Why the EU’s first post-Brexit budget must prioritise investment in climate action

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The EU's seven-year budget known as Multiannual Financial Framework (MFF) is the EU’s secret weapon, says Eliot Whittington. [Shuttersock]

Reflecting on the next EU budget post-Brexit, Eliot Whittington explains why now is the time for the EU to show leadership and unity to drive climate action and make a net-zero carbon economy the new normal.

Eliot Whittington is Acting Director at The Prince of Wales’s Corporate Leaders Group (CLG).

When it comes to setting the global agenda on addressing climate change, the EU has long led the way. It has set ambitious targets, showed diplomatic reach in leading the world to commit to the Paris Agreement, and dedicated financial resources to implement its ambitions.

But the rest of the world – including investors – has been watching, and other regions are quickly catching up. Both China and India, for example, are targeting more than 100GW of solar power within the lifetime of the next EU budget.

Meanwhile, investors have been sizing up the real risks associated with climate change and setting out significant and increasing concerns about stranded assets, climate resilient business concepts and clean smart future growth.

So whilst the world is changing fast and the EU has a number of challenges on its plate, the next EU budget is an opportunity to offer investors some certainty in a complex and increasingly polarised world and to respond to challenges that will have a deep effect on the lives of European citizens.

To this end, the seven-year budget known as the Multiannual Financial Framework (MFF) is the EU’s secret weapon. It has a way of directing investment to priority areas in a way that individual Member States’ alone cannot.

Whether it is the flagship Common Agricultural Policy or the Erasmus scheme that has seen more than three million students studying in other European countries since it began, the MFF is a powerful mechanism for galvanising Member States around shared ambitions.

The MFF for 2020 onwards is an opportunity to re-establish the EU’s leadership in tackling climate change, delivering the at least 20% of EU funds – around €180 billion – promised for climate action.

It is an opportunity to show unity around climate commitments that cross budget headings.

And it is an opportunity for European leaders be bold and make a net-zero carbon economy the new normal, embedding climate compatibility in all policies.

This is why a growing number of voices are calling on EU leaders to ensure it seizes these opportunities. This week the Green Growth Group of climate and environment ministers set out their position and the Prince of Wales’s Corporate Leaders Group also showed their support in a letter to the EU Council Members.

If the EU is to continue to lead the world, it needs to ensure its policies secure innovation and investment to address these concerns.

Europe has long been a leader on climate policy and, as the world becomes increasingly polarised and divided over key issues, its leadership is needed now more than ever.