The recent report The Contribution of the Recovery and Resilience Facility (RRF) to Reducing Greenhouse Gas Emissions in the EU by experts of the European Commission provided a quantified assessment. However, it is questionable that this assessment provided a full picture. Is action against climate change efficient if it is strictly focused on short-term and partial GHG emissions savings? 

The experts explained that quantitative inputs and indicators are chosen over qualitative ones to assess the environmental performance of a reform or an investment. In addition, complex assumptions were made to evaluate GHG emission savings. Therefore, many measures were evaluated incompletely, while others are missing from the analysis. This blind spot is aggravated by the fact that some targets and qualitative indicators can not be converted into GHG emission savings. This means that “Countries relying more heavily on financial instruments, technology-neutral measures, or targets expressed in qualitative or non-standardised terms may see a larger share of their climate-relevant measures excluded from the analysis.” (p.14). 

Long-term costly investments made with RRF funding by some countries are not taken into account by this report. Germany appears as the champion of climate mitigation, with praise for its direct subsidies for private electric vehicles. Meanwhile, States that are economically weaker and less resilient used similar amounts of money to support shifts in energy consumption modes. For example, Italy funded railway development and grid modernization, which will certainly result in greater savings of GHG emissions in the long run. Thus, by spending €4 billion on direct subsidies for private electric vehicles, Germany unlocked immediate emission drops that are easily calculable in the European Commission’s methodology. Thus, the EU's carbon metrics are fundamentally short-sighted : they reward the electrification of the status quo instead of rebuilding the world.

In the report, the experts highlight the importance of energy efficiency without mentioning energy sufficiency. As the graph below shows, more than 35% of the related RRF investments account for energy efficiency policies, making them “the largest contributor to estimated emission reductions.” However, there is no mention of the risks of a rebound effect: improving energy efficiency usually leads to higher consumption and therefore, to more GHG emissions.

The RRF could have been a true asset towards mitigating climate change with an energy sufficiency approach, which would have consisted of re-examining needs, their legitimacy, and how energy and money saved somewhere could be reinvested elsewhere to encourage carbon neutrality. 

Our well-being should be ensured “without threatening that of the planet and future generations” (see Social and political challenges to sufficiency). Such an approach would make it easier to observe structural underinvestment and a failure of political foresight in sectors where climate mitigation action is required. For example, water management measures represented only 3% of the measures financed by the RRF. 

Most importantly, the assessment does not mention how member states spend their budget outside of the RRF despite the fact that national funding, in many cases, is allocated to programs and projects that aggravate the climate crisis. Learning from this mistake, funding disbursement in the next MFF should be linked to the fulfillment of milestones on the national level, and the country’s climate mitigation performance should also be assessed on national level. 

Climate performance should be assessed more carefully than it has been done in the report, taking into account energy production increases due to better energy efficiency, providing realistic estimates for long-term reforms, and including a rigorous risk assessment of each investment and reform. Ultimately, the planning and evaluation of public policies must be tied to reforms. To induce sound financial governance, the EU must stop tracking what is merely easy to count and assess what is necessary to build a sustainable future. This is particularly relevant now, as the next seven-year budget (MFF 2028-2034) is already under preparation.

The article was written in the framework of the project "For a Climate-Friendly and inclusive MFF" implemented as part of the “Funding Fairer Futures” DEAR programme, with co-financing from the European Union. The content of this article does not necessarily reflect the views of the European Union.

By Ethel Nouis,
Clean Air Action Group