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The EU budget was Europe's last big controversy, less than 12 months ago with Tony Blair, former UK Prime Minister, declaring it 'not fit for purpose'. He then secured agreement to a fundamental review and this consultation is now underway.

At the launch, Stephen Hale, director of Green Alliance, said:
"The EU was created to promote peace and security. But climate change threatens both. Today, Europe's leaders are focused inwards on constitutional wrangles. Once the Summit is over, they need to focus outwards and to provide the leadership that is so critical to an effective global response to climate change.

"The European budget is central to this. EU funds currently increase rather than reduce EU emissions, as they subsidise the construction of high carbon transport and energy infrastructure and intensive agriculture."

Hale added:
"We need €32-38 billion spent on climate by 2013 on low-carbon infrastructure, bringing new technologies to market, and to help the poorest countries adapt to climate change. We could find this by reforming the budget, or using the vast revenues (circa €30 billion) from auctioning emissions trading allowances after 2012.

"This investment would set Europe on a course to meet its own climate change targets, for deep long-term emissions cuts, create global economic advantage for Europe, meet Europe's responsibility to countries most affected by climate change and help put the world on a path to climate security.

"Once the summit is over, the budget will soon move centre stage and Gordon Brown should be leading this argument.”

Green Alliance's five priority areas for the EU Budget:

• For energy and transport infrastructure, a new dedicated low-carbon fund should be established with an annual budget of €13-16 billion
• For carbon capture and storage, €3-5 billon should be set aside to secure the pilot plants proposed by 2015
• For research and development, €7.5-8.5 billion per year should be dedicated to bringing breakthrough technologies to market in line with the Stern report
• To support the development of low-carbon infrastructure in countries such as China, the EU should establish a sovereign investment fund of €1 billion a year, managed by the private sector
• For adaptation in the poorest countries, €7.5 billion per year should be provided at EU level