Keynote speech by Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the 7th World Congress of Environmental and Resource Economists

Lisbon, 2 July 2026

In my speech today, I will talk about two factors that have recently contributed to inflation volatility and economic uncertainty in the euro area: war in the Middle East and risks arising from the climate and nature crises. These factors themselves have a common cause: continued overreliance on burning fossil fuels and, in Europe’s case, on imported fossil fuels in particular. Accelerating the transition to net zero carbon helps insulate Europe from these shocks. It is tempting, then, to say we can kill two birds with one stone. While that is not necessarily the most apt idiom to use at a congress of environmental economists, I also think it oversimplifies the task at hand. As I will discuss today, arriving at net zero carbon requires a complementary range of policies…