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• The nexus between forest-based climate mitigation and health is poorly researched. • This scoping review identified exposure pathways and health co-benefits from forests. • There is potential for synergies between forest management and health benefits. • Interdisciplinary efforts are required for advancement of research and understanding. Climate change is a pressing global challenge with profound implications for human health. Forest-based climate change mitigation strategies, such as afforestation, reforestation, and sustainable forest management, offer promising solutions to mitigate climate change and simultaneously yield substantial co-benefits for human health. The objective of this scoping review was to examine research trends related to the interdisciplinary nexus between forests as carbon sinks and human health co-benefits. We developed a conceptual framework model, supporting the inclusion of exposure pathways, such as recreational opportunities or aesthetic experiences, in the co-benefit context. We used a scoping review methodology to identify the proportion of European research on forest-based mitigation strategies that acknowledge the interconnection between mitigation strategies and human impacts. We also aimed to assess whether synergies and trade-offs between forest-based carbon sink capacity and human co-benefits has been analysed and quantified. From the initial 4,062 records retrieved, 349 reports analysed European forest management principles and factors related to climate change mitigation capacity. Of those, 97 studies acknowledged human co-benefits and 13 studies quantified the impacts on exposure pathways or health co-benefits and were included for full review. Our analysis demonstrates that there is potential for synergies related to optimising carbon sink capacity together with human co-benefits, but there is currently a lack of holistic research approaches assessing these interrelationships. We suggest enhanced interdisciplinary efforts, using for example multideterminant modelling approaches, to advance evidence and understanding of the forest and health nexus in the context of climate change mitigation. [ABSTRACT FROM AUTHOR]

Electricity demand is a crucial factor in energy system planning. Understanding future electricity demand is vital for developing effective energy and climate policies, as well as establishing a resilient and sustainable energy system. In light of these considerations, the escalating challenges posed by climate change are anticipated to have a substantial impact on electricity demand. This study, therefore, provides a comprehensive analysis delving into the dynamic nature of Temperature Response Functions (TRFs) of electricity demand across Europe. By examining various factors influencing electricity demand in residential buildings, such as thermal insulation, heating electrification, space cooling, and passive cooling, we aim to understand their collective impact on shaping future Temperature Response Functions. To project electricity demand, our study incorporates these factors into our scenario assumptions. Through a comprehensive investigation of these scenarios, our findings reveal distinctive regional influences of these factors. In regions where heating demand prevails, an initial increase in electricity demand is anticipated due to increased electrification rates. However, improved building thermal insulation is expected to substantially reduce winter electricity demand in the long run. Conversely, in regions with pronounced cooling demand, a notable escalation in electricity demand is foreseen due to increased space cooling penetration rate. Nevertheless, the application of effective passive cooling measurements is expected to mitigate and markedly diminish this increase. By highlighting the differential influences of these factors on electricity demand across Europe, our findings can offer valuable insights and guidelines first for energy system modelers for considering the change in Temperature Response Functions and second for policymakers to develop effective climate change adaptation and mitigation strategies. • Examination of the dynamic characteristics of Temperature Response Functions (TRFs). • Space and passive cooling, electric heating, insulation effects on electricity demand. • Projection of TRFs and electricity demand for 36 European countries until 2100. • Thermal insulation and passive cooling are essential for reducing electricity demand. [ABSTRACT FROM AUTHOR]

• Assessing generalizability of age prediction across cities and countries based on urban form. • Evaluating amount of local data needed to fill data gaps. • Detailed analysis of predictive performance across regions, construction periods, settlement and buildings types. • Assessing the usability of predictions to improve prioritization of large-scale retrofits. • Highlighting climate relevance of scalable, spatially explicit building attribute prediction. • Filling data gaps within countries is possible. • 10% local data allow inference of remaining unknown building ages. • Massive training data improves generalization across regions. • Generalizing across countries is not (yet) possible. • Age predictions can inform retrofit policies and may significantly increase energy savings. To stay within 1.5 °C of global warming, reducing energy-related emissions in the building sector is essential. Rather than generic climate recommendations, this requires tailored, low-carbon urban planning solutions and spatially explicit methods that can inform policy measures at urban, street and building scale. Here, we propose a scalable method that is able to predict building age information in different European countries using only open urban morphology data. We find that spatially cross-validated regression models are sufficiently robust to generalize and predict building age in unseen cities with a mean absolute error (MAE) between 15.3 years (Netherlands) and 19.9 years (Spain). Our experiments show that large-scale models improve generalization for predicting across cities, but are not needed to infer missing data within known cities. Filling data gaps within known cities is possible with a MAE between 9.6 years (Netherlands) and 16.7 years (Spain). Overall, our results demonstrate the feasibility of generating missing age data in different contexts across Europe and informing climate mitigation policies such as large-scale energy retrofits. For the French residential building stock, we find that using age predictions to target retrofit efforts can increase energy savings by more than 50% compared to missing age data. Finally, we highlight challenges posed by data inconsistencies and urban form differences between countries that need to be addressed for an actual roll-out of such methods. [ABSTRACT FROM AUTHOR]

