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'Ending Fossil Fuel Subsidies in Europe' Newsletter No.1 - September 2016

'Ending Fossil Fuel Subsidies in Europe' Newsletter:

A monthly update on policy development, campaigning and communications

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Newsletter No.1 - September 2016

 

CAN EUROPE'S LATEST TAKE ON THE ISSUE

 

G20 Communiqué fails to take the baton from the G7 to set down a deadline for phasing out fossil fuel subsidies

 

The Group of 20 – the world’s 20 largest economies – came together in Hangzhou, China on September 4th and 5th for its annual leaders’ summit. The G20 has usually focused on economic issues such as GDP growth and industrialisation, while climate change and sustainable development have traditionally sat on the fringes of meetings and negotiations.

However, in the months after the Paris Agreement was adopted climate change, energy and sustainable development have featured throughout the discussions and meetings of the G20. The establishment of a Green Finance study group was one indication that climate change and economic concerns are not exclusive of each other, and that more visionary and cooperative action is needed to address our climate crisis. The announcement by the US and China of ratification of the Paris Agreement added further momentum to the G20 summit, adding pressure to other big emitters such as the EU to swiftly follow suit.

Right at the crossroads of complementary economic and climate change action is phasing out public funding for fossil fuels. A long established commitment of the G20 to phase out fossil fuel subsidies raises its head again each year since it was first set down in 2009.

NGOs, businesses and developing countries have voiced the urgency to phase out fossil fuel subsidies, which have shown to be one of the most obvious barriers to effective climate action. This growing number of observers have been specifically calling on the G20 to commit to phase out fossil fuel subsidies by 2020, a move that would help drive down global greenhouse gas emissions and free up funds for clean and safe energy alternatives. But despite the mounting pressure to do more to tackle fossil fuel subsidies, the G20 Communiqué released on September 5th failed to build on its seven year old commitment.

Although the Chinese G20 Presidency paved the way for a positive outcome through ratifying the Paris Agreement together with the United States, it fell short on setting down a deadline to phase out fossil fuel subsidies. The baton is now firmly passed on to the next Presidency, which is to be hosted by Germany. While chairing last year’s G7, Germany set a an impressive precedent for climate ambition through anchoring down long-term decarbonisation goal in the G7 Communique. The achievement displays Merkel’s interest in addressing climate change through such international meetings and negotiations, and it indicates strong potential for similar progress in the G20.

The US-China ratification of the Paris Agreement ahead of the G20 of the Summit guaranteed that there is still momentum around climate action. But the communiqué released at the end of the summit suggests that some of the world’s largest economies are still shying away from solidifying the long-standing commitment to phase out fossil fuel subsidies, particularly to set an end date for when fossil fuel subsidies are to be phased out.


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EU financial plans missing the climate mark: CSO comments on President Juncker’s Investment Plan (2) and the mid-term review of the EU Budget

 

On Wednesday September 14th, EU officials busied themselves with the publication of two key proposals regarding EU financing – the prolongation of the European Fund for Strategic Investments and the mid-term review of the EU’s multiannual financial framework (otherwise known as the EU’s budget).

On the morning of Wednesday 14th, President of the European Commission Jean-Claude Juncker made his State of the European Union speech at the European Parliament in Strasbourg. After a summer of challenging patterns, from the results of the British referendum to leave the EU to the on-going pressure on EU leaders to enforce stronger security and rules on migration, the political weight on President Juncker’s shoulders must have been heavy.

But one thing that Juncker may have had strong confidence in when walking through the doors of the European Parliament is his flagship investment plan, the European Fund for Strategic Investment (EFSI). First launched by the European Commission and the EIB group in 2014, the Investment Plan sets out to stimulate economic growth and job creation across the EU, whilst also providing additional social and environmental goods. Its means of achieving this objective is to attract more private investments and projects in various sectors such as energy infrastructure (including renewable energy), transport and resource efficiency.

The proposal launched on Wednesday last week indicates that the Investment Plan will be extended to 2020, and increase leveraged finance to up to €500 billion. It also indicates that climate action should feature as a component of at least 40% of projects that will be funded, suggesting that some European Commission officials are paying heed to the EU’s objectives under the Paris Agreement. But in the same breath, the proposal will give a pass to projects on the simple basis that they are cross-border between two Member States. This move opens up the potential for any project to get the green light, whether it meets the EU’s long-term climate objectives or not. So while the new phase of the EFSI shows some promising developments for the coming years, the plan doesn’t demonstrate how it will ensure much needed coherence across potential projects so that the 40% of projects that do include climate ‘components’ are not undermined by other projects. It also makes no reference to viable solutions such as de-centralised and smaller scale community renewable energy schemes.

While President Juncker was finalising his speech to the European Parliament, his staff in the Directorate General for Budget (DG BUDG) were preparing the publication of the mid-term review of the EU’s budget which runs from 2014-2020 and amounts to €960 billion.

In 2013, the budget was agreed by all EU Member States, including the provision that 20% of its financing would be channelled for climate related actions, both within the Union and outside of it. Disappointingly, the review admits that this target may not be reached, pointing out that ‘further effort is still needed to make sure that the global target of 20% climate related expenditure can be sustained.’

