. I will then explain how the digital euro could make it easier to achieve the objectives of our retail payments strategy, in particular the creation of a truly pan-European payment solution, the full deployment of instant payments and support for innovation and digitalisation.[7]
My main message is that, in order to successfully meet the challenges we face, we need the same cooperation between the public and private sectors that has been the hallmark of our success in building the European payments market over the last 20 years. The payment market is developing at a fast pace and we need to jointly feel the urgency to deliver on the needs of Europeans.
The progress made towards a Single Euro Payments Area
European integration reflects a political vision – a continuous effort to bring European countries closer together to secure peace, freedom and prosperity. Completing Economic and Monetary Union and the Single Market is a key part of that vision.[8] In the payments sector, this requires Europeans to be able to pay seamlessly, and PSPs to be able to operate, compete and innovate across the Union.
Early efforts in this area focused on unifying central bank money.
The cash changeover in 2002 marked a turning point in Europe’s integration. The new euro banknotes successfully replaced the legacy banknotes of the Member States and rapidly became the most tangible expression of monetary unification. Today, euro banknotes are the most popular instrument for in-person payments, although their use is declining as consumers are increasingly paying digitally.[9]
In parallel, the Eurosystem also made enormous efforts to rapidly integrate wholesale payment systems, which support large payments between financial intermediaries. The transition from the national real-time gross settlement systems[10] to a European system – with the launch of the TARGET system in successive waves[11] – created an efficient infrastructure for wholesale payments in central bank money accessible by European banks throughout the euro area. In other words, banks already benefit from a wholesale central bank digital currency (wholesale CBDC).
Euro banknotes and our wholesale CBDC (in the form of TARGET services) have ensured that central bank money in the euro area can be used at both retail and wholesale level.
Similar progress was also needed for retail payments based on private instruments. This was the starting point for the creation of SEPA, which aimed to make retail payments across borders as easy as within national borders.
The first pan-European payment scheme – the scheme for credit transfers – was launched in 2008. Since then, we have come a long way. Households, firms and governments can now make fast and efficient credit transfers and direct debit payments to anywhere in the European Union, and also to a number of non-EU countries.[12] Every year, over 43 billion payments are made through SEPA[13], supported by almost 4,000 PSPs that participate in one or more of the four payment schemes operated by the EPC[14]. Within this ecosystem, the number of cross-border payments has increased significantly.[15]
The success of SEPA stands out in two ways.
First, SEPA has become a model of successful partnership between public institutions and private intermediaries. It stands as an example of the progress we can achieve in the payments sector when we work together.
The public sector guided the transformation by making it easier for common systems, rules and standards to be adopted. It helped to overcome differences between domestic payment markets, provide a common legal framework and ensure timely progress.[16]
Equally crucial to SEPA’s success was its ability to rely on a strong coalition of private market participants which united all PSPs around a common vision. Today, the schemes managed by the EPC are used on a daily basis by 530 million citizens and 25 million firms.[17]
Second, SEPA’s success emphasised the benefits of innovation.
The development of the SEPA instant credit transfers (SCT Inst) scheme is preparing the European payment system for the future.[18] And the Eurosystem’s TARGET Instant Payment Settlement (TIPS) scheme[19] enables pan-European reachability[20] and allows payments to be settled immediately, around the clock and on every day of the year. This has enabled banks and other payment intermediaries to satisfy customers’ demands for immediacy in the digital age. And TIPS is also starting to be adopted beyond the euro area.[21]
SEPA has thus significantly contributed to an efficient, integrated and innovative payment system.
Integration, innovation and independence: the tasks ahead
But the progress that has been made so far is not enough. In some cases, the creation of pan-European market infrastructures (the “back end”) has not been accompanied by similar progress with the user-facing systems (the “front end”).
We need to implement SEPA for card, online and mobile payments in order to eliminate the residual fragmentation that is hampering or even preventing European customers from using their national payment solutions in all European markets. Not only would this allow us to reap the benefits of economies of scale, it would also help avoid our retail payments market needing to rely on non-European providers to offer pan-European solutions, which is the situation we currently have for card payments.
I therefore welcome the fact that the EPC is contributing to the further integration that is needed in this field.[22]
This brings me to another challenge we face: innovative digital retail payment solutions are not widely available in all European countries, and even less so on a pan-European basis. In many cases, digital payment solutions have limited coverage, are not based on instant settlement, and are not interoperable across Europe. This discourages people from using them.
And this is a typical problem in payments, where both sides of the market may lack incentives to adopt new solutions.
Take the example of instant payments. Not all PSPs use this payment method, therefore some suppliers may be hesitant to make the significant investments needed for it to be adopted more quickly. At the EU level, 61% of PSPs have joined the SCT Inst scheme[23], and only 12% of all SEPA Credit Transfer transactions are actually carried out as instant payments.[24]
On the end-user side, consumers may be deterred from using instant payments as they are often marketed as a premium service with the associated high prices. As I highlighted last year, it costs service providers 0.2 euro cent (€0.002) per transaction to use TIPS, yet instant payments are sometimes offered to consumers for €1 per transaction or even more.[25]
Both sides of the market – PSPs and end users – may therefore be discouraged from swiftly adopting instant payments, and this in turn prevents network effects.[26] To address this situation, we need to work on completing the rails by completing the adoption of SCT Inst and making the payment solutions available.
If we fail to meet users’ demand for innovative payments, others will fill this gap. And this may in turn raise more fundamental concerns. For example, we are seeing global technology companies – big techs – taking on a greater role in providing front-end solutions to customers. While these companies may help to improve efficiency, relying too much on a handful of non-European providers and on infrastructures operated abroad could ultimately harm competition, making the European payments market less dynamic, less diverse and less innovative. It could also leave strategic sectors of our economy exposed to influence by market players that do not necessarily share Europe’s societal and strategic goals.
Back in 2019, the Eurosystem launched a comprehensive retail payments strategy to involve the private sector in achieving an integrated, innovative and independent European payments market.[27]
Among a number of private initiatives launched to meet the objectives of the retail payments strategy, a group of major euro area banks have established the European Payments Initiative. Their aim is to create a unified payment solution for European consumers and merchants alike.[28]
This reflects an awareness that the fragmented nature of the European market makes it difficult to compete with large international players when it comes to digital payments, and that only by joining forces can intermediaries reach the necessary scale to offer competitive pan-European payment solutions.
But it has also become clear that coordinating such cross-border projects represents a formidable challenge. Agreeing on a shared approach to migrate from established domestic payment solutions to a European standard inevitably presents obstacles, given individual countries’ legacy payment systems and preferences. This makes it difficult to involve all euro area countries from the start, and the entire European Union in the end.
The ability to overcome differences and achieve pan-European scale is exactly what made SEPA so remarkable. SEPA’s success shows that obstacles can be overcome if public authorities and private partners work together towards a common goal.
These considerations raise the question of whether public authorities should step up their role once again, working even more closely with European intermediaries to achieve our strategic goals for retail payments.
Close public-private cooperation around the digital euro
At the same time, the ECB is facing the growing challenge of ensuring central bank money remains available and usable for retail payments in an increasingly digitalised world. And this is the primary reason why the Eurosystem is exploring the possibility of issuing a digital euro to complement cash.
For a digital euro to be successful, everyone should be able to use it for digital payments throughout the euro area. It would provide a pan-European means of exchange, just like cash, in line with people’s expectations.[29] We are currently investigating how a digital euro should be designed to be a convenient and efficient means of payment for end users and merchants while responding to Europe’s societal preferences, for instance on privacy.[30]
We have been clear from the outset that we see financial intermediaries having a crucial role in distributing and promoting the digital euro.[31] By design, the digital euro will not crowd out existing private financial instruments. Rather, it will preserve the coexistence of central bank money and private money, supporting innovation by private intermediaries.[32]
Our digital euro project may therefore provide a suitable opportunity to establish the public-private cooperation that is needed to build the pan-European private retail payment solutions of the future. This would combine the comparative advantages of the Eurosystem in relation to large-scale payment infrastructure with the expertise of private sector partners when it comes to distributing payment products and interacting with end users.
And this could bring two fundamental benefits.
First, it would allow us to achieve the required scale and scope by enabling PSPs from all euro area countries to participate and all key use cases to be included.[33] Intermediaries could build a range of innovative payment and financial services on top of the digital euro.
Second, the Eurosystem – in close cooperation with the European Commission and co-legislators – would bring a strong European dimension that all stakeholders could get behind. Given the great diversity of the stakeholders involved, it is necessary to involve all of them and to carefully balance their needs and interests.
A successful public-private partnership, building on an attractive value proposition for consumers, merchants and PSPs alike, could support the objectives of our retail payments strategy. It would help us integrate the European payments market and further digitalise the European economy. And by building on European infrastructure and governance, it would support Europe’s strategic autonomy in payments.
Conclusion
Let me conclude.
Over the past 20 years, the European payments market has become more integrated, more innovative and more efficient. The successful transition from a fragmented payments ecosystem to a Single Euro Payments Area contributed to the smooth introduction of the single currency. And it was the combined knowledge and efforts of both public authorities and private intermediaries that made this possible.
This cooperation is more important than ever today, as we face renewed challenges stemming from the digitalisation of our economies and our financial systems.
The Eurosystem is working on several fronts to meet these challenges, most notably by exploring the possible introduction of a digital euro and by implementing its retail payments strategy. In the coming months, we will step up our interaction with the private sector to explore the links between these two crucial projects. Combining our strengths and working together towards a common goal remains the best way to build a modern, efficient and inclusive European payment system for the future.
Compliments of the European Central Bank.

