The green potential of the current EU budget is still largely untapped, with only 7% of funding in 2014-2020 allocated towards energy efficiency, renewable energy and SMART electric projects.
Earlier this month the European Commission announced its budget for climate action post-2020. Although one of the top priorities for future EU funding, climate action can only count on a meagre five percent increase from its current budget.
Investing in an increasingly carbon-neutral and climate resilient economy has been defined by the European Commission as one of the EU’s key priorities in the coming decades to ensure a more sustainable and climate resilient world.
With a current EU budget of 20 percent going to climate action related programmes for the period 2014 - 2020, the funds allocated to the European Union’s post-2020 climate agenda are set to scale up to a quarter the total budget.
Defining climate finance
From 2020 onwards the Paris Agreement will kick into gear, regulating the way in which countries reduce their emissions, finance climate action and implement adaptation measures to climate change.
The rules governing the Paris Agreement - the so-called ‘Paris rulebook’ - are being shaped in the 2018 UN climate talks, in time to be put into effect by 2020. How well countries can stick to the climate rules that Paris is laying out for them, largely depends on the budget they allocate to taking climate action.
With this in mind, the European Commission has proposed its post-2020 EU budget, in which it allocated 25 percent to climate action programmes, to be implemented horizontally in all different sectors.
This five percent increase compared to the current climate spending results in a total of €320 billion for climate action during the period 2021 - 2027.
Ulrik Lenaerts, co-chair of the EU strategy expert group on global climate change negotiations said: “The actual budget the EU allocates to climate action is of course the basis for our response to climate change, but even more importantly is what strategy and rules are behind spending this money, which is what is currently being discussed in the UN Climate talks.
“It is a relatively easy decision to designate a large part of the EU budget to climate action when is has not been clearly defined what climate finance means.”
The green potential of the current EU budget is still largely untapped, with only seven percent of funding in 2014-2020 allocated towards energy efficiency, renewable energy and SMART electric projects.
Meeting the current 20 percent target is proving difficult. A senior Commission official even told the European Parliament last week that climate expenditure for the current period is expected to come in just below 19 percent.
“To bring European economies closer to the Paris Agreement, the post-2020 EU budget must spend at least 40 percent on the decarbonisation of energy, industry and mobility systems, and ensure not one cent will benefit fossil fuel-related activities and infrastructure,” adds Markus Trilling, finance and subsidies policy coordinator at Climate Action Network Europe.
“In the upcoming budget discussions, member states must support French president Emmanuel Macron’s plea for a 40 percent share of the next EU budget to be dedicated to climate action and the ecological transition.”
Further EU budget talks in late May and June on future funding for agriculture, research and security will be shaping the eventual allocation of the EU’s budget to climate.
Arthur Wyns ia a freelance journalist.