european structural and investment funds' contribution to climate action in eastern europe

www.ieep.eu @IEEP_eu

European Structural and Investment Funds’ Contribution to Climate Action

in Eastern EuropeCéline Charveriat

Executive Director, Institute for European Environmental Policy

European Parliament, Brussels28 September 2016


Where we come from: useful facts from 2007-2013

• A glass 95% empty?: ‒ €50 billion was spent on climate change

under the 2007-2013 EU MFF or a meagre 5% of EU funds (IEEP).

‒ Around 19% of CP funding in the EU was allocated to investments that contributed to declining sustainability in the period 2007-2012 (IEEP).


Where we come from: major effectiveness issues

• The risk of relabelling i.e. projects don’t change in substance, they are simply relabelled

• The challenge of demonstrating impact: the inability to evaluate whether projects lead to a reduction in carbon emission

• The risk of a mitigation-adaptation imbalance, while climate change impacts are increasing in severity and frequency in Europe

• The coherence gap: undermining objectives with the rest of project funding going to “carbon bombs”

• The challenge of optimal additionality i.e. ensuring EU funds finance public or PPP projects that would otherwise not have taken place

• The challenge of cost-effectiveness i.e. wasting scarce public funds on projects that deliver very little impact while missing on other opportunities with much greater potential.


Where we come from: example of effectiveness of ERDF/cohesion funds in public and residential buildings • Total ERDF/CF allocations to “energy

efficiency, co-generation and energy management”= EUR 6.1 bn or 2%

• About half of this was allocated to energy efficiency in public and residential buildings (EUR 3.4 bn)

• 90% of the funds were non-repayable grants

• Role of ERDF/CF was 50% of the total public funding with major variations between countries.

Evidence of impact: Mixed evidence, studied programs achieved 62% of energy reduction but only 23% of emission reduction targets.Evidence of cost-effectiveness: no discernible correlation between level of funding and results in terms of energy reductions and GHGsEvidence of integration with wider national strategy: very littleHighly variable quality and comparability of data


Case studies of particular projects—showing huge disparity among achievements (2007-2013)• Lithuanian Promotion of cohesion

programme• 864 public buildings modernised (101%

of target)• 69% increase in energy efficiency in

multi-apartment buildings covered by the program—although for a significantly lower number of buildings than planned

• Polish infrastructure and Environment Programme

• Energy efficiency funding mostly allocated to public buildings

• 413 public buildings modernised• Result indicator target values were not

achieved• Negligible impact in terms of overall

energy savings and CO2 emissions


The key questions for 2014-2020: is there evidence of:

• Increased volume of spending on climate action?• Increased effectiveness of spending on climate action?• Increased coherence of overall spending?


2014-2020: the promise of a major increase in overall volume of spending• Effective 20% mainstreaming of

the budget would translate into Eur. 188 bn for climate action which is almost four times as much as climate action during the previous MFF, with ESIF providing 90bn as a contribution

• Effective implementation of Art. 8 of CPR=greater alignment of EU funding to Sustainable devt. Click icon to add picture


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Evidence to date

• If current trends continue:• 18.9% of the total EU budget will

have gone to climate action by 2020 i.e. Eur. 200 bn or 30bn a year (EC, 2016).

• For ESIF: 25.2% of total support to climate action i.e. over Eur. 100 bn or 14 bn a year (COWI, 2016)

• For CP: around 15% i.e. Eur. 56 bn or 8 bn a year (EC, 2016)

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And most CEE countries seem to be overshooting the climate action mainstreaming target

RO LT CZ HU LV SK EE HR PL0

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25

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Climate action as share of ESIFs, CEE countries (%)


Scratching below the surface: The example of the European Agricultural Fund for Rural Development (1)

• High ambition: ‒ A minimum of 30% from the EARDF must be spent on climate mitigation and adaptation (as well

as environmental issues).

• Impressive headline figure suggesting a significant over-achievement: ‒ 57.1 % of European Agricultural Fund for Rural Development (EAFRD) earmarked for climate

action (2014-2020) i.e. 56 bn (or a share of 12% of total climate action under ESIF)


The example of EAFRD (2): the case of CEE countries

PL LT EE RO HR LV HU SK CZ0

10

20

30

40

50

60

70

80

Share of climate action in EAFRD funds in CEE countries (%)


The example of EAFRD (3)

• Lower level of specificity in the marker system compared with ERDF (only 10 categories versus 34)

• Only 7.68% of the total RDP budgets (EAFRD + national co-financing) for climate action defined by “promoting resource efficiency and transition to a low carbon economy”

• The bulk of allocations have climate change only as a secondary objective

• 75% of the allocations is under the objective of restoring, preserving and enhancing ecosystems related to agriculture and forestry-some of which can be beneficial or detrimental to mitigation

• Lack of description of specific climate action measures within programs

• Very low targets set by MS in terms of outcomes

• Mitigation vs. adaptation confusion?


Sources

• EC. Commission Staff working document. Mid-term Review of MFF. 14.2016

• COWI. 2016. Mainstreaming of climate action into ESI funds

• Ramboll, IEEP. 2015. Energy efficiency in public and residential buildings, ex-post evaluation of ERDF and CF.

• IEEP. 2014. Mainstreaming climate objectives in EU Cohesion Policy - a guidance briefing.

• IEEP. 2001. Cohesion Policy and Sustainable Development, A report for DG Regio

• IEEP. 2012. Criteria for maximizing European added value of EU budget: the case of climate change

• IEEP. 2012. Walking the talk-practical options for making the 2014-2020 EU MFF deliver on climate change.

• Ecorys, LEI and IEEP, forthcoming, Mapping and analysis of the implementation of the CAP, DG Agriculture and Rural Development.