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Turning the EU Budget into an Instrument to Fight against Climate ChangePresented by Camilla Adelle

Budapest 30 May 2008

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The EU’s Response to Climate Change

• Climate change is one of the new challenges facing the EU.

• In 2007 EU leaders agreed an ambitious set of targets to be reached by 2020:

– To reduce greenhouse gas emissions by 20%;– To increase the share of renewable energy supply to 20%;– To increase the share of biofuels consumed in transport to 10%.

• To reach these targets the Commission proposed a ‘Climate and Energy Package’ of measures in January 2008.

• This will entail a considerable level of investment: private/ public; EU/ Member States.

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The EU Budget and Climate Change

• The EU Budget is complex: Environmental funding is ‘mainstreamed’ into the EU budget.

• Structural and Cohesion Funds: a small proportion of these funds in the 2000-2006 FP were spent on climate friendly investments, such as renewable energy and high-speed rail networks. BUT cohesion countries have greatly increased their carbon emissions.

• Research and Development: funding for research on energy (including climate change) = 2.35 billion euros; and environment and climate change = 1.8 billion euros.

• CAP: intensive agriculture is responsible for 9% of total GHG emissions in the EU but the current FP cut back spending on rural development measures.

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Why Use the Budget for Fighting Climate Change?

• We used three principles to review the role of the budget in funding climate change mitigation:

– Added value– Best policy instrument– Sound financial management.

– Climate change is a classic example of a cross-border problem best tackled at an EU level.

– Redistribution of resources to pay for the costs of climate change mitigation.

– EU expenditure is only one of the policy instruments available to tackle climate change.

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A Future EU Budget?

• A shift of investment in the Structural and Cohesion Funds (low carbon infrastructure; investments in energy efficient technologies).

• Increased investment in research and development to lever additional public and private funding.

• Reform of the CAP towards the provision of public goods, such as enhanced ecosystems services.

• Raising additional funds to tackle climate change? (a climate change fund; revenue from auctioning ETS permits)

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Conclusions

• Climate change is a classic cross-border policy problem which is best tackled at an EU level rather than by individual Member States.

• Only a minor share of the EU budget is dedicated to funding the EU’s climate change objectives.

• Much of the EU budget actually locks in high carbon use well into the future.

• If the EU is to meet its ambitious climate change targets then it needs to consider the coherence and potential contribution of ALL of its policies and instruments, including the budget, to achieving these.

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Thank you

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