• A RCM is used to study the effect of LCC on climate extremes in Europe. • LCC significantly changes the occurrence frequency and duration of extreme climate. • Increasing understanding of land cover change-climate interactions. • Findings are helpful in developing future land management strategies in Europe. Extremes in climate and weather can pose significant challenges to economy, ecosystems and human health. Changes in land cover are one of the drivers for variability in frequency and magnitude of extreme climate at regional and local levels. In this study, a regional climate model (COSMO-CLM v4.8) is used to simulate effects in climate extremes from two different idealized land cover change scenarios in Europe. These two simulations involve abrupt large-scale conversion of today forestland to herbaceous vegetation (deforestation), and of today cropland to evergreen needle-leave forest (afforestation). A control simulation with today land cover distribution is used to identify differences in extreme climate. We find significant changes in extreme climate in both deforestation and afforestation simulations, with seasonal and spatial differences. Deforestation causes a warmer summer (with higher annual maximum temperature) and a colder winter (with lower annual minimum temperature). Afforestation slightly increases the average intensity of the hot extremes, although with high spatial variability (a reduction is common in several locations), and mitigates cold extremes in winter. Changes in extreme indices show that deforestation increases both the frequency and duration of hot and cold extremes, while afforestation causes a lower frequency of extreme cold climate. The two simulations show opposing results in the number of frozen days, as they increase for deforestation and decrease for afforestation. A drier climate is found after deforestation, whereas a wetter climate is observed after afforestation. In general, deforestation and afforestation increase the frequency of hot extreme climate as they reduce the return period and increase the return level. Overall, our findings show the potential critical effects that land cover changes can have on climate extremes, and the possible synergies that land management strategies and planning can have for climate change mitigation and adaptation at a regional scale. [ABSTRACT FROM AUTHOR]

This study is a first attempt to evaluate how the major efforts made by several European cities in the frame of the Covenant of Mayors (CoM) initiative can impact the air pollution levels in the participating cities. CoM is by no mean one of the major cities initiatives aimed at mitigating climate change, supporting local authorities in the implementation of their climate action plans. Energy savings measures reported in the CoM cities' action plans have been analysed from the air quality perspective in order to find quantitative relations in the way local authorities deal with mitigation and how these practices are expected to have consequences on the air quality at urban level and finally positively impacting the citizens' health. In the paper, the air quality 2713 energy saving measures proposed by 146 cities located in 23 countries in the frame of the CoM are selected and their co-benefits for air quality and public health estimated by means of SHERPA, a fast modelling tool that mimics the behaviour of a full physically-based Chemical Transport Model. Besides evaluating the overall benefits of this subset of mitigation measures for the air quality, the study also investigates the relevance of some factors such as the implementation sector, the city size and the pollution levels in achieving the highest possible co-benefits. The results presented refer to the special field covered by the study, i.e. energy saving measures and are not automatically referable to other types of measures. Nevertheless, they clearly show how climate mitigation and air quality policies are deeply interconnected at the urban level. [ABSTRACT FROM AUTHOR]

