PROPOSAL FOR A COUNCIL REGULATION (EEC) ESTABLISHING A FINANCIAL INSTRUMENT FOR THE ENVIRONMENT ( LIFE )
Date: 1991-01-31
Institutions: European Commission
Subjects: EU environmental policy, EU financial instrument, co-financing, environmental protection, interest rate subsidy, quality of the environment

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

C0M(91) 28  final 

Brussels,  31  January  1991 

Proposal  for a 

COUNCIL  REGULATION  (EEC) 

establishing  a  Financial  Instrument  for  the  Environment  (LIFE) 

(presented  by  the  Commission) 

2  -

EXPLANATORY  MEMORANDUM 

I.  INTRODUCTION 

In  recent  years  there  has  been  public,  Member  State  government  and 
European  Parliamentary  pressure  for  more  effective  action  to  achieve  the 
objectives  set  out  In the  Treaty. 

There  is  a  growing  awareness  that  problems  In  this  area  cannot  in  most 
cases  be  resolved  effectively  by  following  an  exclusively  national 
approach.  This  is  clear  In  the  case  of  pollution  problems  affecting 
several  countries,  e.g.  pollution  of  rivers  of  seas.  It  Is  even  more 
obvious  in  the  case  of  problems  which  concern  the  entire  planet,  such  as 
the  depletion  of  the  ozone  layer  or  the  greenhouse  effect.  However,  there 
is  a  need  for  concerted  and  coordinated  action  at  Community  level  even  in 
the  case  of  geographically  more  restricted  problems,  since  some  of  them  are 
directly  concerned  by  Community  policies  such  as  agricultural  policy  or 
regional  policy;  to  be  effective,  solutions  must  therefore  take  Into 
account  inter-relationships  between  environment  policy  and  the  other 
policies  concerned.  Furthermore,  all  environmental  problems  have  major 
economic  implications,  and  the means  adopted  at  national  level  to deal  with 
them  may  affect  the  conditions  of  competition  or  create  trade  barriers. 
The  risks  of  distortion  and  imbalance  are  aggravated  by  the  differences 
between  the  Member  States  in  their  assessment  of  environmental  priorities 
and  the  rigour  with  which  the  national  authorities  enforce  Community 
provisions. 

and 

action 

involving 

coordinated 

In  addition,  the  nature  of  environmental  problems  often  necessitates 
concerted 
countries. 
International  negotiations  concerning  environmental  problems  are  becoming 
increasingly  numerous  and  complex.  The  results  of  these  negotiations  can 
have  major 
the 
competitiveness  of  firms  or  growth  rates,  and  can  considerably  affect  our 
development  model.  The  cohesion  of  the  Member  States  and  the  consistency 
and  effectiveness  of  environmental  measures  taken  within  the  Community  are 
essential  factors  in  the  latter's  credibility  so  that  It  can  effectively 
defend  Its  interests  in the  international  arenas. 

repercussions  on 

the  balance 

countries, 

non-member 

between 

Relations  with  the  countries  of  central  and  eastern  Europe  are  particularly 
important  In  this  context  In  view  of  their  geographical  proximity  to  the 
Community,  the  gravity  and  nature  of  their  environmental  problems  and  the 
direct  impact  which  these  problems  may  have  on  the  state  of  the  environment 
in the Member  States. 

-  3  -

As  concerns  the  environment,  the  Community  Is  now  faced  with  three 
challenges: 

to  achieve  the  ambitious  objectives  set  In  the  Treaty,  especially  that 
guaranteeing  a  high  level  of  protection; 

to  achieve,  in  the  Europe  of  the  Twelve,  cohesion  between  countries  In 
which  there  are  differences,  sometimes  deep  differences,  in  terms  of 
their  level  of  development,  the  nature  and  perception  of  environmental 
problems,  and  the  exploitation  of  new  technologies; 

increasingly  to  shoulder  its  international  responsibilities. 

To  meet  these  three  challenges,  the  Community  must  have  at  Its  disposal 
resources  and  instruments  commensurate  with  the  problems  to  be  solved. 

ii.  instruments 

Getting  to  grips  with  environmental  problems  entails  the  use  of  instruments 
designed  to  alter  the  behaviour  of  individuals,  authorities  and  firms. 

To  implement  a policy  in  this  area,  action  can  be  taken: 

by  regulatory  means,  i.e.  the  progressive  application  of  environmental 
legislation,  comprising  quality  objectives,  standards,  procedures, 
etc. ; 

through  economic  and  fiscal  instruments,  passing  on  the  environmental 
costs  of  activities  in  prices,  charges  or  taxes  paid  by  the  producers 
and/or  consumers  of  the  various  goods  and  services; 

instruments  which  may 

through  financial 
Influence  behaviour  by 
awareness  raising  and  training  actions,  by  providing  a  positive 
stimulation  (demonstration  projects,  subsidies,  loans,  etc.)  and/or 
finance  recovery  or  prevention  operations  designed  to  mitigate  the 
inadequacies  of  the other  instruments  used. 

Each  of  these  three  routes  has  strengths  and  weaknesses. 

Regulation  may,  at  least  theoretically,  guarantee  the  achievement  of 
specific  quantified  objectives.  Its  limitations  lie  In  the  comparatively 
static  and  rigid  Instruments  Involved.  It  also  entails  administrative 
burdens,  in particular  with  regard  to enforcement,  which  may  be  very  great, 
If  the  intention  is  to  take  action  concerning  all  activities  with  an 
environmental  Impact.  Excessive  regulation  and  bureaucracy  could  also  make 
firms  less  dynamic  and  affect  their  competitiveness. 

-  4 -

The  legislative  process  set  In motion  following  the  Paris  European  Council 
in  October  1972  has  developed  satisfactorily  but  there  are  major 
implementation  problems.  In  addition,  the  legislation  adopted  has  to  be 
supplemented  and  regularly  adapted  in  line with  technological  developments 
and  changes  in environmental  data. 

Economic  and  fiscal  Instruments  can  work  in  a  more  flexible  and  dynamic 
fashion.  When  used  In  conjunction  with  legislation,  these  can  contribute 
to  markedly  Improve  its  efficiency.  They  are  also  an  effective  means  of 
integrating  the environment  Into the other  policies.  However, on  their  own 
they  cannot  guarantee  the  attainment  of  specific  objectives.  Moreover,  it 
Is  sometimes  difficult,  If  not  impossible,  to  quantify  the  cost  of 
pollution  to  society,  especially  with  such  global  phenomena  as  the 
greenhouse  effect  and  the  depletion  of  the  ozone  layer.  In practice  it  is 
therefore  very  often  necessary  to  proceed  pragmatically,  progressively 
altering  measures  in the  light of  the  results obtained  and objectives  to be 
achieved. 

The  Council  has  discussed  instruments  of  this  kind  on  several  occasions, 
most  recently  at  Its meeting  on  29 October  1990.  It  has  recognized  their 
effectiveness  and  the  desirability  of  Community  action  In  this  area. 
Concrete  proposals  concerning  certain  priority  sectors  are  now  being 
prepared. 

Financial  instruments  are  the  most  appropriate  means  for  dealing,  for 
example, with  environmental  deterioration  resulting  from  past  activities or 
if  it  is  impossible  to pinpoint  the cause or  the person  responsible. 
Such 
instruments  also  usefully  complement 
initiatives  in  the  field  of 
regulation,  particularly  where  the  aim  Is  to  achieve  ambitious  objectives 
quickly. 

The budgetary  resources  available  for  the Community's  financial  instruments 
available  to  Implement  environmental  policy  are  at  present  Insignificant. 
However,  there  has been  an  increase  in expenditure  on  the environment  using 
other  Community  financial 
instruments.  On  26 June  1990  the  European 
Council  therefore  asked  the Commission  to review  the  situation. 

In  view  of  the  limits  inherent  in  each  means  of  action  it  would  be 
Impossible  to  define  a  consistent  and  effective  strategy  for  the 
environment  without  calling  on  all  three  of  the  means  mentioned.  A 
combination of  regulatory  approach, economic  and  fiscal  means and  financial 
instruments  Is needed  to offset  the weaknesses  and  exploit  the potential  of 
each  one.  Making  use  of  a  combination  of  means  will  make  it  easier  to 
achieve  the consensus needed  to develop  and  implement  Community  policy. 

_  5 -

In  this  context,  financial  assistance  from  the  Community  needs  to  be 
stepped  up  and made more  coherent  so as  to complement  the other  Instruments 
and  make  them  more  reliable  and  effective.  The  European  Parliament  has 
emphasized  the  need  for  this,  In particular  during  the  preparation  of  the 
1990  and  1991  budgets.  It  has  advocated  an  Environment  Fund  commensurate 
with  the  problems  to be  solved  and  the  role which  the  Community  must  play 
In this area. 

