), only a quarter of losses from extreme weather and climate events in the eu are insured. [ 6 ] insurance coverage is even lower among the less affluent parts of the population, who tend to own housing that is more exposed to natural catastrophe risks and who, in relation to their income levels, face a higher cost of protection. although it is leading the transformation at global level, and despite the considerable efforts made so far, the eu is currently not yet on track to meet its climate targets for 2030 and 2050. [ 8 ] further action is needed. the network for greening the financial system ( ngfs ), which brings together central banks and supervisors working on climate issues around the world, has developed scenarios to assess how economies might look on different climate policy paths. these scenarios underline that to achieve the net zero target by 2050 the share of fossil fuels in the eu energy mix must be reduced from around 73 % in 2020 to around 20 % in 2050, however, current policies would only reduce it to slightly below 60 % ( chart 1, panel a ). under current policies, we would fall well short of the net zero target in 2050. even if all existing national pledges were fulfilled, there would still be a large gap ( chart 1, panel b ). chart 1 eu primary energy mix and eu greenhouse gas emissions under different ngfs scenarios from 2020 until 2050 a ) eu primary energy mix under current policies and net zero 2050 scenarios b ) eu greenhouse gas emissions under current policies, nationally determined contributions ( ndcs ) and net zero 2050 scenarios ( percentages of total primary energy ( gt co2e emissions / year ) consumption ) source : ngfs. data is derived from the gcam 6. 0 ngfs model covering the eu27. notes : current policy scenario ( cps ) : assumes that only currently implemented policies are maintained, leading to high physical risks. nationally determined contributions scenario ( ndcs ) : includes all pledged policies, even if not yet implemented, resulting in a moderate and heterogeneous climate goal that leads to a decline in co2 emissions but only limits global heating to 2. 6°c. net zero 2050 ( nz2050 ) scenario : assumes that stringent climate policies are implemented and innovations take place, limiting global warming to 1. 5°c, reaching net zero co2 emissions by 2050. to put the scale of action required into context, consider the investment required to

of climate change and advancing work on nature loss and degradation. these focus areas will guide our exploratory and analytical work in the coming years. chart 5 the ecb has implemented several measures to incorporate climate change considerations into its activities source : ecb. complementarity with other policies notwithstanding these initiatives, it is important to emphasise that the primary responsibility for leading the green transition lies with elected governments, which possess more direct tools and the legislative power to enact the necessary changes. since there are important complementarities between these policies and monetary policy, the ecb stands ready to offer support by providing technical analysis and advice. this knowledge sharing lies squarely within the scope of our primary mandate insofar as these other policies, by mitigating climate change risks, will allow monetary policy instruments to more effectively preserve price stability. let me provide some examples of these complementarities. addressing supply shocks a first example is the complementarity with policies aimed at cushioning supply shocks. in particular, policies that support diversification away from fossil fuels and increase energy efficiency enhance the resilience of our economy to shocks stemming from energy commodities prices, thereby containing inflationary pressures. remarkable technological advances in recent years have greatly enhanced the efficacy and reduced the cost of sustainable technologies. notably, the period from 2010 to 2022 saw dramatic decreases in the cost of producing electricity from offshore wind, onshore wind and solar energy by 60 %, 70 % and 90 % respectively ( chart 6 ). chart 6 decrease in the cost of renewable sources of electricity between 2010 and 2022 ( usd / kwh ) source : international renewable energy agency ( 2023 ), “ renewable power generation costs in 2022 ”, abu dhabi. note : the cost of renewable energy sources is based on data for 2022. at the same time, efforts to secure the supply of key raw materials, jointly purchase them or support innovation to reduce dependency on them can help lessen our exposure to the price and availability of metals and minerals like copper or lithium that are critical for the green transition. likewise, measures to ease the impact on households and businesses of fossil fuel energy price spikes can be designed so as not to suppress the price signal, which is key for providing incentives to reduce consumption of and dependency on fossil fuels. mitigating the negative impact of climate change on productivity and potential output second, other policies can mitigate the negative impact of climate change on productivity and potential output. the eu ’ s emissions trading system (