The European Payments Council represents payment service providers (PSPs) on European payment issues. It manages Single Euro Payments Area (SEPA) payment schemes and promotes further harmonisation in European payments.

Based on McKinsey data, payments revenues amounted to 1.4% of GDP in the EU in 2019, compared with 2.4% in the United States. See McKinsey & Company (2020), “The 2020 McKinsey Global Payments Report”, October, and the testimony of Darrell Duffie (Graduate School of Business, Stanford University) at the hearing on “Building a Stronger Financial System: Opportunities of a Central Bank Digital Currency” before the Subcommittee on Economic Policy of the United States Senate Committee on Banking, Housing and Urban Affairs, 9 June 2021.

For instance, the Payment Services Directive (PSD2) aimed to increase pan-European competition and participation in the payments industry (also from non-banks).

Direct debit schemes allow customers to give companies or organisations authorisation to take money directly from their payment accounts to pay their bills.

Humphrey, D., Willesson, M., Bergendahl, G. and Lindblom, T. (2006), “Benefits from a changing payment technology in European banking”, Journal of Banking & Finance, Vol. 30, No 6, pp. 1631-1652; Levine, R. (2005), “Finance and Growth: Theory and Evidence”, Handbook of Economic Growth, Vol. 1, pp. 865-934.

According to the European Commission’s Standard Eurobarometer 96, based on fieldwork undertaken between 18 January and 14 February 2022, 77% of euro area respondents were in favour of the euro, while only 16% were not.

ECB (2021), “The Eurosystem’s retail payments strategy”.

Panetta, F. (2022), “Europe’s shared destiny, economics and the law”, Lectio Magistralis on the occasion of the conferral of an honorary degree in Law by the University of Cassino and Southern Lazio, 6 April.

Consumers still predominantly use cash for point of sale and person-to-person payments, although its usage has been gradually declining in recent years. See ECB (2020), “Study on the payment attitudes of consumers in the euro area (SPACE)”.

A real-time gross settlement system involves processing and settlement taking place on a transaction-by-transaction basis in real time.

The launch of the TARGET system in 1999, which was technically a set of connected national systems, was followed by the migration to TARGET2, designed as a single shared platform, in 2007.

SEPA was introduced for credit transfers in 2008, followed by direct debits in 2009. It was fully implemented by 2014 in the euro area and by 2016 in non-euro area SEPA countries.

Credit transfers and direct debits each account for half of these transactions. See ECB (2019), “SEPA Migration – Impact Assessment”, and European Payments Council (2022), “The European Payments Council’s 20th anniversary: the transformation of the European payments landscape”, 29 March.

