According to the International Energy Agency (IEA), 80 percent of the cumulative CO2 that can be emitted between 2010 and 2035 if the world is to have a chance of keeping the global mean temperature rise below 2°C is already “locked-in” to existing capital stock. For a 2°C scenario, all investments after 2017 will need to be in zero-carbon utilities, unless existing infrastructure is scrapped before the end of its economic lifespan.

Even in the EU, though, the costs of additional emissions other than CO2 are not fully accounted for and the uncertainty of the future CO2 price makes this a difficult task. One way to tackle this would be for major public investors such as the EBRD and the EIB to elaborate a quota of GHG emissions available to each country of operation both within and outside of the EU according to their historic share of GHG emissions and the necessary reductions up to 2050 for that country; the permitted emissions could then be distributed between different sectors of the economy in that country including the renovation/refurbishments that lead to lifetime extension.