Tuesday 14. July 2020
#148 - April 2012


Green thinking in the new EU budget


The European Commission has launched an ambitious proposal to assign 20% of the next budget period 2014 to 2020 to climate-related issues. In doing so the Commission is giving financial weight to the '2020 Strategy'.


The European Commission is in the midst of negotiations for the new budget that will cover the period 2014 to 2020. One of the most interesting proposal is to devote 20% of the 1 trillion euro budget to climate-related actions. Behind this challenge is the well known commitment of the Climate Change Commissioner, Connie Hedegaard. Logically speaking, she must have to fight with her Commissioner colleagues in order to get such a big slice of the cake, but she was not isolated, finding strong support from the Commission President, Mr Barroso.


This proposal seeks to use the EU budget in service of the 'EU 2020 Strategy' – an instrument designed to promote the EU's prosperity and competitiveness in the new global context. This strategy includes the targets agreed by the EU to combat climate change: that is, the famous 20-20-20 (cuts in emissions, increases in renewable energy, increases in energy efficiency, each improved by 20%). This planning is now embedded in a road map for a low-carbon economy by 2050.


At present there is no quantified target for climate change, but it is estimated that 5% of the EU's activities relate directly to this project, which indicates the magnitude of the shift proposed. It is true that not all initiatives adopted under this title will be completely new: many come under such headings as the Cohesion Funds and the Common Agriculture Policy (CAP). However these too form part of a broad strategy towards achieving a more sustainable economy.


One of the most critical issues in this EU budget proposal is the Connecting Europe Facility. This is a fund to develop cross-border infrastructures that will allow a stable flow of energy relying significantly on renewable sources. It is expected that private initiatives will merge with public ones in order to allocate sufficient funds, bearing in mind the huge scale of the infrastructure required. The proposed €50 billion will include €9.1 billion for cross-border infrastructure, €31.7 billion for transport infrastructure and €9.2 billion for broadband This is clearly a strong commitment to the green agenda.


One important question yet to be clarified is how much of this budget will be used to reduce carbon use. Some analysts fear that investment could be oriented towards major gas pipelines instead of building up the capacity for high-voltage electricity lines that will integrate renewables and 'smart grid' projects.


In any case it is promising that the new rules for the European Regional Development Fund, will require rich member states to allocate 20% of their receipts to efficiency and renewables, while poor member states will have to commit themselves only to 6%. This is a very good message for central and Eastern European states, which are encouraged to modernise their energy structures, while at the same time lessening their carbon footprint.


Technology is to be a pillar of the new low-carbon economy. One of the goals of the EU 2020 strategy is that Research & Development should reach 3% of GDP. This target is central to the preservation of the EU's competitiveness and living standards. The research on clean energies, climate-related activities, the development and deployment of low-carbon technologies and related issues will be covered under the Strategic Energy Technology (or SET) Plan. The new budget proposal proposes that €6.5 billions be set aside for all research and development in non-nuclear energy.


The discussions for the new budget will continue until a final proposal is submitted by the Commission before the end of 2012. Undoubtedly the proposal will undergo many changes: member states will try to reduce the overall budget, limiting the policies that could constrain their own economic activity. The Commission's courage should be recognised as it seeks coherence in the strategies designed by the EU over the last few years, strategies that aspire to be a logical response to challenges we are facing, and assuring the means necessary for them. On this occasion, the Commission's search for budgetary coherence deserves praise.


José Ignacio García SJ


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