1 percent by the end of 2023. [ 4 ] we are now paying the price for our longstanding dependency on fossil fuels. to dampen the impact of high energy prices, many countries have introduced price caps or other subsidies. however, it is important to not dilute the price signals completely and to not create misdirected incentives. in addition, an adequate carbon price remains a key political tool on the road to climate neutrality, with a clear steering effect. of course it is important to keep an eye on the social balance. but for this, policymakers have other, more appropriate instruments. policymakers in europe are rushing to find alternatives to russian gas, too. in germany, for instance, coal plants are being reactivated amid debates about extending the life span of the remaining nuclear power plants. but neither coal nor nuclear power are the silver bullet for energy security. due to low water levels, we have seen instances where coal could not be shipped and nuclear reactors could not be cooled down. there is no simple solution. rather, we are dealing with a multidimensional problem. thus, the situation might even worsen in a non - linear way. it ’ s time to speed up the renewable energy transition to become independent and less vulnerable. greening the energy sector won ’ t be enough. moving carbon - intensive industries towards a low - carbon future is at the heart of the transition. we have to get the entire economy on track for net zero. along this road, policymakers are called on to set the right incentives for investment in the climateneutral transition. 3 financing the sustainable transition there is no doubt that decarbonising our economies will be costly. the european commission, for example, estimates that additional investments of around 350 billion euros per year will be required up to 2030, just to convert the energy system. [ 5 ] but delaying the sustainable transition will cost us more. to reach our goal of net zero greenhouse gas emissions by 2050, the public and the private sector must pull together. of course, targeted public spending is needed. national and european funding programmes could be a vehicle through which companies and private individuals receive grants, loan reduction and guarantees for sustainable projects. this would mean the public sector assumes some of the risk, but the private sector has to pitch in as well. the real economy itself will have to invest a great deal. banks, capital markets and institutional investors stand ready as funding partners. the financial sector has a key role

sabine mauderer : putting our money where our mouths are - joint efforts to finance the global green transition speech by dr sabine mauderer, member of the executive board of the deutsche bundesbank, at the un climate change conference cop 27, sharm el - sheikh, 9 november 2022. * * * to limit global warming and adapt to the impact of climate change, large - scale investments are necessary. the international energy agency highlighted in its recent world energy outlook that, to stand a chance to limit global warming to 1. 5 degrees, investments in clean energy alone would have to reach usd 4 trillion a year by 2030 from only usd 1. 3 trillion today. 1 and a study by the london school of economics pointed out this week, even without considering the investment needs in china, emerging and developing countries will have to spend around usd 2. 4 trillion or 6. 5 % of gdp per year by 2030 on climate change adaptation and mitigation. 2 this will require both public and private funds : public money from governments and multilateral development banks especially but not only for adaptation ; and for innovative projects that mitigate climate change, private money is key, be it from private banks, funds, institutional investors or philanthropic organisations. but as such innovative projects are often risky, governments and multilateral development banks may have to take on part of this risk via equity shares to trigger the necessary private investment. such blended finance would give a boost to the green transition in emerging, developing as well as developed economies. yet public and private investors need transparency about climate impact and climaterelated risks to drive the green transition. improving transparency first, helps financial markets to work efficiently and scale up green finance, and second, allows investors to make sure that their funds are being used as they intend. regulators are in the driver's seat when it comes to increasing market transparency around climate - related risks. central banks can play a supporting role in boosting transparency. they can cooperate internationally to identify best practices as well as inefficiencies and existing obstacles. the ngfs is an excellent forum to this end. a recent ngfs study showed that transparency initiatives around the world differ significantly and that numerous divergent taxonomies, standards and guidelines have been developed. to a large degree, these differences reflect the varying needs in different markets. 1 / 2 bis - central bankers'speeches what works well in one country may not necessarily be a suitable blueprint for other countries or regions. that