• MAOM-C content was modeled for arable fields with different management. • Organic fertilization, crop rotation, and soil texture define MAOM-C content. • A POM-C/MAOM-C ratio indicator was developed and tested. • This indicator contains information on MAOM-C saturation deficits. • POM-C/MAOM-C ratio indicators might support climate mitigation strategies. Soil organic matter (SOM) is indispensable for soil health and, in the context of climate change, is considered a significant CO 2 sink. Improving agricultural management to increase long-term soil organic carbon (SOC) stocks for mitigating climate change requires tools that estimate short and long-cycling SOM pools. In this study, we analyzed changes in fast-cycling particulate organic matter (POM) and slow-cycling mineral-associated organic matter (MAOM) induced by common management practices, i.e., fertilization and crop rotation in topsoils from 25 Central European long-term field experiments. When relating MAOM-C contents to recent MAOM-C saturation levels, estimated sequestration potentials were only met in coarse-textured soils under appropriate agricultural management or fine-textured soils under extreme organic fertilization. Soil texture, organic fertilization, and below-ground OC inputs through root exudates and root biomass were decisive for estimating MAOM-C, allowing for calibration of a mixed-effects model (Nakagawa's: marginal R2 m = 0.6, conditional R2 c = 0.89). While the models containing soil texture and organic fertilization parameters can be validated and generalized (R2 = 0.43), the below-ground OC input predictor substantially decreases the generalizability of the validated models (R2 = 0.14). According to quantile regression models, we estimate the average difference in MAOM-C concentration between well-managed and control site (without organic fertilization) topsoils to 4.1 mg g−1 soil. In dependence on the soil bulk density, this amounts to 1.38 – 1.84 t ha−1 MAOM-C stocks or 5.06 – 10.1 t ha−1 CO 2 -equivalents. POM-C was difficult to predict (R2 = 0.28), presumably due to strong POM dynamics. The POM-C / MAOM-C ratio can inform on the effects of agricultural practices in before/after management change comparisons. Under increasing SOC concentration, an increasing POM-C / MAOM-C ratio indicates that the effects of organic fertilization do not transfer to real effects on long-term SOC sequestration. Because MAOM-C depends on soil texture, this ratio is also a covariate of soil texture, limiting it for comparisons between sites with different textures. However, our data indicate that agricultural long-term field experiment soils constantly approximate MAOM-C saturation when the POM-C/MAOM-C ratio is >0.35. This ratio might be used as a management goal to prevent organic over-fertilization and N loss, especially on coarse-textured soils. Thereby, the POM-C / MAOM-C ratio can help to optimize SOC management and sequestration on agricultural soils and support climate change mitigation strategies in Central Europe. [ABSTRACT FROM AUTHOR]

Rapid decarbonisation of the transport sector calls for increased use of biofuels. Part of the increase may be covered by fuels produced from logging residues, wood chips and round wood. This article addresses the economic potential and possible impacts of increased production of such wood based biofuels on the forest industries and production of wood based heat and power in the European Economic Area. A global model for the markets and trade of forest biomass and products, the EFI-GTM was applied for the analysis. The results indicate, firstly, that policy choices will have strong impacts on the allocation of biomass use between heat and power production and the production of liquid biofuels. Hence, the policy makers must have very clear goal setting for the preferred ways to solve the shift from the fossil fuel based energy system to a less carbon intensive one. Nevertheless, because large investments in biofuel production take time to plan and construct, and because the annual forest growth exceeds the harvests of wood in various parts of Europe, there is time to adjust the policies to control the market development. Secondly, even assuming the goal of limiting the global warming to 2 °C, the European forest industry production is projected to be rather little affected by the increased competition for biomass with the energy sector. This is because the rivalling regions are facing similar biomass demand challenges. Also, the relatively abundant wood biomass resources in Europe help the European forest industry to maintain its market shares. [ABSTRACT FROM AUTHOR]

The non-recyclable fraction of municipal solid waste (MSW refuse) represents over half of the total MSW production in Europe, with an energetic potential of 1250 PJ/year, a similar quantity to the current potential for energy production from agricultural residues. Currently, there are no alternative uses for MSW refuse other than landfilling or incineration. Thus, it represents an important untapped resource for biofuel production in Europe. Standard attributional LCAs have not been able to capture some of the bioenergy interactions with the climate system and neither to properly assess the climate change mitigation potential of bioenergy technologies. This study aims to fill this gap and properly assess the impact of the production of biofuels from MSW refuse on climate change by applying several methodological improvements in a time-dependent assessment, i.e., an explicit consideration of biogenic carbon flows using a dynamic LCA and an absolute formulation of the cumulative and instantaneous climate metrics. Two diverging examples of current MSW management systems are selected as references against which to assess the potential climate benefit of biofuel production: with or without dominant landfill disposal and with high or low GHG emissions from the power generation sector. The results show that in countries with current negligible landfilling, the production of biofuels would lead to a clear climate benefit. For landfill-dominant countries, the climate benefit would only be temporarily achieved in the medium term as the impact of landfills on climate decreases in the long term. However, considering a progressive banning of landfilling promoted by other policies for environmental protection and resource efficiency, the results would become positive for both countries with climate change mitigation guaranteed by using MSW refuse for biofuel production. [ABSTRACT FROM AUTHOR]

