EU - Climate
At a glance
EUI are key players in taking action against climate change
In 2018, the European Union institutions (EUI; including the EU and European Investment Bank, EIB) spent US$5.6 billion of its bilateral allocable ODA on projects which targeted action against climate change as a principal or significant objective, making it the third-largest OECD Development (DAC) donor to the issue, in absolute terms.
The EUI spent 26% of its allocable bilateral ODA on climate finance in 2018. This is slightly higher than the DAC average of 22% and puts the EUI 11th out of 30 DAC members. The EUI's ODA in this sector has slightly decreased since 2016 when spending stood at US$6.4 billion but has increased significantly compared to spending levels in 2014 when climate-related ODA was only US$1.7 billion.
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.
To strengthen climate action, the European Commission (EC) has proposed "mainstreaming" or integrating climate action across all EU programs. The EC currently targets spending at least 20% of EU expenditure on climate objectives under the current budget outlined in the Multiannual Financial Framework (MFF) 2014-2020. In line with this commitment, the EC has pledged to provide at least €14.0 billion (US$16.5 billion, or an average of €2.0 billion or US$2.4 billion, per year) to support climate change-related activities in low- and middle-income countries under the current MFF. The EC has also proposed to increase the spending target to 25% under the next MFF 2021-2027.
According to the EC, climate action will be strengthened in key areas of agriculture, rural development, and external action; along with an increase in dedicated funding for climate action under the ‘LIFE Programme (L’Instrument Financier pour l’Environnement)’, the EU’s funding instrument for the environment and climate-related action.
Climate action is regarded as an integral part of the EU's foreign policy action. Through climate diplomacy and cooperation initiatives, the EU aims to advance global action towards climate change while supporting partner countries in their efforts towards climate change mitigation and adaptation. According to the EC, 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 2020; and
Development financing for partner countries to tackle climate change and/or adapt to climate change impact.
ODA climate policy focus is on climate adaptation in middle- and low-income countries
The EUI’s climate-related ODA overwhelmingly focuses on adaptation (84%) to climate change, in line with the EUI's strategic priority of supporting middle- and low-income countries in building resilience and adapting to climate change. Interventions aimed at climate change mitigation account for 65% of the EUI’s funding in this sector. As is apparent from the relative size of these percentages, there is also a significant overlap between the two markers as a project can target both adaptation and mitigation. In 2018, 49% 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 2018, 33% of the EUI’s bilateral allocable ODA was spent on projects with a principal climate change component (DAC average: 7%). The majority (67%) of bilateral allocable ODA was spent on projects with climate change as a significant goal (DAC average: 15%). According to information from the EU, the EUI are "broadly on track" to meet their 20% target of climate-related spending under the MFF 2014-2020 budget. Based on current levels of climate change-related spending, it is projected that 19% or €200 billion (US$236 billion) of EU operational spending commitments will be spent on climate action. This tracking is based on the EU climate markers, adapted from the 'Rio markers' developed by the OECD.
Key sectors receiving the EUI's climate financing include agriculture (21%), environment protection (13%), infrastructure and other multi sectors (13%), and energy (12%).
EUI support climate action through various multilateral initiatives, mainly through the Global Climate Change Alliance Plus flagship initiative
According to information from the EU, the EUI are the biggest contributor of public climate finance to middle- and low- income countries. In 2018, EUI contributed up to €21.7 billion (US$25.6 billion) in climate financing.
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 €450 million (US$531 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 guaranteed and blending instruments for investments into sustainable development, technical assistance for developing bankable climate projects, and improving climate business investment in partner countries. The EC has contributed €4.1 billion (US$4.8 billion) in public funds to the EIP.
DG CLIMA leads the EU’s climate change policy
The EC’s Directorate-General for Climate Action (DG CLIMA) leads the European EC’s efforts to fight climate change in the EU and globally. 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).
DG CLIMA formulates and implements climates policies and strategies, takes a leading role in international negotiations on climate, implements the EU’s Emissions Trading System, monitors EU member states’ national emissions, and promotes low-carbon technologies and adaptation measures.
Unless otherwise indicated, all data in this section is based on commitment. For more information, see our Donor Tracker Codebook.