The four payment schemes managed by the EPC are the SEPA Credit Transfer scheme, the SEPA Instant Credit Transfer scheme, the SEPA Direct Debit Core scheme and the SEPA Direct Debit Business-to-Business scheme.

ECB (2019), op. cit.

To ensure that migration to the SEPA schemes was taking place in a timely manner, the SEPA migration end date regulation set a migration deadline for the euro area of 1 February 2014 (later postponed to August 2014) and for non-euro area countries of 31 October 2016. As of these dates, the existing national euro credit transfer and direct debit schemes had to be replaced by the SEPA credit transfer and SEPA direct debit schemes. See Russo, D. (ed.) (2021), “Payments and market infrastructure two decades after the start of the European Central Bank”, ECB, July.

Russo, D. (ed.) (2021), ibid.

Other payment-related schemes include the SEPA Proxy Lookup scheme, which aims to facilitate interoperability between person-to-person payment solutions by enabling a proxy (i.e. mobile phone number or email address) to be converted into a payment account identifier, and the SEPA Request-to-Pay scheme, which is a messaging scheme that facilitates the initiation of credit transfer payments.

TIPS was launched by the Eurosystem in November 2018 and enables individuals and firms to transfer money to each other in seconds, irrespective of the opening hours of their local banks.

Any payment service provider in TARGET2 that adheres to the SCT Inst scheme will become reachable in TIPS, either as a participant or as a reachable party. Furthermore, automated clearing house instant payment settlement will move from TARGET2 to TIPS.

Sweden’s central bank is migrating to TIPS, paving the way for the instant settlement of payments in Swedish kronor in TIPS. And the central banks of Norway and Denmark have also expressed an interest in joining TIPS with their respective national currencies.

Following the invitation from the ERPB, the EPC is notably working in a multi-stakeholder context and involving relevant standardisation bodies in developing a QR code standard for instant payments at the point of interaction.

At national level, a majority of providers has joined the SCT Inst scheme in just nine countries, whereas 14 countries are needed to meet the legal requirements for the usage of payment schemes as stated in the SEPA Regulation.

Payments intended to be an instant transaction are often still executed as a classic credit transfer because the payee’s bank is not a member of the SCT Inst scheme.

Panetta, F. (2021), “At the edge of tomorrow: preparing the future of European retail payments”, introductory remarks at the 14th Payment Forum of Suomen Pankki − Finlands Bank, 19 May.

Digital payments adoption is driven by network effects. This means that the more people hold and use a digital payments solution, the more attractive and valuable it becomes to other users. This, in turn, increases the potential number of people who may wish to adopt it as a regular means of payment. See Katz, M.L. and Shapiro, C. (1994), “Systems Competition and Network Effects”, Journal of Economic Perspectives, Vol. 8, No 2, pp. 93-115; and Claessens, S., Dobos, G., Klingebiel, D. and Laeven, L. (2003), “The growing importance of networks in finance and its effects on competition”, in Nagurney, A. (ed.), Innovations in financial and economic networks, Elgar, pp. 110-135.

The Eurosystem has identified five key objectives for its pan-European retail payments strategy: full pan-European reach and unified customer experience; convenience and cost efficiency; safety and security; European identity and governance; and, in the long run, global acceptance.

This initiative was initially aiming to offer a solution involving a payment card and a digital wallet and covering in-store, online and person-to-person payments as well as cash withdrawals. It has since decided to reduce this scope.

Kantar Public (2022), Study on New Digital Payment Methods, March.

Panetta, F. (2022), “A digital euro that serves the needs of the public: striking the right balance”, introductory statement at the Committee on Economic and Monetary Affairs of the European Parliament, 30 March.

ECB (2020), Report on a digital euro, October. See also Letter from the ECB President to Mr Antonio Maria Rinaldi, Mr Marco Zanni, Ms Francesca Donato and Mr Valentino Grant, MEPs, on a digital euro, 22 December 2020; and Panetta, F. (2021), “Evolution or revolution? The impact of a digital euro on the financial system”, speech at a Bruegel online seminar, 10 February.

Panetta, F. (2021), “Central bank digital currencies: a monetary anchor for digital innovation”, speech at the Elcano Royal Institute, 5 November.

Panetta, F. (2022), “A digital euro that serves the needs of the public: striking the right balance”, op. cit.

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After more than a year of Pandemic-related travel restrictions and US embassy closures, international travel has resumed. However, members across the EACC network share that business travel into the United States remains fraught. In certain cases, ESTA applications are being denied and visa applicants must sometimes wait for more than a year for an appointment at a US Consulate.
Please take a moment to answer the below questions about your and/or your company’s experience in attempting to gain entry into the United States for business purposes.
This survey closes on Monday June 20th.
Your responses to this survey are anonymous. No personally identifiable information will be captured unless you voluntarily offer personal or contact information in any of the comment fields.
TAKE THE SURVEY HERE
Thank you for your participation!
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The European Securities and Markets Authority (ESMA), the EU’s securities markets regulator, has published its Annual Report reviewing its achievements in 2021 in fulfilling its mission of enhancing investor protection and promoting stable and orderly financial markets in the European Union (EU), and focusing on its role in the supervision of EU-wide entities and its contribution on sustainable and digital finance.
ESMA’s key achievements in 2021 included the recognition and tiering of third-country central counterparties (CCPs), the coordination of supervisory activity across the EU through its Union strategic supervisory priorities, and the preparation for the supervision of data reporting service providers (DRSPs), critical benchmarks and securitisation repositories. The Annual Report also highlights the most significant elements of ESMA’s work in 2021, particularly the development of the regulatory framework for sustainable finance and the risks and opportunities arising from the digitalisation of markets especially for retail investors.
Verena Ross, Chair, said:

“Last year was a transitional one for ESMA, marking not only its 10th anniversary and the beginning of its second decade as the EU’s securities markets regulator, but also a renewal of the organisation with a new senior management team. I take this opportunity to thank both Steven Maijoor for his work as ESMA’s first Chair and Anneli Tuominen, who acted as Interim Chair.
“Our major areas of focus in 2021 included protecting investors where their growing engagement in sustainable and digital finance risks them being subject to greenwashing and scams, ensuring effective and converged EU supervision, and to supporting the renewed focus on developing a true capital markets union.
“I would like to thank all our stakeholders for their continued support and collaboration in helping ESMA achieve its objectives.”

