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EU lacks reliable tracking of climate spending

Credit: Unsplash/Markus Spiske

EU auditors cannot confirm whether the current target of spending 20 % of the EU budget on climate action will be met, according to a new report.

The European Commission made a commitment for the 2014-2020 period to spend at least 20 % of the EU budget on climate action. It has now raised this target to 25 % next 2021-2027 period (multiannual financial framework, MFF).

According to a new review by the European Court of Auditors (ECA), setting such targets can be an effective step towards achieving the EU’s climate objectives, as long as the methodology used to track the money is robust and applied consistently across policy areas.

“We all want a genuinely greener EU budget”, said Joëlle Elvinger, the ECA member responsible for the review (2 July).

“Progress has been made, but the risk of overestimating EU climate action remains. Looking ahead to the post-2020 period, to the Commission’s Green Deal and the more ambitious target of 25 %, we need reliable reporting on climate-related spending”.

The report does not claim to be an audit and does not include any recommendations but can be seen as a warning signal to the Commission. The ECA chose to carry out the review because of the high levels of interest in the area from its stakeholders.

It is mainly based on publicly available information or material specifically collected for this purpose and aims at updating ECA’s previous analysis of climate tracking in the EU budget and place it in the context of the new MFF, as recommended by the European Parliament and the Council.

In a special audit report in 2016, ECA warned of the risk of falling short of the current 20 % target for EU spending on climate action. The auditors found then that the Commission’s method for tracking climate-related spending in the EU budget, while being simple and pragmatic, had several weaknesses, such as not estimating the carbon footprint of each action.

The auditors focused on the tracking of climate action in the policy areas of agriculture, cohesion and research, which together account for the majority of climate-related expenditure. The new review reaffirms their concerns about the Commission’s methodology for tracking climate-related spending.

According to the review, the Commission estimates that €206 billion, or 20 % of the 2014-2020 MFF, will contribute to climate objectives but the final amount will only be confirmed after 2023, the last year for funding under the 2014-2020 shared management programmes.

How likely is this to happen? The auditors told The Brussels Times that they did not verify the Commission’s target, nor did they look into how data is collected and reported. The review focuses on the reliability of the methodology used for tracking climate spending in the EU budget.

“Having said that, our review highlights some methodological flaws that put its reliability into question and implies a risk of overestimating the actual amount spent on climate change.” Already in the previous report, ECA questioned the Commission’s calculation of contribution to climate action from agricultural direct payments, pointing out that some of the assumptions lacked sound justification.

Furthermore, some expenditure has a negative impact and can lead to increased greenhouse gas emissions. Examples of this could be supporting increased livestock breeding and fertiliser application in agriculture, or supporting investments in fossil fuels in cohesion.

Expenditure with a negative climate impact should technically decrease the overall climate spending, but the Commission’s methodology does not take this into account and the impact of such expenditure is estimated as zero, according to the audit team.

The EU’s overall climate-related spending will depend on the outcome of the current negotiations on next MFF and the new recovery fund to tackle the economic impacts of the coronavirus crisis. In any case, climate change will remain a global challenge and a central concern for citizens, policymakers and stakeholders, ECA concludes.

M. Apelblat
The Brussels Times


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