Cyprus fiscal council warns of climate change economic risks

During the Cyprus Forum held in Nicosia, the chairman of the Fiscal Council, Andreas Charalambous, warned that delays in energy transition and climate change policies pose significant risks to the sustainability of the country's public debt. The Fiscal Council’s 2026 interim report emphasizes that environmental issues are now core economic risks due to the state’s failure to meet established climate targets.

Charalambous highlighted specific deficiencies in energy storage infrastructure, which he identified as a critical barrier to increasing the share of renewable energy in the national grid. Furthermore, he criticized the ongoing shortcomings in waste management, recycling, and energy efficiency. According to Professor Theodoros Zachariades, who also spoke at the event, Cyprus remains the only European Union member state where greenhouse gas emissions are still rising, a trend largely attributed to an excessive reliance on fossil fuels for electricity generation.

The experts noted that current national goals are already less ambitious than broader EU objectives, yet the government continues to struggle with the planning and implementation required to reach these modest targets. The council suggests that the lack of concrete progress in these sectors could negatively impact the long-term stability of public finances.