The Spanish financial sector is fully aware of the challenges it faces and of the key role it will play in the fight against climate change. We are ready to be agents of change and to support the authorities, society and our customers in meeting this challenge. However, I would like to refer to some of the issues raised by this process. I want to avoid a certain overly optimistic view of it, as that would conceal the enormous difficulties that lie ahead. First, we must be aware that the pace of the debate and the desire for action are far ahead of the knowledge we have. Consider, for example, the definition of what is and is not green. We all use this terminology widely, but for the time being there is no clear, unambiguous definition at international level of what should be called green.
Second, we face the problem of uncertainty affecting economic activity. Uncertainty is highly damaging, as it paralyses consumption and investment decisions by economic agents—households and businesses—who normally prefer to wait until doubts have been dispelled before deciding. Well, uncertainty is inherent to the climate change process. The depth of the change in the productive model, or the speed at which that change will materialise, are, for the moment, unknown. There is a risk that initial strategies to combat climate change will increase doubts if they are not sufficiently well defined. We must be especially cautious in this area. Let us therefore avoid generating additional uncertainty.
The third element concerns the social costs of the transition to a sustainable economy. We must not deceive ourselves: although in the long term that model is the only viable one, short-term costs will be generated. To give a simple example: clean energy production will be more expensive insofar as enabling technologies do not exist. How to manage the distribution of those social costs is by no means a trivial matter. Ultimately, it seems difficult for us to converge towards those sustainable models without accepting profound changes in our lifestyle.
Another reflection is that we need to take action, but action that is well planned and better executed, so as to reduce the uncertainties inherent in the fight against climate change, without neglecting efforts to raise awareness and build public understanding. At this point, inaction can only lead to higher costs—the costs of paralysis between two production models—without obtaining any benefit either from the old world we are leaving behind or from the new one we are moving towards.
I would also like to refer to the need to work jointly: government and the private sector, the different productive sectors and the financial industry, or the real economy and civil society. Governments must reduce, as far as possible, the structural uncertainty of the process of combating climate change; but above all, they must try not to generate new uncertainties or introduce additional risks. The key, ultimately, will be the predictability of their actions.
Finally, I am deeply convinced that we must now move to planned action, agreed among the different social stakeholders, to achieve a fairer and more sustainable world. For this reason, I wish all participants at COP25—governments, companies and volunteers—every success in advancing these objectives, because our future and that of the next generations depend on it.
José María Roldán, Chairman of the Spanish Banking Association