Natasha Cazenave, Executive Director, said:

“Last year marked ESMA’s first decade as a European Authority, providing an opportunity to reflect on the progress made since 2011 and lay the groundwork for the next decade.
“ESMA, in 2021, implemented new mandates for the supervision of securitisation repositories, critical benchmark administrators and data reporting service providers, while maintaining a strong focus on existing mandates for CRAs, trade repositories and CCPs. It also contributed to CMU initiatives and began work on key projects including, amongst others, the European Single Access Point and the consolidated tape.
“I want to thank our staff for their remarkable dedication and high-quality work and without whom none of these achievements would be possible.”

The organisation’s key achievements in 2021 related to its work on its cross-sectoral priorities:
Supporting the development of sound EU capital markets

New supervisory responsibilities for securitisation repositories, data reporting service providers and critical benchmark administrators;
Advisory reports on the MiFID/MiFIR, ELTIF, Short-Selling Regulation and Money Market Funds Regulation Reviews;
Peer Reviews on CCP liquidity stress testing and NCAs supervision of cross-border activities of investment firms;
Enforcement action against CRAs and Trade Repositories with fines of €4.3 million;
Comprehensive assessment of Tier 2 CCPs and recognition and monitoring of Tier 1 third-country CCPs;
Public statements on social media investment recommendations aimed at safeguarding retail investors;

Sustainable finance

ESMA’s Sustainable Finance Roadmap 2022-24;
Taxonomy regulation and European Union Platform on Sustainable Finance; and
Preliminary report on the European Union carbon market;

Innovation and digitalisation

Technical advice on the digital finance package; and
Preparation for the distributed ledger technology pilot regime.

Compliments of the European Securities & Markets Authority.
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Following the statement by President Ursula von der Leyen and U.S. President Joe Biden marking the second Global COVID-19 Summit, the European Commission and the U.S. Department of Health and Human Services have signed an arrangement to strengthen cooperation on preparedness and response to public health threats. This will enable the Commission and the U.S. to work together on a broad range of topics to jointly tackle health emergencies, contributing to establishing a strong global health architecture.
Stella Kyriakides, European Commissioner for Health and Food Safety, said: “Today’s first transatlantic arrangement on cooperation in the area of health is an important step in our already close working relationship with the US to counter COVID-19. We share broad mutual interests in the control and prevention of infectious diseases globally. Today we put this cooperation on new footing, to jointly identify health threats, work together on procuring medical countermeasures and prepare for health threats together. As the pandemic has shown us, joining forces will enable us to better deal with future health crises and better protect citizens across Europe and globally.”
Xavier Becerra, Secretary of the U.S. Department of Health and Human Services, said: “Strengthening our collaboration with the European Commission through this formal arrangement signifies the importance the U.S. places on working together toward our shared pandemic preparedness and response goals. In addition, this arrangement gives us an opportunity to jointly assist other countries, including those outside of the European Union, with building up their capacity to prevent, detect, and respond to public health threats.”
The transatlantic arrangement, signed on 19 May in Berlin, will be coordinated by the European Commission Health Emergency and Preparedness Response Authority (HERA) and the Directorate-General for Health and Food Safety on the EU side and the Department of Health and Human Services on the U.S. side. As part of the arrangement, the European Commission and the U.S. will work together on epidemic and supply chain information, research and innovation, and production of medical countermeasures, including vaccines and therapeutics. By facilitating information, knowledge, and data sharing, the arrangement will reduce duplication and ensure strong synergies in our preparedness and response efforts. In particular, the European Commission and the U.S. will strengthen cooperation on:

Reviewing joint threat assessments with the goal of identifying at least one most relevant public health threat per year on which to collaborate on.
Sharing secured data for global surveillance for the early detection of emerging health threats.
Supporting procurement activities, including the assessment of vaccine platforms and exchange of best practices on vaccine arrangements.
Coordinating support for the research and development of innovative medical countermeasures.
Supporting third countries on preparedness and response to public health threats.
Tackling mis- and disinformation on health threats by exchanging good practices and initiating joint actions.

Background
The present administrative arrangement is a deliverable of the U.S.-EU Agenda for Beating the Global Pandemic, Vaccinating the World, Saving Lives Now, and Building Back Better Global Health Security.  It is part of the joint actions announced in the 12 May statement reaffirming the Joint Agenda by President von der Leyen and President Biden on the occasion of the second global COVID-19 summit. It also complements the United States–European Commission Joint Statement on the launch of the joint COVID-19 Manufacturing and Supply Chain Taskforce.
Compliments of the European Commission.
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40% of non-executive director posts should go to the under-represented sex
Dissuasive penalties for non-compliance
Small and medium-sized enterprises with up to 249 employees will be excluded

After being blocked in the Council for a decade, EP and EU countries’ negotiators finally agreed on a bill to increase the presence of women on corporate boards.

