European Green Deal: Integrate gender and intersectional approach into green budgeting and taxation

The report "Why the European Green Deal needs ecofeminism - Moving from gender-blind to gender-transformative environmental policies", by the European Environmental Bureau (EEB) in collaboration with Women Engage for a Common Future (WECF) maps the gender gaps and opportunities in the EU’s flagship European Green Deal. It explores how, though gender issues affect environmental policies and vice-versa, they are not integrated into the European Green Deal. This publication also provides recommendations on how to move from gender-blind to gender-transformative environmental policies. These include intersectional and gender equal environmental objectives, moving towards a feminist economy of well-being and care and ensuring the use of gender mainstreaming methodologies in environmental policies.

This report was produced by the EEB in collaboration with WECF with contributions from ActionAid, BalckEarthKollectiv, DOOR, Ecolise, Equinox, ESF, FOCUS, GenderCC, Geres, the Global Women’s Network for the Energy Transition, Heinrich-Böll Stiftung, IEEP, IREC, IRENA, MilieuKontakt, Newcastle University, Sogesca, Universitat Autonoma Barcelona, Youth Environment Europe and Wide+.

(Green) Gender Budgeting

“Many disparities and inequalities between the sexes have become embedded, to a greater or lesser extent, in the baseline of public policies and the allocation of public resources”, states an Organisation for Economic Co-operation and Development (OECD) report on gender budgeting from 2017.¹ Budgets are a powerful economic tool to transform societies and economies and enhance equality. The other side of the coin is money collection. In most countries of the world, governments collect fees and taxes to generate public revenue that make it possible to invest in essential public services.² While taxation can also enhance gender equality and incentivise a green transition, this chapter will focus on the budget side due to the revenue structure of the European Union (EU), which consists mostly of national contributions, custom duties on imports, and VAT based resources. Direct taxation is the competence of Member States (MS).

Gender budgeting - by incorporating gender equality aspects in all stages of the budget process - offers an approach to policy makers and public finance institutions to shift towards outcomes that support and improve gender equality in the long-term. Gender budgeting is not so much about having separate budgets or dividing expenditures, but rather about taking a gender analysis approach to collection and spending of public resources and to improve the collective understanding of how decisions impact women and men differently. To address additional structural inequalities, it is important to apply an intersectional approach by understanding and analysing the diverse realities of people’s lives and the effects of gender, race, sexual orientation, disability, age, and other characteristics that structure people’s experiences of the public services, spaces and institutions that they seek to use.⁶

Green budgets refer to tools that aim to achieve environmental and climate objectives by analysing the environmental impacts of budgetary and fiscal policy choices. Budgeting can therefore be a tool to mainstream gender equality and environmental objectives at the same time. For instance, investments in public transport rather than new road infrastructure are both green and boost gender equality because women tend to rely more heavily on public transit.⁸ Climate mitigation policies could be thought of as gender-just by definition as climate change disproportionately affects women and minority groups in the Global South because they are more vulnerable due to, inter alia, higher livelihood dependence on natural resources threatened by climate change and a higher likelihood to live in poverty limiting their capacity to adapt to climate change.⁹ However, if the gender lens is not applied when designing the policy, gender inequalities can be perpetuated.

Many ways to combine both green and gender-just budgeting exist: Investing in care fulfils green and gender equality requirements and is furthermore relevant from an intersectional point of view as many migrant women work in the care sector.

The European Green Deal and Gender in the Current EU Budget

The Council of the EU, the Commission and the European Parliament approved the Multiannual Financial Framework, the EU’s seven-year budget, and the Recovery Programme “Next Generation EU” in February 2021. It will allow the EU to provide an unprecedented €1.8 trillion of funding over the coming years to support recovery from the COVID-19 pandemic and the EU’s long-term priorities across different policy areas. The European Green Deal and its objectives played an important role during the lengthy negotiations, whereas the first proposals were blind on the gender dimension. This section looks at whether the current budget has the potential to reap co-benefits arising from green and gender budgeting.

The Multiannual Financial Framework (MFF)

The EU budget can be an effective financing tool to implement the European Green Deal, but also to promote a gender-just society. While accounting for just over 1% of the EU’s overall GDP, the budget has significant political weight and leverage on Member States as well as an important signalling function.

