EU risks failing on harmful subsidy reform

 

In times of a severe public budget crisis, as currently befalling the EU, it should be a top-priority measure to reform those areas of government spending that jeopardize agreed policy objectives and that are proven to create massive future costs to public and private budgets, as is the case with environmentally harmful subsidies. However, despite countless pledges to do so, the EU Member States of the EU are reluctant to take decisive action in this direction, as the following examples show.

 

• The EU’s seven year Multi-annual Financial Framework (MFF, i.e. EU budget) is a 1 trillion EUR investment that spends about 88% of its resources on direct agriculture payments and cohesion policy alone, many of which are clearly harmful to the environment. The European Commission proposals to address this in the next MFF are far from sufficient. For example, the suggestion to dedicate 20% of EU budget to climate action is not reflected in most individual budget line proposals. At the same time there are no systematic measures proposed for biodiversity mainstreaming and proofing in the budget.

• Each year the EU supports intensive, and largely ecologically harmful, farming practices with over 40
  

  Strawberry production in greenhouses around the Donana National Park in southern Spain. Perverse agriculture subsidies often support damaging practices such as increased water use or conversion of valuable habitats.
  Credits: Ariel Brunner

  billion EUR in direct payments. First attempts of the European Commission to address this by linking direct payments, at least partly to some environmental conditions (such as the creation of 7% environmental infrastructure on each farm), are heavily criticised by many Member State governments and parts of the European Parliament – under heavy pressure from the agricultural industry lobby. More on agriculture and the EU Biodiversity Strategy.
  

• Currently, the EU spends over 50 billion EUR per year on regional development subsidies across its territory. A great part of these subsidies is directed to road infrastructure, airports and other traditional high-carbon “grey infrastructure” development, that often also poses grave threats to biodiversity. The currently discussed Cohesion Policy proposals for 2014-2020 lack the mechanisms and safeguards for ensuring that EU investments will not harm biodiversity. Furthermore, there is very limited incentive in the proposals to invest on biodiversity and “Green Infrastructure”. The fact that future economic prosperity has to be environmentally sustainable, lead to the well-being of society, and achieve huge potential for “green jobs” is hardly reflected in the proposals. It is estimated that currently 78% of the EU-budget sustains around one million jobs whereas an ecological reform of only 14% of the total budget alone would already support more than half a million jobs. More on evaluating the potential for Green Jobs in the next MFF.

• The EU’s Common Fisheries Policy (CFP) has failed on all fronts with 72% of European fish stocks overfished and fishing activities inflicting widespread collateral damage on marine ecosystems, including seabirds and other marine wildlife in Europe and beyond. Due to ongoing subsidised overfishing it is one of the most prominent examples of an unsustainable policy that can in a not-too-distant future, lead to the collapse of a whole industry and millions of jobs. The European Commission proposals for the CFP reform package are an encouraging signal in the right direction and the European Parliament has been showing an ambition to support and strengthen the proposal. However Fisheries Ministers seem to be deaf to alarm bells from scientists and in their decisions tend to prioritise short term interests of the small fraction of the sector over the long term future of fish and fishermen in Europe. More on fisheries and the EU Biodiversity Strategy.