COMMUNICATION FROM THE COMMISSION TO THE COUNCIL AND THE EUROPEAN PARLIAMENT - 2003 ENVIRONMENT POLICY REVIEW - Consolidating the environmental pillar of sustainable development

TABLE OF CONTENTS

1. Introduction

2. A new political context

3. Trends, challenges and policy responses

4. A renewed approach to environmental policy

5. New member states - specific challenges of enlargement

6. International dimension

7. Conclusions

ANNEX

1. Introduction

The main purpose of the Review is to report on developments since 2001 and highlight priority issues for the year to come in EU and national environmental policies. The Review is also aimed at monitoring the implementation of the EU's 6th Environment Action Programme (6th EAP). [1]

[1] Decision 1600/2002/EC of the European Parliament and of the Council laying down the Sixth Community Environment Action Programme, OJ L 242, 10 September 2002, p. 1-15.

This Review should be placed within the context of the Lisbon Strategy on economic and social renewal launched in 2000. At Lisbon, EU leaders stated their objective of making the EU "the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion" by 2010. The Lisbon Strategy was supplemented by a third, environmental, pillar following the adoption of the EU Sustainable Development Strategy at the Gothenburg European Council in 2001. [2]

[2] Paragraphs 19-32, Presidency Conclusions, Gothenburg European Council (15-16 June 2001).

This first Review of the European Union and Member States environment policies also follows from the 2003 Spring European Council, which noted "the Commission's intention to carry out an annual stocktaking of the Cardiff process of environmental integration and a regular environment policy review and to report in time for the outcomes of these exercises to be taken into account in the preparation of its future Spring reports, starting in 2004." [3]

[3] Paragraph 58, Presidency Conclusions, Brussels European Council (20-21 March 2003).

This Review first sets out the new political context of EU environmental policy since the adoption of the EU Sustainable Development Strategy in 2001. It then examines the most pressing threats to the environment and policy responses at EU level to date. It continues by outlining the environmental policy mix required to make sustainable development a reality: particular emphasis will need to be placed on the three cross-cutting objectives which underpin environmental policy - integration of environmental concerns into other policies, implementation and information. Finally, the Review considers the particular challenge of enlargement and developments at an international level.

2. A new political context

The context for EU environmental policy has evolved significantly over the past two years, both through decisions directly affecting the environment - adoption of EU and national sustainable development strategies, launch of the 6th Environment Action Programme, the Johannesburg World Summit on Sustainable Development - and through changes to the broader policy setting - the enlargement of the Union to ten new Member States in 2004, the debate on the Future of Europe, the current economic slowdown, increased security concerns.

2.1. Sustainable development at the centre of the political debate

Sustainable development: a priority at all levels of public governance, and increasing awareness in the private sector

- Since its inclusion in the Treaty in 1997, sustainable development is recognised as an overarching goal of the EU. The adoption of the EU Sustainable Development Strategy in June 2001 at the Gothenburg European Council marked a turning point: the need to pursue in a balanced way economic growth, social improvements and environmental protection was translated into a set of detailed objectives and actions. The strategy seeks to promote economic growth and social cohesion without impairing environmental quality. Conversely, it implies that environmental objectives will need to be weighed against their economic and social impacts and 'win-win' solutions devised for the economy, employment and the environment. This marks a major shift in the way environmental policy has been conceived and designed thus far.

- In 2002, the Council and European Parliament adopted the 6th Environment Action Programme , setting out the EU's environmental roadmap for the next ten years. The 6th EAP is the main vehicle by which to achieve the environmental goals of the Sustainable Development Strategy. It sets ambitious, often quantified targets which highlight the long-term commitments of the Union to environmental protection and consequently provides a predictable framework for public and private actors in Europe and the rest of the world.

- At an international level, the second World Summit on Sustainable Development (WSSD) held in Johannesburg in September 2002 gave a new impetus to the global dimension of sustainable development ten years after Rio.

- At a national level, prior to 2001, only a handful of EU Member States had developed national sustainable development strategies. Today a majority of Member States and acceding countries have adopted such strategies, in line with the 2005 target date of the Johannesburg Plan of Implementation.

- Many public authorities throughout Europe have been active in elaborating Local and Regional Agendas 21, i.e. schemes for sustainable development at a local level.

- The private sector is showing an increasing interest in sustainable development, notably through the development of Corporate Social and environmental Responsibility strategies and other voluntary initiatives, including specific actions to improve its environmental performance.

These developments indicate an increased awareness of the interdependencies of economic, social and environmental policy objectives and a long-term commitment towards policy coherence.

An evolving policy setting affecting the sustainable development agenda

- The enlargement of the EU to ten new Member States as of May 2004 will bring a unique set of new environmental assets - including rich bio-diversity and vast areas of relative wilderness - but also represents an important challenge for EU environmental policy given the amplitude of capacity-building and financing needs in the context of the implementation and enforcement of the acquis.

- Directly linked to enlargement is the current debate on the Future of Europe. Building upon the work of the Convention, the Inter-Governmental Conference will decide upon the architecture of the enlarged Union, providing it with a Constitutional Treaty. This Treaty will form the new institutional framework within which to advance environmental protection and sustainable development. As the environment remains at the top of the list of EU citizens' priority issues, the challenge is to ensure that the new Treaty will not only preserve the EU environmental acquis, but also contribute to enhancing it.

- The deteriorating economic and social climate prevailing since 2001 has moved growth and employment towards the top of the political agenda. In line with the overarching objective of sustainable development, present efforts to address growth and employment concerns should also take environmental aspects into account. Innovative policies to maximise resource efficiency and minimise impacts on the environment need to be devised.

- The 11th of September 2001 terrorist attacks and their aftermath - including the Afghanistan and Iraq wars - have given rise to increased security concerns. This has implications for EU environmental policy. Environmental security -i.e. links between scarce resources and conflict, consequences of war for the environment, etc- and civil protection - i.e. preparedness and reaction to terrorist attacks with environmental implications- have moved up the policy agenda, yet the challenge of sustainable development can only be effectively addressed by continuing to pursue a multilateral approach.

This new political context creates a number of challenges that EU environmental policy has to meet in order to become fully integrated into the sustainable development approach.

2.2. Challenges ahead for environmental policy

EU environmental policy faces the following five main challenges:

i. Fully integrate the environmental dimension into the Lisbon Strategy

In many respects, the concept of sustainable development remains elusive. Policy-makers sometimes wrongly interpret it as a repackaging of environmental policy. They often fail to equate it with a balanced approach to the economic, social and environmental pillars, and with the need to place the three dimensions on an equal footing. This is true at EU level: the emergence of sustainable development at the centre of the political debate at EU level has resulted in the inclusion of an environmental dimension in the Spring Report since 2002. Yet to many actors the environment still appeared as an add-on to the rest of the Report in 2002 and 2003.

However, our long-term economic and social prospects very much depend on our ability to consider the environment as a key component of economic and social policy. Neglecting the environmental dimension has hidden costs - such as the health costs of poor air quality and the economic costs of cleaning up pollution- and inherent risks, which could inhibit the ability of the EU to attain the Lisbon goals. Beyond the economic argument, there is a growing awareness that, if not tackled, the root causes of many long-term environmental problems pose significant risks to the quality of life of European citizens.

ii. Develop 'win-win' solutions for the environment and the economy

A strong environmental pillar, increasingly relying upon market instruments and based on cost-effectiveness, can contribute to the achievement of the Lisbon goals. Addressing in a balanced manner potential trade-offs between economic and environmental objectives can bring forth "win-win" solutions and enhance sustainable development. Higher environmental standards can also generate new economic opportunities, notably in fostering the development of new technologies. This can contribute to the core Lisbon objective of making the EU the locus of innovative activity and a knowledge-based society by 2010.

The EU Environment Technology Action Plan (ETAP) planned for the end of 2003 will propose concrete steps and a comprehensive framework for enhancing the synergies between environmental protection, economic growth and social inclusion.

iii. Better articulate efforts toward sustainable development at all levels of governance

Sustainable development cannot be achieved by individual countries or regions acting alone. It requires action at all levels of governance, and that priorities at all levels be better articulated and activities harnessed to serve a common goal.

In this context, the Open Method of Co-ordination (OMC), [4] which is at the heart of the Lisbon Strategy and has thus far not been used in the environmental field, could usefully be introduced.

[4] The Lisbon European Council (paragraph 37, Presidency Conclusions, 23-24 March 2000) introduced the Open Method of Co-ordination, defined as "the means of spreading best practice and achieving greater convergence towards the main EU goals. This method, which is designed to help Member States to progressively develop their own policies, involves:

iv. Make a success of enlargement in the environmental field

Both the EU Sustainable Development Strategy and the 6th EAP include enlargement in their scope and were designed for the enlarged Union. Acceding countries have already made great strides in improving environmental protection and complying with EU environmental legislation. However, significant institutional and financial problems have to be overcome in order to implement and enforce the adopted legislation.

In addition, action taken to improve the infrastructure and living standards in acceding countries, while meeting the legitimate expectations of citizens, could increase pressures on the environment.

Addressing these challenges should continue to be a priority for the post-accession period.

v. Build upon the international credibility gained by the EU in recent years

EU leadership was instrumental in achieving a successful outcome at the World Summit on Sustainable Development. Through its active role at the Summit, domestic action to meet its Kyoto target, and promotion of other key international environmental agreements and conventions, the EU has confirmed its recognised worldwide leadership on environmental matters. Although this brings wider benefits to the EU, it also induces an obligation to deliver.

