Climate Adjustment Fund financed by Cohesion and NGEU

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EESK:s yttrande: Climate Adjustment Fund financed by Cohesion and NGEU

Key points

The EESC:

  • Acknowledges that the European Union (EU) is taking significant steps towards tackling climate change and reducing greenhouse gas (GHG) emissions. EU climate, environmental and energy policies have a long-term plan to help prevent the worst impacts of the climate emergency our planet is facing.
  • Stresses that while the EU's commitment is significant, the consequences of climate change and resource scarcity are sadly already making themselves known. We are therefore having to adjust to a reality we have not experienced before.
  • Points out that since 2021, we have experienced two very notable emergencies that EU funding mechanisms have shown themselves to be ill-equipped to respond to. The first is the destruction caused by the floods and wildfires seen throughout Europe during the summer of 2022. The second is the ongoing energy crisis and need for EU energy autonomy brought about by Russia's invasion of Ukraine in 2022.
  • Notes that the European Union Solidarity Fund (EUSF) available annual budget is dwarfed by the cost of the damage caused by recent natural disasters and needs to be drastically increased. EU funding for the green energy transition is more substantial, but does not take into account the urgency of the EU's current need for energy autonomy and the huge risk of energy poverty.
  • Is the view of the that the EU needs a new funding mechanism that can offer immediate and ambitious assistance to help the Member States in emergencies such as those indicated above. The EESC therefore proposes creating a new Climate Adjustment Fund (CAF). This funding should be redirected from existing EU funds, notably from the Cohesion Fund and the Recovery and Resilience Facility (RRF), but managed in a streamlined and coherent way through this new Fund.
  • Believes that the modernisation of the funding environment could also include broadening the scope, stepping up existing programmes, and considering Next Generation EU (NGEU) as a template for a new funding tool.
  • Advises the Commission to look into bolstering the CAF by encouraging private investment and contributions. Regarding natural disasters specifically, the Commission and the Member States should also make efforts to increase and facilitate insurance coverage and use the insurance system as a means to direct financing toward improving climate change resilience, particularly in at-risk areas, in order to reduce reliance on EU funding support.
  • Proposes that the CAF must be adaptive, flexible, and ready to respond to new and emerging crises in the years and decades to come.
  • Highlights that it is crucial that the functioning of the CAF, with its greater focus on swift and urgent responses, be coherent with the EU's overarching climate, environmental and energy policies, which in the long-run will reduce reliance on emergency responses and protect humanity as well as the natural world.