Columbia International Affairs Online: Working Papers

CIAO DATE: 11/2008

Financial Impacts of Climate Change: Implications for the EU Budget

Arno Behrens, Jorge Núñez Ferrer, Christian Egenhofer

August 2008

Centre for European Policy Studies

Abstract

This study focuses on the financial resources needed to fight global climate change and the implications for the EU budget. The authors apply four different methodologies to estimate global financing requirements and attempt to determine the resources that will be needed at the EU level to meet the EU’s climate change objectives. The study analyses current climate change spending of the EU budget, identifies shortcomings and indicates possibilities for correcting them. It also assesses the potential of the EU emissions trading scheme (EU ETS) to raise additional resources to finance coordinated actions at the EU level aimed at fighting climate change. Finally, it provides three case studies of national public expenditure related to climate change in Germany, the United Kingdom and the United States.