Green Budget News Special Edition · July 2014




Dear readers,

Welcome to the Special Edition of Green Budget News!

We have decided to bring out this special edition of GBN to share our thoughts about the European elections, and to report on recent EFR-developments. In addition, we would like to inform you about selected GBE activities, and most importantly we would like you to save the date for the 2014 GBE Annual Conference on 5 November 2014 in Brussels. Please find details below.

We wish you an interesting read, please do not hesitate to send us your comments!

Your editors Constanze Adolf, Matthieu Chateau, Jacqueline Cottrell and Eike Meyer.

European Elections – What is in it for EFR in the coming 5 years?
Jean-Claude Juncker nominated President of the European Commission
What happens next?

What future for EFR policies under Jean-Claude Juncker?
The European Parliament after the elections in May 2014
Environmental policy and EFR after the 2014 elections
What does this mean for GBE?
Next steps

The Revision of the Energy Tax Directive: a never ending story?

Italy takes over the rotating Presidency of the Council of the European Union

Green Budget Europe Events
SAVE THE DATE: GBE Annual Conference on 5 November 2014 in Brussels
Poster session at the 5th World Congress of Environmental and Resource Economists -WCERE – Istanbul, 28 June - 2 July 2014
GBE at European Sustainable Energy Week Panel Discussion, Brussels, 25 June 2014
EFR Event “Environmental Fiscal Reform, Growth, and Employment in the Context of the Spanish Debate on Tax Reform”, Madrid, 12 June 2014
Series of high-level EFR events in Cyprus, 5-6 June 2014
European Semester – Capacity Building workshop, Brussels, 6 June
EFR Training in Mauritius
Upcoming Events

Green Budget Europe Activities

GBE Publications



Jean-Claude Juncker nominated President of the European Commission

After long discussions, the European Council nominated Jean-Claude Juncker to be the next President of the European Commission on 27 June 2014. The nomination represents a departure from the long tradition that Commission presidents are chosen by a consensus of national heads of government. For the first time, possible candidates for President of the European Commission were put forward by the Parliament’s political groups.
The successful candidate will need the support of at least 376 MEPs in mid-July, most likely from a grand coalition of different groups, and support from a qualified majority from the EU Heads of State and Government.
Just two countries, Great Britain and Hungary, opposed Mr. Juncker’s candidacy. David Cameron, the UK Prime Minister, warned that it would have an impact on the debate in Britain over the UK's future in Europe. According to Cameron, Juncker is too much of a “federalist”, and Cameron has expressed concern that Juncker will obstruct his plans of reforming the EU ahead of a 2017 referendum to quit the EU the UK Conservative party will call, if they win the next UK election. Cameron’s concerns seem unfounded, however, as Juncker has made it clear that he wishes to develop solutions for the British concerns – particularly important in view of the current UK government’s stance on EU membership.

What happens next?

Once the new Commission President has been agreed on, it is his or her role to define the College of Commissioners’ political guidelines and to determine its internal organisation by assigning duties to the various commissioners, who will be nominated by national governments in August - one commissioner per Member State. Political wrangling will revolve around possible revisions to the Commission structure, national candidates, and which portfolio is allocated to each Member State. In September, the EP will hold hearings of nominated commissioners, before voting to approve the new College in late October. The new commissioners are scheduled to take office on the 1st of November 2014.

What future for EFR policies under Jean-Claude Juncker?

It is too early to evaluate Mr. Juncker’s stance on EFR. On the other hand, looking at his policy priorities gives us some insight into what is most important for him. In his manifesto, he puts “policies that create growth and jobs” alongside a “digital single market for consumers and businesses” as key priorities. Growth and jobs, as GBE commissioned research completed by Vivid Economics has shown, are certainly compatible with carbon-energy taxation or a green tax shift to reduce labour costs and thus boost employment. We will make him and his team aware of the results of this study as soon as his position is confirmed.
Secondly, Juncker upholds the need for the reform and reorganization of Europe’s energy policy in a new European Energy Union by combining infrastructures, diversifying energy sources, and reducing energy consumption. He explicitly states his will for “Europe’s Energy Union to become the world number one in renewable energies”. The most efficient way of fostering renewable energy transition and ensuring that the EU regains and retains its position as a world leader in renewable energy would be to create a level playing field in energy markets by implementing EFR – something GBE will communicate to Mr. Juncker at the earliest opportunity.
Thirdly, he advocates a “reasonable and balanced trade agreement with the United States of America“ while emphasizing that he “will not sacrifice Europe’s safety, health, social and data protection standards on the altar of free trade“. That environmental standards do not get a mention in this statement is of course cause for concern. Furthermore, strong words will have to be backed up with strong actions and the assertion of European citizens’ interests during the TTIP negotiations.
The election manifesto of Juncker’s party group the EPP states that “the cornerstone of EPP policy is the idea of the Social Market Economy. (…) Simply put, the economy should serve the people and not the other way around.” The manifesto also highlights the importance of sustainability, climate-friendly growth and prosperity, and investment in renewable energy, and acknowledges the responsibility we all share “to leave our world safer and cleaner for future generations” (EPP Manifesto, p. 9). EFR is an efficient policy instrument to help achieve these ambitions. Given that a prosperous society and environmental well-being are so closely interlinked, encouraging the new Commissioner to strive for an Eco-Social Market Economy seems within reach.