III. THE  EXISTING FINANCIAL  INSTRUMENTS 

As  requested  by  the  European  Council  on  26 June  1990,  the  Commission  has 
reviewed  all  the  budgetary  resources  earmarked  for  financial  support  for 
environmental  measures.  This  review,  which  is  attached  to  this  proposal, 
may  be summarized  as follows: 

Expenditure  concerning  the  environment  directly  or  indirectly  has 
Increased  considerably  in  recent  years.  Until  1987  the  annual 
expenditure  was  around  ECU 60 mi 11 Ion,  but  In  the  period  1988-1993 
environmentally 
over 
ECU 4,000 million,  of  which  90  %  are  for  investment  and  10  %  are 
allocated  to research  and  to demonstration projects. 

expenditure 

related 

should 

amount 

to 

The  amounts  committed  are  from  a  very  varied  range  of  Instruments. 
Only  a  limited  part  of  the  totals  (certain  research  programmes, 
demonstration  projects  financed  In  the  framework  of  ACE,  MEDSPA, 
NORSPA, and ACNAT, actions  to protect  forests  (fire prevention  and  the 
fight  against  acid  rain)  as  well  as  the  budget  line  for  "ecology  in 
the  LDCs")  have  an  environmental  priority. Other  instruments  work  In 
this sector  in order  to achieve  the aims of  the policies of which  they 
ensure  the  financial  support.  Though  the  expenditure  contributes  to 
the  reduction  of  different  forms  of  pollution,  Its  dispersion  across 
many  financial  Instruments,  its subordination  to other  objectives  and 
priorities  and  Its  constraints,  especially  geographical,  mean  it 
cannot  visibly  and  coherently  reflect  the  objectives  and  the 
priorities  of  environmental  policy.  Together,  these  instruments 
therefore  cannot  play  the  orientation  and  stimulation  role  to 
complement  and  support  this policy's other  means of  action. 

-  6  -

The  Treaty  provides  that  environmental  protection  requirements  are  a 
component  of  the  Community's  other  policies.  Providing  finance  for 
environmental  projects  Is  not  of  Itself  enough  to  answer  this 
provision.  Environmental  requirements  also  need  to  be  taken  into 
account  where  finance  Is  given  to  projects  which  do  not  concern  the 
environment 
Infrastructure, 
directly, 
transport,  or  agricultural  support. 

Industrial 

such 

for 

as 

IV.  WHY A FINANCIAL  INSTRUMENT FOR THE ENVIRONMENT ? 

through 

behaviour 

administrative 

initiatives  are  on 

As  stated  In section  II,  a  financial  Instrument  can  contribute  to  improving 
policy  as  a  means  of  orientating 
the  efficiency  of  environmental 
positive 
individual,  corporate  or 
stimulation  or  through  rehabilitation  or  preventative  operations.  In  this 
context  a  financial  Instrument  plays  a  particularly  Important  role  in 
stimulating  and  of  providing  a  framework  for  national,  regional  or  local 
they  rish 
Initiatives.  Such 
accentuating  the  incompatibilities  between  Member  States  where  their 
perceptions  of  the  problems,  definition  of  priorities  and  possibilities  of 
concrete  action  vary  will  become  ever  more  difficult  to  harmonise  since 
they  occur  in  frameworks  for  action  which  are  evolving  more  and  more 
towards  proper  national  policies  for  the  environment.  It would  be  dangerous 
to  under-estimate  the  Inherent  risks  of  such  an  evolution,  particularly  in 
the  context  of  the  distortions  of  competition  and  of  the  limitations  to  the 
free  movement  of  goods  It  can  entail.  This  view  is given  legitimacy  by  the 
European  Court  of  Justice  which  has  recognised  the  use  of  Article  36 of  the 
Treaty  when  dealing  with  environmental  issues. 

Increase  and 

the 

Since  the  sums  engaged  at  the  Community  level  are  often  relatively  modest, 
In  conformity  with  the  principle  of  subsidiarity,  the  efficiency  of  the 
action  depends  to  a  great  extent  on  its  visibility,  of  Its  links  to  and 
coherence  with  the  objectives  and  the  priorities  of  the  policies  for  which 
they  provide  support,  as  well  as  Its  synergy  with  the  other  means  of  policy 
support. 

This  is  particularly  true  of  environment  policy,  given  its  vast  area  of 
concern  as  well  as  the  potentially  very  high  financial  needs  that  any 
action  In  the  field  can  lead  to. 

-  7  -

The  other  financial  instruments  of  the  Community  must  continue  to  bring 
help  in  resolving  environmental  problems  In  pursuit  of  the  objectives  of 
the  policies  to  which  they  provide  support.  However,  these  cannot  provide 
the  main  support  for  environmental  policy  since  they  do  not  themselves 
reflect  its particular  priorities  and  objectives. 

Indeed,  environmental  action  distinguishes  Itself  from  that  used  in  the 
framework  of  other  policies  from  several  points  of  view; 

First  of  all,  environmental  problems  very  often  require  solutions  which 
cannot  be  conceived  of  In  a  regional  or  national  context.  The  action 
required  to  resolve  a  given  problem  could  well  extend  to  the  whole 
Community  territory  or  even  beyond  it,  in  the  framework  of  International 
coopérât ion. 

In  addition,  environmental  action  does  not  target  particular  social  or 
economic  groups,  nor  the  productive  sector  of  specific  regions.  It  aims  to 
encourage 
in 
individual,  corporate  or  adminsitratIve  choice;  It  therefore  targets  the 
whole  populat ion. 

integration  of  environmental 

the  systematic 

concerns 

Finally,  since  it  concerns  the  entire  population,  environmental  action 
rarely  takes  the  form  of  discrete  projects.  It  forms  part  of  a  long-term 
evolution  and  aims  to  provide  permanent  encouragement.  Respecting  the 
polluter  pays  principle,  it stimulates  and  orientates  through  actions  which 
ensure  a multiplIcatory  effect. 

Environment  policy  has  been  developed  in  the  belief  that  the  rational  use 
of  natural  resources  and  sustainable  development  in  time  would  be  a  Utopian 
if  they  were  to  be  achieved  exclusively  or  even  mainly  through  the  use  of 
public  funds,  whether  national  or  of  the  Community,  and  whatever  their 
magnitude.  We  will  never  be  able  to  achieve  such  ends  if  individuals, 
corporations  or  administrations  believe  they  can  continue  to  act  as  they 
have  done  in  the  past.  This  is why  the  polluter  pays  and  the  subsidiarity 
principles  are  of  such  Importance  In  the  context.  It  Is also  why  the  Treaty 
insists  on  the  need  to  Integrate  environmental  considerations  In  other 
policies. 

A  financial  Instrument  for  the  environment  should  therefore  not  be  seen  as 
a  means  of  a  posteriori  repair  of  damage,  nor  can  It  be  seen  as  some  sort 
of  depollution  machine,  operating  In  all  sectors  and  blunting  all  concerns 
in  the  field. 

V.  THE POLLUTER  PAYS PRINCIPLE 

Article  130R(2)  of  the  EEC  Treaty  specifies  that  action  by  the  Community 
relating  to  the  environment  shall  be  based,  among  other  things,  on  the 
principle  that  the  polluter  should  pay. 

According  to  this  principle,  those  responsible  for  pollution  must  bear  the 
cost  of  compliance  with  the  standards  or  quality  objectives  in  force. 
Exceptions  to  this  principle  are  allowed  In two  cases: 

where  the  immediate  application  of  very  stringent  standards  Is  likely 
to  cause  serious  economic  disruption-, 

where,  in  the  framework  of  other  policies,  such  as  regional  or 
agricultural  policy,  environmental  investment  is  designed  to  resolve 
certain  structural  problems of  a  regional  or  sectoral  nature,  provided 
that  the  aid  granted  complies  with  the  provisions  of  the  Treaties, 
and,  in particular  Articles  92  and  93 of  the  EEC  Treaty. 

In  this  connection,  it  should  be  recalled  that  In  three  communications  to 
the  Member  States  In  1974,  1980  and  1987  the  Commission  accorded 
semi-permanent  status  to  State  aid  to  the  environment  provided  that  it  is 
limited  to  15% of  the  value of  the  investment  assisted. 

In  addition,  the  following  are  not  regarded  as  contrary  to  the  polluter 
pays  pr inciple: 

financial  contributions  to  local  authorities  to build  or  manage  public 
environmental  protection  facilities  where  the  expenditure  cannot  for 
the  time  being  be  totally  covered  by  the  charges  levied  on  the 
polluters  using  such  facilities; 

funds  to  offset  particularly  large  burdens  imposed  on  certain 
polluters 
environmental 
to 
clean I iness-, 

exceptional 

achieve 

level 

of 

an 

contributions granted  to promote  research  and  development  in  the  field 
of  clean  technologies, manufacturing  processes  and  products. 

