Climate Change

With overwhelming consensus among scientists that ambitious and urgent action on climate change is necessary, there is a growing need to ensure that EU action effectively reduces emissions in line with the goals of the Paris Agreement, while also ensuring that Europeans are able to adapt to the inevitable impacts of climate change. The EU has long played a leadership role in driving international efforts to limit climate change. The EU’s 2020 and 2030 climate and energy frameworks have enabled the Union to cut greenhouse gas emissions by more than 20% compared to 1990 levels. Efforts have been made over recent years to strengthen the EU-ETS and the Effort Sharing Decision, and the recent adoption of the Energy Union Package will support EU climate policy goals.

Nonetheless, pressure for renewed action remains. Emissions are rising in some sectors, particularly transport, and achieving the vision for achieving a climate-neutral Europe by 2050 as set out in the European Commission’s A Clean Planet for all strategy will require deep emissions’ cuts across all sectors of our society.

Milieu has been supporting effective EU climate policy development since 2011, through its work with the European Commission, the EIB, the Committee of the Regions and the European Parliament. Some highlights of this work include:

 

Effective climate action requires substantial resources and investments in all sectors, both to mitigate the impacts of economic activities on the climate and to help adapt these activities to a changing climate. Investments are necessary in areas such as renewable energy, energy efficiency, climate-proofing infrastructure and facilitating the circular economy. The European Investment Bank (EIB) is the world’s largest multilateral source of climate finance, supporting climate projects both within and outside the EU.

In preparation for the Paris COP21 in November 2015, the EIB refined its Climate Action Strategy. This process included an evaluation of the EIB’s climate action operations and its internal processes with the purpose of assessing the extent to which the EIB’s activities have contributed to climate action and the promotion of a low-carbon growth in the EU in the period 2010-2014 and identifying areas for improvement.

Milieu supported the evaluation of EIB’s Climate Action activities by providing an analysis of the Bank’s internal processes, guidelines and governance that can ensure climate considerations are mainstreamed in all EIB operations. Among the services provided, the Milieu team interviewed EIB staff and conducted a Bank-wide survey in order to identify areas for improvement and possible recommendations. The full report of the evaluation is available on the EIB website.

With the impacts of climate change expected to disrupt the EU’s regions and sectors to varying degrees, taking timely action to build resilience and adapt to adverse impacts is critical. To support the implementation of the EU Adaptation Strategy and help policy-makers and other stakeholders prepare adaptation strategies, the European Climate Adaptation Platform – Climate-ADAPT – was launched.

To enhance the uptake of existing knowledge on adaptation to climate change in key sectors and facilitate the exchange of knowledge and best practices between sectoral stakeholders, Milieu worked with stakeholders in three EU sectors – water, agriculture, and forestry – to identify their needs in relation to climate change adaptation and develop a strategy for addressing any gaps through the exchange of knowledge and experience. Working with existing ‘communities of practice’ in each sector, the project organised workshops and webinars tailored specifically to the needs of the stakeholders in each sector. Building on the insights learned through this close collaboration with sectoral stakeholders, Milieu contributed to the development of Climate-ADAPT by providing factsheets on climate change adaptation in the agriculture, forestry and water management sectors and on the use of insurance as a risk reduction tool that supports cross-sectoral adaptation. We also delivered recommendations for enhancing the relevance of Climate-ADAPT to sectoral practitioners and developed a guide to navigating the platform.

The EU Emissions Trading Scheme (ETS) is a cornerstone of the EU climate policy and one of the principal tools in the EU to reduce industrial greenhouse gas emissions. Following attempts to make fraudulent use of emission allowances and hacking, the European Commission and the Member States took several measures to reinforce the integrity of the EU ETS, such as changes to the Registry Regulation, the VAT Directive and the inclusion of emission allowances under the definition of financial instruments, covered by the Markets in the Financial Instruments Directive (MiFID II), and the Market Abuse Regulation.

In a 2015 report investigating the integrity and implementation of the EU ETS, the European Court of auditors concluded that, in addition to the measures already taken, more clarity in the legal definition of emission allowances could be beneficial to the functioning of the EU ETS market.

Milieu carried out a study for the European Commission in 2016 with as its main aim to provide greater clarity on the legal nature of emission allowances. The study started from a comparative legal analysis of the treatment of emission allowances in five selected Member States, namely Belgium, Germany, France, Poland and the UK, and investigated a range of issues related to the legal nature of emission allowances through legal analysis and consultations with stakeholders. A final step consisted of the identification of practical and possible options for providing further clarity on the legal nature of allowances.

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