EU climate spending massively off-target, agriculture most affected auditors flag

31 May 2022 --- The way the EU reports on the climate is being called into question after an audit reveals confusing and overstated information on how the money spent on agriculture actually links to green policies.

Spending on climate action in the EU’s 2014-2020 budget was “not as high as reported” in official documents, according to the European Court of Auditors (ECA). The audit reveals the EU Commission’s Climate Action report for that period is overstated by €72 billion (US$77 billion).

“Addressing climate change is a key priority for the EU, which has set itself challenging climate and energy objectives,” says Joëlle Elvinger, the ECA member who led the audit.

“We make several recommendations to better link the EU’s expenditure to its climate and energy objectives. For instance, we recommend that the Commission should justify the climate relevance of agricultural funding,” adds Elvinger.

Agriculture the main culprit
The report by the EU commission was found to be the most off-target regarding agricultural funding, which comprises 80% of the total reporting error.

While almost half of the budget was destined to agriculture, the report notes that GHG emissions from farming in the EU have not decreased since 2010.

“Modeling studies on climate change mitigation suggest that without direct payments EU GHG emissions from agriculture would be 2.5% to 4.2% lower,” as found in the report.

Climate contribution within the 2014-2020 EU budget, according to the EU Commission (Credits: ECA).The audit explains that the decrease in agricultural activity, if no funds were granted, would decrease emissions. Adding to a dependence created on direct payments that “may maintain non-viable farms, slowing structural changes that could be necessary for adaptation.” 

However, the decreases in the EU GHG emissions from reducing direct payments in the EU would be “offset to an extent by increased emissions outside the EU.”

The EU Commission originally stated a victorious report with 20.1% of its budget destined for climate action, just over its 20% self-imposed target. The real number, according to the authors, is 13%.

Due to the errors in this report, the auditors “express concerns about the reliability of the 2021-2027 reporting”. 

“Despite the proposed improvements in reporting methods, most of the issues identified for 2014-2020 still remain,” underscores the ECA.

Gross overestimations everywhere
The EU Commission has grossly overstated the amount of climate action money spent across all categories analyzed by the ECA.

“The current tracking method is based on assumptions: it does not evaluate the final contribution made towards EU climate goals, and there is no system in place for monitoring climate results,” highlights the ECA.  

The Commission assigned too much weight to the penalties for infringements of agricultural rules. The body states farmers applied penalties at a higher rate than the actual number. 

“Often farmers just get an early warning, and no penalty…penalties do not apply to small farmers, the level of compliance varies and breaches occur,” says the ECA.

Of the €17.5 billion (US$19 billion) of this category, the auditors state that 100% is “likely an overestimation.” 

This first category is not the only one with a 100% likely overestimation result. On the section of areas facing natural or other constraints, the ECA considers that it does not directly address climate change. For example, money spent on preventing land abandonment is also money spent on preventing ecological restoration. 

The last category with a 100% overestimation is investments in basic services, village renewal, and community-led local development. These were deemed useless, regarding climate action, due to being considered economic, social, and infrastructure investments. 

According to the ECA, of the 17 projects funded under the basic services and village renewal, ten were on local roads, which harm the climate. With only two of the said 17 being linked to climate action.Organic farming is beneficial as it leads to reduced emissions and a better soil quality.

In the community-led local development, 18 projects of the total 78 under this category were sampled and scrutinized, with only one found to be linked to climate action.

The actual climate investments
ECA, as mentioned, found the three categories already mentioned to be ineffectual, but it analyzed two more categories that had a real impact on climate.

The first one was agri-environment-climate measures. The audit reveals that the support of climate-friendly practices like cover crops or the investment in improved soil carbon content has a positive result on emissions. 

However, even in this category, only 40% of the budget was deemed on target with the plan’s objectives. The ECA finds some schemes like crop diversification to have a “very limited” or “no” effect on climate.

The last category, organic farming, was also beneficial as the conversion to these farming practices leads to reduced emissions and better soil quality. But the ECA warns:

“Lower yields from organic farming may lead to more production and emissions elsewhere.”

Biofuels problematic EU investments
The EU Commission just launched the EU Fit 55 $US 225 billion green-transition initiative, which would use one-fifth of Europe’s cropland on bioenergy production from energy crops, according to the World Resource Institute (WRI).

A focus on biofuels could lead to lower crop yields and be a driver of a food crisis, according to the WRI.

In its 2021-2031 Agricultural Outlook, the EU commission projects that biodiesel consumption will peak at 18.9 billion liters in 2023 when the food crisis might still be persistent.

By Marc Cervera

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