• Climate Change

Catalonia’s Climate Fund: Mobilizing Tax Revenue to Boost Community Resilience and Climate Action  

Catalonia is taking a bold stand against climate change with its Climate Fund (Fons Climàtic), an innovative initiative launched in 2017 under the Catalan Climate Change Law. The Fund will be financed by 50% of the revenue from the CO2 emissions tax on vehicles with mechanical traction, along with 20% of the revenue from taxes on environmentally impactful facilities. 

This fund is more than just a financial resource, it is a catalyst for change, empowering communities across the region to adapt to and mitigate the impacts of climate change. The fund is fueled by innovative financing strategies, drawing 50% of its resources from the tax on CO2 emissions from mechanical traction vehicles and 20% from taxes on environmentally impactful installations. By introducing three new taxes targeting carbon emissions from tourism, transportation (including motorbikes and commercial vehicles), and over 1,400 economic activities, the Catalan government has created a dedicated funding stream that complements the general budget and ensures essential climate initiatives receive the support they need. 

Since its launch in 2021, the Climate Fund has mobilized over €300 million for a diverse range of projects. The primary benefits of the Climate Fund lie in its ability to promote both mitigation and adaptation actions at the local government and SME levels. Many of these initiatives would struggle to gain traction without the financial support provided by the fund, highlighting its importance in facilitating sustainable development. 

The Climate Fund not only supports climate initiatives but also promotes local sustainable development. As Sonsoles Letang, Director General for Climate Change and Environmental Quality, explains, “The climate fund is one of the instruments of the Government of Catalonia for the financing of public policies on climate change in the field of local media, research, business, citizen participation, and environmental organisations.”  

A standout project co-funded by the Climate Fund is the Citizens Assembly for Climate of Catalonia. In October 2023, the initiative sent 20,000 invitations to residents, leading to the selection of 100 diverse citizens who came together to develop actionable recommendations for climate action. The Government of the Generalitat of Catalonia plans to review these recommendations in 2024 for potential integration into public policies, ensuring community voices play a pivotal role in shaping climate strategies. 

Recognizing a gap in funding from the Spanish government, Catalonia, as an autonomous community, recognized the need to create its own financial support mechanism to meet critical climate commitments outlined in the Catalan Climate Change Law. Looking ahead, the Government of Catalonia aims to expand the Climate Fund’s scope by addressing two additional challenges: large valleys and economic activities. Plans are underway to broaden financing lines to fully implement the Catalan Climate Change Law, ensuring that the region’s commitment to climate action remains robust and progressive. 

In summary, the Climate Fund of Catalunya exemplifies how innovative funding solutions can drive meaningful climate action. By leveraging local resources and encouraging collaboration across various sectors, Catalonia sets a powerful precedent for other regions striving to make a positive impact on climate change. 

Watch our #RegionsVoice video and discover more about Catalonia’s story: