Pierre Wunsch, Governor of the National Bank of Belgium, invited to the FEB – VBO FEB – Federation of Belgian Enterprises

During the joint meeting of the Board of Directors and the Strategic Committee of the FEB, Pierre Wunsch, Governor of the National Bank of Belgium, spoke about the macroeconomic cost of the ecological transition. This transition will cause significant economic impacts and costs.

Pierre Wunsch explained in detail the link between the economic cost and the need to make the ecological transition. Some observations:

• Technologies exist today to reduce almost all greenhouse gas emissions in most sectors of the economy.
• Electrification in particular is likely to play an important role in the energy transition (green hydrogen and carbon capture and storage are less so).
• Not all decarbonization technologies are cheaper than existing technologies. Consequently, the energy transition will amount to a supply gap and will cost around 2.3 to 3.5% of Belgium’s GDP until 2050.
• The EU’s internal climate policy is already largely enshrined in legislation for the coming years. The main question now is how to mobilize the necessary investments.

Pierre Wunsch concluded with a series of open questions on the international dimension of the energy transition:

• EU climate policy reduces the need to import fossil fuels, makes the European economy less vulnerable to fluctuations in energy prices and strengthens energy security. But the United States (cheap gas) and China (overall cheaper production) are putting European production under pressure. The additional costs of climate policy must be absorbed by the Carbon Border Adjustment Mechanism (CBAM), but what about export markets?
• There are signs that climate policy is increasingly being used to justify restrictions on free trade, posing risks for the EU as a major trading economy.

His speech was followed by lively discussions with the members of the Board of Directors and the business leaders present.