The credibility thus gained will increase the EU's ability to persuade partners, notably developing countries, to better take into account environmental concerns when defining their own paths to economic and social development. In this respect, the Greek Presidency's initiative, endorsed by the Thessaloniki European Council, [5] to promote the establishment of European diplomacy on environment and sustainable development, could be a useful vehicle to better co-ordinate EU and national action.

[5] Paragraphs 76-77, Presidency Conclusions, Thessaloniki European Council (19-20 June 2003).

Meeting the above challenges will help, over time, to strike the right balance between the economic, social and environmental pillars of sustainable development. The worrying environmental trends observed at the time of the launch of the EU sustainable development strategy have continued and require redoubled efforts in the medium and long-term. They are a clear reminder of the urgent need to place renewed emphasis on implementation of the environmental chapter of the Union's agenda for sustainable development.

3. Trends, challenges and policy responses

This section is structured around the four priority issues of the 6th EAP (climate change; nature and biodiversity; resource management; and environment and health). Each section briefly identifies the key trends and challenges, as well as detailing recent policy responses.

3.1. Climate change

The 1990s were the warmest decade for 150 years. The evidence suggests that climate change is not only occurring but also directly affecting the EU. Average temperatures are projected to rise still further with a 1.4 to 5.8° C increase over the next hundred years, increasing the risk of droughts and forest fires if climate change is not mitigated. It is expected that Eastern and Southern Europe will be particularly affected. In addition, parts of Europe may experience higher and more intense rainfall, which will increase the risk and frequency of floods, similar to those that affected Europe in 2001 and 2002.

The EU has played a leading role in developing a multilateral response to the climate change. It successfully rescued the Kyoto Protocol in 2001 together with partners around the world following the U.S. withdrawal. In ratifying it on 31 May 2002, the EU committed itself to reducing its greenhouse gas emissions by 8% in 2008-2012 over 1990 levels.

The latest data available show that in 2001 EU emissions were 2.3% below 1990, indicating that the EU has lost some of the gains that it made in 1999 and 2000, where emission levels had fallen to 4% below 1990 levels (see figure 1 in Annex). If the EU is to deliver on its Kyoto target of an 8% reduction by 2008-2012, and in turn retain its leadership role on climate change, stringent implementation by the Member States of the relevant EU measures recently set in place is needed and additional action may be required.

The causes of climate change, notably greenhouse gas emissions from the industrial, transport and energy sectors (see figure 2 in Annex), are deeply rooted in the structure of the economy. Thus, only an integrated set of measures, coupled with determined leadership and the engagement of all stakeholders, can tackle the issue. In this context, the introduction of flexible market-based instruments is intended to help reduce climate change at a lower cost for industry. Additionally, the climate change issue will only be resolved if the environmental dimension is fully integrated into other policy areas, notably energy, transport and industry.

Priorities

3.1.1. Implement measures identified by the European Climate Change Programme (ECCP)

The European Climate Change Programme (ECCP) was established in June 2000 as a cross-sectoral activity to identify the most cost effective measures required to meet EU Kyoto targets. It is based on a participatory process and fosters policy integration with particular focus on energy, transport, industry and research.

The ECCP is the EU's main instrument in identifying emission reduction measures and it has already produced several important measures. In October 2001 the adoption of the Commission's draft Directive on Greenhouse Gas Emission Trading was a landmark for environmental legislation. The Directive entered into force in October 2003. [6] The EU scheme is the first multi-national emissions trading scheme in the world.

[6] Directive 2003/87 EC of the European Parliament and the Council of 13 October 2003, OJ L 275/32, 25 October 2003.

The Directive exemplifies the flexible approach chosen by the EU to fulfil Kyoto obligations in a cost-effective manner. The system of cost optimisation for the whole of the Union foreseen in the Directive will offer substantial economic benefits compared to a scenario in which separate national emission trading systems would have been set in place or more traditional regulatory policy instruments would have been used. [7]

[7] For more details of the Emissions Trading Directive, see Annex.

In addition, the Commission recently put forward an ambitious proposal to reduce fluorinated greenhouse gas emissions by 25% by 2010.

Despite these important steps, the results of the second Progress Report on the ECCP, released in April 2003, [8] are unambiguous: the measures currently in place will not allow the EU to achieve its Kyoto target. This is a strong incentive to speed up the pace of implementation of the measures identified in the ECCP and reinforce them with a strong monitoring and review process in those areas where action is most needed. A number of key measures are in an advanced stage of preparation, notably proposals on energy services, minimum energy efficiency standards for end-use equipment.

[8] Second ECCP Progress Report 'Can we meet our Kyoto targets?,' April 2003. http://www.europa.eu.int/comm/environment/ climat/eccp.htm

3.1.2. Enhance the integration of climate change concerns in other policies

In 2000 energy industries were the source of 27% of total EU greenhouse gas emissions (see figure 2 in Annex). Improving energy efficiency is a priority. Environmentally harmful energy subsidies will be analysed within the framework of the Commission's Green Paper for the security of Energy Supply, taking into account economic, social, security and environmental impacts, with a view to progressively phasing them out in line with the objectives of the EU Sustainable Development Strategy [9] and the 6th EAP. [10]

[9] Communication from the Commission, A sustainable Europe for a better world: a European Union strategy for sustainable development, COM(2001)264final, 15 May 2001 (p.10): "Phase out subsidies to fossil fuel production and consumption by 2010."

[10] Article 3, 4), first indent: "encouraging reforms of subsidies that have considerable negative effects on the environment and are incompatible with sustainable development, inter alia by establishing, by the mid-term review, a list of criteria allowing such environmentally negative subsidies to be recorded, with a view to progressively eliminating them."

Positive steps have been taken since the launch of the ECCP. Milestones include measures for promoting the generation of electricity from renewable energy sources, [11] the improvement of the energy performance of buildings [12] and promotion of co-production of heat and power. [13] An additional positive step is the Directive on energy labelling of domestic appliances. [14] The effects of these measures are still to come.

[11] Member States are currently implementing this Directive. The Commission is actively following up the measures needed for achieving the 22% of gross electricity consumption from renewable energy sources by 2010. The Commission will present a report to the Council and the European Parliament in May 2004.

[12] This Directive, in force since January 2003, is estimated to have a potential for greenhouse gas emissions reduction of 35-45 Mt CO2eq, as mentioned in the second ECCP progress report (p.13).

[13] The greenhouse gas emissions reduction potential of this measure is estimated to be 65 Mt CO2/year.

[14] Commission proposals for Directives 2002/31/EC and 2002/40/EC of 22 March 2002 implementing Council Directive 1992/75/EEC with regard to energy labelling of domestic air-conditioners and electric ovens. The aim of these Directives, which came into force in January 2003, is to influence the consumer's behaviour by displaying a label, at the point of sale, showing the energy performance of the appliance.

Regarding energy taxation, the adoption in 2003 of a Directive on energy products taxation, [15] following a Commission proposal from 1997, is a positive development. The new Directive will ensure that minimum rates of taxation on oil products, which continue to account for over 40% of the EU's gross inland energy consumption (see figure 3 in Annex), will be brought back in real terms to the levels of 1992. It also introduces minimum rates on a variety of substitute energy products whose use also leads to emissions. However, the directive will only induce limited increases in the levels of energy taxation in a number of Member States so that the impact on energy efficiency and emissions is not likely to be strong.

[15] The Energy Products Tax Directive is due to enter into force on 1 January 2004.

Further efforts will be needed to curb unsustainable trends in the energy sector. While the EU's total inland energy consumption has increased steadily, at approximately 1% per year, since 1985 the share of renewable energy remains low at around 6% (see figure 3 in Annex). In the acceding countries the share is 5%. [16] Latest projections from the European Environment Agency indicate that, unless additional policy measures are taken, the EU will fail to meet its indicative target of 12% by 2010. It is also unlikely that the EU will be able to meet its indicative target of generating 22% of gross electricity consumption from renewable sources by 2010 (see figure 4 in Annex).

[16] However, several candidate countries register a high share of renewable energy - Latvia (30%), Estonia, Romania and Slovenia (11% each).

In 2000 transport not only accounted for approximately 21% of EU greenhouse gas emissions, but was the only sector where emissions were increasing (figure 5 in Annex). In addition, trends are not encouraging in acceding countries: there has been a sharp fall in rail and bus transport and higher growth rates in air and private car transport than in the EU.

Positive steps have been taken in the framework of the EU Sustainable Development Strategy, the 6th Environment Action Programme and the White Paper on European Transport Policy to reduce greenhouse gas emissions from transport, including the biofuels Directive, with the envisaged target of 5.75% market share of alternative fuels by 2010; the proposal for a modification of the Eurovignette Directive; measures on fuel taxation; and the above mentioned energy products taxation Directive, which allows Member States to apply lower minimum tax rates for alternative fuels generating fewer CO2 emissions.

