EU - Climate
At a glance
EUI are key players in taking action against climate change
In 2019, the European Union institutions (EUI; including the European Commission and European Investment Bank, EIB) spent US$5.6 billion in bilateral allocable ODA on projects which targeted action against climate change as a principal or significant objective, making them the third-largest Organisation for Economic Co-operation and Development (OECD) Development Assistance Committee (DAC) donor to the issue, in absolute terms.
The EUI spent 30% of their bilateral allocable ODA on climate finance in 2019. This is slightly higher than the DAC average of 23% and puts the EUI ninth place out of 30 DAC members. The EUI's ODA in this sector has slightly decreased since 2016 when spending stood at US$6.2 billion but has increased significantly compared to 2015 when climate-related ODA was only US$3.3 billion.
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.
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.
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 ‘European Green Deal’ is also a major policy priority for the EU, which it translates into its priorities for external action. For instance, in April 2021, the European Commission President Ursula von der Leyen called for an ‘African Green Deal’ and said the EU will work with African governments toward a green transition, including through green investing, ahead of the COP26 (the UN Climate Change Conference 2021) in November 2021 and the next EU-Africa Summit in Spring 2022.The EU’s new €300 billion (US$336 billion) investment initiative, 'Global Gateway' will use ODA to fund and spur private sector investment in infrastructure in partner countries worldwide, including for facilitating the green transition such as through clean energy.
Key sectors receiving the EUI's climate financing include agriculture (15%), water and sanitation (14%), energy (13%), and ‘other social services’ (10%).
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:
- Principal, for projects in which climate change mitigation or adaptation is a fundamental and explicitly stated goal;
- Significant, for projects in which climate change mitigation or adaptation is not a key driver but still an explicitly stated goal; or
- 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 priority, in 2019, the EUI’s climate-related bilateral allocable ODA overwhelmingly focused on adaptation (83%) to climate change. Interventions aimed at climate change mitigation account for 52% of the EUI’s funding in this sector. As is apparent from the relative size of these percentages, there is also significant overlap between the two markers as a project can target both adaptation and mitigation. In 2019, 35% 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 2019, 7% of the EUI’s bilateral allocable ODA was spent on projects with a principal climate change component (DAC average: 7%) and 23% on projects with a significant climate change component (DAC average: 16%). The majority (70%) was spent on projects that were neither targeted nor screened against the climate markers.
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 of 30% of funding to go to climate-related objectives.
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 has invested €738 million (US$826 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 session.
- 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 Africa and the EU Neighbourhood through the European Fund for Sustainable Development (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. The European Commission has contributed €5.1 billion (US$5.7 billion) in public funds to the EIP.
DG CLIMA leads the EU’s climate change policy
The European Commission’s Directorate-General for Climate Action (DG CLIMA) leads the European 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 and its Director-General Mauro Petriccione and Deputy Director-General Clara de la Torre. DG CLIMA has three units:
- CLIMA.A: International, Mainstreaming, & Policy Coordination (led by Yvon Slingenberg; within this unit, CLIMA.A.1 International Relations is led by Elina Bardram);
- CLIMA.B: European & International Carbon Markets (led by Beatriz Yordi Aguirre); and
- 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.