Despite highlighting the need for the budget to address the causes and consequences of climate change, the mid-term review makes no reference to the Paris Agreement and its call to align financial flows with low greenhouse gas emissions and climate resilient development. The missed opportunity to incorporate the Paris Agreement and the EU’s longer term climate objectives has fazed CSO onlookers, particularly as the financial planning and support laid out now will have a lasting impact on EU-wide decarbonisation in the future.

It will now fall to the European Parliament and Council to correct these errors and establish much better coherence between the EU’s finance and its climate objectives.

 

CAN Europe, CEE Bankwatch and Friends of the Earth Europe reacted to both of the publications in a Press Release [here]

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STORIES TO SHARE

Publications and media coverage

 

The US and China’s ratification dominated the media coverage of the G20, but thanks to a large push by several stakeholder including CSOs, think tanks and insurers fossil fuel subsidies-phase out made headlines both prior to and after the Summit. Below is a snapshot of the media coverage.


The G20 peer reviews of China’s and the United States’ fossil-fuel subsidies have just been published.


Ahead of the Summit, CAN Europe published the briefing, Connecting the Dots - EU’s funding for fossil fuels.

Connecting the dots

Around the same time, Climate Transparency published the report From Brown to Green - Assessing the G20 transition to a low-carbon economy.

Brown to Green

The two figured together in articles across the globe:

- Boursorama (France): Des ONG pointent l'effort insuffisant du G20

- Foreign Affairs (New Zealand): G20 states must take harder line on carbon emissions: NGOs 

- Arab News (Saudi Arabia): Group of 20 states ‘must take harder carbon line’


Insurers with $1.2 trillion under management signed a letter to G20 leaders to ask them to stop funding fossil fuels by 2020, something which drew great media attention in numerous countries:

- The Guardian: Leading insurers tell G20 to stop funding fossil fuels by 2020

- Sky News Australia: Insurers push G20 on climate commitments

- Reuters: Insurers call on G20 to phase out fossil fuel subsidies by 2020


Germanwatch published a "Shifting the trillions" - briefing paper on G20, climate and finance which drew attention to the role of making financial flows consistent with global long-term climate goals

Cover Shifting the Trillions.thumbnail


As the communique of the Summit was published, the (non-existent) agreement on setting a deadline for when to phase out fossil fuel subsidies made headlines:

- The Guardian: G20 reaffirms climate commitments – but dodges deadlines

- Reuters: Pressure for G20 deadline on fossil fuel subsidies shifts to Germany 

 

CAMPAIGNS & ADVOCACY

 

Blog post by Germanwatch in the lead-up to the G20 (by Gerd Leipold, Sofia Gonzales, Juan Carlos Arredondo Brun, Jan Burck)

"G20 not yet on the necessary transition from a “brown” to “green” economy Brown to Green: Development of Key Indicators

Beijing, 1 September 2016 —  The G20 needs to make more effort to move to a green, low-carbon economy, especially in the areas of coal power expansion and climate policy, but is beginning to head in the right direction. This is the key result of a comprehensive assessment of G20 climate action, released in Beijing today ahead of the G20 summit in China this weekend.

The report, “Brown to Green: Assessing the G20 transition to a low-carbon economy” has been produced by Climate Transparency, and written by a range of international experts (1) and was launched at a press conference in Beijing."

Read more here.

 


 

BUILDING A COMMON NARRATIVE 

 

The voice against fossil fuel subsidies has internationally grown stronger the last couple of years - both among civil society and world leaders - but it is apparent that European decision makers don’t feel enough pressure to start putting their money where their mouth is. A united voice from NGOs and other actors will help to steer the debate in the right direction – towards enhanced and fair climate action.  CAN Europe is working with members and non-members across Europe to support the development of a strong, common narrative on phasing out public financial support for fossil fuels. What is your story? Make it heard!
Contact: caroline@caneurope.org

 


 

Have any news you want to share or comments on the content ? Contact: martin@caneurope.org

For continual news updates and useful ressources, visit our website.

 

UPCOMING NGO CONFERENCES & EVENTS

 

- 26-28 September, Brussels: Rosa-Luxemburg-Stiftung Brussels, in cooperation with Corporate Europe Observatory, Counter Balance,  Food and Water Europe, Friends of the Earth Europe; PowerShift e.V. Berlin and War on Want, are organising a three day conference entitled Fossil fuel lock-in: why gas is a false solution. You can find the program here.

 

- 28 September, Brussels: Bankwatch, Counter Balance, FoE Europe, WWF discussion entitled EFSI 2.0 - The Investment Plan for Europe: which contribution to the EU's climate agenda?, including a roundtable with the European Comission, the European Investment Bank and the European Parliament.

 


 

UPCOMING POLITICAL MOMENTS & OTHER EVENTS

 

- 21 September, New York: Paris Climate Change Agreement Ratification Event at UN Headquarters

 

- 29 September, Brussels: European Investment Bank workshop entitled Investing for a 2 Degree World: Green Bond Market Development and EIB’s Contributions - EIB Stakeholder Engagement Workshop

 

- 6 October, Washington DC: G20 Finance ministers and central bank governors meeting

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