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Is the EU budget our best chance at making The One Planet Summit reality?

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Photo by rodrigo capuski on unsplash
Photo by Rodrigo Capuski on unsplash

Two years after the Paris Agreement was adopted leaders are returning to Paris to discuss what’s next for climate action. The question on everyone’s lips: what’s the best way for countries to unlock investment in climate action and clean energy? Luckily for the European Union, there are already plans to discuss priorities for spending in the period after 2020. These discussions on the EU budget offer Europe a golden opportunity to become climate fit for the future.

French President Emmanuel Macron, UN Secretary General António Guterres and World Bank President Jim Yong Kim will jointly convene the One Planet Summit. Heads of State, high-level national representations and a range of other economic actors from cities, regions, business and the financial sector are expected to attend. The Summit will feature state and non-state actor announcements and initiatives mostly focused on climate finance, coal phase-out and clean energy.
 
The Summit is an opportunity to re-characterise high-level political engagement on climate post-Paris and after the US withdrawal announcement. The Summit’s focus on financing climate action can help increase capital mobilisation flows. The European Union’s post-2020 Multiannual Financial Framework (MFF) might sound like a dull, technical process, but in truth, it is a test for the EU’s leadership in the global low-carbon agenda. The MFF lays down the priorities and rules for EU spending over a period of 5-10 years, becoming a key instrument on how EU funds are spent and on which policy objectives. It is thus the most immediate opportunity for the EU to demonstrate its firm commitment to sustainable development. And could make or break Europe’s capacity to shape the global low-carbon transition. 

The European Union prides itself on being a leader in the global low-carbon transition, with EU leaders consistently calling for more ambition on climate action. Similar calls will be expected in Paris as the One Planet Summit takes place.Climate finance will be high on the agenda and as the Paris Agreement states, countries should be working to make all financial flows consistent with a well-below-2ºC pathway. The MFF provides a venue for the European Union to demonstrate it is ready to live up to its commitments. For example, the EU agreed to end fossil fuel subsidies by 2025, which falls under the budgetary period covered by the next Multiannual Financial Framework. An announcement at the One Planet Summit that the next EU budget would rule out public investment in fossil fuels would be one of the strongest signals in support of the Paris Agreement. 

Similarly, the post-2020 Multiannual Financial Framework creates an opportunity for the European Union to scale up the competitiveness of its industry through investments in the early stages of clean energy innovation. Despite the level of available resources under the MFF is limited- only around 1% of the EU’s GNI-, an adequate push from the public side is essential to help breakthrough innovation make it to the market, delivering solutions that work for the European economy.

Finance for adaptation and resilience will have a prominent role in the One Planet Summit discussions, and the post-2020 Multiannual Financial Framework can also deliver on this issue. According to the European Court of Auditors, EU national governments are underprepared to cope with the devastating impacts of climate change. By making the expenditure on disaster prevention more efficient and effective, the EU budget could significantly ramp up Europe’s resilience, protecting the livelihoods of European citizens against climate risk.

For the European Union, the post-2020 Multiannual Financial Framework provides an opportunity to align EU finances with global economic trends and to accompany the progress made by the financial sector. All announcements and commitments to scale up climate ambition expected at the One Planet Summit must be backed by strong financial support. Not doing so would mean much more than lost leadership. It would entail numerous missed opportunities to generate sustainable growth and to create jobs in future-oriented sectors. If Europe is truly committed to taking the lead in the global low-carbon transition, it must start putting its money where its mouth is.