6 ways the EU budget can improve climate action

This week the EU’s Budget Committee held a public hearing on the EU Budget and the Paris Climate agreement. It was an opportunity for MEPs to question the EU Commission, Court of Auditors, the European Investment Bank and other experts on the effectiveness of the Budget and the EU’s intention to put an increasing proportion of the budget to work addressing climate change.

In a few days, the European Commission will unveil its proposal for the European Union’s (EU) next long-term budget, the Multiannual Financial Framework (MFF) for 2021-27. It is important that the proposal is ever more ambitious in tackling climate change, protecting the environment and biodiversity.

The EU has played an instrumental role in pushing forward international climate change negotiations such as the Paris climate agreement. EU laws were crucial in cleaning up British beaches and bathing waters. It was the EU that took the British government to court for failing to enforce rules on air pollution. Gone are the days of the UK being the ‘dirty man Europe’, an achievement very much connected to the UK’s EU membership.

While the EU has undoubtedly also played an important role in spearheading climate and eco-friendly policies, the challenges in these areas are huge and there is far more to do.

Here are six things the EU and its member states could immediately do to improve the environmental and climate impact of their spending:

1) Making the Common Agricultural Policy (CAP) greener

Although the CAP as percentage of the EU budget has been falling in recent years, it is still the largest single spending item and accounts for 38% of the EU budget. Agriculture is one of the main causes of climate change and therefore must play an important role in finding a solution.

Despite many reforms of the CAP to address climate, biodiversity and environmental concerns, there is still a long way to go to achieve a really green CAP. The ‘greening the CAP’ payments are meant to rewarding them for taking care of the environment. However the EU auditors in their recent assessment concluded the scheme is “not yet environmentally effective”. In the next round of funding the EU needs to ensure that climate incentives are not simply income support for farmers by another name.

2) Supporting the transformation of the transport sector to zero emission vehicles

The transformation of the transport sector toward zero emission vehicles is well under way. However the infrastructure implications are great. Widespread electric vehicles will place new demands on power distribution and will require major investment in power networks. The budget, mainly through the EU’s Cohesion and Connecting Europe funds, will need to be able to respond effectively during the next MFF.

3) Introducing a ‘Just Transition Fund’

The EU needs to transform itself into a sustainable low-carbon economy. However, the change to renewable energies should ensure that communities built on extractive industries benefit from the change. This is why my Labour colleague Theresa Griffin and I tabled an amendment to the Parliament’s report on the next MFF, calling for the introduction of a ‘Just Transition Fund’. This fund should focus on the creation of high quality, sustainable jobs together with retraining and new skills in clean processes and technologies, and enhancing social protection schemes. To be successful the fund will need to be backed by a coherent industrial policy and long term backing for emerging industries. Retail parks and distributions centres will not offer the kind of jobs that can effectively sustain communities in moving beyond coal.

4) Expanding the LIFE programme

LIFE is the only financial instrument in the EU budget exclusively dedicated to the environment, climate and biodiversity. Currently it is only 0.3 % of the EU budget. It should be extended, including spend on Natura 2000, to at least 1% of the EU budget.

5) Strengthening conditionalities in cohesion funding

It is time to ensure that the EU’s cohesion funding, the second largest budget area after agriculture, delivers on climate change. New conditions need to be brought to bear to ensure that projects genuinely comply with climate action requirements and funding of projects that increase climate damage need to be phased out.

6. The member states need to pitch in

The EU budget is comparatively small. It stands at about 1% of the 28 EU countries' gross domestic product (GDP) – the total value of all goods and services produced in the EU. By contrast, the budgets of EU countries represent 46,3 % of GDP on average. This shows that the EU budget cannot address this major global challenge alone - member states will need to commit to climate action either themselves or by committing to joint action.

The next MFF is an important opportunity to help achieve the EU’s and international climate and environmental goals. We and our planet cannot afford to miss it.