ECB’s Elderson urges investment in climate resilience and clean energy

European Central Bank executive board member Frank Elderson has called for greater investment in climate adaptation and the green transition, arguing that they are essential to Europe’s economic resilience, energy security and competitiveness.

In a keynote speech at the Green Swan 2026 Conference in Manila on 19 October, Elderson said climate change and nature degradation were already affecting economic activity, prices and financial stability. He urged policymakers to combine measures to limit emissions with preparations for the impacts that are already under way. [1]

Elderson cited Europe’s summer of 2026, which he described as the warmest on record in Western Europe, with drought, wildfires and water scarcity disrupting transport, industry and energy production. He said heat-related excess deaths in Europe exceeded 30,000 between mid-June and mid-August. [1]

The speech also highlighted risks to economic output. Elderson referred to ECB research suggesting severe water scarcity could put as much as 24% of euro-area output at risk. He said nearly 12% of output and more than 60% of euro-area loans faced risks from insufficient flood protection. [1]

Resilience and competitiveness

Elderson argued that adaptation — such as stronger infrastructure, improved water management and early-warning systems — must go hand in hand with mitigation. Without cuts to emissions, he said, the cost and scale of adaptation would continue to grow.

He presented the transition to cleaner energy as an economic and security strategy as well as an environmental one. Europe’s reliance on imported fossil fuels leaves households and businesses exposed to geopolitical shocks, he said, while renewable power and electrification could reduce that dependence. Electricity accounts for about 23% of final energy consumption in the European Union, according to figures cited in the speech. [1]

Elderson said the transition was being held back by uncertainty and limited access to finance. Long-term projects can be delayed when firms are unsure whether policy rules will remain stable, while banks may become more cautious about lending. He called for predictable policies, deeper capital markets and international cooperation to support investment.