Business groups and NGOs call for 'climate proof' EU budget that aligns with Paris Agreement, as Council backs review of how to build 'net zero' emission economy

Nearly 100 business groups and NGOs have today called on EU ministers to align the EU budget with the Paris Agreement and UN Sustainable Development Goals (SDGs) in a bid to boost spending on clean energy, low emission transport, environmental protection, and sustainable farming.

The open letter, signed by 98 organisations and sent today to EU ministers of European and Foreign Affairs, comes just a day after the Environment Ministers on the European Council of member states met to discuss the bloc's response to the stark warning's contained in this week's IPCC report.

The letter calls for a sharp increase in climate action funding in the future EU budget, and urges the bloc to exclude spending on fossil fuel infrastructure and "environmentally harmful" subsidies from its budget.

Following the IPCC's 1.5C report on Monday, the letter argues more money should be invested in renewables, clean transport, ecosystem protection, and sustainable farming. It adds that stronger safeguards are needed to ensure climate compatibility across all of the European Union's funding programmes.

The letter comes ahead of the next round of talks over the future EU budget in Brussels next week, at which ministers are due to discuss EU Commission proposals for a long-term budget of €1.1tr from 2021 to 2027, equivalent to 1.11 per cent of the EU27's gross national income.

Coordinated by Climate Action Network (CAN) Europe, signatories to the letter include the Prince of Wales's Corporate Leaders Group, the European Trade Union Confederation (ETUC), the European Association for Electromobility, and think tank E3G.

Wendel Trio, director of CAN Europe, said the sooner and more invested by the EU in the clean energy transition, the bigger the benefits for society and business. "40 per cent of the future EU budget needs to benefit zero-carbon projects and not one cent should go to fossil fuels, gas included," he said. "This is the only way European public finance can help the world keep temperature rise to 1.5C by the middle of this century."

The letter was published just hours after the European Council's committee of environment ministers concluded their latest round of talks with fresh calls for renewed effort to meet the goals of the Paris Agreement.

The conclusions from the meeting expressed "deep concern" at the IPCC's findings about the climate impacts that will result at 1.5C of warming and above. The committee said the report "demonstrates clearly vulnerabilities, impacts and risks of further global warming to human societies and natural systems, including the attainment of sustainable development and of the Sustainable Development Goals (SDGs)".

The committee's conclusions highlighted the EU's efforts to date to cut greenhouse gas emissions, but contained no new policy proposals.

It did, however, reiterate the Council's support for a recent move to request that the European Commission develop a "Strategy for long-term EU GHG emissions reduction", in line with the Paris Agreement and which includes proposals for building a net zero emission economy consitsent with keeping warming below 1.5C.

Separately, the committee also called for the development of a new international "strategic plan for biodiversity beyond 2020", which could provide an overarching biodiversity framework across the UN. "This framework should place biodiversity and ecosystem services high on political agendas," the group said, adding that it would like to see a high-level biodiversity summit at the level of Heads of State/Heads of Government in 2020 "to strengthen the political visibility of biodiversity and its vital contribution to the 2030 agenda for sustainable development".

However, while the Council's response to the latest IPCC warnings fell short of policy specific, today's letter calls for a raft of new moves to help accelerate emisisons reduction efforts.

Specifically, it urges EU ministers to increase the bloc's climate action target to make up at least 40 per cent of the whole EU budget, and to ensure the budget is "climate proof", meaning no further spending on projects which are not in line with the Paris Agreement.

As well as halting spending on unabated fossil fuels infrastructure and subsidies, it calls for the exclusion criteria on fossil fuels in the EU's Cohesion Fund programme to be extended to all fossil fuel investment and to apply these across all programmes.

Moreover, all planning and preparation of EU programmes and projects should include "energy efficiency first" as a mandatory assessment tool, it adds, while the performance and results of climate action initiatives should be assessed in line with recommendations of the European Court of Auditors to avoid overestimation of their effectiveness.

All EU financial flows and fiscal incentives should be aligned with the Paris Agreement, while National Energy and Climate Plans should on the other hand be aligned with the EU budget's financing strategies, the letter states.

Finally, the EU should also provide support for a low carbon transition in high-carbon regions of Europe, and the budget should "incentivise climate action through higher budget allocation and better financial conditions".

"The recently published IPCC 1.5C report shows that we have the scientific understanding, the technological capacity and the money to avoid the worst impacts of climate change," the letter states. "The only barrier is one of political will, which you and your colleagues can change."