Climate change and CO 2 emissions intertwine corporations and society in current political, social, environmental, and economic debates, specifically in Europe. The climate action plan formulated by the European Commission aims to achieve net zero emissions through eco-innovation by 2050. The objective of this study is to investigate the impact of the European eco-innovation index on CO 2 emissions produced by European firms. Using a dataset of 735 firms from 17 European countries listed during 2010–2018, we found a significant negative association between the country-level eco-innovation index and CO 2 emissions directly produced by the European firms. We also found a significant negative association between the eco-innovation index and indirect CO 2 emissions produced by the value chain of these firms. The results provide evidence that via eco-innovation, supportive steps taken by European countries provide a conducive environment for the European firms to adopt eco-innovative strategies that significantly reduce their direct and indirect CO 2 emissions per dollar of their corporate assets and make their value chains eco-friendly. The results also reveal that financial development brings in some environmental monitoring that cultivates a supportive culture for the corporations to promote corporate efforts to reduce CO 2 emissions. • The first study that uses an eco-innovation index, based on 5 dimensions, developed by the European Commission. • We find a negative impact of country-level eco-innovation on the reduction in direct and indirect corporate CO 2 emissions. • Eco-innovation initiatives taken by the European countries are helping European firms in reducing their CO 2 emissions. [ABSTRACT FROM AUTHOR]

Diesel vehicles are one of many sources of black carbon (BC) emissions in Europe; nevertheless, due to recent changes in fuel composition towards renewable fuel such as biodiesel, advances in engine design and pollution control technology, BC and organic carbon (OC) emissions may worsen air quality and encourage global warming. As there are no regulatory terms on BC mass concentration levels, assessment of pollution sources is crucial for air quality improvement policies and mitigation of climate change. BC mass concentration and aerosol optical absorption were derived using 7-wavelenght Aethalometer during 3 measurement campaigns in 2014, 2017, and 2020. BC source apportionment analysis was performed using 18 combinations of absorption Ångström exponent (AAE) values for assessing BC to fossil fuel combustion and biomass burning. The choice of the most suitable AAE combination (0.9 and 2.2, respectively) was supported by organic aerosol (OA) source apportionment results. AAE value for transport exhaust emission (0.95) from locally available diesel fuel was established using (CI) 1.9 TDI engine with different engine torque regimes and 7-wavelenght Aethalometer. Statistically and experimentally obtained values were compared and showed great agreement. Subsequently, a statistically obtained AAE tr value was used for BC source apportionment and long-term analysis. A significant increase in the contribution of transport-related BC contribution was observed between years 2014 and 2020 (from 51% to 65%) which was associated with a boost in the use of diesel vehicles (by 83.9% of diesel passenger cars comparing 2014 and 2020) and growing diesel fuel consumption. These findings underline the diesel transport-induced problem for local air quality together with its impact on atmospheric radiative balance and raise concerns for public health. • The choice of AAE combination was supported by OA source apportionment results. • BC source apportionment revealed increasing trend of transport-related pollution. • A significant increase in BC tr light absorption was observed during 2014–2020. [ABSTRACT FROM AUTHOR]

• We predict climate change hotspots and coldspots based on climate change velocity in Europe. • Velocities are projected highest in the Continental region, lowest in the Mediterranean region. • The Alpine region will likely contain largest areal proportions of hotspots, the Mediterranean region largest proportions of coldspots. • Natura 2000 area overlapping with hotspots is largest in the Alpine region, with coldspots much smaller in any region. • The outcomes suggest climate-smart conservation prioritization across Europe and the Natura 2000 network. Anthropogenic climate change is challenging biodiversity conservation worldwide. Climate change metrics derived from future climate predictions help to assess potential impacts of climate change on biodiversity. Here we calculated future climate change velocities across biogeographical regions of terrestrial Europe and the Natura 2000 protected area network, the largest protected area network on Earth. We applied climate projections for the year 2070, considering two emission scenarios, six global climate models and a fine spatial resolution. Areas with very high climate change velocity were identified as climate change hotspots, while areas with very low velocity were recognized as coldspots. We further revealed where and to what extent climate change hotspots and coldspots coincide with Natura 2000 sites. We found that climate change velocities are projected highest in the Continental and Boreal regions, and lowest in the Mediterranean and Anatolian regions. However, the Alpine region will likely contain largest areal proportions of climate change hotspots, while areal proportions of coldspots are projected largest in the Mediterranean region. High mountain regions such as the Alps show a high proportion of Natura 2000 sites that coincide with climate change hotspots. Both, hotspots and coldspots, are geographically associated with areas of topographic diversity. Low topographical diversity indicates high climate change exposure. The impact of hotspots increases with spatial isolation. Oceanic climate buffers climate change exposure in contrast to continental climate. However, continental regions of Europe tend to exhibit less spatial isolation. We recommend conservation action in climate change hotspots and coldspots to simultaneously protect the most climate-exposed biodiversity as well as climate change refugia. Climate change hotspots and coldspots overlapping with Natura 2000 sites should be considered priority conservation sites because new protected areas are hard to realize in densely populated landscapes of Europe. This study directs European conservation management and policy towards meeting international conservation goals in a climate-smart way. [ABSTRACT FROM AUTHOR]