The above measures, of which the effects are still to come, are important steps to achieve the set objective of bringing about a modal shift from road and air transport to rail, water and public passenger transport; and to ensure that the environmental costs of different transport modes are better captured in prices charged to users, and in turn achieve the objective of decoupling of the environmentally harmful effects of transport growth and GDP growth. However, additional efforts will be needed if the EU is to meet its Kyoto commitments, and in view of future commitments. [17]

[17] See second ECCP Progress Report, p.14: "the limitation of greenhouse gas emissions in the transport sector will require the development of new strategies and strengthened policies and measures in the future. This is necessary to preserve the overall reductions that are achieved in view of meeting the target of the first commitment, and even more prominently, in view of future commitment periods."

Agriculture, which in 2000 accounted for about 10% of total emissions, remains a major source of emissions of methane [18] and nitrous oxide, [19] two of the important greenhouse gases. [20] The overhaul of the Common Agricultural Policy (CAP) agreed in 2003, introducing increased funding for rural development, is a positive step that could lead to emissions reductions in the agricultural sector. [21] The mid-term evaluation of rural development plans in 2004 will provide a useful opportunity to better articulate the agricultural and climate change policies.

[18] CH4 - Methane emissions are generated principally by enteric fermentation and manure management.

[19] N20 - Nitrous oxide emissions are principally three-fold: (1) direct emissions from agricultural soils and from animal production systems; (2) indirect emissions which take place after nitrogen is lost from the field as nitrogen oxides (Nox) or Ammonia (NH3) or after leaching or runoff of nitrates; (3) emissions resulting from agricultural burning.

[20] In addition, decline in soil organic matter of cropland might add substantially to CO2 emissions but figures at European level are very uncertain. The quantification of biospheric greenhouse gas emissions has therefore been targeted as a research priority within the EU's 6th RTD Framework Programme.

[21] See 3.2 for further information regarding CAP reform.

In order to reduce EU greenhouse gas emissions and improve policy coherence climate change concerns should be better integrated into the EU's Cohesion policy and synergies between environmental and cohesion policies further explored. In its recently adopted Revised Guidelines, the Commission has suggested to Member States to take particularly into account the objectives of promoting energy efficiency measures and of increasing the renewables' share of electricity production to 22%, together with the target of 5.75% for the use of bio-fuels in transport. Local and regional authorities should take on board these Commission Guidelines while looking for the best use of the Structural Funds to boost regional economic development.

3.2. Nature and biodiversity

Biodiversity reflects the complexity, balance and status of the various ecosystems. Not only does biodiversity perform essential life support functions but it also provides the basis for important economic, recreational and cultural activities. The erosion of biodiversity [22] is therefore of great concern. At the UN WSSD at Johannesburg parties committed themselves to significantly reducing the rate of biodiversity loss by 2010. The EU has gone even further by committing itself to halting the loss of biodiversity by 2010. [23]

[22] As documented by IUCN's Red list of endangered and threatened species (IUCN - World Conservation Union).

[23] See Paragraph 31, Presidency Conclusions, Gothenburg European Council (15-16 June 2001).

In order to fulfil these objectives, current agricultural and fishing practices, which place considerable pressure on biodiversity, need to be made more sustainable through increased integration of environmental considerations.

In parallel, the difficulties in protecting biodiversity, as illustrated by the problems in implementing Directives such as the Habitats and Birds Directive, and with financing the Natura 2000 network, need to be addressed. Solutions must be found to current implementation difficulties and pressures on the environment must be better evaluated through effective indicators.

Priorities

3.2.1. Move towards a more sustainable agricultural policy

Under the recently agreed reform of the Common Agricultural Policy (CAP), the vast majority of EU direct payments are to be decoupled from production: there is to be a single farm payment for EU farmers, independent from production. Moreover, this payment will be linked to respect of environmental and food safety standards, including relevant provisions of the Birds and Habitats Directives, and the obligation to keep agricultural land in good agricultural and environmental condition. The introduction of this decoupling is expected to reduce the incentives for intensive farming methods and encourage more sustainable farming.

In addition, support for rural development is to be substantially increased through the transfer of the amounts resulting from savings made through a reduction in the direct payments made to farms receiving such payments beyond a certain threshold. This can allow new measures to be introduced to boost quality production and to promote environmental protection. This should help foster more environmentally benign farming practices, such as organic farming (see figure 6 in Annex).

3.2.2. Green the Common Fisheries Policy

Despite recent measures taken, many fish stocks in European waters are now considered to be below their safe biological limits (see figure 7 in Annex). Further steps need to be taken to secure sustainable exploitation of fish resources to avoid greater long-term economic damage to fishing communities and to the marine environment. Counter-productive subsidies are being progressively removed and appropriate measures need to be taken to help fishing communities to adjust to a lower level of fishing activity, along the lines of the CFP Reform. If implemented, the ecosystem approach to fisheries, multi-annual plans for catches, action based on scientific advice and reductions in subsidies put forward in the Commission Proposals would enhance the prospect of restoring EU fish populations.

3.2.3. Better protect soils and the marine environment

In addition to providing the basis for agricultural production and fisheries, soils and oceans are also huge reservoirs of biodiversity. There is evidence that both soils and oceans are under increasing threat from a series of human activities, causing, in the case of soils, problems such as erosion, decline in organic matter and biodiversity, local and diffuse contamination, sealing, compaction and salinisation. In the case of oceans, problems range from decline in fishing resources, eutrophication to impacts on biodiversity of the introduction of non-indigenous species and of deliberate or accidental releases of oil at sea. It is therefore essential to better protect oceans and soils. An integrated approach must be adopted to this end including appropriate co-financing through Cohesion policy to adequately cover the territorial dimension.

A first step was the adoption of the Communications "Towards a strategy to protect the marine environment" [24] and "Towards a strategy to protect European soils" [25] in 2003. These Communications provide the framework within which the necessary data to elaborate action plans will be collected, in co-operation with all stakeholders with a view to developing fully fledged soils and marine strategies.

[24] Commission Communication - Towards a Strategy to protect and conserve the marine environment, COM(2002)539final, 2 October 2002.

[25] Commission Communication - Towards a Thematic Strategy for Soil Protection, COM(2002)179final, 16 April 2002.

3.2.4. Improve implementation in the field of nature protection

The key to improving implementation of legislation, on nature and biodiversity and in other areas, is to take implementation issues into account right from the formulation stage - as in the case of the Water Framework Directive. In addition, the Commission needs to play an active role in providing support and advice to Member States once legislation is in place - as is currently done to improve implementation of Birds and Habitats Directives.

Implementation of the Birds and Habitats Directives has been difficult. Infringements relating to the two Directives account for over a quarter of instances where the European Commission has taken legal action (see figure 8 in Annex). New ways of working with Member States are being developed to improve implementation of these two Directives, leading to important progress.

The pace of guidance efforts on the implementation of the two Directives has been stepped up since 2000. In 2000, an interpretation document was published on the management of Natura 2000, the "coherent European ecological network of special areas of conservation", for which the Habitat Directive provides. Guidance documents on hunting and forest management will be published shortly. In addition, a 'Sustainable Hunting Initiative' was launched in 2001 as a constructive dialogue with Member States and stakeholders on hunting and conservation issues.

Regarding funding possibilities for Natura 2000 requirements, existing instruments such as the LIFE-Nature programme and Rural Development Plans under the CAP already offer important possibilities. So do the Structural Funds and the Cohesion Fund which set as a condition of awarding financing the compliance with Natura 2000. The Commission is currently working on a Communication on possibilities for future specific EU funding for Natura 2000.

With respect to monitoring progress in site designation under Natura 2000, the Commission is using a 'distance to target' barometer. Once designations are completed, the Commission will develop a barometer of site management progress. In parallel, the Commission has proposed extending by two years the third phase of the LIFE programme notably to support the management of designated sites at national and regional levels, hence bridging the gap between the end of this third phase and the new financial perspectives. In addition, the Commission will develop indicators and geographical information systems to assess Member States' management and monitoring of Natura 2000 sites.

3.2.5. Better highlight trends in the biodiversity area

The Commission has recently launched a broad consultative review of EU biodiversity policy. This review will assess progress at EU and Member State level in implementation of the EC Biodiversity Strategy and Action Plans, effectiveness of action taken in terms of impact on the rate of biodiversity loss, and appropriateness of the objectives and actions proposed within the context of the 2010 biodiversity target and of enlargement. On this basis, a Commission Communication, scheduled for June 2004, will make recommendations for a prioritised set of measures with actors, timeframes and resources identified. [26]

[26] This exercise follows from Chapter IV paragraph 12 of the Communication from the Commission to the Council and to the Parliament on a European Community Biodiversity Strategy (COM (1998) 42), 4 February 1998.

Part of the process of raising awareness on biodiversity trends is the development of the monitoring and reporting framework against the biodiversity strategy and action plans. The Commission is actively working with the European Environment Agency toward the establishment of a set of biodiversity implementation indicators, building upon the progress achieved on the means to measure biodiversity, including standards for monitoring and surveillance of habitats and species of European interest. These standards along with continued research efforts to improve the knowledge-base will give the EU a 'finger on the pulse' of European biodiversity crucial to monitor and evaluate policy actions in this sector (see figure 9 in Annex).