The provisional agreement reached on Tuesday night on the draft legislation aims to ensure gender parity on boards of publicly listed companies in the EU.
At least 40% of non-executive directors should be women
The so-called “Women on Boards” Directive aims to introduce transparent recruitment procedures in companies, so that at least 40% of non-executive director posts or 33% of all director posts are occupied by the under-represented sex. Thanks to Parliament, companies must comply with this target by 30 June 2026, compared to the Council’s proposal of 31 December 2027. In cases where candidates are equally qualified for a post, priority should go to the candidate of the under-represented sex.
MEPs insisted that merit must remain the key criterion in selection procedures, which should be transparent, as part of the agreement. Listed companies will be required to provide information to the competent authorities once a year about the gender representation on their boards and, if the objectives have not been met, how they plan to attain them. This information would be published on the company’s website in an easily accessible manner.
Small and medium-sized enterprises with fewer than 250 employees are excluded from the scope of the directive.
Penalties
The proposal includes effective, dissuasive and proportionate penalties for companies that fail to comply with open and transparent appointment procedures. Parliament succeeded in including examples of specific penalty measures, such as fines and companies having their selection of board directors annulled by a judicial body if they breach the national provisions adopted pursuant to the Directive.
Quotes by the rapporteurs
Evelyn Regner (S&D, AT), co-rapporteur, said: “Parliament has been asking for a Directive for more women on boards for over a decade. The Council was finally ready to come to the table 10 years after the Commission made its proposal. It was high time to have binding measures. More women on boards make companies more resilient, more innovative and will help to change top-down structures in the workplace. One of the main achievements is transparency. Selection processes have to be based on clear, predetermined criteria and with this agreement, only the best candidates will be selected, thereby improving the overall quality of boards.”
Lara Wolters (S&D, NL), co-rapporteur, added: “All data show that gender equality at the top of companies is not achieved by sheer luck. We also know that more diversity in boardrooms contributes to better decision-making and results. This quota can be a push in the right direction for more equality and diversity in companies.”
Press conference
The lead EP negotiators Evelyn Regner (S&D, AT) and Lara Wolters (S&D, NL) will answer journalists’ questions on the deal on Wednesday 8 May at 9.00 CEST in the Daphne Caruana Galizia room (WEISS N -1/201) in the European Parliament in Strasbourg. More details on how to follow the press conference are available here.
Next steps
Once Parliament and Council have formally approved the agreement, the Directive will enter into force 20 days after it has been published in the EU’s Official Journal. Member states would need to implement the directive two years after it has been adopted. Parliament succeeded in including an assessment on the scope of the directive at a later stage on whether non-listed companies should be included in the scope of directive.
Background
The European Commission first presented its proposal in 2012 and the European Parliament adopted its negotiation position back in 2013. The file was blocked in the Council for almost a decade, until Employment and Social Affairs ministers finally agreed on a position last March.
Today, only 30.6% of board members in the EU’s largest publicly listed companies are women, with significant differences among member states (from 45.3% in France to 8.5% in Cyprus).

Compliments of the European Parliament.
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The minimum wage should be adequate to ensure a decent standard of living
Right to redress for workers, their representatives and trade union members if rules are violated
EU rules to respect the powers of national authorities and social partners to determine wages
Collective bargaining to be strengthened in countries where it covers fewer than 80% of workers

The agreed legislation aims to ensure that minimum wages in all EU countries guarantee decent living standards for workers.

With a deal struck on Monday night, Parliament and Council negotiators agreed on EU rules to set adequate minimum wages, as provided by national law and/or collective agreements. The new legislation will apply to all EU workers who have an employment contract or employment relationship. The EU countries in which the minimum wage is protected exclusively via collective agreements will not be obliged to introduce it nor to make these agreements universally applicable.
Adequate wages
According to the agreement, member states will have to assess whether their existing statutory minimum wages (i.e. the lowest wage permitted by law) are adequate to ensure a decent standard of living, taking into account their own socio-economic conditions, purchasing power or the long-term national productivity levels and developments.
For the adequacy assessment, EU countries may establish a basket of goods and services at real prices. Member states may also apply indicative reference values commonly used internationally, such as 60% of the gross median wage and 50% of the gross average wage.
Deductions from or variations to the minimum wage will have to be non-discriminatory, proportionate and have a legitimate objective, such as the recovery of overstated amounts paid or deductions ordered by a judicial or administrative authority.
Collective bargaining
EU negotiators agreed that EU countries will have to strengthen sectoral and cross-industry collective bargaining as an essential factor for protecting workers by providing them with a minimum wage. Member states in which less than 80% of the workforce is protected by a collective agreement will have to create an action plan to progressively increase this coverage. To design the best strategy for this purpose, they should involve social partners and inform the Commission of the adopted measures and make the plan public.
Monitoring and right to redress
The agreed text introduces the obligation for EU countries to set up an enforcement system, including reliable monitoring, controls and field inspections, to ensure compliance and address abusive sub-contracting, bogus self-employment, non-recorded overtime or increased work intensity.
National authorities will have to ensure the right to redress for workers whose rights have been infringed. Authorities must also take the necessary measures to protect workers and trade union representatives.
Next steps
The provisional political agreement reached by the EP negotiating team will now have to be approved first by the Employment and Social Affairs Committee, followed by a plenary vote. The Council also has to approve the deal.
Quotes
After the deal was struck, co-rapporteur Dennis Radtke (EPP, DE) said: “With the agreement on minimum wages, we are writing socio-political history in Europe. For the first time, EU legislation will contribute directly to ensuring that workers are getting fairer, better pay checks”.
Co-rapporteur Agnes Jongerius (S&D, NL) added : With this European law, we reduce wage inequalities, and push for higher wages for Europe’s lowest paid workers. They should be able to buy new clothes, join a sports team, or go on a well-deserved holiday. In short, they should have a decent standard of living”.
Dragos PÎSLARU, (Renew, RO), Chair of the Employment and Social Affairs Committee concluded: “The directive opens new opportunities for European citizens to avoid in-work poverty and gain access to social dialogue. It creates transparent and appropriate procedures as well as common enforcement measures at EU level while also balancing national particularities”.
Background
In the EU, 21 out of 27 countries have a statutory minimum wage, while in the other six (Austria, Cyprus, Denmark, Finland, Italy and Sweden) wage levels are determined through collective bargaining. Expressed in euro, monthly minimum wages vary widely across the EU, ranging from €332 in Bulgaria to €2 202 in Luxembourg (2021 data from Eurostat).

Compliments of the European Parliament.
The post Deal reached on new rules for adequate minimum wages in the EU first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

In response to several months of exceptionally high and volatile energy prices, the Commission sets out today a series of additional short-term measures to tackle high energy prices and address possible supply disruptions from Russia. It also presents a number of areas where the electricity market design can be optimsied, making it fit for the transition away from fossil fuels and more resilient to price shocks, while protecting consumers and delivering affordable electricity.
Commissioner for Energy, Kadri Simson, said: “The EU has put in place a well-functioning and interconnected energy market that continues to provide reliable energy supply in today’s challenging situation. But exceptional times require exceptional measures and today we present additional steps that the Member States can take to combat the high prices. As Russia pursues its unprovoked war in Ukraine, we must also plan for gas supply disruptions and their impact with solidarity measures and possible price interventions. In parallel, we are taking forward the work to improve the electricity market to better protect consumers, reduce volatility and continue to support the green transition.”
Short-term intervention measures
The Commission invites Member States to continue using its Energy Prices Toolbox, which contains measures to lower the energy bills paid by European consumers. In addition, a number of short-term measures are put at the disposal of Member States and can be used now and during the next heating season.
In gas markets:

A possibility for Member States to temporarily extend end-consumer price regulation to a broad range of customers, including households and industry.
Temporary ‘circuit breakers’ and emergency liquidity measures to support effective functioning of commodity markets, in full respect of State aid provisions.
Using the EU Energy Platform to aggregate gas demand, ensure competitive gas prices via voluntary joint purchases, and reduce EU reliance on Russian fossil fuels.

