The next Dutch government must speed up and increase its investments in combating climate change, the central bank said in a set of new recommendations on Wednesday.

In particular, the private sector and households are not making the investments they should be and there is too much waiting around for others to take action first, the DNB said.

‘Much needed investments in energy provision and greening industry, transport, agriculture, and the built environment are not being made, and the Netherlands is falling further behind when it comes to meeting targets,’ the researchers said.

This is worrying, the report said, because the longer the delay in shifting to an energy-neutral society, the more expensive the transition will become. This in turn will cause more damage to both the economy and the financial sector.

More needs to be done to stimulate industry and private households to invest in meeting climate targets. In addition, the report said, ‘major polluters are paying little towards the damage they are causing, and there is little financial incentive to take action.’

At the same time, however, ‘private households are paying a lot to become more durable’.  ‘The government has to better balance this as quickly as possible,’ central bank researcher Riana Luijendijk said.

The central bank said it was speaking out because of its role in regulating the stability of financial institutions. Climate change threatens this, the bank said, and the shift towards a more sustainable economy is one of the biggest challenges facing society and the economy.

Last month, EU commissioner Frans Timmermans also said the new cabinet will have to include tougher climate measures in its plans if it is to comply with new European climate legislation.

EU law stipulates that in nine years’ time greenhouse gases in Europe must be reduced by 55% compared to 1990. That is 15% up from the former goal. Net emissions must zero by 2050, making Europe the first energy neutral continent.