3.2.6. Strengthen biodiversity protection at international level

The Convention on Biological Diversity (CBD) is the key international instrument for the conservation and sustainable use of bioresources. In order to improve the effectiveness of the CBD on the ground, the Commission has been actively supporting the set up of new instruments [27] and a shift of focus from policy development to implementation. The Commission is also active in other international biodiversity agreements, such as the Convention on International Trade on Endangered Species (CITES). [28]

[27] Such as the CBD Strategic Plan, the target to 'significantly reduce the rate of loss of biodiversity by 2010', and the development, thanks to Commission efforts, of a revised and comprehensive Work Programme on Forest and of Guidelines on Access to Genetic Resources and Benefit-Sharing, and of the Guiding Principles on Invasive Alien Species.

[28] The Commission notably supports the listing under CITES of additional fish and timber species and is taking steps to implement these commitments in EC legislation.

The ability of international biodiversity agreements to lead to a substantial reduction of the loss of biodiversity also depends on effective implementation by all Parties to these agreements. Devising ways of promoting implementation of these agreements in developing countries is therefore a priority of the EU's international environmental action. [29]

[29] See Section 6 - International.

An additional, important, EU initiative in the field of international biodiversity is the Commission Action Plan: forest law enforcement, governance [30] adopted in May 2003 to combat illegal logging in line with the EU's Johannesburg commitments. Measures set out in the Action Plan include support for improved governance in wood-producing countries, voluntary partnerships with wood-producing countries to ensure only legally harvested timber enters the EU market, and efforts to develop international collaboration to combat the trade in illegally harvested timber.

[30] COM(2003)251final, 21 May 2003.

3.3. Resource management

The Lisbon Strategy sets out the ambitious goal of achieving an economic growth rate of 3% per annum, which would roughly double GDP in 25 years. However, if we are to avoid additional social and environmental costs, such as continually growing volumes of waste, then we have to break the strong historical link between GDP growth and environmental pressure. Decoupling environmental degradation from economic growth is a central theme of the EU Sustainable Development Strtategy. [31] One of the ways to achieve it is through a significant increase in resource efficiency.

[31] The importance of decoupling was recognised in the Commission's proposal for an EU sustainable development strategy which set out a headline objective to "break the links between economic growth, the use of resources and the generation of waste". It was reaffirmed by the spring 2003 European Council (see paragraph 53, Presidency conclusions, Brussels European Council, 20-21 March 2003).

The efficiency of raw materials and energy use has been increasing in many EU countries. Much of this improvement, however, has been achieved because the economies of many EU countries shifted from manufacturing to service economies in the 1980s and 1990s (see figure 10 in Annex).

To achieve decoupling, the challenge is to further promote sustainable patterns of production and consumption as underscored in the Johannesburg Plan of Implementation. By successfully developing a ten-year Programme for sustainable production and consumption, the EU would ensure that its domestic action is consistent with, and underpins, its international commitments, boosting EU leadership on sustainable development.

Priorities

3.3.1. Intensify efforts towards a more sustainable use of resources

Decoupling is the overarching goal to which the Commission Thematic Strategy on Resource Management will contribute. [32] As implementing new policies and adapting existing ones to achieve the necessary decoupling of resource-related negative environmental impacts from economic growth will be a long-term process, the time scale of the strategy is 25 years.

[32] Commission Communication Towards a Thematic Strategy on the Sustainable Use of Natural Resources, COM(2003)572 final, 1 October 2003.

A comprehensive strategy will be proposed in 2004 based on an open and collaborative process involving the Community institutions and stakeholders.

Priority will be given to three strategic elements throughout the development of the strategy. In a first stage, the strategy will focus on knowledge gathering to determine which resources are of biggest concern in terms of the environmental impacts associated with their use, taking into account technological possibilities and socio-economic considerations. A key objective will be to fill current gaps as to pathways taken by resources in the economic cycle and their impacts on the environment. Based on this knowledge, the strategy will assess how far policy choices are compatible with the overall decoupling objective. It will eventually propose actions to better take into account resource use considerations when devising policy in other sectors.

This Strategy will be underpinned by an Integrated Product Policy, [33] combined with a Thematic Strategy on the Prevention and Recycling of Waste. [34] Based on an extensive consultative process with all stakeholders concerned, these initiatives will look at the environmental impacts across the life cycle of products, so as to reduce pollution, facilitate recycling whenever economically justified, and reduce the costs of waste disposal.

[33] Commission Communication on Integrated Product Policy, 12 June 2003.

[34] Commission Communication Towards a Thematic Strategy on the Prevention and Recycling of Waste, COM(2003)301 final, 27 May 2003.

EU resources policy is supported by important research efforts under the 6th Research and Technological Development Framework (RTD) Programme in the field of sustainable production and consumption.

EU resources policy must be flexible enough to allow for smooth adaptation within the private sector. The whole range of market-based instruments (as well as voluntary agreements [35] whenever appropriate and cost-effective) must therefore be drawn upon in the pursuit of eco-efficiency.

[35] COM(2002)412 final, 17 July 2002.

3.3.2. Ensure proper implementation of existing waste legislation

In addition to preventing waste generation by modifying our patterns of production and consumption, we need to limit the environmental impacts of the use of resources. This requires that existing waste legislation be properly implemented.

Member States have made some progress in recent years in developing and putting into practice the waste management plans required under Community legislation. However, increased efforts are needed to fully transpose and apply the existing legislation and, in turn, reduce waste disposal. In addition, progress is also needed to minimise waste generation from production processes through better use of environmental technologies.

A particular effort is needed in acceding countries to shift from heavy reliance on landfilling - over 90% of municipal waste in most countries- to a more sustainable system of waste management.

3.4. Environment & Health

The protection of public health has been a constant priority of EU environmental policy. However, existing standards have used a 'one size fits all' approach, without taking into account the need to protect the most vulnerable groups in society, such as children. There has never been a comprehensive assessment of the overall impact on human health of the combined effects of the various toxic agents in our environment. A new, integrated approach needs to be developed to efficiently address environment and health challenges as well as existing information and knowledge gaps regarding the environment and health impacts of specific pollutants and product groups.

Priorities

3.4.1. Develop an integrated approach to environment & health issues

There is a strong link between environmental problems and poor health. Around 60,000 deaths per year in large European cities are caused by long-term exposure to air pollution. Furthermore, in Europe, asthma affects one child in seven. Compared to just 30 years ago, the number of children suffering from asthma and other allergies has increased dramatically.

To reduce diseases caused by environmental factors in Europe, it is necessary to step up research to better understand the cause-effect relationships between environmental threats and adverse health impacts. This is the core objective of the EU Environment & Health Strategy adopted in June 2003. [36]

[36] Commission Communication - A European Environment and Health Strategy, COM(2003)338final, 11 June 2003.

The strategy outlines the integrated approach required to address complex environment and health interactions and their impacts on more vulnerable groups such as children. On this basis, an Action Plan for the period 2004-2010 is under preparation. It will constitute the Commission's main contribution to the 4th World Health Organisation Ministerial Conference on Environment & Health to be held in Budapest in 2004. Areas of action under consideration include establishing an EU bio-monitoring framework; launching pilot projects on integrated monitoring of dioxins, heavy metals and endocrine disrupters; and developing harmonised environment and health indicators. During a first cycle, work will focus on three priority groups of diseases: childhood cancers, respiratory diseases and neuro-developmental disorders.

3.4.2. Reduce air pollution

Although much progress has been made over the past few decades in improving air quality, serious problems remain. Studies [37] are showing that existing levels of air pollution pose a significant risk to human health, particularly as regards particulate matter and ground-level ozone. There is a real danger that the downward trend in concentrations of these pollutants might be reversed, e.g. due to growing traffic, if further action is not taken.

[37] See Report on a WHO Working Group, Health aspects of air pollution with particulate matter, ozone and nitrogen dioxide (Bonn, 13-15 January 2003), http://www.euro.who.int/document/ e79097.pdf.

In order to address this problem the Commission launched the Clean Air for Europe (CAFE) programme to gather scientific evidence, assess the likely evolution of pollution levels between now and 2020 and identify the most cost-effective measures to improve the situation. This programme is well underway and will lead to a thematic strategy on air pollution in mid 2005. In this context sound implementation of the existing legislation is crucial, but further legislative and other measures may be necessary in order to achieve levels of air pollution that do not give rise to significant negative impacts on health and the environment, as set out in the 6th EAP.

3.4.3. Reform chemicals policy

The use of synthetic chemicals is widespread in industry and households - 400 million tonnes of chemicals are sold worldwide each year.

The chemicals industry plays a very important economic role, supplying materials to manufacturing industry, as well as stimulating innovation and supplying products needed to sustain and improve the quality of life. The EU is the largest chemicals producing area in the world. Maintaining a competitive and innovative chemicals industry in Europe is therefore a major goal.

At the social level, improving the health and safety of workers and the general public is a key political objective of the Community chemicals policy. Maintaining high levels of employment is also a priority.

In relation to the environment, the avoidance of chemical contamination of air, water, soil and buildings, as well as preventing damage to biodiversity are also major goals. Improved control of persistent, bioaccumulative and toxic substances is of particular importance in this respect. The potential impacts on the environment and human health of synthetic chemicals use and disposal are increasingly a cause of concern. Although research and data gathering increasingly point to a cause-effect relationship between the exposure to certain chemicals and adverse health or environmental effects, scientific evidence is not always conclusive. Improving knowledge of chemicals and management of risks from chemicals is therefore a priority.