Intervention options in electricity markets for Member States:

The possibility to reallocate exceptionally high infra-marginal revenues (so-called windfall profits) to support consumers is extended to cover the next heating season.
In addition, congestion revenues can be used to finance consumer support.
A temporary extension of regulated retail prices to cover small and medium-sized businesses.
For regions with very limited interconnection, the possibility to introduce subsidies for fuel costs in power production to reduce the electricity price, provided they are designed in a way compatible with EU Treaties, in particular with regard to the absence of restrictions to cross border exports, sectoral legislation and State aid rules.

EU measures in case of full disruption of gas supplies
In case of full disruption of Russian gas supplies, further exceptional measures may be needed to manage the situation. The Commission invites Member States to update their contingency plans, taking into account the recommendations contained in the Commission’s EU preparedness review.

The Commission will facilitate setting up a coordinated EU demand reduction plan with pre-emptive voluntary curtailment measures to be ready in case an emergency arises. In a spirit of solidarity, less affected Member States could reduce their gas demand for the benefit of more affected Member States.
To accompany these measures, an administrative price cap on gas might be necessary at EU level in response to a full supply disruption. If introduced, this cap should be limited to the duration of the EU emergency and should not compromise the EU’s ability to attract alternative sources of pipeline gas and LNG supplies, and to reduce demand.

A future-proof electricity market design
The recent ACER report concludes that the fundamentals of the market design bring significant benefits to consumers. It also notes that there are several ways to better protect consumers and deliver affordable electricity, make the market more robust and resilient to future shocks, and align it further with the European Green Deal objectives.
The Commission therefore sets out a number of issues to be studied for an optimal future functioning of the market. These include market-based instruments to protect consumers against price volatility, measures enhancing demand-response and promoting individual self-consumption schemes, appropriate investment signals and a more transparent market surveillance. Building on the analysis presented today, the Commission will launch an impact assessment process on possible adjustments to the electricity market design.
Background
Following the ‘Energy Prices Toolbox’ of October 2021, the Commission presented on 8 March 2022 additional guidance for Member States to shield businesses and households from high prices. It confirmed the possibility to regulate prices for end consumers in exceptional circumstances, and described how Member States can redistribute revenue from high energy sector profits and emissions trading to consumers. On 23 March, the Commission outlined further options to mitigate high energy prices and proposed minimum gas storage obligations and voluntary common gas purchases.
At the meeting of the European Council on 24-25 March 2022, EU leaders asked the Commission to submit proposals that address the problem of excessive electricity prices while preserving the integrity of the Single Market, maintaining incentives for the green transition, preserving the security of supply and avoiding disproportionate budgetary costs. The Commission committed to assess options to optimise the design of the EU’s electricity market and detail a plan to end our dependence on Russian fossil fuels.
Compliments of the European Commission.
The post Energy Markets: EU Commission presents short-term emergency measures and options for long-term improvements first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

The Commission has today proposed an annual EU budget of €185.6 billion for 2023, to be complemented by an estimated €113.9 billion in grants under NextGenerationEU. The EU budget will continue to mobilise significant investments to boost Europe’s strategic autonomy, the ongoing economic recovery, safeguard sustainability and create jobs. The Commission will continue to prioritise green and digital investments while addressing pressing needs arising from recent and current crises.
Commissioner Johannes Hahn, responsible for the EU Budget, said: “We are continuing to put forward extraordinary amounts of funding to support Europe’s recovery and to tackle current and future challenges. The budget remains an important tool the Union has at its disposal to provide clear added value to people’s lives. It helps Europe shape a changing world, in which we are working together for peace, prosperity and our European values”.
The draft budget 2023, boosted by NextGenerationEU, is designed to respond to the most crucial recovery needs of EU Member States and our partners around the world. These financial means will continue to rebuild and modernise the European Union and strengthen Europe’s status as a strong global actor and reliable partner.
Additional proposals to finance the impact of the war in Ukraine both externally and internally will be tabled later in the year, on the basis of a more precise needs assessment, as per the European Council conclusions of 31 May 2022.
The budget reflects the EU’s political priorities, which are crucial to ensure a sustainable recovery and to strengthen Europe’s resilience. To that end, the Commission is proposing to allocate (in commitments):

