Finansudvalget 2018-19 (1. samling)
FIU Alm.del
Offentligt
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Financing EU climate action – reinforcing climate spending and
mainstreaming in the next Multiannual Financial Framework (MFF)
1
EU climate finance, alongside Member State and private finance, plays a significant role
in
achieving
the 2030 climate and energy targets and the long-term goals defined in the
Paris Agreement. Besides a very robust and solid legal framework to implement these
targets, a relative increase of climate-friendly investments in the public and private sector is
urgently needed. It has been estimated that the yearly investments gap for achieving the
EU´s climate and energy targets is almost 180 bn. EUR between 2021-2030
2
It is clear that
an ambitious climate and energy policy requires a coherent funding structure.
Without prejudicing upcoming negotiations, the
next MFF
will have an
important role
to
make the EU funding structures coherent with the EU mid- and long-term climate and
energy targets.
Setting the right example: Public funding as role model
The allocation of public funding is important
to set the right example in this regard
and
transform public budgets into sources for green and future-oriented
investments.
Therefore, the EU budget needs to address future challenges including
catalysing the required greenhouse gas emission (GHG) reduction in our economies and
societies.
The agreement of the EU to spend at least 20% of its total funding resources between
2014-2020 on climate action and to mainstream climate funding across all spending areas
has been an important and necessary step in the right direction. It corresponds to a sum of
at least 180 bn. EUR
throughout the whole period of the current MFF.
While the target has driven integration of climate across the budget programmes, current
analysis by the Commission and the European Court of Auditors (ECA) show that the
climate spending target for the current MFF is very likely to be missed, with an average
between 2014-2016 of 17,6%
3
and a forecast for the whole MFF period of 18,9%
4
. The
potential improvements in the implementation of the climate spending target need to be
addressed to make sure that the next target will be achieved.
At the same time, it is clear that the transition to a low greenhouse gas emission economy
and society will require suitable and appropriate EU funding instruments in the next funding
period. Thereupon, necessary climate-related investments can be put in place for a timely
transition.
It is also important that the EU contributes to the objective of mobilizing $100bn per year of
public and private climate finance to developing countries from 2020.
Points to be taken into account for the next MFF
The statement of the Green Growth Group is without prejudice to the powers of the budget authority
.
https://publications.europa.eu/en/publication-detail/-/publication/1df19257-aef9-11e7-837e-01aa75ed71a1
3
https://www.eca.europa.eu/en/Pages/DocItem.aspx?did=39853
4
http://ec.europa.eu/budget/biblio/documents/2018/2018_en.cfm#draft_budget01
2
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FIU, Alm.del - 2018-19 (1. samling) - Endeligt svar på spørgsmål 73: Spm. om EU's udgifter skal bidrage til at opfylde klimamål i det kommende budgetforslag for 2021-2027, til finansministeren
In order to make climate spending and mainstreaming more effective we therefore urge the
Commission to reflect these findings in their proposal for the next MFF, and to:
Maintain the commitment to climate spending: continue with a climate quota
of at least 20% of the EU´s total funding resources and to allow for inter alia
the necessary reinforcing of investments in climate research and innovation as well as in
projects in the field of sustainable infrastructure (e.g. in energy, buildings and
transport), also in agriculture, regional development and cohesion funds to drive the
transition towards a low greenhouse gas emission economy. LIFE with its unique
character of funding exclusively climate action and environmental projects should be
maintained and improved in the next MFF.
Focus on results:
To create a higher degree of transparency around EU funding, it
would be desirable to verify the impact of relevant projects and investments, including
those under the climate spending target, through respective
monitoring and/or
reporting.
For this purpose, the National Energy and Climate Plans (NECPs) could
provide a framework to help define and target climate-related investments more
effectively.