With Jean-Claude Juncker as the candidate of the biggest group in the EP (EPP - European People’s Party), the next 5 years might create more opportunities for the Parliament to bring in progressive legislative proposals. Hopefully, the Commission President will feel obliged to listen to those who helped him to get his post. However, as long as the elected representatives of the EP do not have more competences in taxation issues, their direct impact on EFR matters will remain limited.

The European Parliament after the elections in May 2014

The 2014 European elections in May with a stable turnout of 43.1% have brought about a wave of euro-scepticism. In addition, the far right vote was very successful, i.e. in the French elections, where the Front National won almost 25% of the vote, and had strong showings in the UK, Hungary and Austria.
At the same time independent MEPs grew from 29 to 43.
An infographic about the results and a list of voted MEPs can be found online.

Environmental policy and EFR after the 2014 elections

What do these changes mean for EFR policies?
First of all, we should not necessarily expect a vehemently anti-climate/environment Parliament. There has been a consistently strong majority in the Parliament supporting progressive climate, energy and environment legislation from socialist, centre-right and green MEPs. Because of this, there have been no close votes on environment, climate or energy. This grand coalition of broad support for climate action is likely to remain after these elections.
Eurosceptic parties will have limited impact on parliamentary business due to ideological and organisational divisions. Populist parties are split between far left and extreme right – and even those with similar positions are unable to form partnerships: As exemplified by UKIP’s rejection of an alliance with the French Front National. Thus, the Eurosceptic influence in the Parliament should not be overestimated.
The result might mean that political will for progress is weaker within the new EP. Euro-sceptic groups are opposed to supranational integration and could limit the extent of tax harmonisation in the future. On the other hand, euro-sceptics have a history of low attendance in parliamentary Committees and thus tend not to participate substantially in the EU legislative process.

What does this mean for GBE?

GBE will reinforce links with previously appointed MEPs that have been re-elected and reaffirm our motivation to advocate EFR. At the same time, it is vital to approach independent MEPs and centrist parties, to have the opportunity to discuss with them the benefits of EFR.
With the Lisbon Treaty and the co-decision procedure firmly in place, the European Parliament has now much more power in amending and even rejecting the Commission’s proposed legislation. Therefore it will be crucial to have engaged and influential MEPs in all important Committees in the EP (Economic and Monetary Affairs, Budget, Environment, etc.).
The Lisbon Treaty, the European Semester of fiscal policy coordination, the Stability and Growth pact and the Excessive Debt procedure – all reflect the increasing power of European institutions. However, the EP still does not have the right to initiate legislation and is merely consulted when it comes to tax policies or the European Semester. It is the Commission which proposes legislation. For this reason, the European Commission will remain the most important interlocutor for GBE’s lobby work.

Next steps

• June – July: Negotiations for EP groups and committees
• 1-3 July: EP votes on President of the European Parliament
• 14-17 July: EP votes on European Council’s nomination of Commission President
• Summer 2014: New Commission President nominates the College of 28 commissioners
• September 2014: EP scrutinises nominated EU Commissioners through individual hearings
• October 2014: New EU Commission is hoped to be confirmed by the European Parliament
• 1 November 2014: Target date for new Commission to take office.


The Revision of the Energy Tax Directive: a never ending story?