€103.5 billion in grants from NextGenerationEU under the Recovery and Resilience Facility (RRF) to support economic recovery and growth following the coronavirus pandemic and to address the challenges posed by the war in Ukraine.
€53.6 billion for the Common Agricultural Policy and €1.1 billion for the European Maritime, Fisheries and Aquaculture Fund, for Europe’s farmers and fishers, but also to strengthen the resilience of the agri-food and fisheries sectors and to provide the necessary scope for crisis management in light of expected global food supply shortages.
€46.1 billion for regional development and cohesion to support economic, social and territorial cohesion, as well as infrastructure supporting the green transition and Union priority projects.
€14.3 billion to support our partners and interests in the world, of which €12 billion under the Neighbourhood, Development and International Cooperation Instrument — Global Europe (NDICI — Global Europe), €2.5 for the Instrument for Pre-Accession Assistance (IPA III), and €1.6 billion for Humanitarian Aid (HUMA).
€13.6 billion for research and innovation, of which €12.3 billion for Horizon Europe, the Union’s flagship research programme. It would receive an extra €1.8 billion in grants from NextGenerationEU.
€4.8 billion for European strategic investments, of which €341 million for InvestEU for key priorities (research and innovation, twin green and digital transition, the health sector, and strategic technologies), €2.9 billion for the Connecting Europe Facility to improve cross-border infrastructure, and €1.3 billion for the Digital Europe Programme to shape the Union’s digital future. InvestEU would receive an extra €2.5 billion in grants from NextGenerationEU.
€4.8 billion for people, social cohesion, and values, of which €3.5 billion Erasmus+ to create education and mobility opportunities for people, €325 million to support artists and creators around Europe, and €212 million to promote justice, rights, and values.
€2.3 billion for environment and climate action, of which €728 million for the LIFE programme to support climate change mitigation and adaptation, and €1.5 billion for the Just Transition Fund to make sure that the green transition works for all. The Just Transition Fund would receive an extra €5.4 billion in grants from NextGenerationEU.
€2.2 billion for spending dedicated to space, mainly for the European Space Programme, which will bring together the Union’s action in this strategic field.
€2.1 billion for protecting our borders, of which €1.1 billion for the Integrated Border Management Fund (IBMF), and €839 million (total EU contribution) for the European Border and Coast Guard Agency (Frontex).
€1.6 billion for migration-related spending, of which €1.4 billion to support migrants and asylum-seekers in line with our values and priorities.
€1.2 billion to address defence challenges, of which €626 million to support capability development and research under the European Defence Fund (EDF), as well as €237 million to support Military Mobility.
€927 million to ensure the smooth functioning of the Single Market, including €593 million for the Single Market Programme, and close to €200 million for work on anti-fraud, taxation, and customs.
€732 million for EU4Health to ensure a comprehensive health response to people’s needs, as well as €147 million to the Union Civil Protection Mechanism (rescEU) to be able deploy operational assistance quickly in case of a crisis.
€689 million for security, of which €310 million for the Internal Security Fund (ISF), which will combat terrorism, radicalisation, organised crime, and cybercrime.
€138 million for secure satellite connections under the proposal for a new Union programme, the Union Secure Connectivity Programme.
Budgetary means for the European Chips Act will be made available under Horizon Europe and through redeployment from other programmes.

The draft budget for 2023 is part of the Union’s long-term budget as adopted by the Heads of State and Governments at the end of 2020, including subsequent technical adjustments, seeks to turn its priorities into concrete annual deliverables. A significant part of the funds will therefore be dedicated to combatting climate change, in line with the target to spend 30% of the long-term budget and the NextGenerationEU recovery instrument on this policy priority.
Background
The draft EU budget for 2023 includes expenditure under NextGenerationEU, to be financed from borrowing at the capital markets, and the expenditure covered by the appropriations under the long-term budget ceilings, financed from own resources. For the latter, two amounts for each programme are proposed in the draft budget – commitments and payments. “Commitments” refer to the funding that can be agreed in contracts in a given year; and “payments” to the money actually paid out. The proposed EU budget for 2023 amounts to €185.6 billion in commitments and €166.3 billion in payments. All amounts are in current prices.
The actual NextGenerationEU payments – and funding needs for which the European Commission will seek market financing – may be different, and will be based on precise estimates evolving over time. The Commission will continue to publish six-monthly funding plans to provide information about its planned issuance volumes in the months to come.
With a budget of up to €807 billion in current prices, NextGenerationEU helps the EU recover from the immediate economic and social damage caused by the coronavirus pandemic and enables us to respond to current and future crises such as the war in Ukraine. The temporary instrument helps build a post-COVID-19 EU that is greener, more digital, more resilient and better fit for the current and forthcoming challenges. The contracts/commitments under NextGenerationEU can be concluded until the end of 2023, the payments linked to the borrowing will follow until the end of 2026.
Compliments of the European Commission.
The post EU budget 2023: Empowering Europe to continue shaping a changing world first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

One single charger for frequently used small and medium-sized portable electronic devices
Charging speed harmonised for devices that support fast charging
Buyers can choose whether to purchase new device with or without charging device

By autumn 2024, USB Type-C will become the common charging port for all mobile phones, tablets and cameras in the EU, Parliament and Council negotiators agreed today.
The provisional agreement on the amended Radio Equipment Directive, establishes a single charging solution for certain electronic devices. This law is a part of a broader EU effort to make products in the EU more sustainable, to reduce electronic waste, and make consumers’ lives easier.
Under the new rules, consumers will no longer need a different charging device and cable every time they purchase a new device, and can use one single charger for all of their small and medium-sized portable electronic devices. Mobile phones, tablets, e-readers, earbuds, digital cameras, headphones and headsets, handheld videogame consoles and portable speakers that are rechargeable via a wired cable will have to be equipped with a USB Type-C port, regardless of their manufacturer. Laptops will also have to be adapted to the requirements by 40 months after the entry into force.
The charging speed is also harmonised for devices that support fast charging, allowing users to charge their devices at the same speed with any compatible charger.
Better information and choice for consumers
Consumers will be provided with clear information on the charging characteristics of new devices, making it easier for them to see whether their existing chargers are compatible. Buyers will also be able to choose whether they want to purchase new electronic equipment with or without a charging device.
These new obligations will lead to more re-use of chargers and will help consumers save up to 250 million euro a year on unnecessary charger purchases. Disposed of and unused chargers are estimated to represent about 11,000 tonnes of e-waste annually.
Encouraging technological innovation
As wireless charging technology becomes more prevalent, the European Commission will be empowered to develop so-called delegated acts, on the interoperability of charging solutions.
Quote
Parliament’s rapporteur Alex Agius Saliba (S&D, MT) said: “Today we have made the common charger a reality in Europe! European consumers were frustrated long with multiple chargers piling up with every new device. Now they will be able to use a single charger for all their portable electronics. We are proud that laptops, e-readers, earbuds, keyboards, computer mice, and portable navigation devices are also included in addition to smartphones, tablets, digital cameras, headphones and headsets, handheld videogame consoles and portable speakers. We have also added provisions on wireless charging being the next evolution in the charging technology and improved information and labelling for consumers”.
Press conference
On Tuesday, 7 June, from 12.30 CEST, Parliament’s rapporteur Alex Agius Saliba (S&D, MT) and Commissioner for the Internal Market Thierry Breton will give a joint press conference in the European Parliament’s press conference room in Strasbourg.
More details on how to follow are available in this media advisory.
Watch the recording of the press conference here.
Next steps
After the summer recess, Parliament and Council will have to formally approve the agreement before it is published in the EU Official Journal. It will enter into force 20 days after publication and its provisions will start to apply after 24 months. The new rules would not apply to products placed on the market before the date of application.
Background
In the past decade, Parliament has been continuously calling on the Commission to table a proposal on a common charger solution. The legislative proposal was tabled on 23 September 2021.
Compliments of the European Parliament.
The post Deal on common charger: reducing hassle for consumers and curbing e-waste first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.

