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Will the future EU budget be green?

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As the European Commission's proposals on the future multiannual financial framework are unveiled this Wednesday, 2 May, the Institute for Sustainable Development and International Relations (IDDRI) is publishing an Policy Brief entitled "Will the future EU budget be green? Ten issues to be followed in the coming months". The share of the budget devoted to environmental expenditure, the selection criteria for European infrastructure projects, the role of environmental taxation in fuelling the EU budget and the presentation of the European budget are among the ten key topics identified by IDDRI that will make the European budget an accelerator of the ecological and energy transition.
 
L’The current EU Multiannual Financial Framework (MFF) - the amounts the EU has been authorised to use for its different policy areas between 2014 and 2020 - is coming to an end soon. The priorities currently being defined for the future EU budget (the Multiannual Financial Framework, 2021-2027) will decisively guide the EU's action and its contribution to the implementation of the ecological transition. Discussions on this new budget have started, and may continue beyond the European Parliament elections and the appointment of a new Commission in 2019. If they focus for the time being on the overall envelope of the future budget or on the financing of new priorities such as defence and the management of migration flows, they will not be able to overlook the ecological transition and in particular climate change.
France, through President Emmanuel Macron, has already called for the ecological transition and the fight against climate change to be made a priority for Europe and proposes to dedicate 40 % of the European budget resources to it.
 
The European budget is often ridiculed for its modest size: around 1 % of the European Union (EU) Gross Domestic Product (GDP), i.e. around 150 billion euros per year, and 2 % of the Member States' budgets.
Nevertheless, its role should not be underestimated. It contributes 14 % to public investment in European countries, and more than 30 % in many countries. In addition, in recent years the EU has developed new financial instruments with the aim of having a significant leverage effect on private funding. (1).
Already, the European Parliament, environmental NGOs and some Member States are calling for the next Financial Framework to be "greened up". As Damien Demailly, coordinator of initiatives at the Institute for Sustainable Development and International Relations (IDDRI), explains in a forum on February 26thAccording to the Commission's communication to the European Parliament and the Council of Heads of State in preparation for the discussions on 23 February, climate, energy and environmental protection in general are not among the EU's priorities for the next decade. No new proposals are made to increase the leverage effect of the European budget on public and private investment in the energy and environmental transition. Both in Europe itself and in the countries with which it cooperates. Two years after the Paris Climate Agreement was signed in Europe, this is surprising to say the least. All the more so as some European leaders such as Emmanuel Macron have stated that these issues should be at the heart of the EU's political project. A Europe that protects must also protect Europeans from global environmental challenges. It is therefore necessary for the EU to significantly increase - or even double - its climate budget target. It could also set additional targets for the preservation of biodiversity and natural resources. In any case, these objectives will have to be set out in the various European funds, specialised in innovation, infrastructures, agriculture, etc. And since the devil is in the details, particular attention will have to be paid to defining, monitoring and reporting on what is considered "green" expenditure to ensure a transparent and informed public debate.
 
Policy Brief by Nicolas Berghmans, Researcher, Climate and Energy, and Damien Demailly, Initiatives Coordinator, identifies ten important topics to be followed, which will make - or not - the future European budget a lever for ecological transition, with four key messages:
 
- How much of the next PSC will be allocated to the ecological transition? The current target of "20 % of climate spending" is considered insufficient by many actors, who call for it to be increased or even extended to other environmental issues. It will still be necessary to better define what can or cannot be counted as an expenditure contributing to ecological transition, in order to avoid any feeling of greenwashing.
 
- Concerning the end of support for projects that contradict the EU's long-term environmental objectives, and in particular the achievement of carbon neutrality, the next MFF will be an opportunity to clarify what the EU considers to be anti-ecological expenditure, and what, on the contrary, is "green" expenditure.
 
- These two sensitive issues will have to be addressed not only at the level of the overall budget, but also in each European fund. Starting with those dedicated to the following five areas of action: solidarity with disadvantaged countries and regions in Europe; agriculture; innovation; infrastructure; and cooperation with developing countries.
 
- Finally, the discussions on the next MFF could be an opportunity to introduce environmental taxes to increase the EU's own resources; to accompany the territories and workers affected by the ecological transition; or even to modify the presentation of the budget to better show its contribution to this transition.
 
 
(1) Thillaye, R. (2016). Can the EU spend better? An EU budget for crises and sustainability. Rowman and Littlefield international.
 

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