1. EFR – key for the European Semester to deliver Green Budget Europe ENVIRONMENTAL FISCAL REFORM IN THE EUROPEAN SEMESTER Putting resource efficiency back on the agenda? 24 November 2014 · Brussels · Friends of the Earth Europe

2. EFR – key for the European Semester to deliver Outline The European Semester: Does it matter?  Role of resource efficiency in the European Semester Hook or much ado about nothing?  Critical assessment of 4 EU Semester cycles Recommendations  How could a greening of the European Semester contribute to a more sustainable EU

3. The European Semester – Does it matter? ?

4. 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

5. EFR – key for the European Semester to deliver Rising labour costs Labour costs have continually and visibly risen: Labour costs manufacturing industry 1969–2004 in €/h (2010)

6. EFR – key for the European Semester to deliver Falling commodity prices Overall, commodity prices have fallen since the beginning of the industrial revolution: Economist „Metal-Detector“: Industrial metal-index 1845–2011 (1845 = 100%)

7. EFR – key for the European Semester to deliver TELL ME…. …what you tax and what you spend, and also what you don´t tax and don´t spend - and I´ll tell you what your true objectives are! Dr. Anselm Görres, GBE President

8. Increase taxes on activities harmful to the environment Reduce taxes on activities not harmful to the environment, e.g. labour Tax what you burn…. not what you earn RATIONALE: price = strongest market signal & driver for changes and efficient allocation of resources

9. EFR – key for the European Semester to deliver Environmental Fiscal Refom (EFR) Taxes Subsidies Tradable permits Border tax Adjust- ments fees

10. EFR – key for the European Semester to deliver Environmental Tax revenue in % of GDP Source: Eurostat 2013

11. EFR – key for the European Semester to deliver Environmental Tax revenue in % of GDP Source: Eurostat 2013 Denmark: 4,1 % The Netherlands: 3,5 % Slovenia: 3,4 % Spain, France, Lithuania, Romania and Slovakia: below 2 %

12. Hook or much ado about nothing?  A critical assessment of 4 Semester cycles

13. EFR – key for the European Semester to deliver CSR assessment 2012-2014 201220132014 Tax Shift / implement green taxes 12118 CZ, ES, IE, HU, IT, LI, LU, LV Environmentally harmful subsidies 023 BE, FR, IT Energy 817 Source: European Commission and Green Budget Europe

14. Implementation of CSRs 2010- 2012

15. EFR – key for the European Semester to deliver 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 15

16. EFR – key for the European Semester to deliver Green Budget Europe activities  Developing alternative CSRs  Lobby European Commission (Sec Gen, Cabinets DG ECFIN, ENVI and CLIMATE), at Hearing (EP), Green New Deal WG (EP), Member States (EESC), ESOs  European Commission Experts Group  Monthly meetings with environmental NGOs in Brussels  Get involved in the National Reform Programmes

17. EFR – key for the European Semester to deliver

19. Recommendations

20. EFR – key for the European Semester to deliver 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

21. EFR – key for the European Semester to deliver CONTENT: Raise environment and resource taxes  10% of total taxes Member States should develop a concrete strategy by2015 on how to phase out Environmental Harmful Subsidies by 2020 PROCESS: EP needs to get involved in the decision making process CSRs should deliver on all Europe 2020 targets withstrong CSO’s involvement

22. EFR – key for the European Semester to deliver T H A N K Y O U! Dr. Constanze Adolf Director Brussels Office Rue du Trône 4 1000 Brussels T: +32 25 88 57 65 M: +32 486 66 65 79 constanze.adolf@green-budget.eu www.green-budget.eu