The world may gain an estimated $78 trillion over coming decades by making this energy transition.
International negotiators can’t agree on how to phase out coal, in part because of opposition to carbon taxes, and now even countries that had been able to abandon the fuel are reversing that progress as the war in Ukraine raises energy prices.
The most common concern about scrapping coal is that replacing it with renewable energy would be too expensive, but we show in new research that the economic benefits would far outweigh the costs.
We analyze this great carbon arbitrage, as we call it, in a recent working paper that calculates the cost of replacing coal with renewables, as well as the social benefits of this important transition. The benefits from ending coal use come from avoiding damage from climate change and harm to people’s health. Our estimate is that by doing so the world would yield a net gain of nearly $78 trillion through the end of this century. That’s around four-fifths of global gross domestic product now, and would be equivalent to about 1.2 percent of annual global economic output during the period.

‘It’s sound economic logic to pay for the replacement of coal with renewables to reap a net social gain measuring in the tens of trillions of dollars.’

To determine both the size of the avoided emissions, as well as any potential losses from their prevention, we use a detailed dataset compiled by Asset Resolution on companies’ historical and projected global coal production based on the aggregation of production at the plant level.
The cost estimate for adopting renewable sources includes capital spending for new energy generation capacity equal to what’s lost with coal, plus compensation to coal companies for lost earnings when they are shut down. The cost estimate does not include compensation for affected workers, but this is likely to be small relative to the overall net gains from the transition. Additional compensation to make the switch to renewables feasible could be offered as long as the social benefits of phasing out coal exceed the more comprehensive set of costs.
Carbon price
We calculate the value of doing so by estimating the reduction in emissions from phasing out coal, and by applying a carbon price to those discharges. This in turn lets us estimate the economic gain from the transition. The difference between the value of the social benefits versus costs of replacement and compensation for missed coal revenues forms our baseline estimate of world’s net gain from finally ending our reliance on the fuel.
While our conservative estimate comes with an unavoidable uncertainty, given the decades-long timeframe, the enormous social benefits from what could be thought of as an inexpensive insurance policy are clear: paying a premium offers coverage for significant potential damages.
So sizeable are the potential gains that world leaders should pursue a global agreement to finance the phase-out of coal as a complement to carbon pricing or equivalent measures that currently don’t fully offset the negative effects of the emissions. We have chosen all our parameters, including the social cost of carbon, in a conservative way. The carbon arbitrage could in fact be bigger still for less conservative estimates.
Our research shows that ending coal use shouldn’t be seen as too costly because it provides economic benefits from reduced carbon emissions, such as avoiding physical damage to infrastructure caused by climate change. Investments in renewable energy also support economic growth and offer additional attendant benefits from innovation.
Significant benefits
The analysis shows that phasing out coal isn’t just urgent because it would help limit the global temperature increase to 1.5 degrees Celsius. Importantly, the economic and health benefits are significant enough that we should push harder for global agreements that unleash the potential power of capital markets.
The bottom line for policy is that if compensation was built into an agreement to scrap coal, and if innovative financing packages could incentivize advanced, emerging and developing economies alike to end the fuel’s use, the net social gains from such an agreement would be enormous.
To better understand just how large the payments would need to be, we broke down the costs for different regions. The present value of total financing that’s conditional on commitments to scrap coal is around $29 trillion globally, in line with what other studies estimate. That works out to between $500 billion and $2 trillion annually, with a front-loaded $3 trillion investment this decade. Of the global financing need of around $29 trillion, we estimate that 46 percent is in Asia, 18 percent in Europe, 13 percent in North America, 13 percent in Australia and New Zealand, 8 percent in Africa, and 2 percent in Latin America and the Caribbean.
It’s a major funding challenge. But despite arguments that no government can afford such investments and that the private sector should steer its funding to renewable energy, most of the backing can indeed come from the private sector, once risks are reduced by sufficient public funds via so called blended finance, which could mean public funding of around 10 percent.
Broadly speaking, it’s in the interest of a government to finance 10 percent of its country’s total costs to replace coal with renewables if this amount is less than its resulting social benefits in terms of lower climate damages. A back-of-the-envelope calculation suggests this holds true for nearly all countries. Considerations of fairness, a country’s fiscal position, or both, may in certain cases call for foreign contributions to finance 10 percent of a country’s costs to phase out coal.
Energy transition
We view global carbon taxation at the social cost of carbon as a first-best solution. Public-private partnerships to finance the replacement of coal with renewables could accelerate the green transition and complement incomplete carbon pricing by helping to achieve the Paris Agreement’s aim of making finance flows consistent with a pathway toward low greenhouse gas emissions and climate-resilient development.
For their part, economists have two different approaches to what the profession calls internalizing negative externalities. That loosely translates as making companies pay more of the costs imposed by some harmful result of their activity, such as pollution. One, associated with Arthur C. Pigou, uses taxation or some other pricing to fully reflect the social cost of an economic activity. The other, linked to Ronald H. Coase, seeks an efficient social outcome through bargaining and contracting. Clearly, both approaches are needed for a global strategy to combat climate change.
Our research concludes that, under the kind of approach Coase pioneered, it’s sound economic logic to pay for the replacement of coal with renewables to reap a net social gain measuring in the tens of trillions of dollars.
Phasing out coal is not only a matter of urgency for the planet. It also makes economic sense because, as we show, the social gains far outweigh the costs of climate financing to end coal.
Compliments of the IMF.
The post IMF | How Replacing Coal With Renewable Energy Could Pay For Itself first appeared on European American Chamber of Commerce New York [EACCNY] | Your Partner for Transatlantic Business Resources.