CLIMATE ACTION IN 2020

Climate mainstreaming in the EU budget is expected to become one strand of a broader strategy. In the speech presenting her College of Commissioners and their programme to the European Parliament, Commission President Ursula von der Leyen highlighted the European Green Deal as the EU's new growth strategy, which is meant to cut emissions while creating new jobs. Noting the significant level of public and private investment that this will require at both European and national levels, she supported the principle of climate mainstreaming not only across the EU budget, but also throughout capital markets and the entire investment chain.

Following the announcement of the European Green Deal on 11 December 2019, negotiations on relevant proposals during the course of 2020 will determine the way the new strategy is translated into concrete measures. Focusing on the contribution of the EU budget to the financing of the European Green Deal, an agreement on the new MFF should be completed this year, since the 2014-2020 framework is coming to an end. For the 2021-2027 period, the Juncker Commission proposed to confirm the principle of climate mainstreaming and to raise the political objective to 25 % of total resources, which would amount to €320 billion in spending relating to climate action (up from the current €210 billion). Parliament has supported a bigger MFF and a more ambitious approach (at least 25 % for the entire period, but the annual share should reach 30 % by 2027 at the latest), which would translate into climate finance worth more than €370 billion. In addition, Parliament expects new initiatives put forward following the European elections to be financed on top of the original Commission proposal. While both Parliament and Commission have called for swift negotiations to avoid delays in the implementation of the new MFF, contrasting positions appear to be persisting in the Council and the European Council. The press reports that a number of EU Member States would like to see cuts in the amounts initially proposed by the Commission. Since the climate objective is expressed as a share of total resources, the final agreement will have a direct impact on the level of ambition for climate finance. In parallel, Parliament and Council are due to finalise negotiations on the post-2020 generation of implementing programmes. The qualitative and quantitative contributions that individual policy areas are able to make to the climate objectives will depend on how the new instruments are designed and implemented as a result of these negotiations. In addition, as part of the preparations for the new programming period, the European Commission could envisage work to strengthen the tracking methodology for climate mainstreaming and its impact, with a view to addressing weaknesses identified by analysts and stakeholders. According to von der Leyen's political guidelines, the package of measures for the European Green Deal will include a Just Transition Mechanism that should mobilise €100 billion to support the people and regions most affected by the green transition and a Sustainable Europe Investment Plan that aims to trigger €1 trillion of private and public investment across the EU over the next decade. The European Investment Bank (EIB) will be an important partner in the implementation of the plan. The EIB, which manages various financial instruments supported by the EU budget, is committed to using 25 % of its lending for climate-related projects, and is stepping up action in the domain with a new policy that will phase out lending for all fossil fuels projects by the end of 2021. In many respects, the year 2020 could therefore be crucial when it comes to shaping the medium term capacity of the EU budget and of broader EU finances to channel support for the clean energy transition and leverage an appropriate level of private and public funding for the European Green Deal. In November 2019, the European Parliament underlined the urgency of tackling these issues, declaring a climate and environmental emergency in Europe and globally, while calling for more financial support for the fight against climate change.