The Greek Presidency prepared a compromise paper on the revision of the Energy Tax Directive (ETD), trying to bring together the various interests of the EU Member States, e.g. in relation to taxation of biofuels. However, even if this might represent a small amount of progress, the presented document is far from the original European Commission proposal – extremely regrettable given that there is an imperative need for clear and ambitious decisions in order to bring Europe closer to its projected energy efficiency and energy security targets, while promoting the switch from fossil fuels to renewables.
The 28 Finance Ministers endorsed a number of conclusions from this compromise paper during their meeting on 20 June 2014.
The Italian Presidency will take the dossier over and will hopefully find a political solution.
GBE will lobby in favour of a renewal of the dossier as soon as possible. Our position paper on the initial Commission proposal is available online.


Italy takes over the rotating Presidency of the Council of the European Union

On 1 July 2014, Italy will take over the six - month rotating presidency of the Council of the European Union. A brief interview to discuss the Presidency’s priorities with Stefano Sannino, Italy’s Permanent Representative to the European Union, is available online.


Green Budget Europe Events

SAVE THE DATE: GBE Annual Conference on 5 November 2014 in Brussels

Given the importance of EU political developments this year, this years’ GBE annual conference will be held in Brussels under the title “Recovery, Jobs and Sustainable Prosperity - A new Agenda for Green Fiscal Reform in Europe“. It will take place at the Economic and Social Committee from 09.00-18:00 on 5 November. Please reserve this day in your calendar. An invitation including the programme will be sent out soon.

Poster session at the 5th World Congress of Environmental and Resource Economists - WCERE – Istanbul, 28 June - 2 July 2014
Aldo Ravazzi, GBE Vice-President is presenting a poster on behalf of Jacqueline Cottrell entitled “Exploring ways to boost public acceptance and support of green taxes” at the 5th World Congress of Environmental and Resource Economists at Istanbul Technical University, TURKEY, 28 June - 2 July 2014. It was based on research findings from GBE’s FRE-Communicate project.

GBE at European Sustainable Energy Week Panel Discussion, Brussels, 25 June 2014
In the context of the European Sustainable Energy week 2014, GBE contributed to a panel discussion on “Is Europe sufficiently exploring the opportunity of an Environmental Fiscal Reform?”

EFR Event “Environmental Fiscal Reform, Growth, and Employment in the Context of the Spanish Debate on Tax Reform”, Madrid, 12 June 2014
GBE (together with Fundació ENT) organized a roundtable debate on the potential role of EFR in the upcoming Spanish fiscal reform, for which the government is currently developing a proposal. The event took place at the National Distance Learning University in Madrid and was attended by approx. 40 people, among them Pedro Herrera, member of the Spanish expert commission on fiscal reform and Ana Maria Madrazo, Speaker for Fiscal Policy of the ruling conservative party. The debate showed that there is broad agreement across the political spectrum that Spain needs to increase its overall tax revenue and catch up with the rest of Europe in terms of the share of revenue from energy taxes. For a documentation of the event, please check out our website.

Series of high-level EFR events in Cyprus, 5-6 June 2014
Together with the Jean Monnet Professorship on “European energy and Environmental Policies at a Crossroads” at the Cyprus University of Technology, GBE organised a number of high-level meetings to discuss opportunities for an enhanced EFR agenda for Cyprus.
The meetings included a high-level roundtable debate, a meeting with the Minister of Finance and a conference entitled “Environmental Tax Reform at Times of Economic Crisis“. This international conference attracted more than 60 participants. Hans Eichel, Finance Minister of Germany in the period 1999-2005, Professor Sir Christopher Pissarides, the 2010 Economics Nobel Laureate and Chairman of the Council of National Economy of Cyprus and Mr. Nico Heslop, Head of Energy and Climate Change Taxes at HM Treasury in the United Kingdom and GBE’s Vice-President Kai Schlegelmilch were amongst a distinguished selection of speakers of this event which took place in the context of the pan-European "Green Week". For a documentation of the event, please check out our website.

European Semester – Capacity Building workshop, Brussels, 6 June
GBE as part of the Steering Committee of the European Semester Alliance for a democratic, social and sustainable European Semester co-organised a 1-day Capacity Building workshop for 35 Alliance members in Brussels which several participants considered a “very useful, dynamic and powerful day”. GBE Vice-President András Lukács presented best practice examples from Hungary. Read more.

EFR Training in Mauritius
Jacqueline Cottrell and Kai Schlegelmilch developed a concept for and facilitated a 5-day capacity building workshop on Fossil Fuel to Renewable Energy (FFRE) transition policies in Mauritius for UNOSD. Participants from Indian Ocean and African small island developing states (SIDS) came together in the “UN Year of the SIDS” to discuss ways of achieving energy independence and promoting energy transition in their countries. More information is available on the UNOSD website.