[Display omitted] Sustainable Development Goal #7 calls for "access to affordable, reliable, sustainable and modern energy for all." Scientific evidence is growing that greenhouse-gas emissions have a noticeable effect on the earth's climate. Many purpose-built post-war social housing estates in Europe that form high-density residential-tower blocks, however, do not meet current stringent energy-efficiency standards. As a result, many of these structures are under threat of overheating and require careful planning to implement holistic energy subsidisation schemes. This article presents a setup of building energy performance framework that was developed according to the in-situ measurements of building-fabric thermal structure to asset robust energy performance evaluation and certification schemes in the residential sector. This empirical study examines social householders' electricity reliability in accordance with assessing overheating risk of housing stock in South-eastern Europe where the weather is subtropical (Csa) and partly semi-arid (Bsh). It also investigates the gap between as-designed and as-built energy performances. The findings for thermal anomalies resulted from air infiltration through the building fabric, and a lack of natural ventilation through living spaces and excessive heat gains through sizeable and glazed areas. On a typical hot summer day, the internal temperatures of the simulated condominiums remained high throughout the day and night, ranging from a minimum 28.5 °C to a maximum 36.5 °C. Insights from this empirical study improve the national energy network and subsidisation schemes in Europe. The energy policy and regulations would benefit from conceptual level analysis and planning prioritisation in accordance with the climate characteristics of each EU-27-member state. [ABSTRACT FROM AUTHOR]

The climate mitigation benefits of battery electric vehicles (BEVs) relative to internal combustion engine vehicles (ICEVs) are highly dependent on the carbon intensity of the electricity consumed during their production and use-phase. A consistent and dynamic approach to grid-mix regionalization of BEV life-cycle assessments in Europe is therefore necessary to offer accurate guidance to consumers and policy makers. To this end, we present ReDyFEV, a simple open-source software tool that can be used to calculate attributional, regionalized lifecycle climate impacts of BEVs in Europe for user-defined time periods, including near real-time. We determine the national lifecycle carbon footprints across all EU states for four BEV size segments and compare them to those of fossil-fuelled vehicles of similar sizes. Simplified sensitivity analyses investigate the effect of lifetime assumptions, electricity demand in battery production, and of relocating battery production to Europe on the carbon footprints of BEVs. [ABSTRACT FROM AUTHOR]

The expected increased share of renewables due to the ongoing energy transition may reduce the estimated potential mitigation effect of wood. Here, we estimated the climate change mitigation effect for five scenarios of wood products use in Europe applying dynamic substitution factors embracing a future energy mix with an increasing share of renewables in accordance with the emission reductions necessary to achieve the Paris Agreement targets. Our innovative modelling approach also included the elimination of eternal recycling loops, the inclusion of more realistic wood use cascading scenarios, and adoption of a more realistic marginal (ceteris paribus) substitution approach. Results show that the mitigation effect derived from material substitution is 33% lower in 2030 than previously predicted, and even 96% lower in 2100, showing its expiry date by the end of the century. Nevertheless, the mitigation effect of wood product use, in addition to mitigation by forests, may represent 3.3% of the European emission reduction targets by 2030. [Display omitted] • A dynamic modelling approach was used to simulate carbon balance in wood products. • Policies should promote the use of long-lived wood products and cascade chains. • Mitigation effect from substitution 33% lower in 2030 than previously predicted. • Mitigation effect from substitution 96% lower in 2100 than previously predicted. • Mitigation by substitution has an expiry date by the end of the century. [ABSTRACT FROM AUTHOR]

