Italy's Central Bank Governor Advocates for Global Carbon Emission Reduction Plan

Italy's Central Bank Governor Fabio Panetta supports a plan to aid poorer countries in cutting their carbon emissions, believing it would lower the overall energy transition cost. Developing nations struggle to fund the transition from coal to clean energy, an issue central to upcoming U.N. climate talks.

Italy's Central Bank Governor Fabio Panetta on Monday endorsed a plan to assist poorer nations in reducing their carbon emissions. Panetta argued that this would ultimately lower the overall energy transition expense.

Panetta, who also serves on the European Central Bank governing council, pointed out the slowing momentum in net inflows into sustainable investment funds. He attributed this to a political backlash against climate initiatives in some countries.

He noted that developing countries face significant challenges in securing the capital required to phase out coal-fired power plants and transition to clean energy. Financing remains a contentious issue at U.N. climate talks scheduled for November in Baku.

Panetta advocated for a scheme where countries with higher per capita emissions would compensate those with lower emissions. He asserted that the economic damage avoided by successful climate transition efforts would more than offset the transferred resources.

Prime Minister Giorgia Meloni's government pledged in January to support developing countries, especially in Africa, in developing low-carbon technologies to stimulate economic growth.

(With inputs from agencies.)