Investing in the transition towards climate neutrality presents a win-win situation for the ‘frugal four’ and net-recipients in Southern and Eastern Europe. It offers guarantees for the budget net-payers that EU funds will be spent wisely in line with higher climate ambition, in renewable energy and energy savings which provide three times more jobs than fossil fuels. What’s more, a green recovery will benefit the fossil fuel regions in their swift transition away from fossil fuels, and allow them to avoid escalating costs of climate change.
The Commission’s proposal on the entire package, which comprises the revamped Multiannual Financial Framework (MFF) 2021-2027 and additional funds specifically tailored to support the economic recovery until 2024 called ‘Next Generation EU’, has in place an overall climate mainstreaming target of at least 25 percent. Today’s decision will increase the climate spending target to 30 percent and couple this financial boost with a commitment to achieve a new, substantially increased climate target for 2030.
However, the legislation for the ‘Next Generation EU’ does not specify how the new funds would contribute to achieving the set climate spending target. And subsidies for fossil fuels are still possible. Member States now need to draft spending plans fit for the climate crisis, and ban harmful measures such as investments in new fossil gas infrastructure.
“This ambitious decision to link the recovery funds with EU’s climate commitments must now trickle down to the Member States’ spending plans” said Markus Trilling, finance and subsidies policy coordinator at Climate Action Network (CAN) Europe. “What leaders will put in their plans will define the EU’s response to both the climate and economic crises in the next 10 years. Now, EU leaders must use the full potential of EU funds to boost climate action and exclude support to fossil fuels.”
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