Analysis of existing approaches and processes of mainstreaming in EU programmes

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Analysis of existing approaches and processes of
mainstreaming in EU programmes
Improving Climate Mainstreaming in the EU Budget
Stakeholder Workshop
Martin Nesbit, Andrea Illes, Kamila Paquel, 27 June 2017

Outline
• The 20% climate mainstreaming target in budgetary contributions
• Horizontal mechanisms: major projects
• Horizontal mechanisms: public procurement
• Decisions on programme priorities
• Decisions on programme implementation
• Climate focus in 2014-2020 as compared to 2007-2013
• Climate focus in other areas of expenditure
• Options to improve EU approach to mainstreaming
• Questions

The 20% target in budgetary contributions
• “The optimal achievement of objectives in some policy areas depends on the mainstreaming of
priorities such as environmental protection into a range of instruments in other policy areas.
Climate action objectives will represent at least 20% of EU spending in the period 2014-2020 and
therefore be reflected in the appropriate instruments to ensure that they contribute to strengthen
energy security, building a low-carbon, resource efficient and climate resilient economy (…)”
European Council (2013)
• Two-fold commitment
‒ Share of EU expenditure dedicated to climate objectives
‒ Mainstreaming of climate change in EU programmes
 To what extent is there a horizontal process for identifying priorities for climate-related expenditure?
 What are the programmes which are best placed to make an effective contribution?
• No coordinated process determining which programmes should contribute what to the 20% target
achievement, but..
• A strong signal to all EU funds to consider climate objectives

Horizontal mechanisms: major projects
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Major
project
Support from ERDF/CF (shared management)
Total eligible costs of min €50 million (€ 75 million for e.g. transport projects)
More than 500 major projects foreseen for 2014-2020
EC informed about the project details including:
-project’s expected contribution to EU and national climate change targets,
-analysis of the environmental impact, taking into account climate change
adaptation and mitigation needs, and disaster resilience
Cost-Benefit Analysis (based on detailed guidelines) including:
- GHG emission evaluation: absolute, baseline, and relative emission calculation +
carbon shadow price estimates (€/t CO2-eq ) based on EIB methodology
- Vulnerability (sensitivity x exposure) and risk (likelihood x impact) assessment
How effective are these rules?
Potential to spread this practice to centrally managed programmes in the future?

Horizontal mechanisms: public procurement
• 48% of ESI funds are spent through public procurement
• 2014 revision of EU directives on public procurement – to reflect environmental
consideration in the rules (applicable to procurements above certain thresholds)
• ‘most economically advantageous tender’ (‘MEAT’) award criterion, based on a cost-
effectiveness approach, such as life-cycle costing
• Public procurement rules are part of the ex ante conditionalities set out in the CPR (shared
management funds)
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“Life-cycle costing shall to the extent relevant cover parts or all of the (…) costs
imputed to environmental externalities linked to the product, service or works during
its life cycle, provided their monetary value can be determined and verified; such
costs may include the cost of emissions of GHG and of other pollutant emissions and
other climate change mitigation costs.” (Art. 14 Dir. 2014/24/EU)