This  list  is not  exhaustive.  Examples  of  other  types  of  public  Investment 
compatible  with  this  principle  are  as  follows: 

protection  of  habitats; 

site  restoration  work  where  the  pollution  in question  is the  result  of 
past  activities  or  It  is  Impossible  to  pinpoint  the  cause  or  the  party 
responsible; 

expenditure  complementing  the  application  of  the  polluter  pays 
principle,  e.g.  grants  for  the  development  of  public  transport  where 
this  Is necessary  In order  to  achieve  the  desired  results; 

initiatives  at  International  level  where  financial  support  may  be 
Justified  on  the grounds  of  interest,  effectiveness  and  solidarity. 

-  9 

The  polluter  pays  principle  is  therefore  not  Incompatible  with  the 
establishment  of  a  flanc la I  Instrument  specifically  for  the  environment. 
However,  this  principle  should  be  taken  Into  account  when  defining  the 
scope  of  the  new  instrument  and  granting  the  funding  provided  for. 

VI.  THE  SUBSIDIARITY  PRINCIPLE 

Article  130R(4)  of  the  Treaty  specifies  that  the  Community  shall  take 
action  relating  to  the  environment  to  the  extent  that  the  objectives 
referred  to  can  be  attained  better  at  Community  level  than  at  the  level  of 
the  individual  Member  States.  Without  prejudice  to  certain  measures  of  a 
Community  nature,  the  Member  States  shall  finance  and  Implement  the  other 
measures. 

when 

remain 

should 

defining 

the  basic  yardstick 

Subsidiarity 
the 
environmental  measures  to  be  pursued  at  Community  level.  However,  this 
criterion  should  be  assessed  and  applied  with  an  eye  to  the  effectiveness 
of  the  policy,  bearing  in mind  Its  objectives,  and  not  in  an  abstract  way 
or  on  the  basis  of  considerations  of  principle.  It  would,  in  particular, 
be  hypocritical  to  claim  that  taking  this  criterion  into  account  prevents 
effective  action  In  a  Community  framework  specific  to  the  environment  but 
authorizes  any  action  relating  to  the  environment  under  other  Community 
policies.  Subsidiarity  is not  exclusive  to  environment  policy.  It  applies 
to  a  large  proportion  of  the  areas  in  which  the  Community  is  active  and, 
from  the  budgetary  point  of  view,  It  is  more  the  rule  than  the  exception. 
The  framework  selected  for  Community  action  should  make  for  greater  rather 
than  less  transparency  in  this  area.  In  particular,  when  it  comes  to 
committing  budgetary  resources  in  response  to  environmental  concerns,  it 
should  ensure  that  subsidiarity  is  not  assessed  differently  depending  on 
whether  funding  is  via  the  financial  Instruments  specific  to  environment 
policy  or  other  Community  financial  Instruments.  Article  130R(4)  should 
not  be  Interpreted  in  a  way  which  might  give  rise  to  irrational  solutions 
which  would  result  in  the  article  in question  being  misused. 

The  environment 
is  in  fact  one  of  the  sectors  In  which  Community 
intervention  is  most  justified  in  terms  of  subsidiarity,  particularly  as 
regards  action  to  resolve  transfrontier  or  global  pollution  problems  or 
where  Community  intervention  Is  necessary  to  ensure  economic  and  social 
cohesion  or  prevent  distortion  of  competition  or  trade  barriers. 

-  10-

Admittedly,  direct  Community  funding  to assist  the  application  of  Community 
law  should  be  avoided;  financial  aid  from  the  Community  should  rather 
promote  speedier 
implementation  of  the  provisions  in  force  or  the 
implementation  of  more  stringent  provisions.  However,  here  too  one  should 
avoid  focusing  on  form  rather  than  substance  since  one  of  the  best  ways  of 
encouraging  people  to  go  further  than  the  standards  In  force  is  to  promote 
the  adoption  of  tougher  standards.  In many  cases  this  objective  cannot  be 
achieved  If  one  rules  out  the  possibility  of  supporting,  even  if  only 
indirectly,  the  applIcatIon  of  new  standards  at  least  In  the  countries 
which  have  the most  problems  in this  area. 

VII.  PRIORITIES  FOR  ASSISTANCE 

The  new  instrument  must  provide  the  financial  underpinning  for  Community 
environment  policy.  It  must  make  the  Community  action  In  this  area  more 
effective  and  more  visible.  It  must  make  for  greater  cohesion  in  the 
behaviour  of  the  Member  States  with  regard  to  environmental  problems  both 
when  dealing  with  problems  with  concern  the  Community  territory  and  when 
negotiating,  at  international  level,  a  concerted  response  to  transfrontier 
or  global  problems.  It  must  also  ensure  a  better  balance  between 
environment  policy  and  other  Community  policies  and  encourage  the 
integration  of  environmental  concerns  Into  those  policies. 

It  should  above  all  provide  a  stimulus  and  give  preference  to  instruments 
which  have  a  snowball  effect.  It  should  help  remove  bottlenecks  hindering 
the  development  of  other  Community  instruments. 

Financial  assistance  under  the  Financial  Instrument  should  be  provided  in a 
variety  of  forms  that  reflect  the  nature  of  the  operation  to  be  carried 
out.  It  may  take  the  form  of  part-financing  of  programmes  or  projects, 
Interest  subsidies,  reimbursable  subsidies,  or  support  for  technical 
assistance. 

In  view  of  its  purpose,  the  new  financial  instrument  would  have  four 
general  objectives  : 

(a)  to  help  strengthen  and  increase  the  effectiveness  of  administrative 
structures  or  services  designed  to  ensure  the  implementation  of 
environmental  provisions; 

(b)  to  help  control  and  reduce  the  various  forms  of  pollution  by  means  of 

measures  complementing  action  of  a  regulatory  nature; 

(c)  to  help  protect  sensitive  areas  and  maintain  biogenetic  diversity; 

(d)  to  provide  technical  and  financial  support  in  third  countries  for  the 
implementation  of  international  conventions  and  for  the  resolution  of 
common  or  global  problems. 

-  11  -

Where  the  first  objective  Is  concerned,  It  has  been  ascertained  that 
Community  provisions  are  often  poorly  implemented.  This  may  be  the  result 
of  shortcomings  in  the  administrative  structures  of  one  or  other  country  or 
local  authority.  It  may  also  be  due  to  the  recent  Identification  of  the 
problems  and  hence  the  lack of  direct  experience  of  how  to  deal  with  them. 

Some  examples  of  the  conceivable  types  of  measures  In  this  context  are  as 
fol lows: 

technical  assistance  to  define  coherent  rehabilitation  strategies  and 
programmes  answering  existing  environmental  problems; 

training  of  environmental  managers,  environmental  advisers  for  the 
public  authorities,  environment  officers  In  firms, management  staff  in 
sensitive  areas  etc; 

development  installation  and  modernization  of  monitoring; 

awareness  and  training. 

The  second  objective  Is  central  to  the  financial  instrument's  activities, 
based  as  it  is  on  the  conviction  that  progress  with  pollution  control 
depends  to  a  large  extent  on  the  direct  involvement  of  local  authorities 
and  firms  and  that  it  is  possible,  as  a  result  of  such  Involvement,  to  go 
further  and  more  quickly  than  is strictly  required  by  legislation.  In  this 
sphere  It  Is  also  possible  to  take  Indirect  action,  e.g.  by  promoting 
"environment-friendly-  labels  so  that  consumer  choice  can  help  guide  firms' 
activities.  Similarly,  financial  support  could  be  given  to  the  victims  of 
environmental  accidents  to enable  them  to  take  emergency  measures  or  assert 
their  rights  vis-à-vis  those  responsible  and  thus  encourage  compliance  with 
the  polluter  pays  principle.  Support  also  needs  to  be  given  In  of  certain 
Community  agricultural  and  industrial  enterprises  especially  the  smaller 
ones,  in order  to support  their  adjustment  efforts.  In  the  context  of  this 
objective,  action  by  the  Community  must  be  geared  above  all,  in  compliance 
with  the  subsidiarity  principle,  to  encouraging  initiatives  at  national 
level,  while  ensuring  that  they  are  mutually  consistent  so  as  to  avoid 
distortions of  competIt ion or  of  exchange. 

