Transcript Document

How green is the European Semester process?
Patrick ten Brink
Senior Fellow and Head of Brussels Office, IEEP
with thanks for inputs by Sirini Withana, IEEP, &
Building, inter alia, on the study for the Greens/EFA Group of the European
Parliament by: Withana, S., Kretschmer, B., Farmer, A. (2013) Environmental
policy in the European Semester: Assessing progress to date. IEEP: Brussels.
24 November 2014
www.ieep.eu
@IEEP_eu
Presentation Structure
I. Key insights on mainstreaming environmental
issues in the European Semester – overview
•
•
Annual Growth Surveys (AGS)
Country-specific recommendations (CSRs)
II. Inputs to the European Semester:
– Studies on EHS, ETR & EPR
III. Conclusions and Next Steps
2
Overview of environmental issues covered in AGS 2014
Environmental issue addressed
Link to economic policy context
MS should ensure longer-term investment inter Priority area 1 ‘Pursuing differentiated
alia in energy and climate action
growth-friendly fiscal consolidation’
Shift tax burden from labour taxes to inter alia
As above
taxes on pollution and reduce EHS
Full implementation of the third energy
package by 2014, complete the internal energy
Priority area 3 ‘Promoting growth and
market, inter alia to contribute to the cost
competitiveness for today and tomorrow’
effectiveness of renewable energy support
schemes
Promote resource efficiency by improving
waste and water management, recycling and
energy efficiency
As above
Improve waste and water management to
exploit full growth potential of the green
economy
As above
Job opportunities through greening the
3 economy
Priority area 4 ‘Tackling unemployment
and the social consequences of the crisis’
AGS : Recurring environment-related themes
•
•
•
•
•
Completion of the internal energy market and the economic benefits associated
with it (e.g. enhanced security of supply, lower energy prices) as well as improving
energy efficiency with potential employment and competitiveness effects
Infrastructure in the energy and transport sectors as growth-inducing investment,
stimulating jobs in the short term and laying the foundation for future growth
Reforming taxation by phasing out EHS and stimulating job markets by shifting taxes
away from labour and towards less distorting taxes, e.g. environmental taxes
Resource efficiency as well as the need to improve waste and water management
The growth and job potential associated with the green economy
 Environmental issues seen as facilitators for growth, economic and labour market
recovery
 Clear focus on consolidating budgets and creating growth and jobs rather than on
the wider goals set out in the Europe 2020 Strategy
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CSRs: Recurring environment-related themes
•
•
•
•
•
Environmental tax reform
Energy (and electricity) infrastructure
Transport infrastructure
Renewable energy and energy efficiency
Better energy market design (completion of the internal
market, implementation of the Third Package)
• Progress towards greenhouse gas emission reduction targets
• Limited number of recommendations on water and waste
management
5
Assessment of CSRs
CSRs mirror AGS and their focus on fiscal consolidation
and stimulating growth
Environmental coverage mostly in relation to climate
change and energy
Resource efficiency not considered per se apart from
ETR and limited references to water and waste
management
No full account taken of the growth-stimulating
potential of environmental policy measures such as
improved resource efficiency
6
Developing Inputs to the European Semester:
Examples of studies on EHS, ETR and EPR
Withana, S., ten Brink, P., Franckx, L.,
Hirschnitz-Garbers, M., Mayeres, I.,
Oosterhuis, F., and Porsch, L. (2012). Study
supporting the phasing out of
environmentally harmful subsidies. A
report by the Institute for European
Environmental Policy (IEEP), Institute for
Environmental Studies – Vrije Universiteit
(IVM), Ecologic Institute and VITO for the
European Commission – DG Environment.
Final Report. Brussels. 2012.
http://ec.europa.eu/environment/enveco/t
axation/pdf/report_phasing_out_env_harmf
7
ul_subsidies.pdf
Eunomia and Aarhus University (2014)
‘Study on Environmental Fiscal Reform
Potential in 12 EU Member States Final Report to DG Environment of the
European Commission’,
http://ec.europa.eu/environment/integ
ration/green_semester/pdf/EFRFinal%20Report.pdf
Oosterhuis F., Ding H., Franckx L., P.
Razzini et al. (2014). Enhancing
comparability of data on estimated
budgetary support and tax
expenditures for fossil fuels. A report
by IVM, Bio, VITO and IEEP for the
European Commission – DG
Environment. Final Report. Brussels.
2014.
Fedrigo-Fazio, D., Withana, S.,
Hirschnitz-Garbers, M., and
Gradmann, A. (2013). Steps towards
greening in the EU, Monitoring
Member States achievements in
selected environmental policy areas EU summary report, prepared for DG
Environment. Brussels. 2013.
http://ec.europa.eu/environment/env
eco/resource_efficiency/pdf/Greening
.pdf
Overview of needs for subsidy reform identified
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There are no particular concerns
relating to this aspect of the subsidy.
There are some concerns with this particular aspect of
the subsidy and further attention is useful.
There are significant concerns with this particular aspect
of the subsidy and further attention/reform is needed.
EHS Fossil Fuels Study – a further input
Direct budgetary support to energy users: EU ~ EUR 1 bn/yr.
•
The largest single items identified are the tax reimbursements for energy
intensive industries in Austria and Germany, and the Fuel Allowance in Ireland.
Direct support to producers (inc. public infrastructure) ~< 5 bn/yr.