In line with the above objectives, the Commission presented in October 2003 [38] a proposal for a new EU regulatory framework for chemicals. The aims of the proposed new regulation are to improve the protection of human health and the environment while maintaining the competitiveness and enhancing the innovative capability of the EU chemicals industry. It establishes the new REACH (Registration, Evaluation and Authorisation of Chemicals) system aiming to:

[38] COM(2003)644, 29 October 2003.

- Require companies that produce and import chemicals to provide information on the properties of substances produced or imported in the EU, in particular the 30,000 existing substances for which little or no information is available, and for higher volume substances to assess the environmental and health risks arising from their use and take the necessary measures to manage any risks they identify;

- Ensure that the resulting information is made available to downstream industries, public authorities, civil society and to the general public;

- Permit public authorities to take more speedy action in cases where risk reduction measures are needed;

- Other guiding principles of the REACH approach include precaution whenever there are information gaps prevention of environmental and health hazards arising from chemicals use; and the promotion of the substitution of dangerous chemicals by safer ones, where possible.

In addition to domestic action, the EU has been active internationally in promoting better health and environment, notably in developing countries, through the negotiation and conclusion of the Rotterdam Convention on the Prior Informed Consent (PIC) procedure for certain hazardous chemicals in international trade; and the Stockholm Convention on Persistent Organic Pollutants (POPs). [39]

[39] The Rotterdam Convention, adopted and opened for signature by a Conference of Plenipotentiaries on 10 September 1998, establishes a first line of defence against possible problems by enabling importing countries, particularly developing countries, to decide which chemicals included in the PIC procedure they want to receive and those to exclude when they cannot manage them safely. The objective of the Stockholm Convention, adopted on 22 May 2001, is the elimination of intentionally produced POPs and the continuous minimisation, or where feasible ultimate elimination, of those POPs that are unintentional by-products. The Stockholm Convention on Persistent Organic Pollutants provides a framework, based on the precautionary principle, to ensure the safe elimination/continuous minimisation of the initial 12 priority Persistent Organic Pollutants. In future it will also enable Parties to identify other candidates for international action using established criteria so as to prevent and minimise their harmful impact on human health and the environment.

3.4.4. Implement the EU regulatory framework on biotechnology

Technological progress is one of the major driving forces behind economic growth. Increasingly, innovation is associated with the commercial exploitation of research and development results in rapidly growing areas of knowledge, such as biotechnology. In order for the EU to be able to fully exploit the potential benefits of biotechnology, while taking a careful approach to managing risks to human health and the environment, proper authorisation mechanisms have been established at EU level.

The EU regulatory framework in the field of GMO-related biotechnology is now complete. Measures set in place on the contained use and deliberate release of GMOs into the environment, [40] as well as on full traceability and labelling for GMOs and processed products for food and feed use will ensure an appropriate level of human health and environmental protection. EU implementation of the Cartagena Protocol on Biosafety regulating the transboundary movements of GMOs, which entered in force in June, will further increase health and environment protection in third countries by controlling movements of GMOs. It is hoped that the implementation of these measures will contribute to re-establishing public confidence and demonstrate that the Community authorisation procedure for the release of GMOs works as designed.

[40] Directives 98/81 and 2001/18.

However, Member States often lag behind with transposition and implementation of Community legislation in the field of GMOs. Yet, a timely and proper implementation of the EU regulatory framework is essential to demonstrate that technological progress and free trade are compatible with high standards of environment and health protection.

3.4.5. Develop a strategy on the sustainable use of pesticides

Agricultural over-production combined with increasing evidence that even low-level exposure to pesticide residues in food may contribute to health problems have led to a reassessment of EU policy in this sector. Steps will continue to be taken to minimise the health and environment risks of pesticides; improve controls on the use and distribution of pesticides; reduce the levels of harmful active substances including through substituting the most dangerous ones with safer, including non-chemicals, alternatives; encourage low-input or pesticide-free crop farming methods. Measures addressing these specific objectives will be covered by the Commission Thematic Strategy on the Sustainable use of Pesticides, [41] which is currently under preparation. [42]

[41] Commission Communication Towards a Thematic Strategy on the Sustainable Use of Pesticides, COM(2002)349 final, 1 July 2002.

[42] These measures will also be covered in the context of revisions to the plant protection acquis.

4. A renewed approach to environmental policy

EU policy responses to reverse environmentally unsustainable trends will only be effective if placed within a further renewed approach to environmental policy that focuses on integration, implementation and information. The effectiveness of the EU in enhancing the environmental component under the Lisbon strategy depends on its ability to:

- Promote an integrated approach to policy-making and give a boost to the integration of the environmental dimension into all other policy areas at EU and national levels;

- Develop a new approach to implementation ensuring, on the one hand, that the EU body of legislation is properly complied with, to bring maximum benefits to the environment, while modernising, on the other hand, the environmental regulatory framework, by, wherever appropriate, moving toward a more flexible, market-friendly, approach, fixing long term environmental targets, and making increasing use of market-based instruments.

- Base environmental policy on sound knowledge and information to increase its efficiency; and make information on environmental impacts widely available to the public to foster the behavioural changes necessary to achieve sustainable development.

4.1. Integration

4.1.1. Improve environmental policy-making

Develop an integrated approach to environmental policy-making

Environmental legislation in Europe has traditionally focused on tackling single pollutants and protecting single environmental compartments, often presenting 'end of pipe' solutions to environmental problems rather than addressing the source of those problems or the combined effects of pollution on different environmental media and the interdependency between these media.

Curbing current unsustainable environmental trends requires developing an integrated approach to policy making. Environmental policy should not only focus on remedying the environmental impacts but also on addressing the most prominent environmental stressors.

The 6th EAP exemplifies this new approach notably through the EU Strategy on Environment and Health [43] and the use of Thematic Strategies. The latter, which are to be presented by 2005, aim to address in an integrated way seven central issues. [44] At the end of 2003, each strategy will have been the subject of a Communication focusing on problem definition. These Communications will be presented to stakeholders for a wide consultation. In a second stage, the strategies as such will be developed. They will include clear sustainable objectives and targets, to be met through a set of cost-effective measures accompanied by a timetable and their own specific objectives.

[43] See Section 3.4. - Environment & health.

[44] The seven thematic strategies cover: soil protection; marine environment; sustainable use of pesticides; urban environment; sustainable use and management of resources; waste recycling and air quality.

Figure A: Progress made toward developing thematic strategies

1. Air quality // The Clean Air For Europe (CAFE) programme: Towards a Thematic Strategy for air quality - COM(2001) 245 final, 4 May 2001

Objective // There is increasing scientific evidence that existing policies are not sufficient to protect human health and ecosystems from the harmful effects of air pollution. The Strategy will therefore propose an integrated set of cost-effective measures to achieve levels of pollution that do not give rise to unacceptable impacts on human health or the environment

2. Soil protection // Towards a Thematic Strategy for soil protection - COM(2002) 179 final, 16 April 2002

Objective // Soil is a vital resource that is essential of the proper functioning of the environment for life supporting function and as providing the basis for many economic activities. The aim of the strategy is to protect and conserve the ecological, chemical and physical status of soil resources in Europe

3. Sustainable use of pesticides // Towards a Thematic Strategy on the sustainable use of pesticides - COM(2002) 349 final, 1 July 2002

Objective // Growing concerns regarding the effects of pesticides on human health and the environment need to be addressed. The strategy will define the set of policy measures and instruments to achieve a more sustainable use of pesticides and to decrease the risks associated with their use

4. Protection and conservation of the marine environment // Towards a Strategy to protect and conserve the marine environment - COM(2002) 539 final, 2 October 2002

Objective // The marine environment is subject to a wide diversity of threats and pressures. An integrated and holistic approach is needed to ensure that the sum of the different actions achieves the necessary level of environmental protection to protect and conserve the ecological, chemical and physical status of the marine environment

5. Waste prevention and recycling // Towards a Thematic Strategy on waste prevention and recycling - COM(2003) 301 final, 27 May 2003

Objective // Waste generation is still increasing as waste prevention is not sufficiently considered a priority. There is therefore a need to explore ways to improve the EU approach to waste management within the framework of sustainable resource management. The objective is to reduce the environmental impact of resource use through waste prevention and recycling. An important additional aim is to simplify and improve implementation of existing waste legislation

6. Sustainable use and management of resources // Towards a Thematic Strategy on the sustainable use of natural resources - COM(2003) 572 final, 1 October 2003

Objective // Due to pervasive demand for natural resources, many different policies affect their use and the associated environmental impacts. These policies are not co-ordinated towards coherent goals regarding quantities used or environmental impacts generated. This issue needs to be addressed. The overarching objective is to decouple negative environmental impacts associated to the use of natural resources from economic growth.

7. Urban environment // Towards a Thematic Strategy on the urban environment - expected end 2003

Objective // Cities, home to 80% of EU citizens, generally suffer from poor air quality, noise, traffic congestion and a lack of sustainable planning. The Communication will propose a framework for local, regional, and national actions to promote sustainable urban transport, urban management and design with a view to improve the environmental performance and quality of urban areas and secure a healthy living environment for urban citizens

Increase policy coherence

Many of the current environmentally unsustainable trends stem from a lack of attention to inter-linkages between sectors, leading to policies in different areas working against one another rather than being mutually supportive. This lack of policy coherence renders policies both more costly and less effective and thus hinders progress towards sustainable development.

