COMMISSION OF THE EUROPEAN COMMUNITIES 
C0M(91) 28 final 
Brussels, 31 January 1991 
Proposal for a 
COUNCIL REGULATION (EEC) 
establishing a Financial Instrument for the Environment (LIFE) 
(presented by the Commission) 
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EXPLANATORY MEMORANDUM 
I. INTRODUCTION 
In recent years there has been public, Member State government and 
European Parliamentary pressure for more effective action to achieve the 
objectives set out In the Treaty. 
There is a growing awareness that problems In this area cannot in most 
cases be resolved effectively by following an exclusively national 
approach. This is clear In the case of pollution problems affecting 
several countries, e.g. pollution of rivers of seas. It Is even more 
obvious in the case of problems which concern the entire planet, such as 
the depletion of the ozone layer or the greenhouse effect. However, there 
is a need for concerted and coordinated action at Community level even in 
the case of geographically more restricted problems, since some of them are 
directly concerned by Community policies such as agricultural policy or 
regional policy; to be effective, solutions must therefore take Into 
account inter-relationships between environment policy and the other 
policies concerned. Furthermore, all environmental problems have major 
economic implications, and the means adopted at national level to deal with 
them may affect the conditions of competition or create trade barriers. 
The risks of distortion and imbalance are aggravated by the differences 
between the Member States in their assessment of environmental priorities 
and the rigour with which the national authorities enforce Community 
provisions. 
In addition, the nature of environmental problems often necessitates 
concerted and coordinated action involving non-member countries. 
International negotiations concerning environmental problems are becoming 
increasingly numerous and complex. The results of these negotiations can 
have major repercussions on the balance between countries, the 
competitiveness of firms or growth rates, and can considerably affect our 
development model. The cohesion of the Member States and the consistency 
and effectiveness of environmental measures taken within the Community are 
essential factors in the latter's credibility so that It can effectively 
defend Its interests in the international arenas. 
Relations with the countries of central and eastern Europe are particularly 
important In this context In view of their geographical proximity to the 
Community, the gravity and nature of their environmental problems and the 
direct impact which these problems may have on the state of the environment 
in the Member States. 
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As concerns the environment, the Community Is now faced with three 
challenges: 
to achieve the ambitious objectives set In the Treaty, especially that 
guaranteeing a high level of protection; 
to achieve, in the Europe of the Twelve, cohesion between countries In 
which there are differences, sometimes deep differences, in terms of 
their level of development, the nature and perception of environmental 
problems, and the exploitation of new technologies; 
increasingly to shoulder its international responsibilities. 
To meet these three challenges, the Community must have at Its disposal 
resources and instruments commensurate with the problems to be solved. 
ii. instruments 
Getting to grips with environmental problems entails the use of instruments 
designed to alter the behaviour of individuals, authorities and firms. 
To implement a policy in this area, action can be taken: 
by regulatory means, i.e. the progressive application of environmental 
legislation, comprising quality objectives, standards, procedures, 
etc. ; 
through economic and fiscal instruments, passing on the environmental 
costs of activities in prices, charges or taxes paid by the producers 
and/or consumers of the various goods and services; 
through financial instruments which may Influence behaviour by 
awareness raising and training actions, by providing a positive 
stimulation (demonstration projects, subsidies, loans, etc.) and/or 
finance recovery or prevention operations designed to mitigate the 
inadequacies of the other instruments used. 
Each of these three routes has strengths and weaknesses. 
Regulation may, at least theoretically, guarantee the achievement of 
specific quantified objectives. Its limitations lie In the comparatively 
static and rigid Instruments Involved. It also entails administrative 
burdens, in particular with regard to enforcement, which may be very great, 
If the intention is to take action concerning all activities with an 
environmental Impact. Excessive regulation and bureaucracy could also make 
firms less dynamic and affect their competitiveness. 
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The legislative process set In motion following the Paris European Council 
in October 1972 has developed satisfactorily but there are major 
implementation problems. In addition, the legislation adopted has to be 
supplemented and regularly adapted in line with technological developments 
and changes in environmental data. 
Economic and fiscal Instruments can work in a more flexible and dynamic 
fashion. When used In conjunction with legislation, these can contribute 
to markedly Improve its efficiency. They are also an effective means of 
integrating the environment Into the other policies. However, on their own 
they cannot guarantee the attainment of specific objectives. Moreover, it 
Is sometimes difficult, If not impossible, to quantify the cost of 
pollution to society, especially with such global phenomena as the 
greenhouse effect and the depletion of the ozone layer. In practice it is 
therefore very often necessary to proceed pragmatically, progressively 
altering measures in the light of the results obtained and objectives to be 
achieved. 
The Council has discussed instruments of this kind on several occasions, 
most recently at Its meeting on 29 October 1990. It has recognized their 
effectiveness and the desirability of Community action In this area. 
Concrete proposals concerning certain priority sectors are now being 
prepared. 
Financial instruments are the most appropriate means for dealing, for 
example, with environmental deterioration resulting from past activities or 
if it is impossible to pinpoint the cause or the person responsible. Such 
instruments also usefully complement initiatives in the field of 
regulation, particularly where the aim Is to achieve ambitious objectives 
quickly. 
The budgetary resources available for the Community's financial instruments 
available to Implement environmental policy are at present Insignificant. 
However, there has been an increase in expenditure on the environment using 
other Community financial instruments. On 26 June 1990 the European 
Council therefore asked the Commission to review the situation. 
In view of the limits inherent in each means of action it would be 
Impossible to define a consistent and effective strategy for the 
environment without calling on all three of the means mentioned. A 
combination of regulatory approach, economic and fiscal means and financial 
instruments Is needed to offset the weaknesses and exploit the potential of 
each one. Making use of a combination of means will make it easier to 
achieve the consensus needed to develop and implement Community policy. 
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In this context, financial assistance from the Community needs to be 
stepped up and made more coherent so as to complement the other Instruments 
and make them more reliable and effective. The European Parliament has 
emphasized the need for this, In particular during the preparation of the 
1990 and 1991 budgets. It has advocated an Environment Fund commensurate 
with the problems to be solved and the role which the Community must play 
In this area. 
III. THE EXISTING FINANCIAL INSTRUMENTS 
As requested by the European Council on 26 June 1990, the Commission has 
reviewed all the budgetary resources earmarked for financial support for 
environmental measures. This review, which is attached to this proposal, 
may be summarized as follows: 
Expenditure concerning the environment directly or indirectly has 
Increased considerably in recent years. Until 1987 the annual 
expenditure was around ECU 60 mi 11 Ion, but In the period 1988-1993 
environmentally related expenditure should amount to over 
ECU 4,000 million, of which 90 % are for investment and 10 % are 
allocated to research and to demonstration projects. 
The amounts committed are from a very varied range of Instruments. 
Only a limited part of the totals (certain research programmes, 
demonstration projects financed In the framework of ACE, MEDSPA, 
NORSPA, and ACNAT, actions to protect forests (fire prevention and the 
fight against acid rain) as well as the budget line for "ecology in 
the LDCs") have an environmental priority. Other instruments work In 
this sector in order to achieve the aims of the policies of which they 
ensure the financial support. Though the expenditure contributes to 
the reduction of different forms of pollution, Its dispersion across 
many financial Instruments, its subordination to other objectives and 
priorities and Its constraints, especially geographical, mean it 
cannot visibly and coherently reflect the objectives and the 
priorities of environmental policy. Together, these instruments 
therefore cannot play the orientation and stimulation role to 
complement and support this policy's other means of action. 
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The Treaty provides that environmental protection requirements are a 
component of the Community's other policies. Providing finance for 
environmental projects Is not of Itself enough to answer this 
provision. Environmental requirements also need to be taken into 
account where finance Is given to projects which do not concern the 
environment directly, such as for Industrial Infrastructure, 
transport, or agricultural support. 
IV. WHY A FINANCIAL INSTRUMENT FOR THE ENVIRONMENT ? 
As stated In section II, a financial Instrument can contribute to improving 
the efficiency of environmental policy as a means of orientating 
individual, corporate or administrative behaviour through positive 
stimulation or through rehabilitation or preventative operations. In this 
context a financial Instrument plays a particularly Important role in 
stimulating and of providing a framework for national, regional or local 
Initiatives. Such initiatives are on the Increase and they rish 
accentuating the incompatibilities between Member States where their 
perceptions of the problems, definition of priorities and possibilities of 
concrete action vary will become ever more difficult to harmonise since 
they occur in frameworks for action which are evolving more and more 
towards proper national policies for the environment. It would be dangerous 
to under-estimate the Inherent risks of such an evolution, particularly in 
the context of the distortions of competition and of the limitations to the 
free movement of goods It can entail. This view is given legitimacy by the 
European Court of Justice which has recognised the use of Article 36 of the 
Treaty when dealing with environmental issues. 
Since the sums engaged at the Community level are often relatively modest, 
In conformity with the principle of subsidiarity, the efficiency of the 
action depends to a great extent on its visibility, of Its links to and 
coherence with the objectives and the priorities of the policies for which 
they provide support, as well as Its synergy with the other means of policy 
support. 
This is particularly true of environment policy, given its vast area of 
concern as well as the potentially very high financial needs that any 
action In the field can lead to. 
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The other financial instruments of the Community must continue to bring 
help in resolving environmental problems In pursuit of the objectives of 
the policies to which they provide support. However, these cannot provide 
the main support for environmental policy since they do not themselves 
reflect its particular priorities and objectives. 
Indeed, environmental action distinguishes Itself from that used in the 
framework of other policies from several points of view; 
First of all, environmental problems very often require solutions which 
cannot be conceived of In a regional or national context. The action 
required to resolve a given problem could well extend to the whole 
Community territory or even beyond it, in the framework of International 
coopérât ion. 
In addition, environmental action does not target particular social or 
economic groups, nor the productive sector of specific regions. It aims to 
encourage the systematic integration of environmental concerns in 
individual, corporate or adminsitratIve choice; It therefore targets the 
whole populat ion. 
Finally, since it concerns the entire population, environmental action 
rarely takes the form of discrete projects. It forms part of a long-term 
evolution and aims to provide permanent encouragement. Respecting the 
polluter pays principle, it stimulates and orientates through actions which 
ensure a multiplIcatory effect. 
Environment policy has been developed in the belief that the rational use 
of natural resources and sustainable development in time would be a Utopian 
if they were to be achieved exclusively or even mainly through the use of 
public funds, whether national or of the Community, and whatever their 
magnitude. We will never be able to achieve such ends if individuals, 
corporations or administrations believe they can continue to act as they 
have done in the past. This is why the polluter pays and the subsidiarity 
principles are of such Importance In the context. It Is also why the Treaty 
insists on the need to Integrate environmental considerations In other 
policies. 
A financial Instrument for the environment should therefore not be seen as 
a means of a posteriori repair of damage, nor can It be seen as some sort 
of depollution machine, operating In all sectors and blunting all concerns 
in the field. 
V. THE POLLUTER PAYS PRINCIPLE 
Article 130R(2) of the EEC Treaty specifies that action by the Community 
relating to the environment shall be based, among other things, on the 
principle that the polluter should pay. 
According to this principle, those responsible for pollution must bear the 
cost of compliance with the standards or quality objectives in force. 
Exceptions to this principle are allowed In two cases: 
where the immediate application of very stringent standards Is likely 
to cause serious economic disruption-, 
where, in the framework of other policies, such as regional or 
agricultural policy, environmental investment is designed to resolve 
certain structural problems of a regional or sectoral nature, provided 
that the aid granted complies with the provisions of the Treaties, 
and, in particular Articles 92 and 93 of the EEC Treaty. 
In this connection, it should be recalled that In three communications to 
the Member States In 1974, 1980 and 1987 the Commission accorded 
semi-permanent status to State aid to the environment provided that it is 
limited to 15% of the value of the investment assisted. 
