The outgoing chief of the European Central Bank (ECB), Christine Lagarde, called on Europe 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, Türkiye, Lagarde said the latest heat waves, 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.
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.
Citing industry research, Lagarde said each euro invested in upgrading the grid saves more than 2 euros ($2.25) in other system costs, while better storage would help carry cheap solar power into the evenings, when heat waves strain supply the most.
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.
Lagarde, who will step down on Feb. 7, said "much of this investment" would have to come from the private sector and did not mention any ECB involvement in its financing.
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.
