EU - Climate

 

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EUI are key players in taking action against climate change 

In 2020, the European Union Institutions (EUI; including the European Commission and European Investment Bank, EIB) spent US$4.6 billion in bilateral allocable ODA on projects which targeted action against climate change as a principal or significant objective, making them the fourth-largest Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) donor to the issue, in absolute terms.
Key sectors receiving the EUI's climate financing in 2020 included agriculture (23%), energy (17%), other multi-sector initiatives (11%), and infrastructure (10%).

The EUI spent 20% of their bilateral allocable ODA on climate finance in 2020. This is slightly lower than the DAC average of 23%, and puts the EUI in thirteenth place out of 30 DAC members. The EUI's ODA in this sector in 2020 was the lowest it has been since 2016.

To strengthen climate action, the European Commission has proposed "mainstreaming" or integrating climate action across all EU programs, including development initiatives. Under the current Multiannual Financial Framework (MFF) 2021-2027, the European Commission aims for 30% of EU expenditure to further climate objectives, an increase from the 20% target in the 2014-2020 MFF.

Furthermore, through climate diplomacy and cooperation initiatives, the EU aims to advance global action toward climate change while supporting partner countries in their efforts toward climate change mitigation and adaptation. According to the European Commission, key areas of climate cooperation with partner countries include:

  • Dialogue and cooperation on climate policy development and implementation;
  • Expertise sharing through bilateral and multilateral cooperation initiatives including research collaboration and technology transfer through Horizon Europe; and
  • Development financing for partner countries to tackle climate change and/or adapt to climate change impact.

The EU also undertakes several initiatives in climate including:

  • In April 2022, the European Parliament adopted a resolution on the European Commission’s May 2021 Communication on its Global Approach to Research and Innovation (R&I) that called for strengthening EU cooperation with lower- and middle-income countries on R&I in climate change (along with other key sectors);
  • In February 2022, climate change and the green transition were highlighted as major areas of cooperation between EU and countries in Africa, as outlined at the 6th African Union (AU) – European Union (EU) Summit; 
  • In December 2021, The EU launched its new strategy, Global Gateway, to mobilize €300 billion (US$341.9 billion) to invest in clean energy (and other sectors such as digital and transport infrastructure, health, education, and research systems) across the globe; and 
  • In November 2021, The European Commission announced that it will contribute €100 million (US$114 million) to the Adaptation Fund for climate adaptation at COP26.

Climate finance: funding for projects tagged in the OECD’s Creditor Reporting System (CRS) database with the Rio markers for climate change mitigation and/or climate change adaptation. Projects can be tagged with either or both markers.

Each marker has three possible scores:

  1. Principal, for projects in which climate change mitigation or adaptation is a fundamental and explicitly stated goal;
  2. Significant, for projects in which climate change mitigation or adaptation is not a key driver but still an explicitly stated goal; or
  3. Not targeted, meaning the project does not address climate change mitigation or adaptation.

Not all projects are screened against the Rio markers; this funding falls into the ‘not screened’ category.


 

ODA climate policy focus is on climate adaptation in middle- and low-income countries 

In line with the EUI's priorities, in 2020, the EUI’s climate-related bilateral allocable ODA focused almost equally on adaptation (79%) and mitigation (74%). As is apparent from the relative size of these percentages, there is also significant overlap between the two markers as projects can target both adaptation and mitigation. In 2020, 53% of the EUI’s funding for actions against climate change was channeled toward projects tagged with both markers. (For more information on the markers, see box.)

In 2020, 7% of the EUI’s bilateral allocable ODA was spent on projects with a principal climate change component (DAC average: 9%) and 13% on projects with a significant climate change component (DAC average: 14%). The majority (80%) was spent on projects that were neither targeted nor screened against the climate markers

EUI support climate action through various multilateral initiatives, mainly through the Global Climate Change Alliance Plus flagship initiative

The EUI support multiple multilateral initiatives for strengthening climate action in partner countries, including:

  • The Global Climate Change Alliance (GCCA+): This is the EU's flagship initiative that focuses on fostering policy dialogue and cooperation on climate change. The GCCA+ has a strong focus on low-income countries and small island states that are most vulnerable to climate change and supports these countries in increasing resilience and implementing climate change adaptation and mitigation strategies. Since 2008, the EUI have invested €738 million (US$841 million) in the GCCA+;
  • The Green Climate Fund: The EU supports partner countries in reducing their greenhouse gas emissions and adapting to climate change through this fund. In 2019, the EUI pledged US$9.7 billion for the Green Climate Fund's second replenishment; 
  • The EU External Investment Plan (EIP): This supports the preparation and financing of bankable climate-relevant development projects. The EIP is aimed at encouraging EU investments in partner countries in countries in Africa and the EU Neighbourhood through the European Fund for Sustainable Development plus (EFSD+), which includes financial guarantees and blending instruments for investments into sustainable development, technical assistance for developing bankable climate projects, and improving climate business investment in partner countries; and
  • The EC released a new strategy on climate adaptation in 2021. To close the climate adaptation financing gap, the EC plans to mobilize larger-scale financing for adaptation, including through the EFSD+. The EC's development instrument, NDICI, includes a target in which 30% of funding will go to climate-related objectives

DG CLIMA leads the EU’s climate change policy  

The European Commission’s Directorate-General for Climate Action (DG CLIMA) leads the European Commission’s efforts to fight climate change in the EU and globally and is responsible for formulating and implementing climate policies and strategies. DG CLIMA is led by Executive Vice-President Frans Timmermans, its Director-General Mauro Petriccione, and Deputy Director-General Clara de la Torre. DG CLIMA has three units: 

  1. CLIMA.A: International, Mainstreaming, & Policy Coordination (led by Yvon Slingenberg; within this unit, CLIMA.A.1 International Relations is led by Elina Bardram);
  2. CLIMA.B: European & International Carbon Markets (led by Beatriz Yordi Aguirre); and
  3. CLIMA.C: Climate strategy, Governance, and Emissions from Non-trading Sectors (led by Artur Runge-Metzger).

However, the European Commission’s Directorate-General for International Partnerships (DG INTPA; formerly the Directorate-General for International Cooperation and Development, or DG DEVCO) leads on EU external action, including funding for climate action in partner countries.


 

Unless otherwise indicated, all data in this section is based on commitment. For more information, see our Donor Tracker Codebook.