In addition, the following are not regarded as contrary to the polluter 
pays pr inciple: 
financial contributions to local authorities to build or manage public 
environmental protection facilities where the expenditure cannot for 
the time being be totally covered by the charges levied on the 
polluters using such facilities; 
funds to offset particularly large burdens imposed on certain 
polluters to achieve an exceptional level of environmental 
clean I iness-, 
contributions granted to promote research and development in the field 
of clean technologies, manufacturing processes and products. 
This list is not exhaustive. Examples of other types of public Investment 
compatible with this principle are as follows: 
protection of habitats; 
site restoration work where the pollution in question is the result of 
past activities or It is Impossible to pinpoint the cause or the party 
responsible; 
expenditure complementing the application of the polluter pays 
principle, e.g. grants for the development of public transport where 
this Is necessary In order to achieve the desired results; 
initiatives at International level where financial support may be 
Justified on the grounds of interest, effectiveness and solidarity. 
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The polluter pays principle is therefore not Incompatible with the 
establishment of a flanc la I Instrument specifically for the environment. 
However, this principle should be taken Into account when defining the 
scope of the new instrument and granting the funding provided for. 
VI. THE SUBSIDIARITY PRINCIPLE 
Article 130R(4) of the Treaty specifies that the Community shall take 
action relating to the environment to the extent that the objectives 
referred to can be attained better at Community level than at the level of 
the individual Member States. Without prejudice to certain measures of a 
Community nature, the Member States shall finance and Implement the other 
measures. 
Subsidiarity should remain the basic yardstick when defining the 
environmental measures to be pursued at Community level. However, this 
criterion should be assessed and applied with an eye to the effectiveness 
of the policy, bearing in mind Its objectives, and not in an abstract way 
or on the basis of considerations of principle. It would, in particular, 
be hypocritical to claim that taking this criterion into account prevents 
effective action In a Community framework specific to the environment but 
authorizes any action relating to the environment under other Community 
policies. Subsidiarity is not exclusive to environment policy. It applies 
to a large proportion of the areas in which the Community is active and, 
from the budgetary point of view, It is more the rule than the exception. 
The framework selected for Community action should make for greater rather 
than less transparency in this area. In particular, when it comes to 
committing budgetary resources in response to environmental concerns, it 
should ensure that subsidiarity is not assessed differently depending on 
whether funding is via the financial Instruments specific to environment 
policy or other Community financial Instruments. Article 130R(4) should 
not be Interpreted in a way which might give rise to irrational solutions 
which would result in the article in question being misused. 
The environment is in fact one of the sectors In which Community 
intervention is most justified in terms of subsidiarity, particularly as 
regards action to resolve transfrontier or global pollution problems or 
where Community intervention Is necessary to ensure economic and social 
cohesion or prevent distortion of competition or trade barriers. 
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Admittedly, direct Community funding to assist the application of Community 
law should be avoided; financial aid from the Community should rather 
promote speedier implementation of the provisions in force or the 
implementation of more stringent provisions. However, here too one should 
avoid focusing on form rather than substance since one of the best ways of 
encouraging people to go further than the standards In force is to promote 
the adoption of tougher standards. In many cases this objective cannot be 
achieved If one rules out the possibility of supporting, even if only 
indirectly, the applIcatIon of new standards at least In the countries 
which have the most problems in this area. 
VII. PRIORITIES FOR ASSISTANCE 
The new instrument must provide the financial underpinning for Community 
environment policy. It must make the Community action In this area more 
effective and more visible. It must make for greater cohesion in the 
behaviour of the Member States with regard to environmental problems both 
when dealing with problems with concern the Community territory and when 
negotiating, at international level, a concerted response to transfrontier 
or global problems. It must also ensure a better balance between 
environment policy and other Community policies and encourage the 
integration of environmental concerns Into those policies. 
It should above all provide a stimulus and give preference to instruments 
which have a snowball effect. It should help remove bottlenecks hindering 
the development of other Community instruments. 
Financial assistance under the Financial Instrument should be provided in a 
variety of forms that reflect the nature of the operation to be carried 
out. It may take the form of part-financing of programmes or projects, 
Interest subsidies, reimbursable subsidies, or support for technical 
assistance. 
In view of its purpose, the new financial instrument would have four 
general objectives : 
(a) to help strengthen and increase the effectiveness of administrative 
structures or services designed to ensure the implementation of 
environmental provisions; 
(b) to help control and reduce the various forms of pollution by means of 
measures complementing action of a regulatory nature; 
(c) to help protect sensitive areas and maintain biogenetic diversity; 
(d) to provide technical and financial support in third countries for the 
implementation of international conventions and for the resolution of 
common or global problems. 
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Where the first objective Is concerned, It has been ascertained that 
Community provisions are often poorly implemented. This may be the result 
of shortcomings in the administrative structures of one or other country or 
local authority. It may also be due to the recent Identification of the 
problems and hence the lack of direct experience of how to deal with them. 
Some examples of the conceivable types of measures In this context are as 
fol lows: 
technical assistance to define coherent rehabilitation strategies and 
programmes answering existing environmental problems; 
training of environmental managers, environmental advisers for the 
public authorities, environment officers In firms, management staff in 
sensitive areas etc; 
development installation and modernization of monitoring; 
awareness and training. 
The second objective Is central to the financial instrument's activities, 
based as it is on the conviction that progress with pollution control 
depends to a large extent on the direct involvement of local authorities 
and firms and that it is possible, as a result of such Involvement, to go 
further and more quickly than is strictly required by legislation. In this 
sphere It Is also possible to take Indirect action, e.g. by promoting 
"environment-friendly- labels so that consumer choice can help guide firms' 
activities. Similarly, financial support could be given to the victims of 
environmental accidents to enable them to take emergency measures or assert 
their rights vis-à-vis those responsible and thus encourage compliance with 
the polluter pays principle. Support also needs to be given In of certain 
Community agricultural and industrial enterprises especially the smaller 
ones, in order to support their adjustment efforts. In the context of this 
objective, action by the Community must be geared above all, in compliance 
with the subsidiarity principle, to encouraging initiatives at national 
level, while ensuring that they are mutually consistent so as to avoid 
distortions of competIt ion or of exchange. 
The second objective could, for example, give rise to the following 
tasks : 
promoting the use of new clean technologies In various particularly 
polluting industrial sectors such as cement works, pulp and paper, 
tanneries, canneries, etc. 
restoring sites contaminated by past industrial activities e.g. 
quarries, spoil heaps, landfills for toxic waste-, 
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supporting SMEs using products which are toxic or dangerous to the 
environment, e.g. dyeworks, photo laboratories, paint shops, print 
shops and hospitals; 
developing waste recycling and reuse techniques; 
promoting environmental auditing in firms. 
The third objective is based on the finding that very often problems 
concerning the protection of the environment and the safeguarding of 
natural resources cannot be solved satisfactorily In regional development 
plans. The aim is to safeguard the biological heritage, to mitigate the 
problems resulting from the greenhouse effect and to prevent erosion and 
desertification. Another aim could also be to encourage the search for 
solutions to environmental problems associated with the decline of 
agriculture and the economic marginalization of certain regions. The 
encouragement of measures to restore or revitalize urban areas is equally 
important. In the context of this task, action by the Community is often 
necessary in order to ensure choices and measures resulting from an 
objective assessment of priorities rather than the degree of awareness or 
preparedness of national or regional authorities and the national budgetary 
resources ava iIabIe. 
In this case, action could be taken in sectors such as : 
the regeneration of plant cover destroyed by fires, erosion or 
desertification; 
safeguard of coastal areas and waters-, 
nature conservation and the safeguard of biogenetic reserves of 
Community interest; 
the restoration and safeguard of urban centres, especially those 
which are part of Europe's cultural heritage. 
Last but not least, the fourth objective concerns the search for solutions 
to global problems such as the greenhouse effect, the destruction of 
tropical forests, the depletion of the ozone layer and marine pollution. 
The measures in question may extend beyond the Community territory, e.g. 
with a view to helping particularly deprived non-member countries, thus 
paving the way for the consensus needed to conclude and implement 
International conventions. 
Particular attention should be paid to areas such as the Baltic and the 
Mediterranean where it Is obviously in the Community's interest that the 
non-member countries concerned should adopt an attitude In line with Its 
own. The same applies to all the central and eastern European countries, 
the state of whose environment directly affects a large part of the 
Community territory. 
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This objective could be reflected in: 
a Community contribution to multilateral financial mechanisms dealing 
with global issues; 
a Community financial contribution towards the Implementation of 
international conventions-, 
programmes of technical assistance non-member countries, in particular 
for Baltic and Mediterranean regions; 
It is necessary to stress that, In the context of the activities developed 
to answer the four prlorIty object Ives, all training Initiatives related to 
the measures considered as well as all public awareness and information 
actions are particularly Important In order to achieve the desired results. 
VIII. ASSISTANCE CRITERIA FOR THE NEW FINANCIAL INSTRUMENT 
Assistance by the new financial instrument must contribute to the 
realisation of the general objectives of Community environmental policy and 
legislation. The level of Community participation will need to take account 
of the seriousness of the environmental problems to be tackled, especially 
at the regional level, the particular interest of the operations from a 
Community point of view, and of the capacity of the beneficiary to 
contrIbute. 
In the case of Individual projects (mainly demonstration projects), the 
granting of Community aid will depend on criteria such as the innovative 
nature of the project, its value as an example which will subsequently give 
rise to considerable scope for application, the involvement of several 
partners from different Member States, and its cost-effeetIveness. 
The financial contribution from the Community would normally be between 30 
and 75% of the total cost of the operations. 
Operations which already benefit from Structural Fund or other Community 
instrument financial assistance cannot be considered for funding under 
LIFE. 
IX. INTEGRATION OF EXISTING FINANCIAL INSTRUMENTS 
In order to ensure the coherence of Community operations in the environment 
field, it is necessary to define the measures which will Integrated into 
the LIFE and to set up a coordination system. 
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LIFE Is the Community Instrument which will provide financial support for 
activities aimed as a matter of priority at safeguarding and improving the 
environment. This Is the case with the activities at present carried out 
or foreseen under MEDSPA, NORSPA, ACE-technologles and ACNAT. It Is also 
the case with operations designed to extend beyond the Community the 
environmental management schemes launched by the Community on its own 
territory and of which they are an essential component (acid rain, 
greenhouse effect, depletion of the ozone layer, pollution of rivers and 
seas which directly affect the Community). 
In those regions where the Structural funds or where other Community 
financial instruments can be used for environmental protection operations, 
the Commission will ensure their coordination with assistance from LIFE. 
The Commission will also ensure similar coordination with development 
coopérât ion. 
Amongst the actions already underway which will be included in the new 
financial Instrument are the MEDSPA, NORSPA, ACE-Technology and ACNAT 
programmes. This integration will have the direct consequence that the 
present Council provisions for their management will need to be repealed as 
soon as the present Regulation comes into force. 
X. IMPLEMENTATION 
As an environmental policy instrument, LIFE must act as a complement to 
legislation to economic and fiscal instruments within the limits deemed 
necessary to increase the efficiency of Community action as a whole. It Is 
therefore neither the only Instrument nor even the privileged instrument in 
this action. 
It Is In this spirit that the programmes reflecting the four general 
objectives of LIFE as set out in Section VII above, will be adopted by the 
Commission on the basis of the opinion of a consultative committee for the 
environment. They wi11 reflect: 
objectives and priorities set in the Community action programmes (the 
draft of the 5th Programme will be sent to the Council and the 
European Parliament in the course of 1991); 
sectoral strategies established at Community level, e.g. for waste 
management, nature conservation and the safeguarding of biological 
diversity, and for the control of acid rain; 
the state of the environment In the Community countries (the 
three-year Community report Is now being finalized; 
commitments entered Into within the framework of International 
convent Ions. 