The  second  objective  could,  for  example,  give  rise  to  the  following 
tasks  : 

promoting  the  use  of  new  clean  technologies  In  various  particularly 
polluting  industrial  sectors  such  as  cement  works,  pulp  and  paper, 
tanneries,  canneries,  etc. 

restoring  sites  contaminated  by  past  industrial  activities  e.g. 
quarries,  spoil  heaps,  landfills  for  toxic waste-, 

-  12 -

supporting  SMEs  using  products  which  are  toxic  or  dangerous  to  the 
environment,  e.g.  dyeworks,  photo  laboratories,  paint  shops,  print 
shops  and  hospitals; 

developing  waste  recycling  and  reuse  techniques; 

promoting  environmental  auditing  in firms. 

The  third  objective  is  based  on  the  finding  that  very  often  problems 
concerning  the  protection  of  the  environment  and  the  safeguarding  of 
natural  resources  cannot  be  solved  satisfactorily  In  regional  development 
plans.  The  aim  is  to  safeguard  the  biological  heritage,  to  mitigate  the 
problems  resulting  from  the  greenhouse  effect  and  to  prevent  erosion  and 
desertification.  Another  aim  could  also  be  to  encourage  the  search  for 
solutions  to  environmental  problems  associated  with  the  decline  of 
agriculture  and  the  economic  marginalization  of  certain  regions.  The 
encouragement  of  measures  to  restore  or  revitalize  urban  areas  is  equally 
important.  In  the  context  of  this  task,  action  by  the  Community  is  often 
necessary  in  order  to  ensure  choices  and  measures  resulting  from  an 
objective  assessment  of  priorities  rather  than  the  degree  of  awareness  or 
preparedness  of  national  or  regional  authorities  and  the  national  budgetary 
resources  ava iIabIe. 

In this case, action  could  be  taken  in sectors  such  as  : 

the  regeneration  of  plant  cover  destroyed  by  fires,  erosion  or 
desertification; 

safeguard  of  coastal  areas  and waters-, 

nature  conservation  and  the  safeguard  of  biogenetic  reserves  of 
Community  interest; 

the  restoration  and  safeguard  of  urban  centres,  especially  those 
which  are  part  of  Europe's  cultural  heritage. 

Last  but  not  least,  the  fourth  objective  concerns  the  search  for  solutions 
to  global  problems  such  as  the  greenhouse  effect,  the  destruction  of 
tropical  forests,  the  depletion  of  the  ozone  layer  and  marine  pollution. 
The  measures  in  question  may  extend  beyond  the  Community  territory,  e.g. 
with  a  view  to  helping  particularly  deprived  non-member  countries,  thus 
paving  the  way  for  the  consensus  needed  to  conclude  and  implement 
International  conventions. 

Particular  attention  should  be  paid  to  areas  such  as  the  Baltic  and  the 
Mediterranean  where  it  Is  obviously  in  the  Community's  interest  that  the 
non-member  countries  concerned  should  adopt  an  attitude  In  line  with  Its 
own.  The  same  applies  to  all  the  central  and  eastern  European  countries, 
the  state  of  whose  environment  directly  affects  a  large  part  of  the 
Community  territory. 

- 1 

This objective  could  be  reflected  in: 

a  Community  contribution  to multilateral  financial  mechanisms  dealing 
with  global  issues; 

a  Community  financial  contribution  towards  the  Implementation  of 
international  conventions-, 

programmes  of  technical  assistance  non-member  countries,  in particular 
for  Baltic  and  Mediterranean  regions; 

It  is necessary  to  stress  that,  In  the  context  of  the  activities  developed 
to answer  the  four  prlorIty  object Ives,  all  training  Initiatives  related  to 
the  measures  considered  as  well  as  all  public  awareness  and  information 
actions  are  particularly  Important  In order  to  achieve  the  desired  results. 

VIII. ASSISTANCE  CRITERIA  FOR  THE  NEW  FINANCIAL  INSTRUMENT 

Assistance  by  the  new  financial 
instrument  must  contribute  to  the 
realisation  of  the  general  objectives  of  Community  environmental  policy  and 
legislation. The  level  of  Community  participation will  need  to  take  account 
of  the  seriousness  of  the  environmental  problems  to  be  tackled,  especially 
at  the  regional  level,  the  particular  interest  of  the  operations  from  a 
Community  point  of  view,  and  of  the  capacity  of  the  beneficiary  to 
contrIbute. 

In  the  case  of  Individual  projects  (mainly  demonstration  projects),  the 
granting  of  Community  aid  will  depend  on  criteria  such  as  the  innovative 
nature  of  the  project,  its value  as  an  example  which  will  subsequently  give 
rise  to  considerable  scope  for  application,  the  involvement  of  several 
partners  from  different  Member  States,  and  its  cost-effeetIveness. 

The  financial  contribution  from  the  Community  would  normally  be  between  30 
and  75% of  the  total  cost  of  the  operations. 

Operations  which  already  benefit  from  Structural  Fund  or  other  Community 
instrument  financial  assistance  cannot  be  considered  for  funding  under 
LIFE. 

IX.  INTEGRATION OF  EXISTING  FINANCIAL  INSTRUMENTS 

In order  to ensure  the  coherence  of  Community  operations  in the  environment 
field,  it  is  necessary  to  define  the  measures  which  will  Integrated  into 
the  LIFE  and  to set  up  a coordination  system. 

- 14  -

LIFE  Is  the  Community  Instrument  which  will  provide  financial  support  for 
activities  aimed  as  a matter  of  priority  at  safeguarding  and  improving  the 
environment.  This  Is  the  case  with  the  activities  at  present  carried  out 
or  foreseen  under  MEDSPA,  NORSPA,  ACE-technologles  and  ACNAT.  It  Is  also 
the  case  with  operations  designed  to  extend  beyond  the  Community  the 
environmental  management  schemes  launched  by  the  Community  on  its  own 
territory  and  of  which  they  are  an  essential  component  (acid  rain, 
greenhouse  effect,  depletion  of  the  ozone  layer,  pollution  of  rivers  and 
seas which  directly  affect  the  Community). 

In  those  regions  where  the  Structural  funds  or  where  other  Community 
financial  instruments  can  be  used  for  environmental  protection  operations, 
the  Commission  will  ensure  their  coordination  with  assistance  from  LIFE. 
The  Commission  will  also  ensure  similar  coordination  with  development 
coopérât ion. 

Amongst  the  actions  already  underway  which  will  be  included  in  the  new 
financial  Instrument  are  the  MEDSPA,  NORSPA,  ACE-Technology  and  ACNAT 
programmes.  This  integration  will  have  the  direct  consequence  that  the 
present  Council  provisions  for  their  management  will  need  to be  repealed  as 
soon  as  the  present  Regulation  comes  into  force. 

X.  IMPLEMENTATION 

As  an  environmental  policy  instrument,  LIFE  must  act  as  a  complement  to 
legislation  to  economic  and  fiscal  instruments  within  the  limits  deemed 
necessary  to  increase  the  efficiency  of  Community  action  as  a whole.  It  Is 
therefore  neither  the only  Instrument  nor  even  the privileged  instrument  in 
this  action. 

It  Is  In  this  spirit  that  the  programmes  reflecting  the  four  general 
objectives  of  LIFE  as set  out  in Section  VII  above, will  be  adopted  by  the 
Commission  on  the  basis  of  the  opinion  of  a consultative  committee  for  the 
environment.  They  wi11  reflect: 

objectives  and  priorities  set  in  the  Community  action  programmes  (the 
draft  of  the  5th  Programme  will  be  sent  to  the  Council  and  the 
European  Parliament  in the  course  of  1991); 

sectoral  strategies  established  at  Community  level,  e.g.  for  waste 
management,  nature  conservation  and  the  safeguarding  of  biological 
diversity,  and  for  the  control  of  acid  rain; 

the  state  of  the  environment 
three-year  Community  report  Is now  being  finalized; 

In  the  Community  countries  (the 

commitments  entered  Into  within  the  framework  of  International 
convent Ions. 

-  15  -

They  will  be  drawn  up with  the main  bodies  concerned  (national  and  regional 
authorities,  economic  and  social  partners,  NGOs)  in  the  context  of  the 
partnership.  Given  that,  in  many  cases,  the  environmental  problems  which 
will  be  taken  In consideration  by  LIFE  will  be of  a  transnational  or  global 
nature,  this  cooperation  should  encourage  a  process  of  Integration  at 
Community 
problem, 
representatives of  a given  socio-economic  category  affected  by  one or  other 
problem  and  groups  which  support  certain  objectives.  This  cooperation 
should  therfore  give  preference  to  the  organizations  resulting  from  this 
integration  process  (associations of  regions,  firms,  NGOs). 

the  parties  concerned 

a  given 

level 

of 

by 

Partnership  should  In particular  enable  a better  understanding  of  problems, 
a  better  definition  of  needs  and  priorities,  and  a  better  distribution  of 
tasks  and  of  responsibilities  with  the  aim  of  guaranteeing  the  best 
possible  use  of  the  financial  resources  allocated.  In  this  respect  the 
passage  from  the  recent  "project"  to a  "programme"  approach  will  ensure  the 
better  management  of  requests  for  Community  funds,  the  greater  Impact  of 
Community  Intervention  as well  as  the  programming  of  operations  In time. 

