enhancing the implementation of environmental fiscal reform at … · 2014. 10. 22. · enhancing...

STRENGTHENING THE DEMOCRATIC LEGITIMACY OF THE EUROPEAN SEMESTER

Enhancing the Implementation of Environmental Fiscal Reform at EU and National Level through the European Semester

· 25 September 2014 · 15th GCET · Copenhagen · Dr. Constanze Adolf ·

· Director Brussels Office · Green Budget Europe ·

Enhancing EFR implementation at EU and national level through the European Semester – 25/09/2014 – GCET Copenhagen

Outline

1. What is the European Semester?

2. How does it work?

3. Hook or much ado about nothing? A critical analysis of 3 Semester cycles

4. Recommendations

1. What is the European Semester?


What is the European Semester?

= Annual cycle of economic and fiscal coordination

• environmental dimension to economic reforms • key policy tool to implement Europe 2020

Strategy:

- Environmental Fiscal Reform and subsidies - Resource efficiency policies


Europe 2020 key priorities, EU overall headline targets & flagship initiatives

Europe 2020 strategy & Fiscal Policies

Fiscal surveillance

Macro-economic surveillance

Thematic surveillance

Europe 2020 Integrated Guidelines (IG)

Europe 2020 five headline targets

Stability and Growth Pact

National Reform

Programmes

Stability and Convergence Programmes

Commission’s Annual Growth Survey

EU annual policy guidance and recommendations

EU flagship initiatives and levers

National level

EU level


… The EU should should take the lead:

For a 10% tax shift from labour to

environment and resource use

Member States should develop a concrete strategy by 2015 on how to phase out Environmental Harmful Subsidies by 2020


Environmental taxes (on total tax revenues and social contributions) 2002 and 2012

8

Source: Eurostat 2014


Environmental Tax revenue in % of GDP



Environmental Tax revenue in % of GDP


Denmark: 4,1 %

The Netherlands: 3,5 %

Slovenia: 3,4 %

Spain, France, Lithuania,

Romania and Slovakia:

below 2 %

Italy: 2,8 %

2. How does it work?


The European Semester – in short

http://ec.europa.eu/economy_finance/economic_governance/images/european_semester_en.htm


Annual Growth Survey 2014

1. Pursuing differentiated, growth-friendly fiscal consolidation

2. Restoring bank lending to the economy

3. Promoting growth and competitiveness for today and tomorrow

4. Tackling unemployment and the social consequences of the crisis

5. Modernising public administration



1. Pursuing differentiated, growth-friendly fiscal consolidation

Tax should be designed to be more growth-friendly, for instance by shifting the tax burden away from labour on to tax bases linked to consumption, property, and combatting pollution (EC/2013/800, p. 7)

Environmentally harmful subsidies should be reduced (EC/2013/800, p. 7)

Member States should ensure longer-term investment inter alia in energy and climate action



3. Promoting growth and competitiveness for today and tomorrow

Full implementation of the third energy package in 2014, and improving the cost effectiveness of support schemes for renewable energy.

Promoting resource efficiency by improving waste and water management, recycling and energy efficiency. (EC/2013/800, p. 7)



4. Tackling unemployment and the social consequences of the crisis

Job opportunities through greening the economy


Source: European Commission

3. Hook or much ado about nothing?

A critical assessment of 3 Semester cycles


CSR assessment 2012-2014

2012 2013 2014

Tax Shift /

implement green

taxes

12 11 8

CZ, ES, IE,

HU, IT, LI, LU,

LV

Environmentally

harmful subsidies 0 2 3

BE, FR, IT

Energy 8 17

Source: European Commission and Green Budget Europe


Yes… but

Clear focus on consolidating budgets (fine) and creating growth (STOP: what kind of growth?), rather than on the wider goals set out in the Europe 2020 stragegy

20

No full account taken of the growth-stimulation potential of EFR or other environmental policies such as improved resource efficiency

EFR not seen as part of the solution (mainstreaming) but as a « nice to have »


Yes… but II

Mainstreaming of environmental / climate issues limited so far (no implementation of 7 EAP)

21

No logic coherence of recommendations (i.e. green economy)

Where recommendations are not repeated, reasons remain unclear

Who is behind the decisions? Where is the power?

What role for the Semester in the new Commission?


Weaknesses

Democratic legitimation European and national Parliaments have a very weak role

Consultation of CSOs, MoE, regional decision makers!

Enforcement

Low political priority regarding green taxes, 2030 “targets”

Deliver robust data! CEPRiE

Visibility

Communication between Ministries, Services other MS?