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They will be drawn up with the main bodies concerned (national and regional 
authorities, economic and social partners, NGOs) in the context of the 
partnership. Given that, in many cases, the environmental problems which 
will be taken In consideration by LIFE will be of a transnational or global 
nature, this cooperation should encourage a process of Integration at 
Community level of the parties concerned by a given problem, 
representatives of a given socio-economic category affected by one or other 
problem and groups which support certain objectives. This cooperation 
should therfore give preference to the organizations resulting from this 
integration process (associations of regions, firms, NGOs). 
Partnership should In particular enable a better understanding of problems, 
a better definition of needs and priorities, and a better distribution of 
tasks and of responsibilities with the aim of guaranteeing the best 
possible use of the financial resources allocated. In this respect the 
passage from the recent "project" to a "programme" approach will ensure the 
better management of requests for Community funds, the greater Impact of 
Community Intervention as well as the programming of operations In time. 
Programmes will be implemented on the basis of a Commission Decision 
addressed to the national or regional public authorities concerned or on 
the basis of contracts or agreements concluded with the parties responsible 
for carrying out the measures (associations of firms concerned, 
international organizations, NGOs) setting out the nature and amount of aid 
granted and the relevant conditions. The budgetary ressources made 
available to LIFE will be determined annually by the budgetary authority. 
In adit ion, they will be the subject of multiannual forecasts by priority 
object ive. 
The action by the Community must entail a permanent balancing on the basis 
of the needs expressed and the resources available. In this connection, 
the Regulation provides for a mechanism for the effective evaluation and 
monitoring of the implementation of financial assistance making it possible 
to review measures under way, where appropriate. 
For the first two-year phase covering 1991 and 1992, the financial 
instrument uses special simplified provisions aiming to ensure the 
commitment of the available budgetary resources. This phase will also allow 
the new instrument to be tested. Following the experience acquired in the 
course of the two years in question, and taking account of the resources 
foreseen in the framework of the new financial perspectives, LIFE will be 
reexamined by the Council on the basis of a Commission proposal to be 
presented by 31st Decembger 1992. 
XI. BUDGETING FOR THE FINANCIAL INSTRUMENT 
Where funding is concerned, it would be possible to opt either for new 
Community revenue or for the normal budgetary procedure. 
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The second solution has been chosen even If it is closely bound up with the 
renegotiation of the Community's "financial perspectives". Financing the 
Fund by means of specific Community fiscal measures would necessitate 
amending the provisions of the Treaty concerning own resources and 
agreement between the Member States on the fiscal measures to be used as 
the basis for funding. 
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Proposal for a 
COUNCIL REGULATION (EEC) 
establishing a Financial Instrument for 
the Environment (LIFE) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty establishing the European Economic 
Community, and in particular Article 130s thereof, 
Having regard to the proposal from the Commission,1 
Having regard to the opinion of the European Parliament,2 
Having regard to the opinion of the Economic and Social Committee,3 
Whereas the Treaty provides for the development and implementation of a 
Community environment policy and sets out the objectives and principles 
which should guide that policy-, 
Whereas, by virtue of Article 130r, Community action with respect to 
the environment aims, in particular, to preserve, protect and improve 
the quality of the environment, and that in the elaboration of this 
action, it will take account inter alia, of environmental conditions in 
the different regions of the Community as well as of the economic and 
social development of the Community as a whole and of the balanced 
development of its regions; 
1 OJ No C 
2 OJ No C 
3 OJ No C 
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Whereas Article 130r(4) of the Treaty provides that the Community shall 
take action relating to the environment to the extent that the 
objectives referred to can be attained better at Community level than 
at the level of the individual Member States; whereas, without 
prejudice to certain measures of a Community nature, the Member States 
shall finance and implement the other measures; 
Whereas, in order to face up to environmental problems of a global or 
common nature, it is necessary to enable the Community to assist third 
countries or to assist in the implementation of international 
conventions in conformity with Article 130r(5); 
Whereas, at its meeting on 25 and 26 June 1990, the European Council 
adopted a declaration setting out guidelines for future action by the 
Community relating to the environment, in which it indicates that the 
legislative approach should be supplemented, where appropriate, by 
economic and fiscal measures; 
Whereas in that declaration the European Council invited the Commission 
to review all the budgetary resources devoted to Community environment 
policy which are currently disbursed through numerous separate funding 
mechanisms, and to submit its findings to the Council as soon as 
possible; 
Whereas an analysis of the budgetary resources has revealed a rapid 
increase in environmental expenditure through a great number of 
financing sources answering objectives and constraints inherent to the 
financial instruments used; 
Whereas a financial instrument for the environment (LIFE) should be 
established which would provide a coherent financing framework and be 
more suited to action by the Community relating to the environment 
while complying with the polluter-pays principle and the subsidiarity 
pr inciple-, 
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Whereas it is necessary, in order to achieve the aim set by 
Article 130r of the Treaty, to define the instrument's general 
objectives, whilst respecting the principle of concentration of 
resources, to specify the main categories of tasks assigned to it as 
well as to define the types of measures LIFE may support; that these 
measures may aim to complete actions already decided on and 
implemented, particularly for the protection and safeguard of forests; 
Whereas it is necessary that, for the first phase covering 1991 and 
1992, LIFE enables the financing of priority actions on the basis of a 
simplified procedure; 
Whereas in order to ensure LIFE'S greater financial efficiency and to 
respond better to beneficiaries' aspirations, close consultations 
should be instituted between the Commission, the Member State concerned 
and the other economic and social partners concerned by the operations 
of LIFE, with each party acting as a partner, within the framework of 
its responsibilities and powers, in the pursuit of a common goal; 
Whereas it is necessary to specify the principal forms of LIFE 
assistance; 
Whereas mechanisms should be established for varying Community 
assistance characteristics In line with the particular features of the 
measures to be supported and in the light of the capacity of the 
beneficiaries to contribute; 
Whereas it is necessary to establish effective methods of monitoring, 
assessment and evaluation as well as to ensure adequate information for 
potential beneficiaries and for the public; 
Whereas in the light of the first phase of implementation covering the 
years 1991 and 1992, taking account of budgetary forecasts the Council 
should reexamine LIFE'S provisions on the basis of a Commission 
proposal to be presented before 31 December 1992, 
HAS ADOPTED THIS REGULATION: 
- 20 -
Article 1 
1. A Financial Instrument for the Environment (LIFE) is hereby 
established in order to promote the development and implementation 
of Community environmental policy. 
2. LIFE'S purpose shall be to contribute financially to environmental 
operations in the entire territory of the Member States, and to 
technical and financial assistance operations carried out by the 
Community within the framework of the international conventions to 
which it is a contracting party or the cooperation measures in 
which it participates. 
3. LIFE shall incorporate existing financial instruments : Council 
Regulation (EEC) No 2242/87 of 23 July 1987 relating to Community 
actions for the environment (1>(ACE) as well as Council Regulation 
(EEC) No ..../91 [relating to a Community action for the protection 
of the environment in the Mediterranean region] (2)(MEDSPA). 
Article 2 
Pr iority objectives 
LIFE shall have the following objectives: 
* Within the Community: 
to strengthen and increase the effectiveness of administrative 
structures or services designed to ensure the implementation of 
environmental provisions; 
to help control and reduce the various forms of pollution; 
to help protect sensitive areas and maintain biogenetic diversity; 
(1) OJ No L 207, 29.7.87, p. 8 
(2) OJ No L 
- 21 -
* Outside the Community: 
to provide technical and financial support for the implementation 
of international conventions and the resolution of common or global 
problems. 
Article 3 
Specif ic Objectives 
1. By 30 September each year, the Commission shall establish, in 
accordance with the principle of concentration, after consultation 
with the Committee provided for in Article 13 and on the basis of 
the provisions of this Regulation and of the Community Action 
Programme for the Environment, the general objectives and the 
piuriannual operations as well as the related performance 
indicators and the criteria governing the choice of individual 
measures to be financed by LIFE. 
2. However, in the course of an initial phase covering 1991 and 1992, 
LIFE shall finance the following actions as a priority: 
actions answering the eligibility criteria of the existing 
environmental financial instruments (ACE, MEDSPA); 
actions aiming to resolve particularly serious environmental 
problems or problems of particular Community interest; 
technical assistance and financial support actions in third 
countr ies. 
3. The Annex to this Regulation lists the types of actions which may 
be supported through LIFE. 
- 22 -
Article 4 
Forms of assistance 
Financial assistance from LIFE shall be provided in one of the 
following forms, depending on the nature of the operations to be 
carr ied out : 
(a) part-financing of programmes; 
(b) part-financing of projects; 
(c) interest subsidies; 
(d) reimbursable subsidies; 
(e) support for technical assistance and studies in preparation for 
operat ions. 
Article 5 
E I igibiIi ty 
1. Operations which meet the objectives set out in Articles 2 and 3 
may qualify for assistance under this Regulation. 
2. Projects receiving assistance under the Structural funds or under 
other Community financial instruments shall not be eligible for 
assistance under this Regulation. 
Article 6 
Coordinat ion 
The Commission shall ensure the coordination and the coherence between 
actions undertaken in the framework of this Regulation and those 
undertaken by the Structural funds and by the other Community financial 
instruments. 
- 23 -
Article 7 
Partnership 
Operations financed under LIFE shall be conceived and implemented in 
close consultation between the Commission, the Member State concerned 
represented by the competent national, regional or local authorities 
designated by it, and the economic and social partners concerned. 
Article 8 
LIFE s resources 
The budgetary resources allocated to the actions set out in the present 
Regulation shall be the subject of an annual entry in the European 
Community's general budget. The Budgetary Authority shall determine the 
funds available for each financial year. 
When the financial perspectives are renewed, the Commission shall 
present a multi-annual projection of the sums deemed necessary for 
LIFE, distributed by objective as described in Articles 2 and 3. 
Article 9 
Differentiation of rates of assistance 
1. The Community contributions to the financing of operations shall be 
differentiated in the light of the following: 
the seriousness of the specific, notably regional, 
environmental problems to be tackled; 
the special importance attaching to the measures from a 
Community viewpoint; 
the capacity of the country or of the beneficiary to 
contr ibute. 
- 24 -
2. The rates of Community assistance granted under LIFE shall be 
subject to the following ceilings: 
a maximum of 30% of the total cost in the case of private 
investments ; 
a maximum of 50% of the total cost in the case of public 
investments and pilot or demonstration projects-, 
exceptionally, a maximum of 75% of the cost in the case of 
biotopes or habitats of Community interest; 
exceptionally, a maximum of 100% of the total cost in the case 
of measures destined to acquire the information required to 
undertake an action as well as for technical assistance. 
Article 10 
Treatment of applications for assistance 
1. Applications for assistance from the Instrument shall be prepared 
by the competent national, regional or local authorities designated 
by the Member States and shall be submitted to the Commission. 
However, the Commission may, on its own initiative, ask any legal 
or natural persons established in the Community to submit 
applications for assistance in respect of measures of particular 
interest to the Community by means of a call for expressions of 
interest published in the Official Journal of the European 
Communi t ies. 
Applications from third countries shall be submitted to the 
Commission by the relevant national authorities. 
The Commission shall inform the Member States of projects received 
in the framework of such expressions of interest and of projects 
submitted by third countries. 
2. Applications for assistance shall be submitted by 31 March of each 
year. For the initial phase, the date shall be 30 September 1991. 
- 25 -
3. Projects or measures selected by the Commission after consultation 
of the Committee described in Article 13, may give rise: 
a) either to a Commission decision approving the project or 
measure concerned addressed the competent national, regional or 
local authorities designated by the Member States; 
b) or to a contract or agreement governing the rights and 
obligations of the parties concluded with the legal or natural 
persons responsible for implementation. 