To further avoid that differing objectives between policy areas lead to policy inconsistency, a unified system for ex-ante impact assessment of all major policy proposals was introduced in the Commission in 2002 [45] following a request from the European Council. [46] By allowing the Commission to base its decisions on sound analysis of economic, social and environmental effects, impact assessment enables informed political judgements and sensible trade-offs to be made in achieving competing objectives.

[45] Commission Communication on Impact Assessment, COM(2002)276 final, 5 June 2002.

[46] See paragraph 24, Presidency Conclusions, Gothenburg European Council (15-16 June 2001).

Impact assessment by itself is not sufficient: trade-offs and spill-overs need not only to be identified. They also need to be systematically taken into account up stream by sectoral policies.

4.1.2. Enhance sectoral integration

Environmental policy alone cannot address the challenges of environmentally unsustainable trends. The changes required to reverse current trends in fisheries, agriculture, energy, transport and other areas where environmental pressures are particularly high can only be achieved through a process of environmental policy integration in these sectors, and by also ensuring that the specific economic and social considerations applicable to these sectors are taken into account.

At EU level the importance of environmental integration is recognised in Article 6 of the Treaty. In June 1998 the European Council took an important step to give practical application to Article 6 - known as the 'Cardiff Process': it requested different Council formations to prepare strategies and programmes aimed at integrating environmental into their policy areas, starting with energy, transport and agriculture. The process now embraces nine sectors. [47]

[47] In addition to the transport, agriculture and energy sectors, the Cardiff process covers industry, internal market, development, fisheries, General Affairs and economic and financial affairs.

The Cardiff process has produced positive results. It has contributed to raising the profile of environmental integration, now regularly discussed at the highest political level. It has also led to concrete results for integration in some sectors - the historic reform of CAP achieved in June 2003 is a case in point. However, the consistency and implementation of existing strategies needs to be improved as underscored by the Spring European Council in March 2003. [48] To this end, the Commission intends to carry out a stocktaking of integration to date. It will examine which priority actions are required to revitalise the Cardiff process and, in particular, whether:

[48] See paragraph 57, Presidency Conclusions to the European Council (Brussels, 20-21 March 2003).

- Sufficient emphasis is placed on strategy implementation to ensure that Council formations deliver on promises made. Obviously the strategies need to be given time to ripen and be implemented. One should remain vigilant however that they do not remain mere declarations of intent.

- Strategy monitoring needs to be strengthened: progress needs to be made on the development of integration indicators and sector-specific decoupling objectives. [49]

[49] This was underlined in the Presidency Conclusions to the Spring European Council (20-21 March 2003), paragraph 57.

- Adequate updating and review mechanisms have been foreseen to allow for adjustments and relevant policy developments to be taken into account in implementation.

The specificities of each strategy's institutional and policy contexts will be taken into account in the future development of the Cardiff process. In any case, efforts to improve environmental integration at EU level need to be backed by commitments at national level to reach their full potential.

4.1.3. Enhancing integration in Member States

The national level

The majority of EU Member States and acceding countries have now developed sustainable development strategies. EU and national sustainable development strategies are interdependent as, on the one hand, some environment-related policy objectives are established at the EU level - e.g. air quality norms, total allowed fish catches; and some policy instruments operate at the EU level - e.g. agricultural subsidies, internal market rules, state aids, etc. On the other hand, in line with the subsidiarity principle, Member States and regional authorities remain responsible for other areas of environmental policy making. Against this backdrop, it is essential to ensure coherence and maximise synergies between strategies at EU and national levels.

National strategies are at different stages of development. However, the structure and approach are clear enough to lend themselves to a preliminary comparative analysis. Such an analysis should be considered a first step toward fostering further convergence and consistency between the environmental objectives of the strategies; and toward identifying good practices with a view to facilitating their dissemination.

A first overview of existing strategies shows that they are highly diverse reflecting specific national contexts. The environmental dimension is a predominant theme in many strategies. However, some strategies address sustainable development in its three dimensions and include explicit social and economic objectives. Geographical focus also varies widely from one strategy to the next, with some focusing primarily or exclusively on domestic priorities, and others considering global issues as well; and with some giving prominence to the territorial dimension while others do not. Finally some strategies are based upon a sectoral approach -e.g. transport, agriculture, fisheries etc- while others are organised around priority issues -e.g. climate change, biodiversity protection, resource use, etc.

Exchanges of experiences may eventually help to identify common elements whose inclusion into the strategies would be conducive to progress irrespective of the national context, and which may therefore usefully be disseminated.

Priority should be given to exploring how key sustainable development issues are being addressed in Member States. On that basis, the most effective solutions devised could be highlighted with a view to spreading them elsewhere whenever relevant and feasible.

A measure of success of a strategy is how effectively it tackles the problem of resolving trade-offs between the different pillars of sustainable development. Comparing institutional mechanisms in place for this, examining the principles on which they operate as well as instruments set in place, and how effective they are, would therefore be useful to determine which successful experiences may be followed.

A strategy is of little value unless it is properly implemented. Indicators and review procedures are also key to ensuring that there is proper follow-up. In this context, it is valuable to compare the steps that have been taken to assess the impact and effectiveness of the strategy. Measures should focus not only on impacts through outcome indicators, but also on processes to ensure coherence.

The local and regional levels

Local authorities play a key role in constructing, operating, and maintaining economic, social, and environmental infrastructures. They are responsible for setting local environmental policies and regulations, and assist in implementing national and EU environmental policies. They are particularly active in areas such as land use, waste management, mobility plans, or control of industrial nuisances. Due to these broad responsibilities and to the particular acuteness of environmental issues at the local level - e.g. air pollution in urban areas, EU and national efforts towards sustainable development need to be complemented by appropriate measures at the regional and local levels.

An important tool to achieve sustainable development at a local and regional level is the Local Agenda 21 process, launched at the Rio Summit in 1992. This Local Agenda 21 process has been particularly well supported in Europe since 1992.

Complementary initiatives such as the 1994 Aalborg Charter of 'European Cities and Towns towards Sustainable Development' and the Commission supported 'European Sustainable Towns and Cities Campaign' have helped make Europe the global leader in Local Agenda 21. Nearly 2,000 European towns and cities have voluntarily signed the Aalborg Charter committing themselves to developing long-term action plans for sustainability, a key step towards sustainable development at the local level.

The European Commission's forthcoming Thematic Strategy on the Urban Environment [50] will propose a framework which local, regional national and European authorities will be invited to use when addressing the issues of sustainable urban transport as well as urban management, design and construction. [51]

[50] http://www.europa.eu.int/comm/environment/ urban/home_en.htm

[51] The priority themes for the Thematic Strategy are urban management, urban transport, construction and urban design. Promoting integration between these and other themes will be an important part of the Thematic Strategy.

The Commission's main instrument to foster the further development of regional and local sustainable development strategies is the Cohesion Policy. Advancing integration of environmental -alongside economic and social- considerations into this policy area is thus the best avenue to promote sustainable development at local and regional levels. It may also help in facilitating further the transposition and implementation of EU environmental legislation.

4.2. Implementation

During the last thirty years, the European Community has developed an extensive body of European environmental law. Approximately 200 pieces of EC environmental legislation, including more than 140 directives, are currently in force, covering almost all areas of environmental policy.

When adequately implemented in the Member States, Community environmental legislation has contributed to substantial progress - e.g. regarding the quality of waters or the treatment of waste. Ensuring the proper implementation of existing environmental legislation remains a priority.

Newly adopted Directives often replace and streamline older legislative initiatives. [52] In this context, renewed attention must be paid to the need to avoid generating policy inconsistencies and to ensure that cross-cutting issues are addressed satisfactorily.

[52] For instance, Directive 2000/76/EC on incineration of waste replaces three older Directives and Water Framework Directive 2000/60/EC replaces seven Directives.

Only a combined effort from government and society at large will make it possible to move towards sustainable development. It is therefore important that ongoing efforts to modernise environmental legislation be pursued in parallel to ensuring the proper implementation of EU environmental legislation.

4.2.1. Confront the shortcomings of implementation

Implementation of existing legislation is an area that poses increasing challenges for both the Commission and Member States - present and future - and where improvements are urgently needed.

The current infringement difficulties

The environment sector alone represents over a third of all infringement cases concerning instances of non-compliance with Community law investigated by the Commission. However, these figures need to be put into perspective, as they reflect the whole spectrum of implementation problems, ranging from where Member States have failed to transpose a Directive through to cases where while having successfully transposed a Directive the Member Sates has failed to communicate this to the Commission. Figure B depicts the current situation.

Figure B: open infringements per member states as of 04.11.2003

>REFERENCE TO A GRAPHIC>

The graph illustrates the wide range in the number of open infringements among Member States, as of 4 November 2003.

Source: European Commission

Among the many factors causing the acute implementation gap, four play a particularly determinant role:

- Member States do not always give themselves the means to transpose and implement environmental legislation properly, as illustrated in certain cases by a lack of human and financial resources devoted to implementation. Implicitly opting for short-term avoidance of immediate costs signals a lack of political will to tackle longer-term issues.

- EU environmental legislation can sometimes be complex to implement. Several Directives require that far-reaching environmental assessment obligations be taken into account in planning and authorising a specific project. [53] This complicates decision-making, involving a wide range of policy sectors at different levels of governance. In addition, environmental rules must be regularly adjusted to take into account changing technical and scientific standards. These conditions can act as a brake to effective implementation.

