Towards a climate neutral EU: funding and incentives for a transformative European Green Deal and Recovery Plan
European Environmental Bureau and Clean Air Action Group (Levegő Munkacsoport) has started in October 2020 a new project with the participation of CEEWeb (membership across CEE), Economic PoIicy Institute (BG), Centre for Transport and Energy (CZ), Green Liberty (LV), Polish Green Network (PL), Focus Eco Center (RO), Umanotera (SI) and Centre for Sustainable Alternatives (SK). The project is supported by the German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU). This project aims to have an impact on the Multiannual Financial Framework (MFF), i.e. the EU budget for the period 2021–27) and the Recovery and Resilience Facility by providing inputs to policy process work, exchanging views, increasing awareness on the necessity of making this EU budget climate-proof and developing targeted recommendations for improving the use of EU funds.
What is the Multiannual Financial Framework (MFF) and the Recovery and Resilience Facility (RRF)?
The Multiannual Financial Framework is the EU’s long-term budget and forecasts how much can be invested in policies that strengthen Europe’s future. It’s one of the most important financial tools in the hands of national governments. The next MFF will extend from 2021 to 2027 and is currently under negotiation.
The Recovery and Resilience Facility has been proposed in May 2020 by the European Commission as an emergency temporary recovery instrument to help to eliminate the immediate damage brought by the coronavirus pandemic. This facility will take the form of a €672.5 billion of grants and loans addressed to the EU Member States. These grants and loans will be combined with the next MFF to tackle the effect of the crisis and to invest in a more green, digital, social and resilient European economy.
Why are the MFF and RRF important for the climate?
The EU’s transition to climate neutrality will require a major change in public funding and incentives. The next MFF alongside with the Recovery and Resilience Facility is the number one financial instrument at the disposal of EU institutions (it amounts to more than €1,000 billion) to boost climate action across the bloc. Moreover, the MFF 2021-2027 is the last investment cycle to help change the course of climate change, and a stronger climate performance is urgently needed to reach EU 2030 climate targets.
Therefore, these funds represent a formidable opportunity for the civil society to push towards a greener budget by changing the way the EU funds are used by the Member States. Indeed, during the former MFF, many countries used the EU money inefficiently, sometimes wastefully and, in many cases, even supported environmentally harmful investments. This is why it is important to take lessons from the past and make the spending of these funds more effective, increase transparency and support implementation, monitoring and assessment.