4. The amount of financial support, financial procedures and controls, 
as well as all the technical conditions necessary for the 
implementation of the action are determined on the basis of the 
form of assistance provided either in the Commission Decision or in 
the contract or agreement concluded with the beneficiaries. 
5. Commission commitments and payments shall be denominated and 
carr ied out in Ecus. 
Article 11 
Financial Control 
Without prejudice to checks carried out by national authorities in 
accordance with national laws, regulations and administrative 
provisions, and without prejudice to Article 206 of the Treaty or to 
any inspection carried out on the basis of Article 209(c) of the 
Treaty, the Commission may carry out on-the-spot checks in conformity 
with the procedures set out in the financial regulations, including 
sample checks, in respect of actions financed by LIFE, and may examine 
the control systems and measures established by national authorities, 
which inform the Commission of the measures taken in this respect. 
- 26 -
Article 12 
Ionitoring and evaluation 
The Commission shall ensure that the implementation of Community 
operations is efficiently monitored and evaluated on the terms set out 
in the Decision, Contract or Agreement. 
Article 13 
The Committee 
For the implementation of this Regulation, the Commission shall be 
assisted by an Environment Committee of an advisory nature composed of 
the representatives of the Member States and chaired by the 
representative of the Commission. 
The representative of the Commission shall submit to the Committee a 
draft of the measures to be taken. The Committee shall deliver its 
opinion on the draft, within a time limit which the chairman may lay 
down according to the urgency of the matter, if necessary by taking a 
vote. 
The opinion shall be recorded in the minutes; in addition each Member 
State shall have the right to ask to have its position recorded in the 
minutes. 
The Commission shall take the utmost account of the opinion delivered 
by the Committee. It shall inform the Committee of the manner in which 
its opinion has been taken into account. 
- 27 -
Article 14 
Information and publicity 
The body responsible for implementing an operation carried out with 
financial assistance from the Community shall ensure that adequate 
publicity is given to the operation, with a view to: 
making potential beneficiaries and trade organizations aware of the 
opportunities afforded by the action-, 
making the general public aware of the rôle played by the Community 
in relation to the action. 
Member States shall consult the Commission, and inform it about the 
steps taken for these purposes. 
Article 15 
Réexaminât ion 
The Council shall reexamine this Regulation for the first time on the 
basis of the experience acquired, taking account of budgetary 
forecasts, and on a proposal from the Commission to be submitted before 
31 December 1992. 
A second reexamination shall take place five years after the first. 
The Council shall decide on the Commission's proposals by a qualified 
major ity. 
- 28 -
Article 16 
Transitional provision 
This Regulation shall not affect the prosecution of actions decided on 
and coming into operation on the basis of Regulations (EEC) No 2242/87 
(ACE) and (EEC) No /91 (MEDSPA) before the entry into force of this 
Régulât ion. 
Article 17 
Regulations (EEC) No 2242/87 (ACE) and 
repealed. 791 (MEDSPA) are hereby 
Article 18 
Entry into force 
This Regulation shall enter into force on 1 June 1991. 
This Regulation shall be binding in its entirety and directly 
applicable in all Member States. 
Done at Brussels, For the CounciI 
- 29 -
ANNEX 1 
TYPES OF MEASURES WHICH LIFE MAY SUPPORT 
(the list is not exhaustive) 
technical assistance for the authorities responsible for 
implementing those provisions; 
training, information and awareness; 
the equipment, modernization or development of monitoring 
networks; 
the promotion of environmental auditing in firms; 
the rehabilitation of sites contaminated by past industrial 
activities; 
the promotion of new clean technologies; 
the development of waste recycling and reuse techniques; 
support for SMEs using products which are toxic or dangerous to the 
env ironment; 
the regeneration of plant cover destroyed by fire, erosion or 
desertification; 
the prevention and control of forest fires-, 
the safeguarding of coastal areas and waters; 
nature conservation and the safeguarding of biogenetic reserves of 
Community interest; 
the restoration and safeguarding of urban centres which are part of 
Europe's cultural heritage. 
assistance to third countries in order to implement international 
conventions or to resolve common regional or global problems. 
- 30 -
FICHE FINANCIERE 
1. Intitulé de l'action : création d'un instrument financier pour 
I'environnement. 
2. Lianes budgétaires concernées 
(Article B4-320 LIFE (Instrument financier pour 
l'environnement) 
Poste B4-300 ACE 
B4-301 ACNAT 
B4-302 MEDSPA 
B4-303 NORSPA 
Pour la procédure budgétaire 1992, toutes ces lignes seront 
fusionnées sous l'article LIFE. 
3. Base Juridique 
Résolution du Conseil des Communautés européennes et des 
représentants des Etats membres réunis au sein du Conseil du 
19 octobre 1987 concernant la poursuite et la réalisation d'une 
politique et d'un programme d'action des Communautés 
européennes en matière d'environnement (1987-1992). 
Proposition de règlement CEE du Conseil portant sur la création 
d'un instrument financier pour l'environnement. 
4- Description de l'action 
4.1. Oblectifs spécifiques 
L'Instrument financier pour l'environnement doit accroître 
l'efficacité et la visibilité des Interventions financières 
dans ce secteur. Il doit favoriser une plus grande cohésion 
dans le comportement des Etats membres à l'égard des problèmes 
env i ronnementaux. 
Il doit également assurer un meilleur équilibre entre la 
politique environnementale et les autres politiques 
communautaires. 
- 31 -
4.2. Purée 
Elle dépendra des activités à financer et des ressources qui 
pourront y être affectées par la procédure budgétaire annuelle, 
particulièrement dans le cadre de la renégociation des 
perspectives financières de la Communauté. Avant le 31 décembre 
1992, la Commission examinera l'évolution qu'elle entend voir 
prendre à LIFE. 
4.3. Populations visées par l'action 
Les autorités locales, les milieux économiques et sociaux ainsi 
que les organisations non gouvernementales dans la Communauté. 
Les autorités responsables de l'environnement des pays tiers. 
5. Classification de la dépense 
Dépenses non obligatoires, crédits dissociés. 
6. Nature de la dépense 
Le règlement prévolt plusieurs types de dépenses en fonction 
des actions retenues : 
co-fInancement de programmes; 
co-f Inancement de projets-, 
bonification d'intérêts; 
subvention remboursable; 
soutien à l'assistance technique et aux études 
préparatoires à l'élaboration des actions 
Dans cette dernière catégorie de mesures, on pourra financer 
des analyses descriptives et d'évaluation, consultations, 
prestations de service, collecte et diffusion de l'information, 
publication de rapports ainsi que toute autre intervention 
nécessaire à la gestion de l'action. 
7. Incidence financière de l'action sur les crédits d'Intervention 
7.1. Mode de calcul 
En 1991, le coût de l'action s'élèvera à environ 64,5 Mécus. 
Ce chiffre résulte, d'une part, des crédits qui sont inscrits 
pour LIFE, d'autre part, des crédits qui sont inscrits au 
budget pour les Instruments appelés à être fusionnés avec LIFE, 
i savoir les crédits figurant aux postes B4-300 à B4-303. 
- 32 -
Le pourcentage de l'intervention communautaire dans le 
financement des actions prévues par LIFE peut varier entre 30 % 
et 100 % conformément aux règles définies dans la proposition 
de règlement du Conseil et notamment son article 9. 
Pour les années 1993 et suivantes, le coût de l'action dépendra 
de l'évaluation par la Commission de la mise en oeuvre de LIFE 
pendant les 24 premiers mois et du résultat de la négociation 
sur les perspectives financières. 
7.2. Mini-budget 
Le montant du mini-budget sera fixé annuellement selon les 
règles adoptées par la Commission le 22 mai 1990 et couvrira 
les dépenses de personnel, les dépenses relatives aux contrats 
d'entreprise, les dépenses d'Infrastructure, les dépenses 
relatives à l'Information et aux publications ainsi que 
d'autres dépenses de fonctionnement qui découlent de cette 
action. 
7.3. Echéancier 
Un échéancier des crédits d'engagement pour les cinq prochaines 
années ne peut être établi à l'heure actuelle. 
Pour les crédits de paiement, on peut prévoir que la moitié des 
crédits inscrits au budget 1991 seront payés en 1991, l'autre 
molt ié en 1992. 
8. Dispositions anti-fraude 
Le règlement du Conseil prévoit un mécanisme de suivi tant sur 
le plan technique que financier. 
Des dispositions anti-fraude seront incluses dans les contrats 
liant la Commission aux bénéficiaires de l'action. 
9. Recettes 
L'action ne génère pas de recettes autres que la récupération 
de l'indu. 
- 33 -
DEPENSES ADMINISTRATIVES 
L'action proposée Implique une augmentation du nombre des effectifs de 
la Commission. 
La gestion des Instruments qui seront fusionnés avec LIFE est assurée 
actuellement par six fonctionnaires (3A, 2B, 1C), un expert national, 
un fonctionnaire temporaire B et neuf prestataires de service (1A, 5B, 
3C). 
Pour 1991 et 1992, une partie des prestataires de service devrait être 
remplacée par des fonctionnaires, à savoir 1A, 3B et 3C, à trouver soit 
par redéploiement, soit par la voie de la procédure budgétaire annuelle 
dans le cadre de la programmation des ressources par la Commission pour 
l'exercice concerné. 
L'incidence financière sur les crédits du personnel et du 
fonctionnement courant en 1000 Ecus/an est de : 
un fonctionnaire A 1 x 44 44 
3 fonctionnaires B 3 x 29 87 
3 fonctionnaires C 3 x 22 66 
total 197 
Après 1992, dans la mesure où les perspectives financières de la 
Communauté permettront de doter LIFE de ressources budgétaires 
Importantes, l'unité actuelle qui gère les instruments financiers qui 
seront fusionnés avec LIFE ne sera plus en mesure de gérer l'instrument 
financier. La structure de la DG XI devra être revue pour faire face à 
l'accroissement des activités. 
- 34 -
ANALYSE COUT-EFFICACITE 
1. Oblectlfs et cohérence avec la programmation financière. 
L'action comporte quatre objectifs généraux (cf. article 2) 
L'article 3 de la proposition de règlement prévolt que la 
Commission établira des objectifs spécifiques et actions 
plurIannuel les assorties de critères pour le choix des mesures 
financées par LIFE. Les lignes budgétaires qui seront fusionnées 
dans LIFE sont Intégrées dans la programmation financière de la DG 
XI • 
2. Justification de Taction 
Un des objectifs généraux de LIFE est de favoriser la mise en 
oeuvre de la politique communautaire de l'environnement. L'approche 
législative suivie Jusqu'à présent ayant montré ses limites, 
d'autres moyens d'action doivent être utilisés, en particulier un 
instrument financier (cf. exposé des motifs). 
Les actions financées par LIFE sont surtout des actions de 
démonstration cofinancées au maximum à 50 % pour les autorités 
publiques et à 30 % pour les entreprises. L'effet multiplicateur 
direct sera donc égal à deux ou trois selon le type d'actions 
visées. L'effet multiplicateur Indirect n'est pas mesurable à 
l'heure actuelle, il dépendra des résultats positifs des actions de 
démonstration elles-mêmes. 
3. Suivi et évaluation de l'action 
L'article 3 prévolt que chaque action plur(annuel le de LIFE fera 
l'objet d'une décision de la Commission qui comportera des 
objectifs spécifiques et des Indicateurs de performance. De manière 
à Juger de leur efficacité, les actions financées par LIFE feront 
^ l'objet d'une évaluation et d'un suivi afin de s'assurer que les 
objectifs auront été atteints en tenant compte des Indicateurs de 
performance et du rapport coût/efficacité. 
- 35 -
FICHE D'IMPACT SUR LA COMPETITIVITE ET L'EMPLOI 
1. Quelle est la justification principale de la mesure ? 
Créer un instrument financier qui puisse contribuer à 
favoriser le développement et la mise en oeuvre de ia 
politique communautaire de l'environnement. 
