Policy Updates

On December 2, 2023, during the opening days of COP28, Antigua and Barbuda, Barbados, France, Kenya, Spain, and the African Union Commission, with the European Commission as an observer, jointly launched a new taskforce on international taxation.

The taskforce is the result of discussions initiated at the June 2023 Paris Summit for a New Financing Pact and the September 2023 African Climate Summit, held in Nairobi.

The taskforce was announced with the goal to identify innovative finance mechanisms and mobilize new, additional, predictable and adequate financial resources for development, climate change and the protection of biodiversity. It is intended to ensure that all economic sectors, particularly those with a low tax burden, contribute a fair share to climate financing according to respective greenhouse gas emission levels.

The taskforce is planned to analyze various taxation options, such as a global carbon tax regime, a carbon tax on the fossil fuel trade, shipping, and aviation, as well as a global Financial Transaction Tax.

The members of the coalition mobilized around the taskforce stated their openness to cooperation with other countries and CSOs. The taskforce will be supported by the European Climate Foundation.

The next steps for the taskforce were listed as:

• The appointment of experts and the creation of a detailed working plan in early 2024;
• The presentation of the taskforce's mandate and initial assessments at COP29 in late 2024; and
• The formulation of concrete proposals, to be adopted by relevant institutions at COP30 in 2025.

On December 2, 2023, during the opening days of COP28, outgoing Dutch Prime Minister Rutte announced a commitment of EUR15 million (US$16 million) to help establish the Loss and Damage Fund.

The EUI pledged US$125 million, Germany and the UAE each pledged US$100 million, the UK pledged GBP60 million (US$78 million), the US pledged US$18 million, and Japan pledged US$10 million. The total funds surpass the US$400 million needed to initiate the establishment and operation of the Loss and Damage Fund.

Dutch NGO ActionAid Netherlands responded by commenting that while the pledge is a fair initial contribution to the fund, it is far from a "fair share" for the Netherlands when based on the country’s emissions levels.

On December 2, 2023, the EU institutions, the EIB, the EBRD, and the Member States that comprise Team Europe pledged EUR20 billion (US$21.8 billion) for clean energy partnerships with African partners.

The funding announcement listeed EUR3.4 billion (US$3.7 billion) in grants and covered the period from 2021-2027. The project, AEGEI, aims to produce over 50 Gigawatts of renewable energy by 2030.

12 EU Member States contributed to the funding. No language regarding specific partner countries was included in the announcement.

On November 30, 2023, European Commissioner for International Partnerships Jutta Urpilainen announced EUR143 million (US$156 million) in support for humanitarian assistance in Afghanistan.

Prioritizing displaced and vulnerable populations, the package included assistance for education, WASH, health, and gender equality, including WEE. Under the heading of basic services, the assistance also included psychological care, educational incentives such as free school meals, and efforts to shore up local economies.

On November 23, 2023, it was reported that the Swedish Presidency of the Council of the EU presented three draft revisions to the Commission's EUR66 billion (US$72 billion) June 2023 proposal and proposed alternative paths totaling EUR61 billion (US$65.9 billion), EUR56 billion (US$60.5 billion), and EUR46 billion (US$49.7 billion).

As EUi institutions negotiate the Commission's proposed increases to the bloc's MFF, a seven-year budgeting tool, European leaders have urged the bloc to reduce its planned spending.

Citing the tension of net-contributer countries financing the projects of net-recipient countries, as well as pressures from COVID-19 spending and the war in Ukraine, some officials argued that spending should be reigned in by at least 20%.

MFF negotiations are expected to continue through the meeting of the European Council in December 2023.

On November 13, 2023, EU Climate Commissioner Wopke Hoekstra signalled that the bloc would make a substantial contribution to the loss & damage fund at COP28.

Hoekstra made the announcement during a meeting with COP28 President Designate Dr. Sultan Al Jaber, which focused on priorities and anticipated outcomes of the conference. Hoekstra highlighted the bloc's support for equitable climate action, prioritizing both mitigation and adaptation measures.

Hoekstra also indicated that the EU would provide support for the COP28 Renewable Energy and Energy Efficiency pledge.

On November 11, 2023, the Commission of the EU announced that the Parliament and Council of the EU had reached agreement on the 2024 budget.