FRE-communicate! contra EU jargon

Implementation Strong sectoral lobby

Best practices and front runners

22


Implementation of CSRs 2010-2012


Green Budget Europe activities

Developing alternative CSRs

Lobby European Commission (Sec Gen, DG ECFIN, ENVI and CLIMATE), at Hearing (EP), Green New Deal WG (EP), Member States (EESC), ESOs

„EU 2020 / Semester Coalition“

Developing common CSRs

Hearing at European Parliament and high level conference

EU Semester at Member State level: 3 Pilot countries

European Commission Experts Group

Monthly meetings with environmental NGOs in Brussels

Get involved in the National Reform Programmes

4. Recommendations


Recommendations

Stop thinking in dichotomies Europe 2020 versus fiscal surveillance

EFR is part of the solution!

Climate and energy scoreboard and indicators deepening or broadening?

Assess CSR implementation via cohesion policy

Enhance process: Strong CSO’s involvement

Questions and Answers


Rue du Trône 4 • B-1000 Brussels •[email protected] • www.green-budget.eu

Please join us and share our vision of Europe as a

pioneer of green fiscal policy, green technology and

a green economy!

4 November 2014, Brussels (Belgium):

Become a founding member of GBE, a unique, non-profit

expert platform on environmental fiscal reform

5 November 2014, Brussels (Belgium):

GBE Annual Conference:

Recovery, Jobs and Sustainable Prosperity - A New

Agenda for Green Fiscal Reform in Europe

Including the presentation of the 2014 Environmental

Fiscal Reformer of the Year award.

Please visit our website for further information

T h a n k y o u!

Don’t hesitate to contace me: [email protected]

www.green-budget.eu

Enhancing EFR implementation at EU and national level through the European Semester – 25/09/2014 – GCET Copenhagen Source: European Commission, Alert Mechanism Report on macroeconomic imbalances

Overview: The Macroeconomic Imbalance Procedure


7. Umweltaktionsprogramm

Referenz Art. 4 im UAP: „Die Kommission gewährleistet, dass die Umsetzung der relevanten Elemente des 7. UAP im Rahmen des Prozesses der regulären Überwachung der Europa-2020-Strategie überwacht wird. Dieser Prozess stützt sich auf die Indikatoren der Europäischen Umweltagentur zum Zustand der Umwelt sowie auf Indikatoren, die zur Überwachung von Fortschritten bei der Verwirklichung bestehender Rechtsvorschriften auf dem Gebiet des Umwelt- und Klimaschutzes und von Zielen wie Klima- und Energieziele, Biodiversitätsziele und Ressourceneffizienz-Meilensteine verwendet werden.“

Derzeit noch unklar, wie Art. 4 umgesetzt werden soll: Frage an MS und EU-KOM


331

Source: Cambridge Econometrics E3ME model

Energy tax reform is the least damaging

of the three options considered

-0.6

-0.5

-0.4

-0.3

-0.2

-0.1

0

2013 2014 2015 2016 2017 2018 2019 2020

Ch

an

ge i

n G

DP

fro

m b

aseli

ne, %

Energy tax Direct Indirect

Figure 4. Energy tax reform cap has a smaller

negative impact on GDP than a direct tax

Figure 5. And no worse employment impact

-0.5

-0.4

-0.3

-0.2

-0.1

0

0.1

2013 2014 2015 2016 2017 2018 2019 2020

Ch

an

ge

in

em

plo

ym

en

tfr

om

bas

eli

ne, %

Energy tax Direct Indirect


Source: Vivid Economics: http://www.foes.de/internationales/green-budget-europe/gbe-projekte/cetrie/?lang=en

Reform proposals energy tax curve – the reform proposals aim for a consistent carbon price across most emissions Transport fuels are an exception as they cause further externalities

Residential // Natural Gas; Residential

//Coal € 0

Residential // Heat, € 12

Commercial and public services // Electricity,

€ 20

Residential // Electricity, € 20

Agriculture/forestry // Gas/diesel oil, € 94

Road // Motor gasoline, € 180

Road // LPG, € 166

Road // diesel, € 155

0

50

100

150

200

250

To

tal im

plied

tax r

ate

, €/t

CO

2

Emissions from energy consumption, tCO2

2012 Taxes (including EU ETS)

2020 Proposed Taxes

Source: Vivid Economics

enhancing the implementation of environmental fiscal reform at … · 2014. 10. 22. · enhancing...

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