[53] See for instance Directive 92/43/EEC on the conservation of natural habitats and wild flora and fauna (OJ L206, 22 July 1992, p.7) and Directive 85/337/EEC on the assessment of the effects of certain public and private projects on the environment (OJ L175, 5 July 1985, p.40) as modified by Directive 97/11/EC (OJ L73, 14 March 1997, p.5).

- Environmental legislation may be costly: it can require significant economic investments from national authorities and society at large whose financing can be problematic.

- Infringements may be more widely reported than in other sectors: environmental issues attract a great deal of public attention and involve many stakeholders, which multiplies possibilities to bring instances of non-compliance to the attention of the Commission.

These factors have received specific attention as implementation has been identified as a priority in the 6th EAP: [54]

[54] The Commission publishes regular surveys on the implementation and enforcement of Community environment law. The latest survey, covering the year 2002, was published in July 2003 - SEC(2003)804 Commission Staff Working Paper. This latest survey provides up-to-date information on the state of application of Community environmental law. It also describes Commission efforts to smooth the progress of implementation in the framework of the European Network for the Implementation and Enforcement of Community Environmental Law (IMPEL).

- In the framework of its commitment to update and simplify Community legislation, [55] the Commission will screen in 2004 waste and air quality legislation with a view to identifying specific legislative acts as candidates for simplification. Legal acts identified as candidates for possible simplification will be examined in detail and concrete simplification proposals be developed - such proposals will be made in 2004 for waste legislation. [56] This better regulation process will be continued in the future and will allow the Commission to better assess the consistency, clarity and effectiveness of EC environmental legislation.

[55] COM(2003) 71.

[56] See Communication from the Commission to the Council and the European Parliament - The Commission's legislative work programme for 2004, COM(2003)645, 29 October 2003.

- New working methods with Member States are being developed to sort out up-stream any potential implementation difficulties;

- Steps are being taken to address the financial burden of implementation and improve the cost-effectiveness of legislation, and to rely more systematically on the 'best available scientific evidence' when devising new legislation;

- Efforts are being made to offer citizens alternatives to complaint and infringement procedures.

Develop new working methods with Member States

It is crucial to involve Member States and regional authorities starting from the policy formulation stage. Insufficient co-operation with Member States in the past has in some cases resulted in legislation which is too prescriptive, too costly, or not in phase with the national context.

There is now growing awareness that environmental legislation should continue to be increasingly performance-based and flexible as to means to be used to reach targets. The Water Framework Directive adopted in 2000, which is flanked by a detailed implementation strategy involving Member States, stakeholders, NGOs and acceding countries, is a good illustration of how this new, framework approach can be made operational. The Directive is ambitious in its scope - the objective is to achieve good ecological and chemical status in all inland and coastal water by 2015 - but not overly prescriptive in its tools.

Increased co-operation between the Commission and Member States is of utmost importance prior to adoption. It is also essential once legislation has entered into force to sort out concrete implementation difficulties on the ground. Several important mechanisms have been set in place at EU level to bolster post-adoption co-operation.

- The informal EU Network for the Implementation and Enforcement of Environmental Law (IMPEL), a regular gathering between the Commission, Member States and acceding countries, [57] provides an opportunity for exchanging information and best practice and for injecting greater consistency to implementation, application and enforcement of environmental legislation. A major boost to IMPEL was the introduction, in 2001, of a scheme under which Member States report and offer advice on inspectorates and inspection procedures on implementation. [58] This mechanism has contributed to drawing up minimum qualifications criteria and training programmes for inspectors; as well as to strengthening cross-border co-operation of inspections and in turn preventing illegal cross-border environmental practices.

[57] There previously existed a similar network to IMPEL specifically dealing with acceding countries - AC IMPEL. The two bodies have now merged.

[58] Recommendation of the European Parliament and the Council on Minimum Criteria for Environmental Inspections (2001/331/EC), OJ L 118, 27 April 2001, p.41.

- Interpretative guidance documents are regularly published to advise Member States on concrete aspects of implementation, e.g. efforts to provide clarifications on the implementation of nature and biodiversity legislation, [59] and recent Commission document aimed at helping Member States transpose the 'Strategic Environmental Assessment' Directive. [60]

[59] See Section 3.2.4 - Improve implementation in the field of nature protection.

[60] The Strategic Environmental Assessment Directive is due to be transposed by 21 July 2004. This document has been drawn up to provide guidance for Member States to ensure from an early stage as consistent implementation and application of the SEA Directive as possible across the whole Community. The document is available at http://europa.eu.int/comm/environment/eia/ 030923_sea_guidance.pdf

- Ad hoc seminars with Member States on implementation of particularly complex directives are regularly organised with a view to prevent instances of bad application.

- Capacity-building and training efforts are carried out to facilitate implementation, e.g. training for the authorities responsible for dealing with individual Environment Impact Assessments in the framework of the Environment Impact Assessment Directive.

- In 2001 the Commission launched "Name, Fame & Shame" seminars to examine publicly with Member States a policy field or a defined piece of legislation, to highlight good and bad practice. These seminars contribute to sensitising Member States about the effects of poor implementation.

- Effective reporting from Member States on implementation of environmental legislation is key to monitoring the implementation process. In accordance with the 6th EAP, the Commission is committed to set in place a more coherent and effective system for environmental reporting.

Address the financing burden of implementation

Cohesion policy, which represents one third of the EU budget, makes a significant contribution to implementing environmental legislation. Taking further steps towards establishing sustainable development as an overarching objective of cohesion would usefully extend possibilities for structural funds' contributions to environmental policy - alongside economic and social priorities- notably in relation to implementation - the Habitat Directive is an obvious candidate as the Community is required under it to co-fund the Natura 2000 network. [61]

[61] See Section 3.2. - Nature and biodiversity.

The use of structural funds requires compliance with Community policies and instruments including those for environment and sustainable development. In this way, structural funds constitute an important lever for the implementation of environmental legislation.

In parallel, the LIFE programme, which provides funding to projects aimed at demonstrating how new policies can be implemented in practice, continues to support the implementation of environmental legislation.

Offer alternatives to complaint and infringement procedures

The number of complaints in the environment sector alone has more than tripled between 1996 and 2000. In 2002, almost 600 new complaints on environmental issues were lodged with the Commission.

The complaint and infringement procedures set out in the Treaty cannot be the sole instruments in dealing with the growing public awareness and response to environmental issues in individual cases. In many cases, complainants can obtain satisfaction more quickly by using means of redress under national law.

Improving access to information and justice on environmental matters and harmonising complaints procedures in Member States are key to reducing infringement cases at EU level while enhancing citizens' rights. In this respect, the implementation at EU level of the Aarhus Convention [62] is particularly important as it will enhance the mechanisms to get access to environmental information and create a more efficient access to justice at Member State level.

[62] The Aarhus Convention deals with Access to Information, Public Participation in Decision-Making and Access to Justice in Environmental Matters. See Directive 2003/4/EC of the European Parliament and of the Council of 28 January 2003 on public access to environmental information.

4.2.2. Adapt environmental policy to the challenges of sustainable development

To progress on the way towards sustainable development, potential synergies between environment and the other two dimensions- economic and social- must be fully exploited.

Environment and the social dimension

- Environment and job creation

Economic activities linked to the protection of the environment are on a rising trend. The rising demand for better environment quality is already reflected in an expanding supply of environmentally friendly products and services, as well as in more investments in eco-efficient technologies. Current market developments in the eco-industry sector, as defined by the OECD, provide clear evidence of these trends. Both total turnover and employment creation in a sector which presently accounts for over 2.5 million jobs have constantly been above average over the last decade [63]. Against this background, the challenge for the EU is to fully exploit this market potential, and turn the ideas of decoupling and sustainable development into a driving force for growth by placing the focus on measures which combine productivity and resources efficiency through innovation, new technology and job creating investment. In line with the European Initiative for Growth, this will be the main thrust of the Environmental Technology Action Plan.

[63] COM(2002) 122 final of 13.3.2002, Report from the Commission: Environmental technology for sustainable development

- Environment and job quality

Environmental policies can affect the quality of employment. For example, the increased use of environmental technology has in several instances led to some high-tech cleaner technology jobs replacing low-tech waste management jobs. The evolution of environmental policies away from end-of-pipe solutions towards integrated solutions that tend to require more skilled workers will contribute to that trend. Such shifts need to be accompanied by retraining that allows workers to adapt to their new jobs. This retraining can in turn be an important vehicle to raise awareness of environmental challenges within the framework of sustainable development.

Workers are often also subject to high levels of exposure to environmental hazards, and this needs to be addressed by environmental policies. For example, it has been estimated that around 35,000 workers lose their lives each year due to exposure to carcinogenic chemicals at their workplaces. [64]

[64] "Assessment of the Impact of the New Chemicals Policy on Occupational Health", RPA, 2003

- Environment policy and the fight against poverty and exclusion

Environmental policies can contribute to the fight against poverty and exclusion. The people who gain most from environmental policies are often society's poorest, who tend to occupy areas that suffer the most from air quality problems or blighted landscapes. Tackling a degraded environment can therefore have positive distributional impacts.