Programmes  will  be  implemented  on  the  basis  of  a  Commission  Decision 
addressed  to  the  national  or  regional  public  authorities  concerned  or  on 
the  basis of  contracts  or  agreements  concluded  with  the  parties  responsible 
for  carrying  out 
concerned, 
international  organizations,  NGOs) setting  out  the  nature  and  amount  of  aid 
granted  and  the  relevant  conditions.  The  budgetary  ressources  made 
available  to  LIFE  will  be  determined  annually  by  the  budgetary  authority. 
In  adit ion,  they  will  be  the  subject  of  multiannual  forecasts  by  priority 
object ive. 

(associations  of 

the  measures 

firms 

The  action  by  the  Community  must  entail  a  permanent  balancing  on  the  basis 
of  the  needs  expressed  and  the  resources  available.  In  this  connection, 
the  Regulation  provides  for  a  mechanism  for  the  effective  evaluation  and 
monitoring  of  the  implementation  of  financial  assistance  making  it  possible 
to  review  measures  under  way, where  appropriate. 

For  the  first  two-year  phase  covering  1991  and  1992,  the  financial 
instrument  uses  special  simplified  provisions  aiming  to  ensure  the 
commitment  of  the  available  budgetary  resources. This  phase  will  also  allow 
the  new  instrument  to  be  tested.  Following  the  experience  acquired  in  the 
course  of  the  two  years  in  question,  and  taking  account  of  the  resources 
foreseen  in  the  framework  of  the  new  financial  perspectives,  LIFE  will  be 
reexamined  by  the  Council  on  the  basis  of  a  Commission  proposal  to  be 
presented  by  31st  Decembger  1992. 

XI.  BUDGETING  FOR  THE  FINANCIAL  INSTRUMENT 

Where  funding  is  concerned,  it  would  be  possible  to  opt  either  for  new 
Community  revenue  or  for  the  normal  budgetary  procedure. 

-  16 -

The  second  solution  has been  chosen  even  If  it  is closely  bound  up with  the 
renegotiation  of  the  Community's  "financial  perspectives".  Financing  the 
Fund  by  means  of  specific  Community  fiscal  measures  would  necessitate 
amending  the  provisions  of  the  Treaty  concerning  own  resources  and 
agreement  between  the  Member  States  on  the  fiscal  measures  to  be  used  as 
the basis  for  funding. 

- 17 -

Proposal for a 

COUNCIL REGULATION (EEC) 

establishing a Financial  Instrument for 

the Environment (LIFE) 

THE COUNCIL OF THE EUROPEAN COMMUNITIES, 

Having  regard  to  the  Treaty  establishing  the  European  Economic 

Community, and  in particular Article 130s thereof, 

Having regard to the proposal  from the Commission,1 

Having regard to the opinion of the European Parliament,2 

Having regard to the opinion of the Economic and Social Committee,3 

Whereas the Treaty provides for the development and  implementation of a 

Community environment policy and sets out the objectives and principles 

which should guide that policy-, 

Whereas, by  virtue of Article  130r, Community  action  with  respect  to 

the environment  aims,  in particular, to preserve, protect  and  improve 

the  quality  of  the  environment, and  that  in  the  elaboration  of  this 

action, it will take account  inter alia, of environmental  conditions in 

the different  regions of  the Community  as well  as of  the economic and 

social  development  of  the  Community  as  a  whole  and  of  the  balanced 

development of  its regions; 

1 

2 

3 

OJ No C 

OJ No C 

OJ No C 

-  18  -

Whereas  Article  130r(4) of  the Treaty  provides  that  the  Community  shall 

take  action  relating  to  the  environment  to  the  extent  that  the 

objectives  referred  to  can  be  attained  better  at  Community  level  than 

at  the  level  of  the  individual  Member  States;  whereas,  without 

prejudice  to  certain  measures  of  a Community  nature,  the  Member  States 

shall  finance  and  implement  the other  measures; 

Whereas,  in  order  to  face  up  to  environmental  problems  of  a  global  or 

common  nature,  it  is necessary  to  enable  the  Community  to  assist  third 

countries  or  to  assist 

in  the  implementation  of 

international 

conventions  in conformity  with  Article  130r(5); 

Whereas,  at  its  meeting  on  25  and  26  June  1990,  the  European  Council 

adopted  a  declaration  setting  out  guidelines  for  future  action  by  the 

Community  relating  to  the  environment,  in  which  it  indicates  that  the 

legislative  approach  should  be  supplemented,  where  appropriate,  by 

economic  and  fiscal  measures; 

Whereas  in  that  declaration  the  European  Council  invited  the  Commission 

to  review  all  the  budgetary  resources  devoted  to  Community  environment 

policy  which  are  currently  disbursed  through  numerous  separate  funding 

mechanisms,  and  to  submit  its  findings  to  the  Council  as  soon  as 

possible; 

Whereas  an  analysis  of  the  budgetary  resources  has  revealed  a  rapid 

increase  in  environmental  expenditure  through  a  great  number  of 

financing  sources  answering  objectives  and  constraints  inherent  to  the 

financial  instruments  used; 

Whereas  a  financial  instrument  for  the  environment  (LIFE)  should  be 

established  which  would  provide  a  coherent  financing  framework  and  be 

more  suited  to  action  by  the  Community  relating  to  the  environment 

while  complying  with  the  polluter-pays  principle  and  the  subsidiarity 

pr inciple-, 

-  19 -

Whereas  it  is  necessary,  in  order  to  achieve  the  aim  set  by 

Article  130r  of  the  Treaty,  to  define  the  instrument's  general 

objectives,  whilst  respecting  the  principle  of  concentration  of 

resources,  to  specify  the  main  categories  of  tasks  assigned  to  it  as 

well  as  to  define  the  types  of  measures  LIFE  may  support;  that  these 

measures  may  aim  to  complete  actions  already  decided  on  and 

implemented,  particularly  for  the protection  and  safeguard  of  forests; 

Whereas  it  is  necessary  that,  for  the  first  phase  covering  1991  and 

1992,  LIFE  enables  the  financing  of  priority  actions  on  the  basis  of a 

simplified  procedure; 

Whereas  in order  to  ensure  LIFE'S  greater  financial  efficiency  and  to 

respond  better  to  beneficiaries'  aspirations,  close  consultations 

should  be  instituted  between  the Commission,  the Member  State  concerned 

and  the other  economic  and  social  partners  concerned  by  the  operations 

of  LIFE,  with  each  party  acting  as  a  partner,  within  the  framework  of 

its responsibilities and  powers,  in the pursuit  of  a common  goal; 

Whereas  it  is  necessary  to  specify  the  principal  forms  of  LIFE 

assistance; 

Whereas  mechanisms  should  be  established  for  varying  Community 

assistance  characteristics  In  line with  the  particular  features  of  the 

measures  to  be  supported  and  in  the  light  of  the  capacity  of  the 

beneficiaries  to contribute; 

Whereas  it  is  necessary  to  establish  effective  methods  of  monitoring, 

assessment  and  evaluation  as well  as  to ensure  adequate  information  for 

potential  beneficiaries and  for  the public; 

Whereas  in  the  light  of  the  first  phase  of  implementation  covering  the 

years  1991  and  1992,  taking  account  of  budgetary  forecasts  the  Council 

should  reexamine  LIFE'S  provisions  on  the  basis  of  a  Commission 

proposal  to be presented  before  31  December  1992, 

HAS ADOPTED  THIS REGULATION: 

-  20 -

Article 1 

1.  A  Financial  Instrument  for  the  Environment  (LIFE)  is  hereby 

established  in order  to promote  the development  and  implementation 

of  Community  environmental  policy. 

2.  LIFE'S  purpose  shall  be  to contribute  financially  to environmental 

operations  in  the  entire  territory  of  the  Member  States,  and  to 

technical  and  financial  assistance  operations  carried  out  by  the 

Community  within  the  framework  of  the  international  conventions  to 

which  it  is  a  contracting  party  or  the  cooperation  measures  in 

which  it participates. 

3.  LIFE  shall  incorporate  existing  financial  instruments  :  Council 

Regulation  (EEC) No  2242/87  of  23  July  1987  relating  to  Community 

actions  for  the environment  (1>(ACE) as well  as  Council  Regulation 

(EEC) No  ..../91  [relating  to a Community  action  for  the  protection 

of  the environment  in the Mediterranean  region]  (2)(MEDSPA). 