Before the current MFF, gender budgeting has not been applied systematically to all parts of the EU general budget. Instead, the principle had been pursued through specific programmes, mainly those tackling employment and social issues.¹¹ The legal requirements with respect to gender budgeting vary from one spending programme to another. Still in 2018, the spending review of current programmes that accompanied the Commission’s proposal for the 2021-2027 MFF found that gender equality had not been mainstreamed across the EU budget in the same way as for example for climate change.¹² The EU member states administer large parts of the EU budget and report on climate spending using an established methodology.¹³ While the EU had agreed to make at least 20% of EU expenditure climate-related in 2014-2020, this number increased to 30% for the next MFF. Even though many problems remain,¹⁴ with a mixed record on climate spending overall, mostly due to the continued existence of incoherent spending programmes, and unsatisfactory monitoring, there is a history of data compiling, tracking, reporting and discussing the climate impact of spending programmes.¹⁵ Not so for gender – despite comprehensive work on tolls for gender budgeting, for example by the European Institute for Gender Equality (EIGE).¹⁶

Thanks to pressure from Civil Society Organisations (CSOs) and the European Parliament, the 2021-2027 MFF¹⁷ foresees gender impact assessments. This means that the programmes will be screened according to their impact on gender equality to establish gender tracking, similar to the climate tracking which is already in place. While this wording is good progress, more work lies ahead of us on a way to a budget that combines the promotion of gender equality and the green transition.

First, large spending programmes, also those that should contribute to the objectives of the European Green Deal, remain gender-blind – above all the EU’s Common Agricultural Policy (CAP) which represents about one-third of the overall budget and is the EU’s single biggest element of expenditure. As demonstrated in Chapter 14 of this report, by being gender-blind the CAP is probably damaging to gender equality as most subsidies go to male farm holders and reinforces gender stereotypes.¹⁸

Second, it is noteworthy that the interinstitutional agreement only addresses equality between men and women in a binary and non-intersectional perspective, as described in Chapter 1 in this report. Notions of the complex interdependencies of greening the budget and gender budgeting are lacking.

Third, data that would make an analysis of gender equality possible in the first place is lacking. With gender budgeting being a toolbox that is only useful with gender-related data, this point is key.¹⁹

The Recovery and Resilience Facility

On 27 May 2020, in response to the unprecedented crisis caused by the coronavirus, the European Commission proposed the temporary recovery instrument Next Generation EU (NGEU) of €750 billion.²⁰ The lion’s share goes to the Recovery and Resilience Facility (RFF)²¹ which this section is focusing on. Green and digital investments are priorities, with spending benchmarks of 37% for climate²² and 20% for digital. This means the allocation of a large share of funds mobilised for economic stimuli to sectors with high shares of male employment, such as the energy, agriculture, construction and transport industries.²³ The over-representation of male employees in these sectors is even higher in countries such as Italy and Spain which will receive particularly large shares of the Recovery Fund. Without adequate gender impact assessments, the green and digital priorities pose a significant risk of aggravating already existing gender inequalities,²⁴ such as in relation to employment creation, job structure and quality, income, revaluation of jobs, social security, working conditions and segregation within the labour market. Further efforts are necessary to reduce the gender divide in these sectors as well, so that all genders benefit equally from the job creation potential of green branches of the economy.

Civil society and gender-sensitive members of the European Parliament put pressure on the Commission with the movement #halfofit, and demanded an update of the original gender-blind crisis plan.²⁵ This led to a better inclusion of the gender dimension in several relevant dossiers, including the Recovery and Resilience Facility (RRF) which notes that governments “should set out the expected contribution to gender equality and equal opportunities for all.” However, the transition to a gender-just society and the green transition are not thought of together, but remain in silos. While the word “green” appears 22 times in the regulation, not once is it associated with gender. The section on gender does not contain a reference to the low-carbon nature of the care industry, either. The European Commission’s guidance for drafting the national recovery also provides some opportunities for gender mainstreaming.²⁶ Yet, there are risks that the implementation will have shortcomings.²⁷

First, the Commission only added gender mainstreaming at a later stage. This might have come too late to influence the EU and member states’ spending plans as the required gender perspectives risks to be added on top of already existing investment and reform priorities without influencing their content.

