According to a special report published today by the European Court of Auditors (ECA), the EU failed to spend at least 20% of its 2014-2020 budget on climate action, a goal it had set for itself. . The European Commission had announced that the EU had achieved its 20% target, stating that it had spent € 216 billion on climate action. However, the auditors found that the costs reported were not always climate-related. They even concluded that the amount reported to have been spent for this purpose had been overestimated by at least € 72 billion. They also fear that the credibility problems posed by the Commission’s reporting will continue into 2021-2027, when the EU’s climate spending target has risen to 30%.
“Tackling climate change is a key priority for the EU, which is committed to pursuing demanding climate and energy targets,” said Joelle Elvinger, ECA Member and Control Officer. “We found that, in the period 2014-2020, EU budget expenditure presented as climate-related did not all contribute to climate action. That is why we are making a series of recommendations with which we seek to better link EU expenditure with “Its climate and energy targets. For example, we urge the Commission to justify the relevance of agricultural financing to the climate.”
Key areas of the EU ‘s climate – related expenditure programs are agriculture, infrastructure and cohesion. The Commission sets rates for the various components of the programs depending on their expected contribution to climate action. Reporting data on climate spending shows weaknesses, say auditors, making the whole process unreliable. The monitoring methodology currently used is based on assumptions: the final contribution to meeting the EU’s climate targets is not assessed, and there is no system for monitoring climate results. Rates are not always realistic: in some cases costs are considered climate-related, even if the projects and programs they support have little or no impact (eg infrastructure in rural areas). In other cases, the potential negative consequences are not taken into account (eg the negative impact of carbon emissions).
The biggest overestimation of climate spending is in the area of agricultural financing: according to auditors, it reaches 60 billion euros. The Commission stated that 26% of the EU’s agricultural funding, or about half of its total climate expenditure, was linked to climate action. However, greenhouse gas emissions from agricultural holdings in the EU have remained unchanged since 2010. Similarly, auditors consider that the Commission has overestimated the contribution to climate action of financing key infrastructure and cohesion sectors, such as rail, electricity and energy and biomass.
By applying more reasonable rates, auditors estimate that the share of climate spending in the EU budget is likely to be close to 13% (around € 144 billion) rather than the reported 20%. They also warn of the risk that sums that have been planned or committed will not be spent in the end, which could further inflate the climate spending reported.
The auditors also looked at the changes that are expected to occur in the monitoring of climate spending after 2020, in order to help the Commission improve its reporting on climate spending in the future.
They are concerned about the reliability of the 2021-2027 report on climate spending. Despite the proposed improvements in reporting methods, most of the problems identified during 2014-2020 have not been addressed. The NextGenerationEU (NGEU) financial instrument, introduced in 2020, incorporates the basic principle of “no harm”, according to which economic activities should not jeopardize environmental or climate targets. Nevertheless, the auditors find that the NGEU also increases the challenges, as there is no clear link between payments and climate targets.
General information
The special report 09/2022, entitled “Climate expenditure from the EU budget for the period 2014-2020 – In fact lower than mentioned”, is available on the ECA website. The audit further enriches previous audit work of the ECA in this area, such as the special report 17/2013, the special report 31/2016 and the review 01/2020. In addition, Special Report 22/2021 highlighted the risk that climate spending under the Recovery and Resilience Mechanism (MAA) would not meet EU taxation standards.
Source: Capital
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