Against the backdrop of the midterm review of the bloc's MFF, the 2024 budget included commitments of EUR189.4 billion (US$204.7 billion), a slight increase over the EUR186.6 billion (US$201.7 billion) budget for 2023.

Heading 6: Neighborhood and the World fell to EUR16.2 billion (US$17.5 billion) from EUR17.2 billion (US$18.6 billion) in 2023, a 5% decrease. Notable changes included:

• Humanitarian assistance increased by EUR100 million (US$108 million) to EUR1.9 billion (US$2.1 billion); and
• NDICI-Global Europe fell EUR800 million (US$864 million) to EUR11.5 billion (US$12.4 billion), emphasizing spending priorities of reducing drivers of migration.

On October 25-26, 2023, the EU hosted the Global Gateway Forum, which invited stakeholders from international businesses, partner countries, and CSOs.

The two-day conference aimed to increase visibility of the Global Gateway program, the EU's investment and ODA platform, which aims to strengthen Europe's ties with partner countries while addressing contemporary challenges like climate change or energy transition.

Over the course of the conference, EU Commission President Ursula von der Leyen and Commissioner for International Partnerships Jutta Uprilainen announced a variety of partnerships and funding, including:

• EUR634 million (US$669 million) for global health, including EUR500 million (US$528 million) for a partnership between the EIB, BMGF to support SMEs working on global health R&D and vaccine development, and EUR134 million (US$141 million) to support health product manufacturing in Egypt, Ghana, Nigeria, Rwanda, Senegal, and South Africa;
• EUR500 million (EUR528 million) to launch a credit facility for the EU's Just Energy Transition Partnership with Vietnam, which will focus on decarbonization projects, and was accompanied by EUR1 billion (US$1.1 billion) in loans from the EIB, AFD, and KfW;
• EUR470 million (US$496 million) for Bangladesh, including an EUR395 million (US$418 million) loan from the EIB for solar and wing projects, and EUR70 million education, and combatting GBV;
• EUR146 million (US$154 million) from the EU and AFD for Tanzania to support the construction of a hydropower plant on the Kagera river;
• EUR72 million (US$76 million) for the 2023 EU - Kenya cooperation priorities, which included assistance for green energy transition, shoring up cybersecurity, combatting female genital cutting, and strengthening democratic structures; and
• EUR46 million (US$49 million) to support the foundation of a Regional Teacher Facility in Africa to support the realization of commitments made at the 2022 Transforming Education Summit, with an emphasis on foundational learning, capacity-building, and technical assistance for partner countries in Africa.

While the event resulted in a variety of high-level commitments, observers expressed concern at the mismatch between representation from partner countries, many of whom sent heads of government or state, and EU Member States, some of which either did not attend or were represented by lower-level officials.

On October 25, 2023, UK Minister for Development and Africa Andrew Mitchell announced a GBP48 million (US$58 million) new Green Cities and Infrastructure Program at the EU’s Global Gateway Forum in Brussels.

The program will draw on the UK’s expertise and technical support and private sector support. The program will focus on LICs. One program initiative is providing technical support to Zambia to reduce transportation costs of goods in key regions within the country. In Tanzania, the program will work to improve waste management in the capital city. In Bangladesh, the program hopes to improve traffic management and reduce pollution.

The program is part of the UK’s commitment to the G7’s Partnership for Global Infrastructure and Investment. Delivery of the program is slated through the FCDO’s relatively new Centers of Expertise. The centers plan to bring together UK expertise on key thematic areas to support the delivery of UK development policy. The FCDO will also work closely with the UK’s development finance institution BII to lead the program.

On October 20 and 23, 2023, the EU announced US$32 million for food security in Afghanistan.

The additional funding was announced in two separate packages. On October 20, 2023, the bloc pledged EUR10 million (US$10 million) to the WFP to provide fortified snacks for schoolchildren. The funding aimed to provide 1.4 million children with nutritious snacks at school, rations for 340,000 children, and additional rations for 480,000 girl students and their families.

On October 23, 2023, the bloc announced additional funding of US$22 million in humanitarian assistance to the WFP. WFP indicated that its goal was to provide nutritious food to 21 million individuals, with additional focus on breastfeeding mothers and young children.