I. Caractéristiques des entreprises concernées. 
Les entreprises concernées sont les entreprises 
industrielles ou de service, grandes et petites pour autant 
que leurs Installations soient anciennes. En effet, le 
concours financier que pourra apporter l'Instrument doit 
respecter le principe du pollueur-payeur qui interdit des 
aides aux établissements nouveaux sauf lorsque les 
équipements visent à respecter des normes plus sévères que 
la norme imposée. 
III. Quel les sont 
entreprises 7 les obligations Imposées directement aux 
Aucune 
IV. Quelles sont les obligations susceptibles d'être imposées 
Indirectement aux entreprises via les autorités locales 7 
Aucune 
V. Y a-t-ll des mesures spéciales pour les PME 7 Lesquelles 7 
Une des missions de l'Instrument financier vise 
spécifiquement les P.M.E. Elle prévoit le soutien aux 
P.M.E. qui utilisent des produits toxiques ou dangereux 
pour l'environnement afin de leur permettre de se doter de 
technologies propres. 
L'Instrument prévolt aussi des programmes de démonstration 
pour les technologies de recyclage et de réutilisation des 
déchets ainsi que des programmes d'équipement de techniques 
modernes de surveillance et de contrôle qui sont très 
souvent produits par les P.M.E. 
- 36 -
VI. Quel est l'effet prévisible 7 
a) sur la compétitivité des entreprises 7 
L'action envisagée n'impose directement aucune obligation 
aux entreprises. Elle vise principalement l'Introduction de 
technologies propres dont l'effet sera positif sur la 
compétitivité des entreprises. L'action aura également un 
Impact favorable sur les secteurs équipements et 
Installations de dépollution. 
b) sur I'emploi 7 
Les conséquences sur l'emploi de l'augmentation de la 
compétitivité des entreprises sont favorables mais 
difficilement quant If labiés. Les mesures envisagées 
entraîneront certainement des besoins en main d'oeuvre 
locale. 
VII. Les partenaires sociaux ont-Ils été consultés 7 
Quels sont leurs avis 7 
La procédure institutionnelle prévolt cette consultation 
dans le cadre du Comité Economique et Social. 
37 -
REVIEW OF BUDGETARY RESOURCES 
FOR THE ENVIRONMENT 
I. INTRODUCTION 
At Its meeting on 25 and 26 June 1990 the European Council Invited the 
Commission to take stock of all the resources available under the 
Community budget to fund environmental operations. This memorandum is 
a response to that Invitation. It indicates briefly the appropriations 
available for and the areas covered by each financial Instrument and 
analyses trends in the way these appropriations are being used. This 
description only covers Intervention appropriations, studies being a 
négligeable element. 
The document also provides some Information on EIB activity in the 
environment field. 
Annex 1 gives breakdowns of individual financial instruments. Annex 2 
gives a financial synthesis, while Annex 3 reproduces the Commission's 
data on environmental expenditure in some of the Member States.* 
Several financial instruments provide backing for environmental 
operations. Among these Instruments we need to distinguish between 
those with a specifically environmental purpose and those which can 
have a bearing on the environment even though their principal purpose 
is something other than environmental protection. 
II. ENVIRONMENTAL INSTRUMENTS 
11.1 Technological research and development programmes 
Primarily this Involves research and development activity which Is 
being carried out under several specific programmes within the 
Community framework programme for technological research and 
development 1987-1991 and which will continue under the new framework 
programme 1990-1994. 
The framework programme for environmental research and development, 
implemented by means of shared-cost contracts, concerted action and 
coordination and training activities, comprises three programmes: 
A study currently under way at the Commission is Intended to 
provide a more comprehensive overall picture. 
- 38 -
Between 1989 and 1992, the STEP programme (Science and Technology for 
Environmental Protection) will provide ECU 75 million of Community 
funding for research In the following nine areas: environment and human 
health, assessment of risks associated with chemicals, atmospheric 
processes and air quality, water quality, soil and groundwater 
protection, ecosystems, protection and conservation of the European 
cultural heritage, technologies for environmental protection and major 
technological hazards. A new 1991 to 1994 programme Is In the process 
of being adopted. 
Between 1989 and 1992 the EPOCH programme (European Programme on 
Climatology and Natural Hazards) will provide ECU 40 million Community 
funding for research in the following four areas: past climates and 
climate change, climate processes and models, climatic impacts and 
climate-related hazards, seismic hazard. 
Between July 1989 and June 1992 the MAST programme (Marine Science and 
Technology) will provide ECU 50 million in Community funding for 
research into basic and applied marine science, coastal zone science 
and engineering, marine technology and supporting initiatives. A new 
1991 to 1994 programme is In the process of being adopted. 
In addition, RDT programme of the Joint Research Centre has provided 
ECU 137 million between 1987 and 1990 for research Into environmental 
protection, remote sensing monitoring of land and sea environments and 
industrial hazards. Over the same period, ECU 17 million was spent on 
scientific and technical support activities In several environmental 
fields. 
The third framework programme for RDT Community action (1990-94) 
adopted by the Council on 23 April 1990 foresaw a specific action In 
the environment field and estimated its cost at 518 Mécus (227 in 1990-
92, 291 In 1993-94), including the direct action research of the JRC. 
On 3rd May 1990, the Commission presented proposals for specific 
environmental RDT programmes whose basic objectives are : 
participation in global change programmes; 
technology and engineering for the environment; 
economic and social aspects of environmental problems; 
Integrated research projects. 
The proposal is before the Council. 
11.2 Action by the Community relating to the environment (ACE) 
ACE is a demonstration programme through which support may be granted 
In the following six areas: 
- 39 -
1. Demonstration projects aimed at developing new clean technologies, 
i.e. which cause little or no pollution and which may also be more 
economical in their use of natural resources. 
2. Demonstration projects aimed at developing new techniques and 
methods for measuring and monitoring the quality of the natural 
environment. 
3. Projects providing an incentive towards the maintenance or 
reestablishment of seriously threatened blotopes which are the 
habitat of endangered species of birds and are of particular 
importance to the Community under Directive 79/409/EEC. 
4. Demonstration projects aimed at developing techniques for recycling 
and re-using waste, Including waste water. 
5. Demonstration projects aimed at developing techniques for locating 
and restoring sites contaminated by hazardous waste and/or 
hazardous substances. 
6. Projects providing an Incentive towards the protection or 
restoration of soils threatened or damaged by fire, erosion and 
desertification. 
Over the four years from July 1987 to June 1991, the ACE programme will 
have received funding totalling ECU 24 million. 
The paucity of funds in relation to the broad field of action covered 
by the ACE programme has recently prompted the Commission to submit 
three proposals to the Council intended to focus Community action on 
certain priority areas while at the same time stepping up the means at 
Its disposal. These proposals relate to MEDSPA, ACNAT and NORSPA. 
11.3 Specific action in the Mediterranean (MEDSPA) 
In 1984 the Commission presented a communication indicating that over a 
period of five years It would take a series of specific measures to 
protect the environment in the Mediterranean basin. 
Between 1986 and 1990 the Commission did indeed provide ECU 16 million 
for demonstration projects. 
In March 1990 It sent the Council a proposal for a regulation 
establishing the conditions in which priority action on the environment 
could be financed in the Mediterranean basin. 
The sums estimated to be needed for the first three years Is ECU 37 
million, to be used to finance Incentive and sensitization measures 
complementary to the Investment operations financed by the structural 
Funds. 
- 40 
In the Member States, MEDSPA will cover not only demonstration projects 
under ACE but all other pilot or demonstration projects aimed at 
solving a specifically Mediterranean problem or transferring know-how 
from the North to the South. 
MEDSPA Is also intended to provide technical assistance and the 
expertise needed to prepare plans and working programmes being proposed 
at national or local level. 
The Commission proposal also provides for support for action to help 
non-member Mediterranean countries. Such action should help those 
countries to set up sound administrative structures to deal with the 
environment and should provide technical assistance enabling them to 
establish consistent policies and action programmes In that field. 
11.4 Nature conservation (ACNAT) 
On 16 August 1988 the Commission sent the Council a proposal for a 
directive on the protection of natural and semi-natural habitats and 
wi Id fI ora and fauna. 
During Council discussions on the proposal it became apparent that a 
greater financial commitment by the Community would make it easier to 
Implement rules in this field satisfactorily. 
At the beginning of the year the Commission therefore sent the Council 
a proposal for the creation of a specific financial Instrument for 
nature conservation (ACNAT). This instrument, with estimated budgetary 
commitments of ECU 60 million over the first three years, would enable 
the Community to take broader action than under the ACE programme, 
including the protection of species other than birds. 
11.5 Specific action In the North of the Community (NORSPA) 
The Commission recently sent the Council a proposal for a regulation on 
action to protect the coastal areas and coastal waters of the Irish 
Sea, the North Sea, the Baltic and the north-eastern Atlantic. 
This programme, the northern counterpart of MEDSPA, would grant 
financial support to demonstration projects to reduce pollution in the 
areas concerned and promote action encouraging the use of technologies 
beneficial to the environment in those areas. 
Estimated budgetary requirements for 1991 to 1992 total ECU 10 million, 
but additional amounts are foreseen for the new German Lander. 
- 41 -
11.6 Forest protection 
Under the common forestry policy the Council adopted two regulations 
designed to protect forests against acid rain and fires. ECU 37 
million has been spent in this way between 1987 and 1990. 
III. INSTRUMENTS WITH NON-ENVIRONMENTAL PURPOSES 
111.1 Technological research and development programmes 
Several research programmes can provide funding for projects relating 
to the environment. However, It is not easy to determine what funds 
are actually earmarked for this type of project. The programmes with 
the most obvious environmental links, whether direct or indirect, are 
the fol lowing: 
The ECLAIR programme (technological research and development in the 
agro-industrial field) has been allocated ECU 80 million over the five-
year period from 1988 to 1993 and can provide funding for research 
projects on farming methods which are less harmful to the environment. 
The agricultural research programme has been allocated ECU 55 million 
for the five-year period from 1989 to 1993 and includes research 
activity in fields linked to the protection of the environment, such as 
reduced use of fertilizers, fungicides and pesticides, the effects of 
residues, toxins and other harmful substances, etc. 
The JOULE programme (non-nuclear energy and rational use of energy), 
1989-92, allocates a part of Its budget to the elaboration of models 
concerning energy and the environment. These models enable quantified 
analyses and forecasts of interactions between energy use, the 
environment and the economy. Research covered by the JOULE programme 
aims, inter alia, at the reduction of gases linked to the greenhouse 
effect. A new 1991 to 1994 programme Is In the process of being 
adopted. 
The radiation protection programme has been allocated ECU 21 million 
for 1990 and 1991 and will serve, inter alia, to increase our knowledge 
of the effects of radiation on man and his environment. 
The radioactive waste management programme and the programme for the 
decommissioning of nuclear installations will further contribute to the 
protection of people and the environment. 
The raw materials and recycling programme has been allocated ECU 45 
million for the period from 1990 to 1992 and includes research into 
improving the competitiveness of European businesses In the sampling, 
analysis and classification of waste, in recycling technologies and in 
the production of energy from waste. 
- 42 -
The DRIVE programme (road transport Informatics and telecommunications) 
has been allocated ECU 60 million for the period from June 1988 to 
May 1991 and includes among Its objectives the development of modern, 
intelligent technologies to make road transport safe and reduce 
pollut ion hazards. 
The EURET programme (European research for transport) has been 
allocated ECU 25 million for the period from 1990 to 1993 and will use 
some of those funds towards reducing harmful external effects (noise 
and pollution) by making the best possible use of transport networks 
and logistics. 
The MONITOR programme (strategic analysis, forecasting and evaluation 
in matters of research and development) has been allocated ECU 22 
million for the four-year period from July 1989 to June 1993. 