•
The main support schemes are for coal production (in Germany and Poland)
and the Italian ‘CIP 6/92’ mechanism (mainly benefitting cogeneration).
Tax expenditures in excise taxes (using the benchmark of the tax
rates as proposed in Energy Tax Directive proposal) ~< 28 bn/yr
•
For most Member States, the estimated support levels are between EUR 100
mln and several billions of euros per year.
Tax expenditures: using alternative benchmark highest
prevailing rate per unit of energy in the MS. ~> 200 bn/yr in EU
•
This benchmark leads to much higher estimated amounts (more than EUR 10
billion per year in several Member States).
VAT reductions: fossil fuels &/or fossil-based electricity - few MS.
•
Total amounts particularly significant in UK (> EUR 4 bn/yr) & Italy (>EUR 1
bn/yr).
Tax expenditures: corporate income tax and royalty schemes:
•
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Estimates available only for two countries: Germany and the UK: royalty
reductions available ~EUR 350 MEUR/yr in each of them.
ETR: Eunomia et al., I and II
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Eunomia and Aarhus University (2014)
‘Study on Environmental Fiscal Reform
Potential in 12 EU Member States Final Report to DG Environment of the
European Commission’,
http://ec.europa.eu/environment/integ
ration/green_semester/pdf/EFRFinal%20Report.pdf
European Policy Review, EPR
Advice and recommendations
Economic, fiscal and financial elements
• Budgetary expenditure
• Market-based instruments
• Environmentally harmful subsidies
• State aids
Waste management
Support to SMEs
Air quality
Source: Fedrigo-Fazio, D., Withana, S., Hirschnitz-Garbers, M., and Gradmann, A. (2013). Steps towards greening in the EU, Monitoring
Member States achievements in selected environmental policy areas - EU summary report, prepared for DG Environment. Brussels. 2013.
11
http://ec.europa.eu/environment/enveco/resource_efficiency/pdf/Greening.pdf
Conclusions and next steps
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Conclusions…
• Mainstreaming of environmental issues limited so far
• Overriding concerns are growth, jobs and fiscal consolidation as
apparent all along the process
• Where environment is mentioned, focus is on classical win-win
options such as ETR, energy and transport infrastructure etc.
• Exploitation of win-wins not comprehensive and key EU policy
areas ignored:
– Biodiversity and ecosystem services (evidenced economic importance)
– Important Europe 2020 topics side-lined such as recycling, eco-innovation
• Range of initiatives inputting to the European Semester
• European Semester part of a context for resource efficiency
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The European Semester in (ETR) Context
Diversity to coordination to harmonisation
Legislative specific minimum requirement: e.g. Energy Tax
Directive; value added tax (VAT)
Legal approaches across the
European Union
Legal approaches for a subset
of EU Member States:
Enhanced cooperation
Political intention to promote
ETR: Open Method of
Coordination (OMC)
Legislative general requirement: e.g. 'principle of recovery of the
costs of water services' under the Water Framework Directive
Legislative possibility: e.g. strengthen Eurovignette Directive
Special legal framework: e.g. initial Schengen (limited number of
countries under international treaty distinct from EU treaties).
Existing legal framework: e.g. Enhanced cooperation under EU
Treaties – little used to date (patents, discussion on financial
transaction tax, FTT)
Formal/structured OMC: e.g. country specific recommendations
under the European Semester
Flexible/light OMC: e.g. Green public procurement (GPP)
Voluntary policy coordination: e.g. Cars CO2; reform of EHS
Multi-country cooperation and
coordination
National, regional and local
approaches &
Learning from others
(copy-catting)
‘Coalition of like-minded countries’ to be defined depending on
interests: e.g. climate and energy, resource efficiency and circular
economy, pollution and health etc.
Inspired by and/or based on other countries’ & states’ initiatives
Own initiatives developed according to own needs
Withana, S., ten Brink, P., Illes, A., Nanni, S., Watkins, E., (2014) Environmental tax reform in Europe: Opportunities for the future, A report by the Institute for European Environmental Policy
(IEEP)
14 for the Netherlands Ministry of Infrastructure and the Environment. Final Report. Brussels. 2014. http://www.ieep.eu/work-areas/environmental-economics/market-basedinstruments/2014/06/environmental-tax-reform-in-europe-opportunities-for-the-future
…and next steps - recommendations
• Future AGS: wider interpretation of priority areas and/or
separate priority area for the environment
• Future CSRs: wider coverage of environmental issues in
support of Europe 2020 Strategy (biodiversity, ES, water,
air etc.)
• Increase ownership and engagement of MS, e.g. through
regular exchanges between MS on best practices
• Engage the European Parliament
• Civil society and other stakeholders: take Commission’s
‘fact finding missions’ to MS as an opportunity to input
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Thank you for your attention
Contact:
Patrick ten Brink, [email protected]
Reports citations: See links throughout.
IEEP is an independent not for profit institute dedicated to advancing an environmentally
sustainable Europe through policy analysis, development and dissemination.
New Book! Paying the Polluter - Environmentally Harmful Subsidies and their Reform
by F. Oosterhuis and P ten Brink (eds).
http://www.ieep.eu/news/2014/05/new-book-out-now-paying-the-polluter-environmentally-harmful-subsidies-and-their-reform
www.ieep.eu
@IEEP_eu