Environment and the economic dimension

While there can be a need to make trade-offs between a high standard of environmental protection on the one hand, and economic growth and competitiveness on the other, there are also a number of potential 'win-win' areas:

- A number of private sector activities depend directly on the quality of natural resources. Tourism and the agri-food industry are obvious examples. In specific cases of commercially exploited resources like fish-stocks, current unsustainable trends threaten not only the environment but also the industry itself and thus the livelihoods of those in the industry. In these conditions, it is crucial that there be clear limits to the pressure on natural resources to ensure that the resource has time to renew itself and maintain its long term productivity.

- In the fast moving economy in which the private sector operates, innovation, knowledge and responsiveness to public perceptions are precious assets to be 'quicker to market and closer to customer.' In this context, businesses can no longer succeed based on low cost strategies in which the environment is seen as a cheap resource to exploit. The environment becomes a source of value and a vehicle for competitiveness opportunely contributing to boosting industry's dynamism and image.

- Environmental quality may be a means for attracting skilled workers and foreign investors. An illustration of this trend can be found in the high-tech research park movement where 'green' locations are considered to be key assets, alongside highly qualified resources and the proximity to knowledge-base centres.

Synergies between enterprise and the environment need to be fully exploited to foster economic growth that brings broader benefits while minimising environmental damage. To this end, in addition to legislation, the environmental policy mix needs to include innovative instruments that may reconcile the business sector including industry with environmental protection.

On the one hand, a balanced approach to regulation based on a combination of flexibility, incentives and predictability needs to be taken to engage actively with industry and social partners. In this context, the Commission will, whenever appropriate and applicable, increasingly rely upon market-based instruments to improve cost-effectiveness. On the other hand, industry needs to be encouraged to further embrace sustainable development through a greater sense of environmental responsibility and accountability. In cases where industry fails to act responsibly and causes damage to the environment, a sanctioning system, in the form of a liability scheme, must be in place.

Further develop synergies between environment and the private sector

- Promoting the development of environmental technologies

New and innovative technologies will be instrumental in achieving the shift to the model of a knowledge-based society the EU embraced in the Lisbon Strategy. These technologies are a powerful engine for economic growth, competitiveness and improved environmental protection and quality of life. They can contribute to reducing the costs of environmental protection by allowing users to meet environmental targets at a lower cost.

Environmental technologies can free up resources for use elsewhere in the economy. This decoupling of economic growth from environmental damage and resources use is precisely what is required to move towards sustainable development. Environmental technologies constitute therefore a natural bridge between the economic and environmental pillars of the Lisbon Strategy.

However, much of their potential remains unrealised due to market and institutional barriers hindering their use. Action is therefore required on several fronts crucial if the full potential of environmental technologies is to be realised. Further efforts need to be made to raise awareness and fill information deficits when it comes to the potential of these technologies - the LIFE programme makes a valuable contribution in this respect. In addition, removing market obstacles, especially many implicit and direct subsidies for more polluting technologies, is crucial.

Promoting the development of environmental technologies is a Commission priority. The Commission is working on an Action Plan to establish the adequate framework to boost environmental technologies. This Action Plan will build upon the Commission Report on environmental technologies of 2002 [65] and the Commission Communication 'Developing an action plan for environmental technology' of 2003. [66]

[65] COM(2002)122, 13 March 2002.

[66] Commission Communication - Developing an action plan for environmental technology, COM(2003)0131final, 25 March 2003.

- Favour flexible market-based solutions

Provided that they are designed appropriately, flexible market-based mechanisms such as taxes, charges, reduction of environmentally harmful subsidies, promotion of trading mechanisms and voluntary environmental agreements are doubly attractive for environment policy: they can help achieve maximum efficiency in implementation while ensuring wider acceptance by industry by limiting costs. They can also contribute to making the EU economy more competitive by achieving more efficient use of natural resources. This potential is increasingly recognised by policy makers.

Important progress has been made at EU level in the use of market-based instruments in recent years as illustrated by the adoption of the Directive on Emissions Trading. [67] Action at EU level is of particular importance to avoid distortions in the single market and risks of a loss of competitiveness for industry stemming from national initiatives to 'green the market.'

[67] See Section 3.1. - Climate Change.

The Commission approach on the use of market-based instruments in the framework of environmental policy will be outlined in a Communication foreseen for 2004.

- Provide a predictable regulatory environment

Increasing reliance on flexible regulation and voluntary initiatives does not mean that more stringent regulation and binding instruments have lost relevance. Mandatory schemes continue to be necessary to lay down environmental standards. They must remain an integral part of the environmental policy mix.

Binding instruments can generate costs for industry and other economic actors. It is therefore imperative to set long-term targets to be reached gradually to allow those economic actors and industry to anticipate changes and to adjust their business plans to them. The more predictable our regulatory environment, the easier its incorporation into the normal investment cycle of business will be.

Foster new business approaches to the environment

- Promote responsibility and accountability

Government efforts to make the regulatory framework more flexible need to be backed by industry commitments.

This can best be achieved by the development of company Corporate Social Responsibility (CSR) strategies which explicitly cover the environment. CSR implies voluntarily taking on commitments that go beyond the regulatory framework in place to raise the standards of environmental protection and social development with a view to promoting sustainable development. [68] CSR is thus an important business contribution to sustainable development.

[68] See Communication from the Commission concerning Corporate Social Responsibility: a business contribution to sustainable development, COM(2002)347, 2 July 2002.

An increasing number of European companies have developed CSR strategies in recent years. These strategies are conceived in the first place as assets in competition, based on the increased profitability that can arise from an improvement in social and environmental performance. They are also seen as a marketing tool, based on the assumption that being perceived as 'doing well while doing good' is likely to attract new customers.

Communication by companies of the efforts that they are making is an important contribution to maximising the external impact of CSR. Raising awareness of CSR through the exchange of best practice between businesses and within sectors as well as benchmarking business initiatives are also important means of encouraging CSR. The European Multistakeholder Forum on CSR is one step towards achieving this. The two following tools, already supported by the Commission, can make an important contribution to operationalising CSR:

* Publication of rigorous and independently verified environmental reports by companies. The 6th EAP encourages the publication of such reports. This is particularly applicable to larger companies. The number of companies established in the EU that regularly publish environment reports is steadily increasing but is still not large enough. For these reports to realise their full potential, they should be based on common sets of indicators, thus allowing for sector-based benchmarking.

* EU Eco-Management and Audit Scheme (EMAS). Introduced in 1993, the EMAS scheme is aimed at promoting continuous environmental performance improvements of industrial activities by committing organisations to evaluate and improve their own environmental performance and provide information to the public. Since 2001, the scope of EMAS has been extended to all sectors of the economy including public authorities [69] and efforts have been made to adapt it to the particular context of SMEs. EMAS registrations have increased steadily since 1993 but remain too unequally distributed throughout the Union.

[69] See Regulation 761/2001 of the European Parliament and of the Council of 19 March 2001 allowing voluntary participation by organisations in a Community eco-management and audit scheme (EMAS), OJ L 114/1, 24 April 2001.

Introduce an EU liability framework

Liability is the necessary corollary to business environmental responsibility. By acting as a disincentive to unsustainable practices, liability contributes to bolstering responsible behaviour from industry.

The draft Directive on Environmental Liability [70] establishes an environmental liability framework at EU level based on the polluter pays principle. Under the draft Directive, operators are required to take preventive action where there is an imminent threat of damage and remedial action - at their own expense - when damage occurs.

[70] Proposal for a Directive of the European Parliament and the Council on environmental liability with regard to the prevention and remedying of environmental damage, COM(2002)17 final, 23 January 2002.

Political agreement on the Liability Directive was reached in the June Environment Council, paving the way for legislative adoption in 2004, consistent with the spring 2003 European Council Conclusions. [71]

[71] Paragraph 58, Presidency Conclusions, European Council, Brussels, 20-21 March 2003.

Protect the environment through criminal law in cases of severe non-observance of Community law

Not all Member States provide for criminal sanctions against the most serious breaches of Community law protecting the environment. Therefore, the Commission presented in 2001 a proposal for a Directive of the European Parliament and of the Council on the protection of the environment through criminal law. [72] As the Council adopted instead a Framework-Decision [73] under the third pillar of the Treaty on the European Union, the Commission brought an action before the Court of Justice, in order to obtain clarifications as to whether provisions on penal sanctions belong to the first or third pillar of the Treaty on the European Union. [74]

[72] COM (2001) 139 Final - OJ, 26 June 2001, C180/238.

[73] OJ, 5 February 2003, L029/55.

[74] See press release of the Commission, IP/03/461 and summary of the case 176/03, published in OJ C 135 dated 7 April 2003, p.1.

In addition, after the accident of the Prestige tanker off the Spanish coast in November 2002, the Commission promptly adopted two new instruments introducing criminal sanctions in order to prevent new oil spills on the European coastline. [75]

[75] A proposal for a Directive on ship-source pollution and on the introduction of sanctions, including criminal sanctions, for pollution offences (COM(2003)92, 5 March 2003). The content of this proposal is twofold. It incorporates the existing international discharge rules for ship-source pollution into Community law (MARPOL 73/78 standards) and provides that violations for these discharge rules shall be qualified as criminal offences. In order to complement the proposal for a Directive, the Commission adopted a proposal for a Council Framework-decision to strengthen the criminal law framework for the enforcement of the law against ship-source pollution (COM(2003)227final, 2 May 2003). This proposal relates in particular to harmonisation of penalties by setting