The strategic analysis part of the programme (the sub-programme SAST) 
will include a survey on how scientific and technological strategy 
might help overcome the environmental problems relating to transport. 
Other analyses will cover topics relating to the environment, e.g. 
Identifying ways in which the new Information, telecommunications and 
modelling technologies might help improve environmental management 
capacity. 
The ECSC research programme includes projects on air pollut ion control, 
utilization of waste, impact studies, etc. Between 1986 and 1990 
ECU 12.8 million has been spent on this work. 
The third framework programme 1990-94 Includes other specific RDT 
domains for which the Commission has already put forward proposals for 
Council Decisions and which will have direct repercussions on the 
environment. These are the programmes for telematlc systems, research 
on recycling technologies and Integrated projects such as the "clean 
car"; the programme for industrial and materials technologies, 
measurements and trials for work in areas such as pollution monitoring 
In the North Sea or methods to determine the chemical form of polluting 
substances; marine science and technology; the biotechnology RDT 
programme; agriculture and agro-Industry; blomedeclne and health; life 
sciences and technologies for LCDs-, non-nuclear energies; 
radioprotection and reactor safety in the nuclear fission field; 
aspects of security and environmental protection in the demonstration 
of the feasibility of energy from controlled thermonuclear fusion, as 
well as the "human capital and mobility" programme. Together, these 
confirm the high priority given to the environment In Community RDT 
actions in 1990-94. 
- 43 -
The EUREKA European cooperation programme of research and Industrial 
technology Includes projects such as Eurotrac, Euromar and Eurocare, 
which deal respectively with troposphere/stratosphere chemistry, air-
sea interchanges and the processes by which monuments are damaged. It 
Interests non-Community European countries as well as the Community. 
111.2 The Structural Funds 
Between 1985 and 1988 the ERDF provided ECU 135 million towards the co-
financing of various projects with a bearing on environmental 
protection. In 1985 the ERDF also began co-fInane Ing multlannual 
programmes containing measures relating to environmental protection. 
The programme approach means that the environmental nature of 
individual projects cannot necessarily be identified. However, we 
estimate that some ECU 70 million was spent on environmental work 
between 1985 and 1987 and ECU 55 million in 1988. 
The reform of the structural Funds meant that assistance was 
concentrated on those regions and sectors hit by development problems. 
Four of the structural Funds' objectives are particularly concerned 
with the Community's environmental policy: 
the development of less-developed regions (Objective 1); 
the conversion of regions seriously affected by industrial decline 
(Objective 2); 
the acceleration of the adaptation of agricultural structures 
(object ive 5a); 
the development of rural areas (Objective 5b). 
Between 1989 and 1993 objectives 1, 2 and 5b should be receiving 
ECU 38 300 million, ECU 7 205 million and ECU 2 795 million 
respectively. The total amount provided under objective 5a amounted to 
ECU 2406 million 1987 to 1989. 
The main types of programme put forward by the Member States deal with 
sectoral development, generally multi-regional, and regional or local 
multi-sectoral development. They vary considerably in size, from a few 
million ecus to a billion ecus, reflecting the diversity both of the 
territory involved and the objectives in question. 
Regional development plans put forward by the Member States under the 
four objectives mentioned have included proposals for financing 
operations relating to the environment at the same time as to economic 
and social development. 
The Community support frameworks which are based on the Plans provide a 
major financial contribution to such operations. Six of the seven 
Objective 1 countries have made environmental Improvement a priority 
development axis. 
Assistance from the structural Funds for environmental work In these 
Objective 1 regions is estimated at ECU 1 967 million for the period 
from 1989 to 1993, representing 6% of Community aid. 
- 44 -
As for the Objective 2 and Objective 5b areas, the contribution Is 
estimated at ECU 535 million and ECU 310 million respectively, 
representing 15% and 12% of Community aid. 
Community participation on environmental measures in the framework of 
objective 5a (Article 19 of Regulation EEC 797/85) Is put at ECU 39 
million for the period 1989-1993, or 1% of the total allocation. 
The table below gives a breakdown of these amounts by Member State: 
Assistance from the structural Funds (ECU million) 
obj 1 obj 2 obj 5a obj 5b Total 
Greece 202 
Spain 675 94 
France 19,5 72,5 
Ireland 228 
Italy 622 43 
Portugal 168 
United Kingdom 53 90 
Denmark - 53 
Germany - 108 
Netherlands - 3 
Be I g I urn - 9 
Luxembourg 12 
2 
20 
1 79,5 
73 
22 
26 
110 202 
849,5 
165 
228 
690 
168 
181 
55 
238 
4 
9 
TOTAL 1967,5 537 39 310,5 2854 
The main areas covered are: 
the protection of natural resources, including water resources, and 
their exploitation; 
management of environmentally sensitive areas (biotopes), 
prevention of erosion and fires; 
environmental Iy-sensitive agrI cultural practices; 
infrastructure supporting development, especially in Industrial and 
tourism areas (pubIic transport, networks, etc.); 
management of household, Industrial and toxic waste; 
water treatment; 
aid for clean technologies, including demonstration projects; 
training as a complement to the abovementloned operations. 
45 -
The reform of the structural Funds allows the Commission, acting on its 
own initiative, to launch operations of Community Interest which are 
not covered or are inadequately covered by the development plans of the 
Member States which were mentioned earlier. These initiatives can 
contribute either to the resolution of serious problems directly linked 
to the Implementation of other Community policies which affect the 
regions' socio-economic situation, or to encourage regional application 
of Community policies, or again to contribute to resolving problems 
common to certain categories of region. 
The ENVI REG Community initiative, launched on 9th May 1990, concerns 
the environment and answers all three objectives. It alms to assist the 
least-favoured regions of the Community to deal with their 
environmental problems In order to place their social and economic 
development on a sustainable base. In addition It ought to encourage 
the realisation of certain aspects of Community environmental policy 
(notably the management of water and of urban and Industrial waste) by 
helping the least-favoured regions to overcome these problems. Special 
attention is given to reducing pollution in coastal areas, especially 
Mediterranean, whose economy depends on tourism to a significant 
extent. 
ENVI REG participates In the co-financing of equipment and 
infrastructure (or of their modernisation) which are necessary to 
achieve the objectives. At the same time it supports and encourages the 
development of the regional authorities' institutional capacity In 
environmental protection. Particular attention Is given to the 
development of environmental management know-how, to the setting up of 
operations destined to improve depollution Installation management, to 
expertise on the choice of solution to be envisaged and on the transfer 
of technology at the regional and Community levels. 
The structural Funds' overall contribution to ENVIREG for the period 
1990-93 is estimated to be ECU 500 million. The Community contribution 
to each operational programme put forward by the Member States 
concerned is a function of need in the relevant sectors as well as of 
the quality of the programmes submitted. One of the quality evaluation 
criteria which has been specified is the state of application of 
Community environmental policy In the sectors to be funded through 
ENVIREG, chosen for their relevance to economic development. 
- 46 
The operational programmes have all been submitted, the Commission Is 
examining them and is collaborating with national authorities, In the 
partnership framework!, to Improve the definition of the measures 
foreseen. 
Apart from ENVIREG, other Community initiatives adopted since the 
reform of the Funds programmes can provide financial support for work 
to improve the environment: 
RECHAR can fund the rehabilitation and reuse of spoil heaps and the 
creation of green areas in areas severely degraded by coal mining 
actIvity. 
INTERREG can encourage cross-border cooperation on 
control, waste disposal and environmental protection. pollut ion 
STRIDE can be of importance for research linked to natural 
resources and environmental conditions In the regions concerned. 
REGEN funds gas networks in peripheral regions and thus contributed 
to reducing pollution linked to energy production. 
In the regions it concerns, REGIS foresees the establishment of 
"discovery tourism" beyond the areas of tourism concentration which 
is well integrated into the local fabric and which does not 
endanger biologically fragile areas. 
Other programmes of Community interest launched before the reform of 
the Structural fund and now in the course of execution also include 
certain environmental aspects (RESIDER, RENAVAL and VALOREN). 
111.3 Energy 
As in a lot of other cases, it Is virtually impossible to determine 
whether it Is the economic or the environmental dimension which has the 
upper hand In research work and demonstration projects relating to 
energy. Such activities therefore mainly provide indirect 
contributions to environmental protection. 
Nonetheless, between 1987 and 1989 ECU 7.2 million was spent In the 
coal research programme on the reduction of air emissions, the 
gasification of coal to produce a cleaner fuel and more acceptable 
forms of disposal of mining waste and ash. 
As regards demonstration projects, ECU 74.2 million has been spent on 
the gasification of solid fuels and on Improving the combustion of 
those fuels. 
- 47 -
The THERMIE programme (European technologies for energy management) 
will back projects Implementing new energy technology. Work will be 
carried out In such fields as the rational use of energy, use of solar 
energy, blomass, geothermal energy, hydro power and wind power and 
ecological techniques for processing coal and other solid fuels where 
the estimated necessary budget for 1990-92 is ECU 350 million. 
111.4 The European Investment Bank (EIB) 
The EIB can finance projects in a large number of fields provided that 
they are technically and economically viable. They must contribute 
directly or indirectly to Increased economic productivity and assist 
regional development or present a Community Interest to several Member 
States or the Community as a whole. 
In the environmental field, public and private investment projects 
eligible for funding Include infrastructure for water supply -
installations to supply water, to collect and treat waste water, to 
remove effluent and produce drinking water - site restoration, waste 
treatment or installations to protect sea waters. The EIB can also 
fund specific pollution control projects. 
According to the 1988 annual report, EIB funding for Investment 
projects Intended specifically to protect or Improve the environment 
rose to over ECU 1.2 billion, i.e. 14.3% of all financing, against an 
average of 9.3% between 1984 and 1987. 
In 1989 assistance for investments designed specifically to protect or 
improve the environment and living conditions rose to ECU 1.7 billion, 
representing some 15% of the Bank's funding. Other investments also 
had a beneficial effect on the environment. 
- 48 
The table 
countrles: below shows a sectoral breakdown In the eleven recipient 
EIB funding in 1989 (ECU million) 
Water conservation and management 
Waste management 
Atmospheric pollution control 
Soi I conservât ion 
Other 899 
150 
337.4 
61.3 
102 
Similar urban development projects 178.3 
Total 1 728 
Following an agreement negotiated with the Commission, the EIB 
automatically assesses environmental impact when examining the projects 
it receives, checking that they comply with national and Community 
legislation In this field. 
In 1988 the European Investment Bank and the World Bank worked together 
on drawing up an environmental programme for the Mediterranean in order 
that they might increase the scope and effectiveness of their work. 
This programme has resulted in a regional study which has determined 
the main problems and allowed the Identification the main areas of 
prlor ity act ion. 
At the beginning of 1990 the operational phase of this Joint action 
began with the creation of a specific Instrument to provide technical 
assistance (the METAP programme), bringing together the EIB, the World 
Bank, the Commission of the European Communities (via MEDSPA) and the 
United Nations Development Programme. 
As regards demonstration projects, ECU 74.2 million has been spent on 
the gasification of solid fuels and on improving the combustion of 
those fuels. 
IV. FINANCIAL INSTRUMENTS PROVIDING ASSISTANCE IN NON-MEMBER COUNTRIES 
Mention should also be made of the financial Instruments which have 
provided or could provide assistance for environmental work In non-
member countries. 
- 49 -
IV.1 Non-member countries In the Mediterranean 
(a) The financial protocols to the bilateral agreements between the 
Community and Mediterranean non-member countries countries were 
renewed in 1987. These protocols expire on 31st October 1991. One 
of the components of the renewed Mediterranean policy concerns the 
fourth generation of financial protocols with the Southern and 
Eastern Mediterranean countries. In the Indicative programmes which 
fix the specific objectives of financial and technical cooperation 
as well as actions foreseen under the protocols, the use of 
budgetary resources for environmental protection Is only foreseen 
in a number of cases (for example sewerage and waste water 
treatment in Egypt). 
