REACHING FOR BLUE GOLD - How the EU can rise to the water challenge while reaping the rewards. EPC Issue Paper No. 80, November 2015

Foreword. Climate change is bad news for water resources – and thus for human development, societies, economies, the environment, and local and global security. The increasing frequency and severity of extreme weather events such as droughts and floods serves as a reminder of the effects climate change can have on the quantity and quality of global water reserves, and thus on various other aspects of life. Even though the effects differ from region to region, this is a global challenge with far-reaching consequences to which Europe is not immune. As the world leaders gather in Paris in December 2015 to discuss a new international climate deal, it is worth to remind politicians, businesses and citizens of the water challenge and its wider implications, which already affect us today – and which will only get worse with climate change. However, water-related risks resulting from climate change are not a fatality and damage control doesn’t have to be the only mantra. Placing the water challenge at the centre of political and security dialogues, development strategies and climate mitigation and adaptation measures, and implementing smarter water management, could also bring great economic, environmental and social benefits, in and outside the European Union. It would also contribute to global security. Water matters – now more than ever. This is also what this publication demonstrates. Building on the European Policy Centre’s, two-year “Blue Gold” project, this publication shows the rationale for action, how the EU could use its existing internal and external policy instruments to tackle the water challenge with its various dimensions and the benefits of action.

Financial risks and opportunities in the time of climate change. Bruegel Policy Brief ISSUE 2016/02 APRIL 2016

Real economic imbalances can lead to financial crisis. The current unsustainable use of our environment is such an imbalance. Financial shocks can be triggered by either intensified environmental policies, cleantech breakthroughs (both resulting in the stranding of unsustainable assets), or the economic costs of crossing ecological boundaries (eg floods and droughts due to climate change). Financial supervisors and risk managers have so far paid little attention to this ecological dimension, allowing systemic financial imbalances resulting from ecological pressures to build up. Inattention also leads to missed economic and financial opportunities from the sustainability transition.