The EU finances a wide range of activities in the Member States, in particular to promote sustainable growth, to preserve and manage natural resources - for example through the common agriculture and fisheries policies - and to safeguard freedom, security and justice. The EU budget is an increasingly significant source to finance actions as part of the fight against climate change. Together with law-making and policy coordination, it is a crucial tool for delivering on the EU's climate action priorities.
The EU funds can contribute to delivering smart, sustainable and inclusive growth by addressing collective challenges such as energy efficiency and security, and climate change.
As from June 2011 the European Commission has presented various proposals forming the package for the Multiannual Financial Framework (MFF) 2014-2020, and how to implement it in sectors such as agriculture and cohesion policy. This framework will set the maximum annual expenditure amounts for broad policy areas ("headings") as well as an overall annual ceiling. The overall total proposed for the period 2014-2020 is €1,025 billion (1.05% of the EU Gross National Income).
These proposals are under discussion by the European Council, the Council and the European Parliament.
On 8 February 2013 the European Council agreed on an overall budget for 2014-2020 totalling €960 billion (1.00% of the EU's gross national income). Once the Council and Parliament reach an agreement, the Council will adopt the MFF regulation and it will become legally binding. And once the framework enters into force (January 2014), the Commission will propose annual budgets, to be approved by the Council and the Parliament each year.
The EU budget has an important role to play in promoting climate action in all sectors of the European economy and in catalysing the specific investments that will be needed to meet climate targets and to ensure climate resilience. These investments relate to technologies that improve energy efficiency, renewable energy sources and related infrastructures, and adaptation to climate change. The EU budget can also deliver EU added-value by facilitating investments in Member States with high potential for cost-effective emissions reductions, but which have a relatively low capacity to invest.
A proportion of the EU budget is already related to climate mainstreaming and so contributes to Europe's transition to a low carbon and climate resilient society. The Commission has proposed increasing the proportion to at least 20%, either directly on climate action, or through other policies where climate action is also addressed. The European Council agreement confirms this goal.
To achieve this aim, climate mitigation and adaptation actions will be mainstreamed into all the major EU programmes, in particular cohesion policy, energy and transport, research and innovation and by greening the Common Agricultural Policy. Read Commissioner Connie Hedegaard's statement welcoming the European Council agreement.
The Commission has also proposed assigning €3.6 billion to a new LIFE fund for environment and climate projects in the 2014-2020 period, building on the experiences of the existing LIFE programme. A new climate action sub-programme will act as a platform for the exchange of best practices among Member States and a catalyst for more effective investments. It will help develop capacity building projects at local/regional levels and support private actors in implementing small-scale low carbon and adaptation technologies.
The budget agreed by the European Council, if approved by the European Parliament, would reduce the overall budget for the LIFE fund to near €3.4 billion and the budget for the climate action sub-programme to approximately €846.5 million from €904.5 million proposed by the Commission.