In addition, Egypt has invoked its financial protocol with the 
Community In a project to set up and manage a nature reserve on the 
Red Sea; Malta has planned a general pollution control project, 
through which it would install pollution control equipment. 
(b) The Community budget also includes specific appropriations to 
support scientific cooperation within the framework of the 
Community's agreements with non-associated countries which have not 
signed a financial protocol. 
This Instrument has funded several environmental research projects 
and exchanges of researchers with the two eligible countries: 
Israel and Yugoslavia which have benefitted from ECU 0.6 and 1.7 
mill Ion respectIvely. 
(c) In December 1990, the Council adopted the Commission's proposals 
for a revamped Mediterranean policy (1992-1996) which actions in 
favour of the environment are included amongst the priority 
object Ives. 
For operations promoting multilateral and regional or sub-regional 
cooperation in the Mediterranean, the Council has accepted an 
indicative five-year financial perspective of at least ECU 230 
million of which an important part will be given to environmental 
operations such as demonstration projects or training and 
information activities. 
- 50 -
Lastly, as regards the ElB's work outside the protocols, the 
Council has accepted a global financial enveloppe of ECU 1-8 
billion of which at least ECU 350 million will be for the 
environment. These loans may also enjoy interest rate subsidies of 
3% from appropriations available outside the protocol. 
IV.2 Countries of Central and Eastern Europe 
Under the PHARE programme, which received ECU 500 million in 1990, 
ECU 102.5 million will be spent on environmental projects, broken down 
as fol lows: 
Poland ECU 22 ml I I ion 
Hungary ECU 25 million 
ex East Germany ECU 20 million 
Budapest regional centre ECU 2 million 
Czechoslovakia ECU 30 mi 11 ion 
Bulgaria ECU 3.5 million 
The operations Involved deal principally with pollution control of the 
air In Poland, air, water, waste and energy In Hungary and 
Czechoslovakia and water, air and waste in the former GDR. 
In 1991 PHARE will receive ECU 820 million, not yet broken down by 
country or by activity. 
IV.3 Countries of Latin America and Asia (LAA) 
Funds allocated to the environment as part of the Community's 
cooperation with the LAA countries come from the budgetary 
appropriations earmarked for: 
cooperation on development aid; 
economic cooperation; 
ecology in the developing countries. 
It is impossible to estimate how much is spent on environmental 
protection from these budgetary appropriations, it being difficult to 
separate development activities from those dealing with the 
environment. 
As for the future direction of cooperation with the LAA countries, as 
defined In the Commission's communication to the Council covering the 
period 1991-2000, priority has been given to Increased environmental 
protection. To this end at least 10% of the economic, financial and 
technical cooperation budget should be used for environmental purposes, 
i.e. some ECU 275 mi it ion. It should also be stressed that cooperation 
projects will automatically be subject to impact studies. 
- 51 -
IV.4 The countries of Africa, the Car I bean and the Pacific (ACP) 
Ever since the decision to give food security the priority in the 3rd 
Lomé Convention, the Community placed emphasis in Its assistance to ACP 
countries on environmental and natural resource protection which forms 
the basis of their development potential. Unfortunately, it has not 
been possible to distinguish clearly between projects designed to 
protect the environment and natural resources and those aimed at rural 
development and thus to establish environmental expenditure. 
In any event, projects funded between 1986 and 1989 which included a 
"fight against desertification and environmental protection" component 
represented commitments of about one billion ECU. 
For the future Lomé IV contains a strong Joint commitment by the 
Community and the ACP states to increasing the attention given to the 
environment in the allocation of the 12 billion ecu available under the 
Convention. Lomé IV identifies five major environmental priorities; the 
protection of water resources, the preservation of tropical forests and 
biological diversity, the promotion of a better balance between urban 
and rural areas, urban problems and appropriate control of locusts. 
Already the environmental priority is being reflected in the 
négociations on National Indicative Programmes being conducted with 
each ACP state. 
IV.5 Ecology in the developing countries 
Between 1988 and 1990, ECU 20.8 million were committed in the framework 
of the "Ecology In developing countries" budget line. These commitments 
cover research, feasibility studies and demonstration projects 
concerning desertification, tropical forests, biodiversity 
conservation, marine environment, urban and methodological problems. 
V. NATIONAL BUDGETARY RESOURCES 
Data on national budgetary resources for environmental protection has 
been taken from a compendium published by the OECD in 1986 and from 
further data taken from the statistical offices of certain Member 
States. 
The minimal data available, recalculated in ECU at. 1985 prices, is set 
out in Annex 3. 
These data do not take account of measures in the form of direct tax 
incentives favouring environmental investments widely used by certain 
States, notably Germany, Belgium, France and Luxembourg. 
- 52-
This data should be treated with extreme caution: 
(a) the definition of environmental expenditure varies from country to 
country, which makes comparison quite arbitrary, even If figures 
are available for the same year-, 
(b) It is impossible to extrapolate a tendency from Table 3 for those 
Member States on which no data Is available, since the nature of 
the problems involved, the priorities attributed and the funds 
available vary widely from one country to another; 
(c) it is difficult to pinpoint Community-wide trends given the limited 
amount of data on annual expenditure from only a limited number of 
countrles. 
Subject to the above reservations, it appears that overall national 
environmental expenditure (national budgets plus private or business 
expenditure) rose between 1985 and 1988 both In nominal value and as a 
percentage of GNP. The same trend is generally apparent in respect of 
the share borne by State budgets. 
VI. CONCLUSIONS 
Even though expenditure has often only been programmed rather than 
committed for many of the operations cited, the following conclusions 
can nevertheless be drawn. 
The procedures in force and the degree of synthesis inherent in the 
programming process sometimes make it difficult to assess the sum 
allocated to environmental measures. For example, "the rehabilitation 
of industrial wasteland" heading found in several objective 2 
programmes of the Regional Fund includes an environmental element which 
is the restoration of land to make it usable, but often also comprises 
other costs associated with site re-use (service infrastructure and 
superstructures). Similarly, a measure to exploit water resources in an 
objective 1 region Includes an environmental part concerning the 
protection of water quality and resource management as well as water 
collection and abstraction operations which account for most of the 
expenditure. 
The review nevertheless enables certain general findings and 
considerations to be given, especially as concerns the evolution of 
expenditure. What it does not allow so well Is to appreciate the impact 
of the Community Support Framework obligation to give priority to the 
achievement of the objectives of environmental legislation where it is 
lacking. This provision is seen as an answer to the obligation 
expressed in Article 130R of the Treaty to Incorporate the needs of 
environmental protection In the Community's other policies. However, 
the tightness of the timetable for the preparation of funding 
applications mean that the Monitoring Committees will have special 
responsibility in this respect. 
-53-
1. The trends In expenditure 
Until 1987 the contributions from the various financial Instruments 
towards environmental measures totalled about ECU 60 million per annum, 
half of this figure being for research and half for the funding of 
Regional Fund projects or programmes. 
Since 1988 there has been a considerable increase in expenditure at the 
Community as well as the national levels. All the financial instruments 
are concerned but the Increase is particularly significant in the 
various structural Funds. Between 1988 and 1993 expenditure on the 
environment should total almost ECU 4 billion, that is around 
ECU 650 million per annum, 90% being investment expenditure and 10% 
funds for research or demonstration projects. In addition, annual 
investments funded by the EIB could be between ECU 1.5 and 2 billion. 
The budgetary resources available to the Community action programmes 
specifically aimed at environment policy remain marginal. They 
amounted to ECU 19 million in 1990 out of a total of ECU 48 million for 
the environmental part of Chapter 66 of the Commission's budget. They 
will rise to ECU 64,5 million out of 104 million in-1991. 
The ressources allocated to research, to actions In favour of forests 
(fight against acid rain and the prevention of fires), as well as to 
actions financed under the live "Ecology in the LDCs amount to some ECU 
50 mi I I ion per annum. 
Turning to the national budgets, the fragmentary data available, which 
is confined to a few Member States only, would seem to indicate an 
upward trend in the already substantial amounts committed. 
This upward trend In public spending on the environment should continue 
or even accelerate over the next few years. It results from the 
growing awareness of the gravity of the environmental problems 
affecting a large proportion of the Community's territory and the rest 
of the planet. This trend cannot be reversed until the safeguard of 
the environment and the need for more rational use of natural resources 
are genuinely integrated as objectives of the various economic 
policies, and when the environmental costs of activities are passed on 
in the prices, charges or taxes paid by the producers and consumers of 
goods and services. 
It should also be stressed that even taking into account all the 
expenditure at Community level directly or indirectly concerned with 
the environment, the amounts Involved are no more than marginal in 
relation to the costs considered necessary to resolve all the 
Community's environmental problems. 
54 -
2. A large number of funding sources and Instruments conditioned by 
the specific objectives and constraints of the Policies they 
support 
The amounts committed for the environment at Community level come from 
numerous sources of funding which differ, sometimes considerably, in 
their conception, objectives, geographical scope and Implementation and 
financial procedures, as well as In the administrative arrangements 
for the granting of aid and for project or programme monitoring. The 
dispersion is often very great for a given financial Instrument. For 
example, In the case of research, measures which may have an 
environmental impact are scattered among 14 different programmes. 
Any operation financed by the existing Structurât funds must be part of 
an economic and social development strategy for the sector of activity 
or region directly concerned. 
The activity of these Funds, especially that of the Regional Fund, Is 
also largely circumscribed, geographically speaking, by the recognized 
and legitimate need to channel a significant proportion of the funds 
available to certain regions, in particular the less favoured regions. 
It is true that an environmental measure is always based on the concern 
to guarantee the continuity of the economic and social development 
process. However, it cannot often guarantee that the benefits of a 
given investment will actually materialize in the region in which it 
has been made. This is particularly true of many of the operations 
designed to safeguard the biological heritage or to reduce water and 
air pollution. For example, an operation in the south of the Community 
to safeguard a biotope may constitute a handicap for the local economy 
since it limits the scope for the development of tourism, but it may on 
the other hand be very profitable for a pharmaceutical business in a 
country In the north of the Community which uses the biotope's plant 
resources. Where air and water pollution is concerned, it may 
sometimes be the case that even the Community level Is an inadequate 
framework for coherent and effective action and to ensure the balanced 
sharing of burdens and benefits between the various parties concerned. 
That is why International negotiations have been launched to coordinate 
action to deal with problems such as the greenhouse effect and the 
depletion of the ozone layer. 
Together, the expenditure in question makes a real contribution to 
improving the environment, but it is not conceived as specific 
functional underpinning for Community environment policy. Its main aim 
is not to answer that policy's objectives and priorities In a 
systematic or coherent way. 
- 55 
3. The increase In environmental expenditure LS Qui necessar I lY 
synonymous with the Integration of environmental objectives Into 
other PQIides 
The increase in expenditure on measures concerning the environment 
reflects a growing awareness of environmental problems and is therefore 
a positive factor. It is also an Indication of the will to integrate 
environmental objectives Into other Community policies. 
However, genuine integration cannot be confined to those activities 
directly concerned with environmental protection. Nor can it be 
confined to compliance with the provisions laid down by the legislation 
in force. It supposes that environmental concerns figure among the 
factors giving rise to and determine the overall strategy for the 
policy which the financial instrument concerned Is there to serve. For 
example, when it comes to financing a motorway, it Is not enough to 
make sure that the environmental impact provisions in force are 
complied with. The decision should take more into account the balance 
between various modes of transport in terms of the nuisance they cause 
or with a view to making a better use of non-renewable energy sources. 