One indicator to verify the impact of investments and projects in terms of climate is the
amount by which they reduced GHG emissions and the associated cost-effectiveness of
these reductions. The key in this context is monitoring the impact of large-scale projects
on the climate in the EU budget in general, for instance in the field of infrastructure. The
results indicators for climate impacts will differ between types of activities and GHG
emissions might not be the only appropriate indicators for more long-term or
knowledge-centred activities.
Avoid detrimental impacts of EU funding:
It is important to make sure that the part
of the EU funding (currently 80%) which is not labelled as climate-related does not
have detrimental impacts on the ability of the EU to reach its medium- and long-term
climate targets or deliver in line with the Paris Agreement. New investments should be
compatible with a transition to the required GHG emission reduction in our economy in
order to avoid stranded assets in the long term. In this context, it is also important to
emphasize that subsidies that are not in line with the Paris Agreement, such as for
carbon-intensive projects, should be phased out as quickly as possible and have no
place in the EU budget. EU development funding should be consistent with our long-
term goals as defined by the Paris Agreement.
Improve transparency by reporting:
The Commission should, in a separate report
on the implementation of climate action, give information on the implementation of the
climate quota, the results of overall spending, and how the EU budget supports our
medium-and long-term climate and energy targets and the goals of the Paris
agreement. Additionally, the reporting on private climate financing mobilized by public
intervention should be enhanced.
Improve the EU climate marker-methodology:
The climate markers are a suitable
methodology to apply to the climate spending target in the EU budget with little
administrative effort. In order to improve the effect of the Markers the following
measures – which are also partly mentioned in the ECOFIN Conclusions of March 2017 –
should be implemented in the next MFF:
FIU, Alm.del - 2018-19 (1. samling) - Endeligt svar på spørgsmål 73: Spm. om EU's udgifter skal bidrage til at opfylde klimamål i det kommende budgetforslag for 2021-2027, til finansministeren
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Where possible and practicable, differentiate between mitigation and adaptation
measures, while recognising that some measures are for both mitigation and
adaptation.
Enhance coherence and consistency across spending programmes through aligning
the number of areas of intervention more closely
and standardise the application of
the markers across the whole budget.
Limit the possibility of over- and underestimation by applying the conservativeness
principle
5
systematically.
Lars Chr. Lilleholt
Minister for Energy, Utilities and Climate
Denmark
Kimmo Tiilikainen
Minister of the Environment, Energy and Housing
Finland
Barbara Hendricks
Minister for the Environment, Nature Conservation, Building and Nuclear Safety
Germany
Carole Dieschbourg
Minister for Environment
Luxembourg
João Pedro Matos Fernandes
Minister of Environment
Portugal
Céline Fremault
Brussels Minister of Environment, Energy, Housing and Quality of Life
(On behalf of Belgium)
Eric Wiebes
Minister of Economic Affairs and Climate Policy
Netherlands
Isabella Lövin
Minister for International Development Cooperation and Climate and Deputy Prime Minister
Sweden
Irina Majcen
Minister of the Environment and Spatial planning
Slovenia
The Rt Hon Clairre Perry MP
Minister of State for Energy and Clean Growth
United Kingdom
The conservativeness principle developed by the World Bank for tracking climate finance shall prevent overestimation of
climate action expenditure. Uncertainties will be removed through the application of the conservativeness principle that
implies that the lower amount of climate contribution should be taken into account if no data is available.
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FIU, Alm.del - 2018-19 (1. samling) - Endeligt svar på spørgsmål 73: Spm. om EU's udgifter skal bidrage til at opfylde klimamål i det kommende budgetforslag for 2021-2027, til finansministeren
Gian Luca Galletti
Minister for the Environment, Land and Sea
Italy
Isabel García Tejerina
Minister of Agriculture and Fisheries, Food and Environment
Spain
The above listed Ministers are part of the Green Growth Group. The Green Growth Group
consists of 16 EU Member States plus Norway that have been collaborating over the last
four years to make EU climate policy more ambitious and sustainable.