Second, the drafting and implementation of the national plans is in many countries dominated by economic actors, such as ministries of finance. Budgeting, financing and monetary policies remain male-dominated, often without adequate support for gender-sensitive analysis.

Lastly, at this stage it remains uncertain how seriously the gender analysis requirements will be implemented. The European Commission analyses the plans, if it considers that all requirements of the regulation are met, it then proposes to the Council that approves the disbursement of EU funds by qualified majority. The question is whether the gender mainstreaming dimension and the compliance with the categorisation of climate spending will be considered seriously during the assessment of the plans. ²⁸

Italy’s recovery plan

Let’s look at the example of Italy, the biggest beneficiary of the EU fund. The Italian government published its national recovery plan on April 25th with €222.1 billion allocated for investments, from which €191.5 billion will stem from NGEU package of grants and loans. According to the prime minister,²⁹ the biggest beneficiaries of the Italian recovery plan are women and the young, in line with the plan’s aim to create a more equal society. 70% of people who lost their job during the pandemic are women in Italy.³⁰ However, instead of using significant parts of the funds to invest in better care infrastructure and other measures that would boost gender equality and the transition to a low-carbon economy at the same time, the plan gives priority to digitalisation, buildings, automotive transport and energy, all sectors where men dominate without applying gender analysis.³¹ Plans on how to boost participation of women in sectors in which they are currently so under-represented are needed, too.

Recommendations

• We need a broader understanding of the necessary transition. A low-carbon economy is not only about the fields of energy, buildings, transport, and digitalisation, sectors in which male-employment dominates. We should always consider low-carbon care and service industry jobs alongside these priorities and treat them as equally important in the budgeting process. The transition goes beyond employment-related issues, including most notably unpaid care and domestic work, which is under-valued and neglected in economic decision-making. Investments in care do not only have highly positive employment and economic recovery effects but also address the key challenges towards building truly resilient European low emitting economies. We need a transition towards a gender-just digital, green and care economy, that leaves silo thinking behind.  
• We need better gender-disaggregated data for effective gender budgeting and an equivalent to the green recovery tracker³⁶ for gender equality to support spending decisions and track progress. Monitoring the effectiveness of the RRF and national plans in addressing gender equality problems requires adequate data and monitoring indicators. The same applies to green spending programmes under the European Green Deal, such as the Just Transition and the Renovation Wave.
• Gender and green budgeting are about the right spending priorities, but it is also important to generate the revenues in a gender-sensitive manner.³⁷ This topic goes beyond what this chapter was able to cover. It is nevertheless crucial to address the issue together with spending, especially as the question of how to generate resources for green and gender budgeting becomes more important as the need for public investments increases with the ecological and social transition. The EU has taken on common debt for the first time in history and needs to design policies now to pay them back in a socially and gender-just way. Their impact analysis should also include different genders beyond the EU, for example in the case of the planned Carbon Border Adjustment Mechanism, as mentioned in Chapter 8 of this report. 

Conclusion

The most recent EU budget is “greener” than before, but a lot of work is ahead of us concerning its compatibility with the Paris Agreement and European Green Deal objectives.³⁸ For the first time, the EU’s seven-year budget also includes gender budgeting and the stimulus package explicitly provides a gender-sensitive assessment of the impact. While both the centrality of the European Green Deal and the inclusion of gender budgeting are important steps forward, there is a risk that governments may not fully exploit these opportunities, especially when it comes to thinking about the two together instead of in silos. The European Green Deal and the digital agenda are important priorities, but policy-makers must not pursue them in a gender-blind manner. Unbalanced investments in the still male-dominated green and digital sector may deepen the gender employment and investment gap. More of the budgets need to go for example towards care which can boost well-being and is low emitting by nature. Gender democracy also requires a higher share of women’s participation in the power, transport, buildings and digital sectors and governments need to pursue policies that tackle the existing gender divide.
 Very little research exists on combining gender and climate budgeting for EU spending. This needs to change. We hope that this chapter has provided food for thought.

Disclaimer: This chapter was written between April and May 2021 while the national recovery plans were finalised and then analysed by the European Commission. Latest development such as the final approval of the plans by the European Commission came out later and are therefore not included in our analysis.

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