Upcoming events
• Milan, 17 July : GBE is invited by the upcoming Italian Presidency to contribute to the first Joint In-formal Meeting of the EU Environment and Labour Ministers dedicated to Green growth and Jobs
• Lisbon, 16 September: In early 2014, Portugal has set up a Tax Commission on EFR and invited GBE to organise a conference on 16 September 2014 in Lisbon in order to influence the budgetary process. The event will be jointly organised by the Portuguese Minister of Environment, the Portuguese Ministry of Finance, the Portuguese Tax Commission and the GBE.
• The Global Conference on Environmental Taxation (GCET) is taking place from 24-25 September 2014 in Copenhagen. GBE’s Jacqueline Cottrell is a member of the international programme committee.
• Last but not least, the GBE Annual Conference on 5 November in Brussels. Details above.


Green Budget Europe Activities

Country-Specific Recommendations published
The European Commission published its proposals on Country-specific Recommendations (CSRs) at the beginning of June. The overall message is that economic progress is being made. With growth returning and public finances improving, we need to make sure that ambitious EFR-proposals remain on the agenda for the European Semester as the biggest hook for EFR.
Out of a total of 26 Member States which get CSRs (apart from the Troika-countries Greece and Cyprus), 18 countries got EFR related CSRs which is a success. Compared with 2013 where there were 23 EFR related CSRs, this year the number increased to 28. This is good news. In addition, the proportion of environmentally related CSRs in the staff working document, a wider document per country which is the basis for the CSRs, increased by 25%.
GBE would like to thank all those of you who contributed to the set of alternative proposals.
Get involved! Consultation on the Mid-Term Review of Europe 2020

A public consultation on the Europe 2020 Strategy has been launched, with a deadline of 31 October 2014. This consultation will aim to inform the Mid-Term Review of Europe 2020 which will take place under the new Commission in 2015. A press release is available online. How will it be done? Read more.


GBE Publications

GBE, in cooperation with the Heinrich Boell Stiftung, released a report entitled "TTIP and Fossil Fuel Subsidies: Using international policy processes as entry points for reform in the EU and the USA".

GBE was appointed as expert for an Opinion of the European Economic and Social Committee on the Market-based instruments towards a resource efficient and low carbon economy.

Togeher with the Fundació ENT, GBE published a policy paper on the current situation of energy taxes in Spain and proposals for reform.

On behalf of GBE, Fundació  ENT and the Basque Centre for Competitiveness (ORKESTRA) wrote a report on the status quo of energy taxation in Spain.

Jacqueline Cottrell contributed a chapter on the political economy of subsidy reform, focusing on drivers for change, in "Paying the polluter: Environmentally harmful subsidies and their reform", edited by Frans Oosterhuis and Patrick ten Brinck (Edward Elgar 2014)




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European Elections – What is in it for EFR in the coming 5 years?
The Revision of the Energy Tax Directive: a never ending story?
Italy takes over the rotating Presidency o the Council of the European Union

Green Budget Europe Events
Green Budget Europe Activites
GBE Publications
Editors and Founders of Green Budget News

Steering Committee
Dr Anselm Görres (President)
*Prof Paul Ekins, UK
David Gee, UK
Miroslav Hájek, CZ
Dr Ion Karagounis, CH
Valdur Lahtvee, EE
*András Lukács, HU
Hans Mayrhofer, AT
*Magnus Nilsson, SV
*Pieter de Pous, NE
*Aldo Ravazzi Douvan, IT
Klemens Riegler-Picker, AT
*Kai Schlegelmilch, DE
Prof Thomas Sterner, SE
Prof Jon Strand, US
*Eero Yrjö-Koskinen, FI
*= GBE Vice Presidents

GBE Team
Dr Constanze Adolf, BE
Rozan Consten, BE 
Jacqueline Cottrell, UK
Eike Meyer, DE/BE

Wise Patrons
Prof Jean-Philippe Barde, FR
Dr Martin Bursík, CZ
Rae Kwon Chung, KR
Prof Frank Convery, IE
Hans Eichel, DE
Dr Franz Fischler, AT
Gabi Hildesheimer, CH
Dr Peter Liese, MEP, DE
Prof Alberto Majocchi, IT
Prof Jacqueline McGlade, DK
Dr Paul Metz, NL
Prof Janet Milne, US
Yannis Palaiokrassas, GR
Dr Rathin Roy, (UNDP)
Prof Ernst-U. v. Weizsäcker, DE
Jeremy Wates, (EEB)
Anders Wijkman, SE