The proposals for the CAP for the 2014–2020 period were heralded by the Agriculture Commissioner as providing ‘a new partnership between Europe and its farmers’ that will ‘enhance both the economic and ecological competitiveness of agriculture’, to meet the ‘challenges of food security, sustainable use of natural resources and growth’. For the past two decades, the integration of environmental concerns within the CAP has been characterised by a gradual shift in emphasis towards more targeted, regionally defined and programmed approaches, embodied in the agri-environment measures and Pillar 2 more generally, underpinned by cross compliance. These elements all remain within the current proposals, however, a major new element has come into play – the introduction of green direct payments in Pillar 1. The proposals aim to extend a basic level of environmental management to the majority of farmland in Europe, recognising the scale of the environmental challenges to be met. However, these are contentious proposals, faced with criticisms that they are both too demanding and too weak. At the same time, their introduction is coupled with a net reduction in the Pillar 2 budget over the next programming period. Within the context of the broader CAP proposals, this paper considers the opportunities and risks embodied in the proposals for green direct payments as well as possible alternative options. It considers the implications of the proposals for the environment and whether they genuinely will lead to the much needed improvements in environmental outcomes required to meet the significant environmental and climate challenges facing the EU.