Decisions on programme priorities
• Programmes have different ways of identifying positive potential for the delivery of climate
objectives
‒ Horizon 2020, Development Cooperation Instrument (DCI) - active process of seeking out areas of
climate focus and prioritising programmes and projects in those areas
‒ Connecting Europe Facility (CEF) and COSME – no apparent effort
• Reliance on guidance documents
‒ Well developed guidance is useful provided it is used
• System of programming rules (e.g. ex ante conditionalities which promote the implementation of EU
legal requirements on climate action)
• Negative impacts?
‒ In theory, negative impacts on mitigation should be integrated into decisions through life-cycle
costing/CBA through the shadow carbon price
‒ NGO criticism of support to “fossil fuel related infrastructure or technology”
(e.g. CAN Europe, Bankwatch)
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Decisions on programme implementation
• Differences across the programmes
• Central vs shared management
‒ Central: greater flexibility in how climate objectives are addressed
‒ Shared: more detailed mechanisms for ensuring compliance with the mainstreaming objectives
• ESI Funds (under shared management) rely on:
‒ Thematic objectives, including two directly relevant to climate action
 “Supporting the shift towards a low-carbon economy in all sectors” (TO 4), and
 “Promoting climate change adaptation, risk prevention management” (TO 5).
and other with significant potential to contribute: TO6 (environment & resource efficiency), TO7
(sustainable transport), TO1 (research and innovation)
‒ Partnership Agreements
 Guidance from the Commission
 Positive examples from Poland and Hungary
• identification of minimum levels of spending on climate objective
(ERDF, Horizon2020, LIFE, EAFRD, DCI)
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Climate focus in 2014-2020 as compared to 2007-2013
• Mainstreaming methodologies are generally more detailed in the current
programming period than in the previous one
• ESI Funds
‒ Greater focus structured around the thematic objectives, Partnership Agreements, ex ante
conditionalities, and relevant guidance documents
• EAGF
‒ the greening measures introduced for 2014-2020 represent a clear increase in the political
importance of climate objectives; but there is little precision on the intended impact on climate
outcomes; and guidance (EU and MS level) focuses on legal compliance, rather than maximising
environmental benefits.
• LIFE, Horizon 2020 with a greater climate focus as compared to their predecessors
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Climate focus in other areas of expenditure
Humanitarian aid
(€7.1 billion)
• important driver of
international disaster
risk reduction
activities, a “resilience
marker” approach to
anchor resilience in all
its humanitarian
programmes
• expected €295 million
to climate objectives,
• potential for further
mainstreaming
Instrument contributing
to Stability and Peace
(€2.3 billion)
• support measures
include reduction of
vulnerabilities to
future shocks and
building up of climate
resilience,
• potential for climate
mainstreaming
Youth Employment
Initiative
(€6.4 billion)
• so far the Commission
data shows that €5.4
million out of the €3.2
billion YEI own budget
was committed to
climate action (0.2%),
mainstreaming
Erasmus +
(€14.7 billion)
• support to the
European Solidarity
Corps active in
climate adaptation,
mainstreaming
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Options to improve EU approach to mainstreaming (1)
1. Determination of budgetary contributions to climate objectives
• Lack of a process to ensure that the 20% mainstreaming target is met; or that it is met with the most effective
contribution to climate objectives
Problem
• Commission-wide process to identify priorities for climate expenditure, based on an
analysis of which areas of the budget are capable of contributing most effectively to
delivery of mitigation and adaptation targets, while also delivering on existing
programme priorities.
Option
• Enhanced effectiveness of the 20% climate target (or any increased target for the next MFF), and improved
policy coherence. Should also help to improve efficiency (by avoiding distortion to programme priorities in
areas which are less effective in delivering climate outcomes.
Expected impact
• An exclusive focus on the € cost per tonne of emissions reduction, or € per increase in resilience, might not
reflect the specific added value of the EU budget, or the need to improve attention to climate change in areas
which have not yet prioritised it. We therefore recommend framing programme contributions in terms of the
impact on the EU’s long-term decarbonisation trajectory.
Feasibility, implementation and risks
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2.1 Horizontal mechanisms
• Attention paid to tracking of the 20% commitment may limit the focus on climate mainstreaming in other
areas of programmes
Problem
• Introduction of specific reporting requirements on broader mainstreaming in the legal
basis of relevant programmes
Option
• Should contribute to effectiveness of climate mainstreaming by encouraging greater attention to lower-
profile, but still relevant, mainstreaming opportunities; greater policy coherence between climate and
programme objectives.
Expected impact
• Some administrative cost downsides; and risks that (except in cases where the sectoral stakeholder
community is already engaged and interested) any reports would not be widely read. May be best to
introduce the idea in a few policy areas initially, to judge broader applicability.
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Options to improve EU approach to mainstreaming (3) 2.1
• Inconsistent use of opportunities presented by Green Public Procurement
Problem
• Greater support to capacity building in Member States; and use of the ex ante
conditionalities to encourage greater use of GPP.
