ECB's Lagarde urges climate resilience drive after scorching summer

Lagarde Urges EU Investment in Climate Resilience After Scorching Summer

ECB President Highlights Urgent Need for Climate Adaptation in Europe

Lagarde’s Call to Action Following Extreme Weather

FRANKFURT, Nov 4 (Reuters) - European Central Bank President Christine Lagarde urged Europe on Wednesday to boost climate-related insurance, invest more in power infrastructure and help companies generate their own electricity, saying last summer's extreme heat should serve as a warning.

Ahead of next week's COP31 summit in Antalya, Turkey, Lagarde said the latest heatwaves, droughts and wildfires had exposed vulnerabilities in Europe's economy and energy system that would become more acute as the climate warms.

"As extreme weather becomes a regular feature of our summers, Europe must proactively prepare and be better protected against its financial fallout," Lagarde, who announced her resignation last week, said in a blog post.

Insurance and Reinsurance Gaps in Europe

She called on the European Union to work on a public-private reinsurance scheme against climate disasters, saying only a quarter of catastrophe losses in Europe have historically been covered by insurance.

Investments in Power Infrastructure and Grid Upgrades

Citing industry research, Lagarde said each euro invested in upgrading the grid saves more than €2 ($2.25) in other system costs, while better storage would help carry cheap solar power into the evenings, when heatwaves strain supply the most.

Enabling Companies to Generate and Supply Their Own Power

She also made the case for common rules allowing firms with their own power generators and batteries to connect more quickly to the grid so they can help at times of stress.

Role of the Private Sector and the ECB

Lagarde, who will step down on February 7, said "much of this investment" would have to come from the private sector and did not mention any ECB involvement in its financing.

EU’s Climate Agenda at COP31

The EU will use the upcoming COP31 summit to push for agreement on a "package" of efforts to reduce the greenhouse gas emissions heating the planet, according to an internal EU document seen by Reuters.

Additional Information

($1 = 0.8905 euros)

(Reporting by Francesco Canepa; Editing by Sharon Singleton)