• Tue. Sep 20th, 2022

European Commission overestimated climate spending by €72 billion, say auditors

ByChad J. Johnson

May 31, 2022

Only 13% of 2014-20 EU spending was linked to climate action, not 20% as the European Court of Auditors claims, with the biggest gap in agricultural policy

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

The court said the European Union had missed its target of devoting at least 20% of its budget to climate action by about 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, climate-relevant spending was more likely to account for around 13% of the EU budget – or €144 billion – rather than the reported 20%, the ECA found.

“Not all climate-related expenditure declared under the EU budget was actually relevant for climate action,” said Joëlle Elvinger, a member of the European Court of Auditors who led the audit.

Current reporting is done “before expenditures are actually spent,” meaning the numbers are “inflated by unspent or undisbursed funds,” Elvinger told reporters at a press briefing today.

Moreover, “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”, he said. she adds.

Citing organic farming as an example, 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.

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

In its report, the European Court of Auditors made several recommendations to better link EU spending to its climate and energy objectives. These include a recommendation asking 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 objectives. It should focus in particular on how to measure the impact of the budget on mitigating climate change,” the report says.

Worryingly, problems will likely persist in the current fiscal period, which runs from 2021 to 2027, the ECA said.

In the current budget, the European Union has pledged to spend at least 30% on climate action, a target that rises to 37% when it comes to the EU’s recovery fund of 800 billion euros after the Covid-19 crisis, adopted in 2020.

But the auditors expressed “concerns about the reliability” of climate reporting for the current period, saying “most of the issues identified for 2014-2020 remain”.

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These problems are even likely to get worse due to the “unclear links between payments and the climate objective” under the EU’s coronavirus recovery fund, which introduces the principle of “do no significant harm that spending should not threaten any of the EU’s environmental or climate objectives. Goals.

Under the new €800 billion fund, the Commission will calculate contributions to climate spending in advance, based on estimated costs set out in national spending plans. But verifying compliance will be tricky, the ECA warned, saying there is a “significant risk of error in climate spending” against budgeted amounts.

“We identified potential issues such as the risk of errors in climate spending” in cases where the difference between amounts committed and actually spent is large, Elvinger said.

Another risk is that the milestones and targets that trigger payments under the fund are not clearly linked to climate goals, Elvinger added. “This raises the question of the reliability of future climate reports, which could be subject to 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 assertions, the Commission’s methodology for the EU budget is sound and reliable precisely because its underlying assumptions are clear, reasonable, transparently communicated and correctly applied,” he said. she stated.

Regarding the current budget period (2021-2027), the Commission said the EU had already “significantly strengthened” its methodology, for example by “moving away from marking climate relevance based on intent of an intervention to base it on the expected effect”. ”.

This article was produced by EURACTIV and republished under a content-sharing agreement.