EU climate spending ‘overstated’ by 72 billion euros

EU climate spending ‘overstated’ by 72 billion euros

Spending on climate action in the EU budget 2014-2020 was not “not as high as advertised” in official documents, the European Court of Auditors (ECA) said in a report published on Monday (May 30).

According to the Court, the European Union has fallen short of its target of devoting at least 20% of its budget to climate action by around seven percentage points.

The European Commission, which manages and implements the EU budget, previously reported that €216 billion was spent on climate action in the 2014-2020 budget period.

In reality, the corresponding climate spending was more likely to amount to around 13% of the EU budget, or €144 billion, rather than the 20% reported, the ECA found.

“Not all climate-related expenditure declared under the EU budget was actually linked to climate action”said Joëlle Elvinger, CEC member who led the audit.

Current reports are established “before the expenditure is actually made”which means that the numbers are “inflated by unused or undisbursed funds”Ms Elvinger told reporters at a press briefing today.

Furthermore, “the methodology for tracking climate expenditure only takes into account the potential positive impact on the climate and does not track the potential negative impacts of measures that serve other EU objectives”she added.

Citing the example of organic farming, Ms Elvinger said the Commission’s figures ignore potential downsides such as lower agricultural productivity and increased grain imports from countries with less stringent environmental rules. strict.

Agriculture is the main culprit

It is in agricultural policy that climate spending is the most overestimated, by nearly 60 billion euros, according to the European Court of Auditors. Similarly, the climate contribution of spending in areas such as rail transport, electricity and biomass also tends to be overstated, according to the auditors.

In its report, the ECA made several recommendations aimed at better linking EU spending to its climate and energy goals. These include a recommendation calling on the Commission to justify the climate relevance of funding under the Common Agricultural Policy (CAP), which accounts for around 40% of all EU spending.

“The Commission should report on the contribution of climate spending to EU climate and energy goals. It should focus in particular on how to measure the impact of the budget on the fight against climate change”says the report.

These problems are expected to continue during the current budget period, which runs from 2021 to 2027, the European Court of Auditors said.

In the current budget, the European Union has pledged to dedicate at least 30% of its budget to climate action, a target that rises to 37% when it comes to the EU recovery fund for 800 billion euros resulting from the COVID-19 crisis, adopted in 2020.

But listeners expressed “reliability concerns” climate reports for the current period, claiming that “most of the problems identified for the 2014-2020 period remain”.

These problems may even be aggravated by the “lack of clarity of the relationship between payments and the climate objective” under the EU Coronavirus Recovery Fund, which introduces the “do no harm principle” that public spending must not conflict with any of the EU’s environmental or climate objectives.

Under the new €800 billion fund, the Commission will calculate contributions to upstream climate spending, based on estimated costs in national spending plans. But the control of conformity will be delicate, warned the Court of Auditors, which considers that there is a “significant risk of climate expenditure inaccuracy” compared to the budgeted amounts.

“We have identified potential issues such as the risk of misrepresentation of climate expenditure” in cases where the difference between the amounts committed and those actually spent is significant, Ms. Elvinger said.

Another risk is that the thresholds and targets that trigger payments from the fund are not clearly linked to climate goals, Ms Elvinger added. “This raises the question of the reliability of future climate assessments, which could be the subject of future audits”she warned.

The European Commission maintained its initial assessment, saying that 20.6% of the EU’s 2014-2020 budget was dedicated to climate action. “Contrary to the ECA’s claims, the Commission’s methodology for the EU budget is sound and reliable precisely because its basic assumptions are clear, reasonable, transparently communicated and correctly applied”she said.

Regarding the current budgetary period (2021-2027), the Commission stated that the EU has already “significantly strengthened” its methodology, for example by “ceasing to determine the climatic value according to the content of an intervention to base it on the expected effect”.

Source