Article  2 

Pr iority objectives 

LIFE shall  have  the  following objectives: 

* Within  the  Community: 

to  strengthen  and  increase  the  effectiveness  of  administrative 

structures  or  services  designed  to  ensure  the  implementation  of 

environmental  provisions; 

to help control  and  reduce  the various  forms of  pollution; 

to help protect  sensitive  areas and maintain  biogenetic  diversity; 

(1) OJ  No L 207, 29.7.87, p. 8 

(2) OJ  No L 

* Outside  the Community: 

-  21  -

to  provide  technical  and  financial  support  for  the  implementation 

of  international  conventions and  the resolution of  common or  global 

problems. 

Article  3 

Specif ic Objectives 

1.  By  30  September  each  year,  the  Commission  shall  establish,  in 

accordance  with  the  principle  of  concentration, after  consultation 

with  the  Committee  provided  for  in Article  13  and  on  the  basis  of 

the  provisions  of  this  Regulation  and  of  the  Community  Action 

Programme  for  the  Environment,  the  general  objectives  and  the 

piuriannual  operations  as  well  as  the  related  performance 

indicators  and  the  criteria  governing  the  choice  of  individual 

measures  to be  financed by LIFE. 

2.  However,  in the course of  an  initial  phase  covering  1991  and  1992, 

LIFE shall  finance  the following actions as a priority: 

actions  answering  the  eligibility  criteria  of  the  existing 

environmental  financial  instruments  (ACE, MEDSPA); 

actions  aiming  to  resolve  particularly  serious  environmental 

problems or  problems of  particular  Community  interest; 

technical  assistance  and  financial  support  actions  in  third 

countr ies. 

3.  The  Annex  to  this  Regulation  lists  the  types of  actions  which  may 

be supported  through LIFE. 

-  22 -

Article  4 

Forms of  assistance 

Financial  assistance  from  LIFE  shall  be  provided  in  one  of  the 

following  forms,  depending  on  the  nature  of  the  operations  to  be 

carr ied out : 

(a) part-financing of  programmes; 

(b) part-financing of  projects; 

(c)  interest  subsidies; 

(d) reimbursable  subsidies; 

(e) support  for  technical  assistance  and  studies  in  preparation  for 

operat ions. 

Article  5 

E I igibiIi ty 

1.  Operations  which  meet  the  objectives  set  out  in  Articles  2  and  3 

may  qualify  for  assistance  under  this Regulation. 

2.  Projects  receiving  assistance  under  the  Structural  funds  or  under 

other  Community  financial  instruments  shall  not  be  eligible  for 

assistance  under  this Regulation. 

Article  6 

Coordinat ion 

The  Commission  shall  ensure  the  coordination  and  the  coherence  between 

actions  undertaken  in  the  framework  of  this  Regulation  and  those 

undertaken  by  the Structural  funds and  by  the other  Community  financial 

instruments. 

-  23 -

Article  7 

Partnership 

Operations  financed  under  LIFE  shall  be  conceived  and  implemented  in 

close  consultation  between  the  Commission,  the  Member  State  concerned 

represented  by  the  competent  national,  regional  or  local  authorities 

designated  by  it, and  the economic  and  social  partners  concerned. 

Article  8 

LIFE s  resources 

The budgetary  resources  allocated  to the actions set  out  in the  present 

Regulation  shall  be  the  subject  of  an  annual  entry  in  the  European 

Community's general  budget. The Budgetary  Authority  shall  determine  the 

funds available  for  each  financial  year. 

When  the  financial  perspectives  are  renewed,  the  Commission  shall 

present  a  multi-annual  projection  of  the  sums  deemed  necessary  for 

LIFE, distributed  by objective  as described  in Articles  2 and  3. 

Article  9 

Differentiation of  rates of  assistance 

1.  The Community  contributions  to the  financing  of operations shall  be 

differentiated  in the  light of  the  following: 

the 

seriousness 

of 

the 

specific, 

notably 

regional, 

environmental  problems  to be  tackled; 

the  special  importance  attaching  to  the  measures  from  a 

Community  viewpoint; 

the  capacity  of  the  country  or  of  the  beneficiary  to 

contr ibute. 

-  24 -

2.  The  rates  of  Community  assistance  granted  under  LIFE  shall  be 

subject  to  the  following  ceilings: 

a  maximum  of  30%  of  the  total  cost  in  the  case  of  private 

investments  ; 

a  maximum  of  50%  of  the  total  cost  in  the  case  of  public 

investments  and  pilot or  demonstration projects-, 

exceptionally,  a  maximum  of  75%  of  the  cost  in  the  case  of 

biotopes or  habitats of Community  interest; 

exceptionally,  a maximum  of  100% of  the  total  cost  in  the  case 

of  measures  destined  to  acquire  the  information  required  to 

undertake  an action  as well  as  for  technical  assistance. 

Article  10 

Treatment  of  applications  for  assistance 

1.  Applications  for  assistance  from  the  Instrument  shall  be  prepared 

by  the  competent  national, regional  or  local  authorities  designated 

by  the Member  States and  shall  be submitted  to  the  Commission. 

However,  the  Commission  may,  on  its own  initiative,  ask  any  legal 

or  natural  persons  established  in  the  Community  to  submit 

applications  for  assistance  in  respect  of  measures  of  particular 

interest  to  the  Community  by  means  of  a  call  for  expressions  of 

interest  published  in  the  Official  Journal  of  the  European 

Communi t ies. 

Applications  from  third  countries  shall  be  submitted  to  the 

Commission  by  the  relevant  national  authorities. 

The  Commission  shall  inform  the  Member  States  of  projects  received 

in  the  framework  of  such  expressions  of  interest  and  of  projects 

submitted  by  third  countries. 

2.  Applications  for  assistance  shall  be  submitted  by  31  March  of  each 

year.  For  the  initial  phase, the date  shall  be  30 September  1991. 

-  25  -

3.  Projects  or  measures  selected  by  the  Commission  after  consultation 

of  the Committee  described  in Article  13, may  give  rise: 

a)  either  to  a  Commission  decision  approving  the  project  or 

measure  concerned  addressed  the  competent  national,  regional  or 

local  authorities  designated  by  the Member  States; 

b)  or  to  a  contract  or  agreement  governing  the  rights  and 

obligations  of  the  parties  concluded  with  the  legal  or  natural 

persons  responsible  for  implementation. 

4.  The  amount  of  financial  support,  financial  procedures  and  controls, 

as  well  as  all  the  technical  conditions  necessary  for  the 

implementation  of  the  action  are  determined  on  the  basis  of  the 

form  of  assistance  provided  either  in the  Commission  Decision  or  in 

the  contract  or  agreement  concluded  with  the  beneficiaries. 

5.  Commission  commitments  and  payments  shall  be  denominated  and 

carr ied out  in Ecus. 

Article  11 

Financial  Control 

Without  prejudice  to  checks  carried  out  by  national  authorities  in 

accordance 

with 

national 

laws,  regulations 

and 

administrative 

provisions,  and  without  prejudice  to  Article  206  of  the  Treaty  or  to 

any  inspection  carried  out  on  the  basis  of  Article  209(c)  of  the 

Treaty,  the  Commission  may  carry  out  on-the-spot  checks  in  conformity 

with  the  procedures  set  out  in  the  financial  regulations,  including 

sample  checks,  in  respect  of  actions  financed  by  LIFE,  and  may  examine 

the  control  systems  and  measures  established  by  national  authorities, 

which  inform  the Commission  of  the measures  taken  in  this  respect. 

-  26 

-

A r t i c le  12 

Ionitoring and  evaluation 

The  Commission  shall  ensure  that  the  implementation  of  Community 

operations  is efficiently  monitored  and  evaluated  on  the  terms  set  out 

in the Decision, Contract  or  Agreement. 

Article  13 

The Committee 

For  the  implementation  of  this  Regulation,  the  Commission  shall  be 

assisted  by  an  Environment  Committee  of  an  advisory  nature  composed  of 

the  representatives  of  the  Member  States  and  chaired  by  the 

representative of  the Commission. 

The  representative  of  the  Commission  shall  submit  to  the  Committee  a 

draft  of  the  measures  to  be  taken.  The  Committee  shall  deliver  its 

opinion  on  the  draft, within  a  time  limit  which  the  chairman  may  lay 

down  according  to  the urgency  of  the matter,  if necessary  by  taking  a 

vote. 

The  opinion  shall  be  recorded  in  the  minutes;  in  addition  each  Member 

State  shall  have  the  right  to ask  to have  its position  recorded  in the 

minutes. 

The  Commission  shall  take  the  utmost  account  of  the  opinion  delivered 

by  the Committee.  It shall  inform  the Committee  of  the manner  in which 

its opinion  has been  taken  into account. 

