EU Budget Review: ‘Turning the EU Budget into an Instrument to Support the Fight Against Climate Change

A report by IEEP ‘Turning the EU Budget into an Instrument to Support the Fight Against Climate Change’ was presented by Marc Pallemaerts on the 14 April at the Centre for European Policy Studies in Brussels. The report was launched at a lunch time seminar on the EU budget review alongside two further reports on the review all of which were commissioned by the Swedish Institute for European Policy Studies (SIEPS).

A wide ranging review of the pattern of European Union (EU) spending and its sources of income is underway which could pave the way to a more considered Financial Perspective after 2013. In the launch of its public consultation on the budget reform in September 2007 the Commission recognised that climate change is one of the new challenges which could have a significant impact on where the Union directs its effort in terms of expenditure in future. Currently the lion’s share of the budget is spent on the Common Agricultural Policy (CAP) and EU Structural Funds, neither of which contribute significantly to combating climate change and, in parts, actually contributes to increasing the EU’s greenhouse gas emissions.

IEEP’s report aims to contribute to the Commission’s consultation process on the budget review which closes in mid April. The report demonstrates that the concept of subsidiarity can be used to justify tackling cross border problems, such as climate change, through the EU budget, ie that climate change is an example of ‘EU value added’. It also presents an argument based on the concept of redistribution of financial transfers from richer to poorer Member States to support the investment in infrastructure and technology to implement climate change commitments.

It makes suggestions on how the budget could be developed post 2013 to better support the EU’s fight against climate change. These include: decarbonising the Structural and Cohesion funds; increasing investment in research and development of ‘green’ technologies; refocusing the CAP so that it provides a framework to guide a climate sensitive form of sustainable land management through ecosystem services; and earmarking some of the revenue raised from auctioning allowances under the EU Emission Trading Scheme for increased climate friendly investment. The budget review is expected to continue throughout 2008/9. The results of this consultation with stakeholders should be fed into the Commission’s own reflections on the budget review which are expected to be published some time in the autumn.

Download: Turning the EU Budget into an Instrument to support the Fight against Climate Change (PDF 240KB)