• A trans -scalar analysis of architectural issues relating to passive solar heating through glazing. • A global estimation of the potential for passive solar heating in Europe. • A multi-criteria comparative analysis of the efficiency of different types of glazing. • An investigation of the carbon and energy payback times according to the properties of glazing. • An economic analysis using a novel method based on the levelized cost of energy. Glazing transparency provides buildings with valuable solar energy during periods of colder weather, thus contributing to the mitigation of climate change. However, this same transparency also leads to heat loss which can offset heat gains. Although the use of insulated glazing addresses this challenge by multiplying the number of glass panes, at the same time it reduces the solar factor and thus the heating potential. This article aims to estimate the potential for passive solar heating in Europe according to the energy performance of glazing. This potential is undoubtedly a valuable resource for sustainable architecture. However, an analysis based on regional weather conditions shows a wide disparity in the energy savings that can be expected from a south-facing facade. These savings are most often well below a building's average energy consumption and so a balance has to be found between the thermal resistance and the solar factor of glazing. In addition, the carbon footprint and cost of the most efficient glazing can considerably extend the environmental and economic payback time of a retrofit. This research shows that the potential for passive solar heating is significant but only as long as each architectural situation is analysed according to its specific context and function. This potential would be even greater if windows were designed and used as adjustable facade elements to suit variations in weather and use. [ABSTRACT FROM AUTHOR]

• Real historic buildings with artworks are examined. • Indoor environment, thermal comfort and energy performance were assessed. • The indoor environment is simulated and validated with on-site measurements. • Future indoor climate conditions were predicted for a 2050 scenario. • Future climate change will increase cooling demand. Climate change will affect the indoor temperature of historic buildings, impacting the preservation of artworks and the thermal comfort of users, and possibly leading to increased energy consumption. These buildings generate more emissions than new buildings and in most European countries, preservation principles take precedence over energy efficiency and the reduction of emissions. This research is a key topic for the mitigation of climate change and proposes a method for assessing the impact of climate change on the preservation of artworks, thermal comfort, and energy consumption. An experimental method was followed, combining analytical formulations, on-site measurements, and Heating, Ventilation and Air Conditioning systems in order to identify the adequate hygrothermal parameters for historic buildings. The climate change scenario predicted for 2050 was based on projected temperature variation. The case studies were Baroque churches, historic buildings located in the south of Europe. Data obtained from a monitoring campaign carried out in these churches was used to validate dynamic simulation models. The churches analysed showed an increase in cooling demand and a decrease in heating demand. Furthermore, in order to ensure human comfort and the preservation of artworks, it was necessary to implement active systems in operation for 12-hour periods. These results suggest an energy overconsumption, as the energy consumption for human comfort and artwork preservation was 50% higher than the energy consumption of active systems for the preservation of valuable historic objects. In addition, the annual energy consumption decreases for future scenarios for 2050 in the case of artwork preservation and thermal comfort, but increases by almost 15% for the preservation of works of art due to higher level relative humidity. Before historic buildings can be adapted, it is essential to understand the influence of the future climate on their design, construction, and environmental conditions. [ABSTRACT FROM AUTHOR]

• First power system study considering regional differences in cost of capital. • System design is significantly affected compared to homogeneous reference. • Levelized costs of wind power decrease. • Levelized costs of solar photovoltaic increase. • Levelized costs of electricity are unevenly distributed across Europe. In order to reduce greenhouse gas emissions of the power sector, high shares of renewable power sources need to be integrated into existing systems. This will require vast amounts of investments. Cost of the capital needed for these investments are unevenly distributed among European regions. They show a clear North-South and West-East divide, which has not exhibited significant signs of narrowing in recent years. Power system studies investigating a continent-wide European power system, however, usually assume homogeneous cost of capital. The objective of this paper is to investigate how regional differences in cost of capital affect the result of these studies with respect to the optimal power system design. Our analysis is based on power system optimization with inhomogeneous cost of capital in Europe. We find that assuming homogeneous cost of capital leads to estimates on the levelized costs of electricity in a highly renewable European power system, which are too conservative. The optimal system design is significantly affected compared to an inhomogeneous scenario. In particular, we show that inhomogeneous cost of capital favors overall wind power deployment in the case of Europe, while the investment in solar power decreases. [ABSTRACT FROM AUTHOR]