[Publication] The Green Deal and the CAP: policy implications to adapt farming practices and to preserve the EU’s natural resources

Making the post-2020 CAP compatible with the Green Deal objectives requires major changes to the Commission’s June 2018 proposals for this policy. While some Member States and Members of the European Parliament (MEP) wish to alleviate the climatic and environmental ambition of the future CAP, we conclude – on the contrary – that the Green Deal must make the initial proposals of the Commission considerably more stringent in these areas. Provisions that are crucial include conditionality requirements, plus targets, instruments and budgets of both the eco-schemes in Pillar 1 and climate- and environment-related interventions in Pillar 2.

General principles of public economics and fiscal federalism help to clarify the goals and roles of the various CAP tools. First, it is vital to more effectively apply the “polluter-pays principle”, upon which conditionality relies, in order to better justify the increased implementation of the “provider-gets principle” that underlines both the eco-schemes and climate- and environment-related measures. Second, the Pillar 1 eco-scheme measures that are fully financed by the European budget must target global public goods; that is, climate mitigation, biodiversity preservation and restoration, as well as animal welfare. Third, the eco-schemes must be supplemented by Pillar 2 measures that are focused on local public goods; notably, water quantity and quality, soil fertility and diversified landscapes.

The current conditionality criteria should not be weakened, and exemptions must end in order to increase the environmental efficiency of the CAP and to close loopholes. Provisions of new Good and Agri-Environmental Conditions (GAEC) to replace the greening criteria of the current CAP must reflect the same level of climatic and environmental ambition at the very least and should be gradually increased over time. Both GAEC #2 on the protection of wetlands and peatlands and GAEC #9 related to high-diversity landscape features must be made more binding. New GAEC should be introduced to increase agricultural producers’ awareness of the flow of the nutrients, molecules and GHG emissions they generate, and to provide a benchmark for payments under associated eco-scheme measures. Such payments would remunerate farmers for their efforts that go beyond conditionality requirements and would increase proportionally with their efforts and non-market benefits. Consistent with this, two new ring-fenced budgets would be introduced in Pillar 1, with 20% of spending reserved for climate mitigation actions and 20% for measures targeting biodiversity. In addition, 35% of Pillar 2 expenditure should focus on environmental interventions.

We point out several unresolved issues for making CAP National Strategic Plans (NSP) more consistent with the Green Deal roadmap. The main issues concerning the Green Deal targets are: first, their legal status must be clarified; second, the ways in which they are calculated are not detailed enough and should be more precisely defined; third, the methods used to define the corresponding national targets are unknown. They also concern the CAP. The performance indicators currently proposed do not make it possible to monitor progress made towards the targets. More generally, the CAP does not allow progress to be sufficiently enforced, reported and monitored, nor does it impose an effective corrective action plan if progress does not occur.