Even when it Is a question of financing a measure which directly 
concerns the environment, compliance with the legislation In force does 
not guarantee that Community environment policy guidelines or 
priorities will be taken into account. Let us take the example of a 
Member State which proposes to construct a toxic waste incineration 
unit. The unit satisfies an economic need as a facility which, among 
other things, allows the establishment of new businesses which may 
produce such waste. However, if environmental concerns had genuinely 
been taken Into account, it would have been possible to combine 
prevention, recycling and reuse facilities with a, possibly different, 
waste disposal measure. 
Bad environmental choices, just like bad economic choices, may 
jeopardize development prospects and hence the long-term profitability 
of investments. Environmental considerations are becoming Increasingly 
decisive factors in consumer choice, whether In housing, tourism, 
leisure or consumer products are concerned. This is now clear to the 
more dynamic and far-sighted businessmen. Taking these factors into 
account in the definition of development strategies reflects not only a 
concern to improve the environment in the Community but also the 
interests of countries and regions now trying to catch up. 
- 56 -
As a result It Is necessary to maintain the effort to Integrate the 
environment into the activity of the different Community financial 
instruments, effort in which the Commission plays a role, as well as 
those responsible, nationally or regionally, for programme definition 
and implementation, such an effort is not limited to the development of 
some new activities to be undertaken by the different financial 
instruments, but translates into a new approach to the evolution of 
these instruments activities as a whole. 
- 57 -
ERDF CONTRIBUTION BEFORE THE REFORM 
(ECU million) 
1. Funding of projects Annex 1 
1985 1986 1987 1988 TOTAL 
Coastal protection 
Improvement and 
protection of groundwater 
Site protect Ion and 
improvement 
Waste incineration and 
recyclIng 
Pol lut ion control 3.8 
11.4 
0.3 
8.0 1.2 
29.5 
9.3 
2.8 
2.6 6.7 
6.7 
4.4 
6.1 
1.3 11.2 
7.2 
9.1 
9.8 
3.7 22.9 
54.8 
23.1 
26.7 
7.6 
TOTAL 23.5 45.4 25.2 41 135.1 
2. Funding of programmes 
Since 1975 the ERDF has co-financed multiannual programmes 
measures relating to the protection of the environment. ncluding 
The ERDF finances measures to improve run-down industrial or urban 
sites through the "textiles", "steel" and "shipbuilding" non-quota 
programmes. In addition, a number of programmes financed by the ERDF 
since 1985 Include a sub-programme or measures relating to the 
protection of the environment. 
However, the programme approach means that we are unable to pinpoint 
the nature of each of the projects in this field being financed through 
these programmes, though the funding tables do give an idea of the 
ERDF's contribution to environmental protection through sub-programmes 
or measures. This estimated funding totals ECU 70 million for the 
period from 1985 to 1987 and ECU 55 million for 1988. 
- 58 -
STRUCTURAL FUND CONTRIBUTION THROUGH THE CSFs 
(ECU million) 
Objective 1 regions 
The structural Fund contribution towards environmental protection 
concerns the following areas in particular: 
waste collection and treatment, 
water treatment, 
improvement of coastal areas and river basins, 
reafforestation for protection, for production and for groundwater 
protect Ion, 
the protection, preservation, development and utilization of 
natural resources, 
problems relating to expanding urban centres, industrial zones and 
areas of major tourist concentration. 
The geographical distribution of funds (in ECU million) is as follows: 
% of total Community 
contrI but ion to CSF 
Greece 
Spain 
France 
I re I and 
Italy 
Portugal 
United Kingdom 
TOTAL 202 
675 
19.5 
228 
622 
168 
53 
1 967.5 3.8 
8.8 
2.7 
8 
10 
2.9 
9.6 
6.7 
- 59 -
Objective 2 regions 
Environmental protection operations financed here concern not only the 
rehabilitation of Industrial land and urban regeneration, but also: 
the processing and recycling of industrial waste, 
water treatment, 
information, demonstration, advice and promotion regarding clean 
technologies in SME and pilot projects in this area, 
aid for "non-polluting" Investment or investment helping to Improve 
the environment, 
promotion of public transport, 
the creation and preservation of natural parks. 
The geographical distribution of funds (In ECU million) is as follows: 
New Existing Total % of total 
operations operations Community aid 
to CSFs 
Denmark 53 
Germany 108.3 
France 72.5 
Italy 43.1 
Netherlands 2.8 
United Kingdom 90.3 
Be I g I urn 9 
Spain 94.1 2 
8.1 
36.6 
2 
2.6 
51 .4 
5.2 
3.7 7.3 
116.4 
109.1 
45.1 
5.4 
141 .7 
14.2 
97.8 24.3 
34.7 
18.1 
20.4 
7 
10.4 
7.9 
13.3 
The above figures are an estimate of the Community's contribution 
towards environmental protection. It is very difficult to determine 
the total contribution of the structural Funds provided for in 
Objective 2 CSFs to fund industrial land rehabilitation, urban 
regeneration and environmental protection in the strict sense of the 
term. On the one hand, new operations planned in these fields are 
spread among the various priority sectors; In addition, we should 
mention assistance of this nature being provided in operations which 
are already under way (IMP, NPCI, I DO CP, non-quota) but which form an 
Integral part of the CSFs concerned. 
- 60 -
Objective 5b regions 
Environmental protection and conservation of the natural heritage 
constitute a development priority in rural areas. 
For the same reasons as were given In respect of the Objective 2 
regions, It is very difficult to determine the exact contribution of 
the structural Funds to environmental protection. 
The following is an estimate (in ECU million) of contributions from the 
varlous CSFs: 
New Existing Total % of total 
operations operations Community aid 
to CSFs 
Belgium - n.a. 
Netherlands - n.a. 
Spain 79.5 - 79.5 27.9 
Italy 22.0 - 22.0 5.7 
France 65.3 7.8 73.1 10.1 
Germany 99.5 10.5 110.0 2.9 
Denmark -
United Kingdom - 25.8 25.8 7.4 
Luxembourg 
TOTAL 266.3 44.1 310.4 11.9 
- 61 -
CONTRIBUTION FROM THF JOINT RESEARCH CENTRE 
(ECU mi II ion) 
Year Amount committed Total 
Frame.prog. Scientific and 
technical support 
1987 29.9 0.6 30.5 
1988 33.2 4.2 37.4 
1989 35.8 4.8 40.6 
1990 (forecast) 38 7.4 45.4 
Framework Programme activities relate to: 
environmental protection (air pollution, water quality, chemicals, 
chemical waste, etc.); 
remote sensing monitoring of land and sea environments; 
industrial hazards (analysis, prevention and management of hazards, 
taking account also of the human factor). 
The scientific and technical support activities relate chiefly to: 
air quality and air pollution (management of the central laboratory 
for the Implementation of directives, European pollutant evaluation 
system; 
the European Inventory of existing chemical substances; 
the major accidents project, including the preparation of a Major 
Accident Reporting System; 
monitoring of background radiation; 
applications of remote sensing in the CORINE project and In the 
monitoring of coastal areas. 
- 62 -
CONTRIBUTIONS FROM ENVIRONMENTAL R&D PROGRAMMES 
(ECU mi I I Ion) 
Framework prog. 1987 1988 1989 19901 1987 - 1990 
1984 - 1987 26.9 16.4 3 4.2 50.5 
1987 - 1991 - - 9.3 98.5 107.8 
1990 - 1994 0 0 
TOTAL 26.9 16.4 12.3 102.7 158.3 
The three specific programmes of technological R&D on the environment 
being financed by the Community are: 
- STEP, which covers specific research topics relating to 
environmental protection, cultural heritage, major technological 
hazards and fire safety, dealing with them In the following nine 
research areas: 
. environment and human health 
. assessment of risks associated with chemicals 
. atmospheric processes and air quality 
. water qua Il.ty 
. soil and groundwater protection 
. ecosystem research 
. protection and conservation of Europe's cultural heritage 
. technologies for environmental protection 
. major technological hazards and fire safety 
- EPOCH, which looks at climatology and natural hazards In the 
following four research areas: 
. past climates and climate change 
. climate processes and models 
. climatic impacts and climate-related hazards 
. seismic hazard 
- MAST, which deals with marine science and technology and is intended 
to help create a scientific and technological basis for the 
exploration, use, management and protection of European coastal and 
regional waters through the following research activities: 
. coastal zone science and engineering 
. marine technology and supporting initiatives 
. basic and applied marine science research. 
1 Budgetary allocation Including appropriations carried over from 1989 
- 63 -
CONTRIBUTION FROM ECSC RESEARCH 
(ECU mi 11 Ion) 
Year Amount committed Sufrlect 
1986 - 1990 12.81 - air pollution 
- pollution of fresh and salt 
water 
- waste problems and waste 
utiIIzation 
- Impact study 
- noise pollut Ion 
Although activities undertaken within the framework of Article 55 of 
the ECSC Treaty are not primarily environmental In aim, certain 
research projects do in fact cover environmental problems. 
The above figures are the best possible estimate and give an idea of 
the environmental contribution from this budget. 
- 64 -
CONTRIBUTION FROM THE "ENERGY" BUDGET 
(ECU mi 11 ion) 
1987 1988 1989 
(D "Coal" research programme 
- reduction of gaseous emissions 0.17 1.35 1.41 
and suspended particles 
- optimal use of mining waste and 0.46 0.18 0.46 
coal ash 
- gasification of coal 1.04 0.92 1.23 
(2) Demonstration programme 
- combustion of solid fuels 15.75 22.48 14.64 
- gasification of solid fuels 14.86 3.07 3.45 
The budget for demonstration programmes on energy and for coal 
technology research programmes (ECSC) provides only an indirect 
contribution to environmental policy. A lot of demonstration or 
research projects on energy have environmental implications, but it is 
difficult to say whether it is economics or ecology which carries more 
weight. 
Budgetary resources for environmental actions within the Community (In ECU millions) Annex 2 
Research 
-Environmental programmes 
(STEP/EPOCH/MAST) 
-JRC 
-New env. progr. (Including 
JRC direct action) 
-ECSC 
Demonstration for the 
environment 
MEDSPA 
NORSPA 
ACE Technology) 
ACNAT ) 
Coal 
Structural Funds 
ronr « M 
ERDF objective 1 
objective 2 
ENVIREG 
EAGGF 5a 
5b 
forests 
Third countries 
Ecology In developing countries 85 86 87 88 89 
' 90 91 92 93 94 Programmes 
Value Duration 
(Mecus) (years) 
162 4 
137 4 
518 4 
12,8 6 
62,6 9 
13.5 4 
59.6 5 
74,3 3 
260 4 
1967,5 5 
537 3 
500 4 
39 5 
310 5 
58 6 
20,8 3 
le total Identifiable amount allocated to environmental actions Is ECU 4409 million, 
i 1989 (about ECU 650 million a year compared to about ECU 135 million a year). The part commlted after 1989 is considerably greater than that commlted prior 
-66-
Annex 3 
NATIONAL ENVIRONMENTAL EXPENDITURE 
(ECU ml I I Ion) 
1. Total expenditure 
1985 1986 1988 
/ 
ECU m % GNP ECU m % GNP ECU m % GNP 
Germany 11 480 1.52 - - 16 610 1.78 
France 6 950 0.86 7 090 0.86 9 910 1.27 
Netherlands 1 960 1.26 - - 2 680 1.50 
United Kingdom 7 430 1.25 
2. Public expenditure 
1985 1986 1988 
ECU m % GNP ECU m % GNP ECU m % GNP 
Germany 5 910 0.78 - - 8 190 0.86 
Denmark 620 0.77 660 0.82 
France 4 520 0.56 4 630 0.56 5 250 0.69 
Italy 890 0.13 1 290 0.13 
Netherlands 1 480 0.95 - - 1 680 0.94 
United Kingdom 3 720 0.62 - - -
ISSN 0254-1475 
COM (91)28 final 
DOCUMENTS 
EN oi 
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ISBN 92-77-69219-7 
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