-  27 -

Article  14 

Information  and  publicity 

The  body  responsible  for  implementing  an  operation  carried  out  with 

financial  assistance  from  the  Community  shall  ensure  that  adequate 

publicity  is given  to the operation, with  a view  to: 

making  potential  beneficiaries and  trade organizations aware of  the 

opportunities afforded  by  the action-, 

making  the general  public  aware of  the  rôle played  by  the  Community 

in relation  to the action. 

Member  States  shall  consult  the  Commission,  and  inform  it  about  the 

steps  taken  for  these purposes. 

Article  15 

Réexaminât ion 

The  Council  shall  reexamine  this  Regulation  for  the  first  time  on  the 

basis  of  the  experience  acquired,  taking  account  of  budgetary 

forecasts, and on  a proposal  from  the Commission  to be submitted  before 

31  December  1992. 

A  second  reexamination shall  take place  five years after  the  first. 

The  Council  shall  decide  on  the  Commission's  proposals  by  a  qualified 

major ity. 

-  28 -
Article  16 

Transitional  provision 

This  Regulation  shall  not  affect  the prosecution  of  actions  decided  on 

and  coming  into operation  on  the basis of  Regulations  (EEC) No  2242/87 

(ACE) and  (EEC) No 

/91  (MEDSPA) before  the entry  into force of  this 

Régulât ion. 

Article  17 

Regulations  (EEC)  No  2242/87  (ACE)  and 

791  (MEDSPA)  are  hereby 

repealed. 

Article  18 

Entry  into force 

This Regulation  shall  enter  into force on  1 June 1991. 

This  Regulation  shall  be  binding  in  its  entirety  and  directly 

applicable  in all Member  States. 

Done at Brussels, 

For  the CounciI 

-  29  -

ANNEX  1 

TYPES OF  MEASURES  WHICH  LIFE  MAY  SUPPORT 

(the  list  is not  exhaustive) 

technical 

assistance 

for 

the 

authorities 

responsible 

for 

implementing  those  provisions; 

training,  information  and  awareness; 

the 

equipment,  modernization 

or 

development 

of 

monitoring 

networks; 

the  promotion  of  environmental  auditing  in  firms; 

the  rehabilitation  of  sites  contaminated  by  past 

industrial 

activities; 

the  promotion  of  new  clean  technologies; 

the  development  of  waste  recycling  and  reuse  techniques; 

support  for  SMEs  using  products  which  are  toxic or  dangerous  to  the 

env ironment; 

the  regeneration  of  plant  cover  destroyed  by  fire,  erosion  or 

desertification; 

the  prevention  and  control  of  forest  fires-, 

the  safeguarding  of  coastal  areas  and  waters; 

nature  conservation  and  the  safeguarding  of  biogenetic  reserves  of 

Community  interest; 

the  restoration  and  safeguarding  of  urban  centres  which  are  part  of 

Europe's  cultural  heritage. 

assistance  to  third  countries  in  order  to  implement  international 

conventions or  to  resolve  common  regional  or  global  problems. 

-  30 -

FICHE  FINANCIERE 

1. 

Intitulé  de  l'action  : création  d'un  instrument  financier  pour 
I'environnement. 

2. 

Lianes budgétaires  concernées 

LIFE  (Instrument 

financier 

pour 

(Article 
l'environnement) 

B4-320 

Poste B4-300 
B4-301 
B4-302 
B4-303 

ACE 
ACNAT 
MEDSPA 
NORSPA 

Pour  la  procédure  budgétaire  1992,  toutes  ces  lignes  seront 
fusionnées  sous  l'article  LIFE. 

3. 

Base  Juridique 

Résolution  du  Conseil  des  Communautés  européennes  et  des 
représentants  des  Etats  membres  réunis  au  sein  du  Conseil  du 
19 octobre  1987 concernant  la poursuite et  la réalisation  d'une 
politique  et 
Communautés 
européennes  en matière  d'environnement  (1987-1992). 

programme 

d'action 

d'un 

des 

Proposition  de règlement  CEE  du Conseil  portant  sur  la création 
d'un  instrument  financier  pour  l'environnement. 

4- 

Description de  l'action 

4.1. 

Oblectifs  spécifiques 

L'Instrument  financier  pour  l'environnement  doit  accroître 
l'efficacité  et  la  visibilité  des  Interventions  financières 
dans  ce  secteur.  Il  doit  favoriser  une  plus  grande  cohésion 
dans  le comportement  des  Etats  membres  à  l'égard  des  problèmes 
env i ronnementaux. 

Il  doit  également  assurer  un  meilleur  équilibre  entre  la 
politique 
politiques 
et 
communautaires. 

environnementale 

autres 

les 

-  31  -

4.2. 

Purée 

Elle  dépendra  des  activités  à  financer  et  des  ressources  qui 
pourront  y être  affectées par  la procédure  budgétaire  annuelle, 
particulièrement  dans  le  cadre  de  la  renégociation  des 
perspectives  financières de  la Communauté.  Avant  le 31  décembre 
1992,  la  Commission  examinera  l'évolution  qu'elle  entend  voir 
prendre  à LIFE. 

4.3. 

Populations  visées  par  l'action 

Les autorités  locales,  les milieux  économiques  et  sociaux  ainsi 
que  les organisations non gouvernementales  dans  la Communauté. 
Les  autorités  responsables  de  l'environnement  des pays  tiers. 

5. 

Classification  de  la dépense 

Dépenses  non obligatoires, crédits  dissociés. 

6. 

Nature  de  la dépense 

Le  règlement  prévolt  plusieurs  types  de  dépenses  en  fonction 
des  actions  retenues  : 

co-fInancement  de  programmes; 
co-f Inancement  de projets-, 
bonification  d'intérêts; 
subvention  remboursable; 
soutien 
l'assistance 
préparatoires  à  l'élaboration  des  actions 

technique 

à 

et 

aux 

études 

Dans  cette  dernière  catégorie  de  mesures,  on  pourra  financer 
des  analyses  descriptives  et  d'évaluation,  consultations, 
prestations  de service, collecte et  diffusion  de  l'information, 
publication  de  rapports  ainsi  que  toute  autre  intervention 
nécessaire  à  la gestion  de  l'action. 

7. 

Incidence  financière  de  l'action  sur  les crédits  d'Intervention 

7.1. 

Mode de calcul 

En  1991,  le coût  de  l'action  s'élèvera  à environ  64,5 Mécus. 
Ce  chiffre  résulte,  d'une  part,  des  crédits  qui  sont  inscrits 
pour  LIFE,  d'autre  part,  des  crédits  qui  sont  inscrits  au 
budget  pour  les  Instruments  appelés  à être  fusionnés  avec  LIFE, 
i  savoir  les crédits  figurant  aux  postes B4-300 à B4-303. 

-  32 -

dans  le 
Le  pourcentage  de 
financement  des actions prévues  par  LIFE  peut  varier  entre  30 % 
et  100  %  conformément  aux  règles  définies  dans  la  proposition 
de  règlement  du Conseil  et  notamment  son  article  9. 

l'intervention  communautaire 

Pour  les années  1993 et  suivantes,  le coût  de  l'action  dépendra 
de  l'évaluation  par  la Commission  de  la mise  en  oeuvre  de  LIFE 
pendant  les  24  premiers  mois  et  du  résultat  de  la  négociation 
sur  les perspectives  financières. 

7.2. 

Mini-budget 

Le  montant  du  mini-budget  sera  fixé  annuellement  selon  les 
règles  adoptées  par  la  Commission  le  22  mai  1990  et  couvrira 
les  dépenses  de  personnel,  les dépenses  relatives  aux  contrats 
d'entreprise,  les  dépenses  d'Infrastructure,  les  dépenses 
relatives  à  l'Information  et  aux  publications  ainsi  que 
d'autres  dépenses  de  fonctionnement  qui  découlent  de  cette 
action. 

7.3. 

Echéancier 

Un échéancier  des crédits d'engagement  pour  les cinq  prochaines 
années  ne  peut  être établi  à  l'heure  actuelle. 

Pour  les crédits  de paiement, on  peut  prévoir  que  la moitié  des 
crédits  inscrits  au  budget  1991  seront  payés  en  1991,  l'autre 
molt ié en  1992. 

8. 

Dispositions  anti-fraude 

Le  règlement  du  Conseil  prévoit  un  mécanisme  de  suivi  tant  sur 
le plan  technique  que  financier. 
Des  dispositions  anti-fraude  seront  incluses  dans  les  contrats 
liant  la Commission  aux  bénéficiaires de  l'action. 

9. 

Recettes 

L'action  ne  génère  pas  de  recettes  autres  que  la  récupération 
de  l'indu. 

-  33 -

DEPENSES  ADMINISTRATIVES 

L'action  proposée  Implique  une  augmentation  du  nombre  des  effectifs  de 
la Commission. 

