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Tracking climate related expenditure in the post-2013 EU budget

AUTHORS: Sirini Withana – David Baldock – Andrea Illes – Matt Rayment – Keti Medarova-Bergstrom

The EU Multiannual Financial Framework (MFF) for 2014 – 2020 includes a commitment to ‘mainstream’ climate change across different policy areas and for at least 20 per cent of the EU budget to support climate change related activities, whether for mitigation or adaptation. This gives rise to new tracking and reporting requirements to assess progress towards this commitment. However, operationalising an approach to tracking this expenditure which is both practical and reasonably accurate is challenging. The tracking system needs to be simple and not create additional administrative burdens, while at the same time providing meaningful, credible information for policy makers and stakeholders.

Discussions on the approach to tracking climate related expenditure under the EU budget are underway among the Commission services. In some cases a common understanding was reached in 2013 among DGs on an approach suited for particular funds. This study led by IEEP in collaboration with ICF GHK and CPI seeks to support DG CLIMA in considering how the emerging tracking methodology could be further elaborated and refined over the period of the MFF. As information about the rules of different funding instruments is clarified and the availability of actual expenditure data improves, further precision can be phased into the tracking methodology. Thus, the study recommends that tracking should be seen as an on-going, staged process over the period of the MFF that allows for the development of more detailed and accurate estimates of climate related expenditure from year to year.

The immediate focus in the coming years is to improve and ensure consistency in the emerging tracking methodology within the Commission and how it is applied between different EU funding instruments. This will help to ensure that expenditure estimates are well-founded and comparable. Looking ahead there is a need to reflect on further improvements and potential extensions to the tracking approach as data availability improves. This could for example include distinguishing between climate adaptation and mitigation expenditure or complementing the current ex-ante approach with an ex-post system of performance-based reporting. Such improvements would help to strengthen the result-orientation of the 2014-2020 MFF and are options to consider in view of the mid-term review of the MFF and the post-2020 MFF.

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