Option
• The ex ante conditionalities focus primarily on legal compliance, rather than whether Member States are using
the full potential available to them. A greater administrative burden; but could be accompanied by increased
coherence and efficiency of expenditure in delivering climate outcomes.
Expected impact
• Consultation with Member States and managing authorities on how to improve their capacity for using green
public procurement mechanisms could help to ensure that progress is made without adding unnecessarily to
administrative burdens.
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Options to improve EU approach to mainstreaming (4) 2.1
• Lack of a widespread understanding among policymakers of potential for mainstreaming climate in
programmes or projects
Problem
• Better use of good practice examples both in terms of process (for example, effective
guidance on mainstreaming used by DG DEVCO) and in terms of selection of projects
and investments (for example, explicit weighting of climate impacts).
Option
• The effectiveness of tools such as guidance is linked not just to the quality of the guidance, but also to
whether it is read and acted on. This in turn will depend on the broader political signals to which decision-
makers are responding.
Expected impact
• Development of tools to improve understanding should be accompanied by a Commission effort to ensure
that climate issues become part of the wider political debate about expenditure instruments.
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3.1 Programme priorities
• Difficulties in ensuring effective climate mainstreaming in some programme areas
Problem
• Earmarking of climate resources, or minimum spend requirements, should be
considered more widely across programmes, on a case by case basis, and included in
legislative proposals where appropriate
Option
• Earmarking and minimum spend requirements are in theory likely to lead to less efficient spending (by
reducing budgetary flexibility); but can in practice ensure greater effectiveness, and coherence with political
priorities. It is likely to be more effective in those programme areas where mainstreaming is less well
embedded, or where there is inconsistent implementation of climate mainstreaming at Member State level.
Expected impact
• Depends on securing sufficient political support among relevant co-legislators (Council formation; EP
Committee).
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3.1 Programme priorities
• Centrally managed funds have less detailed processes for integration of climate mainstreaming, leading to a
lack of focus in areas of expenditure which are not labelled as climate relevant.
Problem
• Processes for centrally-managed funds which replicate some of the detailed
programming rules for shared management programmes, or mirrors its benefits in
terms of a broad consideration of climate impacts; for example, reporting
requirements, or stakeholder dialogue on climate impacts.
Option
• A negative impact on administrative cost; but greater dialogue on climate impacts of expenditure should
ensure both greater coherence of policy and expenditure, and greater effectiveness of expenditure in
delivering climate objectives.
Expected impact
• Processes introduced should be consistent with the formal status of Commission decisions (as decisions of the
whole Commission), but allow for public and stakeholder challenge of whether climate opportunities are
being fully exploited, and climate risks identified and mitigated.
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4.1 Programme implementation
• Climate mainstreaming is not linked to intended results
Problem
• Greater clarity on what results climate-related expenditure is expected to deliver, and
a process for monitoring delivery of those results.
Option
• Should achieve significantly enhanced effectiveness and coherence, through greater transparency over the
budgetary process.
Expected impact
• Requires close attention to the baselines against which results are measured, and an accurate and consistent
system for monitoring.
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4.2 Programme implementation
• Some expenditure areas make little use of guidance to encourage better integration of climate objectives in
implementation decisions.
Problem
• Best practice in the use of guidance (and in particular in the practical impacts on
guidance) should be identified and promulgated; where implementation decisions
can increase the effectiveness of delivery of climate objectives, clear guidance should
be provided.
Option
• Linked to the point above under “horizontal mechanisms”. Guidance could help decisions-makers at the
implementation level better integrate climate objectives in their decisions, ensuring greater coherence, but
this will depend on the use of the guidance in practice.
Expected impact
•Sufficient administrative capacity to follow the guidance
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Questions
• Would a top-down identification of programme contributions to climate spending be useful/relevant for
fulfilling the potential of climate mainstreaming? (option 1)
• On horizontal mechanisms for integrating climate in the EU budget, are the three options of
2.1 integrating specific reporting in programme legal basis,
2.2 setting ex-ante conditionalities on Green Public Procurement and
2.3 giving guidance
relevant and feasible, and are there other elements that should be addressed?
• On individual programme priorities, are the options of
3.1 creating specific climate windows or spending targets, and
3.2 aligning the processes for centrally managed funds with the shared managed funds
• On implementation, are the options of
4.1 strengthened results-focus and
4.2 greater guidance
• Any other questions?
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Further information: Martin Nesbit mnesbit@ieep.eu
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