EU 2014-2020 budget proposals risk massive underfinancing of biodiversity
Many studies have shown that investing now in safeguarding and restoring functioning ecosystems and biodiversity provides high returns, whereas, the costs of inaction on biodiversity loss are by far bigger. A study from the European Commission estimates the cost of the EU not halting the loss of biodiversity to be 1 trillion Euro annually by 2050.
At the same time robust scientific evidence exists about the significant direct and indirect socio-economic benefits of biodiversity and, for example, protected nature areas. Several case studies estimated that the EU’s Natura 2000 network generates economic benefits about seven times higher than its costs. In addition, Natura 2000 has the potential to create employment even if this is not its primary aim. With an investment of 1 billion EUR of EU subsidies, investing in the Natura 2000 network can create five to nine times more jobs than current spending policy of agriculture subsidies (29,000 jobs compared to 3,000 – 6,000 jobs). Investment in the Natura 2000 network would lead to diverse types of employment including increasing jobs in the agricultural sector. More on evaluating the potential for Green Jobs in the next MFF.
Despite this evidence the mobilisation of financial resources in the EU is very slow and insufficient to meet agreed biodiversity targets.
Assessment of progress on overarching aspects of funding for biodiversity:
- While estimates have been made of the EU’s current spending on biodiversity or of certain aspects of it (e.g. global biodiversity, or Natura 2000) , there is no systematic tracking of existing biodiversity spending. Given such information about the “baseline” is fundamental for assessing remaining financing gaps and formulating future targets, the EU must urgently act here, in the same way as it asks developing countries to deliver this data.
- Referring to the crisis of public budgets many EU decision makers are reluctant to allocate even a small fraction of the EU budget to biodiversity, while they point out the need to explore innovative financial mechanisms. The debate on the latter, however, is kept vague and general, while it would be very timely to now discuss effective and binding payment schemes, including taxation, for the use of ecosystem services, as well as “polluter-pays”-approaches.
Assessment of progress on funding for Natura 2000 and through the LIFE fund:
- The costs of a fully operational Natura 2000 network are estimated to be less than 6 billion EUR annually for the whole EU and around 4% of the EU budget. Environmental NGOs suggest that the EU budget should cover 75% of these costs, while the remainder should be financed by EU Member States. However, studies show that so far less than one fifth of Natura 2000 costs are met by EU funds, with the Member State share likely to be even lower. The current proposals for the EU’s 2014-2020 budget and the state of negotiations to date are worryingly indicating that this funding gap will not be closed, and thus the EU will be unable to meet its CBD obligations for protected areas (see Aichi Target 11).
- The European Commission has proposed a promising new way how to improve mainstreaming of financing Natura 2000 into sectoral funds through the Prioritised Action Frameworks (PAFs). These frameworks act as national financial plans for Natura 2000, identifying management priorities and potential financial resources. They now need to be fully integrated into EU and Member State funding practice, but are not sufficiently reflected in EU budget regulations so far. (See assessment of progress on Natura 2000 and Natura 2000 financing).
- The EU’s only direct environmental funding programme LIFE currently makes up 0.2 % of the EU budget (2007-2013 annual average: 306 million EUR). The European Commission has proposed to increase this share to 0.3% (517 million EUR annually) while at the same time to significantly widen the thematic scope to include climate mitigation and adaptation activities. This means there is no significant increase for spending on direct biodiversity measures. Environmental organisations are asking for LIFE to receive at least 1 billion EUR annually for biodiversity action, leveraging 20% of Natura 2000 costs and in total, about 1% of the EU budget. The call for a significant increase of LIFE is increasingly being echoed by EU governments, the European Parliament and national parliaments. (E.g. see resolution of the Environment Committee of the Federal Parliament of Germany of 27th June 2012 asking for an increase of LIFE to cover 10% of Natura 2000 costs, and press release of the Federal Ministry of Environment asking for additional 2 billion EUR for LIFE)
Assessment of progress on funding for biodiversity via sectoral funds:
- With agricultural land covering almost half of the EU territory and taking up almost 30% of the Natura 2000 network, the EU’s Common Agricultural Policy (CAP) has a very important influence on biodiversity. Rural Development funding (i.e. pillar II of the CAP, including so called agro-environmental measures) is essential for supporting and enabling farmers to take care of rural nature and to allow them to deliver environmental goods and services to society. Despite the fact that this type of funding is the most targeted, cost-effective and justifiable type of EU farm subsidies, it forms just a relatively small part of the overall agricultural budget (approximately 25%). For 2014-2020 the European Commission’s proposals foresee an 8% reduction of funding compared to the current period. Furthermore, it remains unclear how much of the Rural Development budget will be ring fenced for targeted environmental spending. More on agriculture and the EU Biodiversity Strategy.
- The EU’s Cohesion Policy, with its more than 50 billion EUR spent annually, has tremendous impact on habitat fragmentation in Europe, mainly through the financing of heavy infrastructure projects. The main funding streams, European Regional Development Fund (ERDF) and the Cohesion Fund lack effective safeguards for biodiversity and are failing to invest in “Green Infrastructure” and large scale land based restoration. Unfortunately, the European Commission has done very little to ensure that this will change in 2014-2020. The proposals do not ensure that funding priorities will be consistent with the defined financing needs of Natura 2000. Also, the proposed Regulations are lacking specific earmarking for investments for biodiversity.
Assessment of progress on funding global biodiversity:
- While EU Nature legislation is implemented throughout the whole of the EU, including the Portuguese (Azores and Madeira) and Spanish Outermost Regions (Canary Islands), the network does not extend to the five French Outermost Regions. In recent years, some support has been delivered through the scheme for Preparatory Action for the Voluntary scheme for Biodiversity and Ecosystem Services in Territories of the EU Outermost Regions and Overseas Countries and Territories (BEST). BEST provides a systematic approach to assess ecosystems and ensure coherence of funding such as agriculture, fisheries, regional, and cohesion subsidies with environmental objectives. In the proposal for the future EU budget the European Commission has failed to identify funds for the future of BEST, however. More on the global dimension and the EU Biodiversity Strategy.
- The main funding source from the EU Budget for tackling biodiversity loss outside the European Union is development aid, mainly through a “thematic programme for the environment” under the Development Cooperation Instrument (DCI). Environmental mainstreaming has seen some improvement under the DCI, as well as the European Development Fund, the European Neighbourhood Policy Instrument and the Instrument for Pre-Accession (IPA).
In its proposals for the 2014-2020 development aid budget the European Commission has foreseen increased funding for the environment: 50% of the new “Global Public Goods” programme should be ring-fenced for the environment and climate action). However the European Commission is not sufficiently ensuring that there will be an efficient tracking system of spending towards international commitments. More disappointingly, the financing for biodiversity in the EU’s Outermost Regions and the Overseas Countries and Territories has largely been ignored in the current EU budget proposal. More on the global dimension and the EU Biodiversity Strategy.