La  gestion  des  Instruments  qui  seront  fusionnés  avec  LIFE  est  assurée 
actuellement  par  six  fonctionnaires  (3A,  2B,  1C), un  expert  national, 
un  fonctionnaire  temporaire  B et  neuf  prestataires  de service  (1A, 5B, 
3C). 

Pour  1991  et  1992, une  partie  des  prestataires  de  service  devrait  être 
remplacée  par  des  fonctionnaires, à savoir  1A, 3B et  3C, à  trouver  soit 
par  redéploiement, soit  par  la voie  de  la procédure  budgétaire  annuelle 
dans  le cadre  de  la programmation  des  ressources par  la Commission  pour 
l'exercice  concerné. 

L'incidence 
fonctionnement  courant  en  1000 Ecus/an  est  de : 

les  crédits 

financière 

sur 

du 

personnel 

et 

du 

un  fonctionnaire A 
3  fonctionnaires B 
3  fonctionnaires C 

1 x 44 
3 x 29 
3 x 22 

total 

44 
87 
66 

197 

Après  1992,  dans  la  mesure  où  les  perspectives  financières  de  la 
Communauté  permettront  de  doter  LIFE  de  ressources  budgétaires 
Importantes,  l'unité  actuelle  qui  gère  les  instruments  financiers  qui 
seront  fusionnés  avec  LIFE  ne sera  plus en mesure  de gérer  l'instrument 
financier.  La  structure  de  la DG  XI  devra  être  revue  pour  faire  face à 
l'accroissement  des  activités. 

-  34  -

ANALYSE  COUT-EFFICACITE 

1.  Oblectlfs  et  cohérence  avec  la programmation  financière. 

L'action  comporte  quatre  objectifs  généraux  (cf. article  2) 

établira 

L'article  3  de  la  proposition  de  règlement  prévolt  que  la 
Commission 
actions 
objectifs 
plurIannuel les  assorties  de  critères  pour  le  choix  des  mesures 
financées  par  LIFE.  Les  lignes  budgétaires  qui  seront  fusionnées 
dans  LIFE  sont  Intégrées  dans  la programmation  financière  de  la DG 
XI • 

spécifiques 

des 

et 

2.  Justification de Taction 

Un  des  objectifs  généraux  de  LIFE  est  de  favoriser  la  mise  en 
oeuvre  de  la politique  communautaire  de  l'environnement.  L'approche 
législative  suivie  Jusqu'à  présent  ayant  montré  ses  limites, 
d'autres  moyens  d'action  doivent  être  utilisés,  en  particulier  un 
instrument  financier  (cf. exposé  des  motifs). 

Les  actions  financées  par  LIFE  sont  surtout  des  actions  de 
démonstration  cofinancées  au  maximum  à  50  %  pour  les  autorités 
publiques  et  à  30  %  pour  les  entreprises.  L'effet  multiplicateur 
direct  sera  donc  égal  à  deux  ou  trois  selon  le  type  d'actions 
visées.  L'effet  multiplicateur  Indirect  n'est  pas  mesurable  à 
l'heure  actuelle,  il dépendra  des  résultats  positifs  des  actions  de 
démonstration  elles-mêmes. 

3.  Suivi  et  évaluation  de  l'action 

L'article  3  prévolt  que  chaque  action  plur(annuel le  de  LIFE  fera 
l'objet  d'une  décision  de  la  Commission  qui  comportera  des 
objectifs  spécifiques  et  des  Indicateurs  de  performance.  De  manière 
à  Juger  de  leur  efficacité,  les  actions  financées  par  LIFE  feront 
^  l'objet  d'une  évaluation  et  d'un  suivi  afin  de  s'assurer  que  les 
objectifs  auront  été  atteints  en  tenant  compte  des  Indicateurs  de 
performance  et  du  rapport  coût/efficacité. 

-  35  -

FICHE  D'IMPACT  SUR  LA COMPETITIVITE  ET  L'EMPLOI 

1. 

Quelle  est  la  justification  principale  de  la mesure  ? 

Créer  un  instrument  financier  qui  puisse  contribuer  à 
favoriser  le  développement  et  la  mise  en  oeuvre  de  ia 
politique  communautaire  de  l'environnement. 

I.  Caractéristiques  des entreprises  concernées. 

sont 

concernées 

entreprises 

Les 
entreprises 
industrielles ou  de  service, grandes  et  petites  pour  autant 
que  leurs  Installations  soient  anciennes.  En  effet,  le 
concours  financier  que  pourra  apporter  l'Instrument  doit 
respecter  le  principe  du  pollueur-payeur  qui  interdit  des 
aides  aux  établissements  nouveaux 
les 
équipements  visent  à  respecter  des  normes  plus  sévères  que 
la norme  imposée. 

lorsque 

sauf 

les 

III. Quel les  sont 
entreprises  7 

Aucune 

les  obligations  Imposées  directement  aux 

IV.  Quelles  sont  les  obligations  susceptibles  d'être  imposées 

Indirectement  aux  entreprises  via  les autorités  locales  7 

Aucune 

V. 

Y  a-t-ll  des mesures  spéciales  pour  les PME  7 Lesquelles  7 

de 

des 

missions 

financier 

l'Instrument 

Une 
vise 
spécifiquement  les  P.M.E.  Elle  prévoit  le  soutien  aux 
P.M.E.  qui  utilisent  des  produits  toxiques  ou  dangereux 
pour  l'environnement  afin  de  leur  permettre  de  se  doter  de 
technologies  propres. 
L'Instrument  prévolt  aussi  des  programmes  de  démonstration 
pour  les  technologies  de  recyclage  et  de  réutilisation  des 
déchets  ainsi  que  des  programmes  d'équipement  de  techniques 
modernes  de  surveillance  et  de  contrôle  qui  sont  très 
souvent  produits  par  les  P.M.E. 

-  36 -

VI.  Quel  est  l'effet  prévisible  7 

a) sur  la compétitivité  des entreprises  7 

L'action  envisagée  n'impose  directement  aucune  obligation 
aux  entreprises. Elle  vise  principalement  l'Introduction  de 
technologies  propres  dont  l'effet  sera  positif  sur  la 
compétitivité  des  entreprises.  L'action  aura  également  un 
et 
Impact 
Installations de  dépollution. 

les  secteurs 

équipements 

favorable 

sur 

b) sur  I'emploi  7 

Les  conséquences  sur  l'emploi  de  l'augmentation  de  la 
compétitivité 
mais 
difficilement 
envisagées 
entraîneront  certainement  des  besoins  en  main  d'oeuvre 
locale. 

des 
quant If labiés. 

entreprises 

favorables 

mesures 

sont 

Les 

VII.  Les  partenaires  sociaux  ont-Ils  été  consultés  7 

Quels  sont  leurs avis  7 

La  procédure  institutionnelle  prévolt  cette  consultation 
dans  le cadre  du  Comité  Economique  et  Social. 

37 -

REVIEW OF BUDGETARY  RESOURCES 

FOR THE ENVIRONMENT 

I.  INTRODUCTION 

At  Its meeting  on  25  and  26 June  1990  the  European  Council  Invited  the 
Commission  to  take  stock  of  all  the  resources  available  under  the 
Community  budget  to  fund  environmental  operations.  This memorandum  is 
a  response  to that  Invitation.  It  indicates briefly  the appropriations 
available  for  and  the  areas  covered  by  each  financial  Instrument  and 
analyses  trends  in  the  way  these  appropriations  are  being  used.  This 
description  only  covers  Intervention  appropriations,  studies  being  a 
négligeable element. 

The  document  also  provides  some  Information  on  EIB  activity  in  the 
environment  field. 

Annex  1 gives  breakdowns  of  individual  financial  instruments.  Annex  2 
gives  a  financial  synthesis, while  Annex  3  reproduces  the  Commission's 
data on environmental  expenditure  in some of  the Member  States.* 

Several  financial 
instruments  provide  backing  for  environmental 
operations.  Among  these  Instruments  we  need  to  distinguish  between 
those  with  a  specifically  environmental  purpose  and  those  which  can 
have  a  bearing  on  the  environment  even  though  their  principal  purpose 
is something  other  than  environmental  protection. 

II.  ENVIRONMENTAL  INSTRUMENTS 

11.1 Technological  research  and  development  programmes 

Primarily  this  Involves  research  and  development  activity  which  Is 
being  carried  out  under  several  specific  programmes  within  the 
Community 
and 
development  1987-1991  and  which  will  continue  under  the  new  framework 
programme  1990-1994. 

technological 

programme 

framework 

research 

for 

The  framework  programme  for  environmental  research  and  development, 
implemented  by  means  of  shared-cost  contracts,  concerted  action  and 
coordination and  training  activities, comprises three programmes: 

A  study  currently  under  way  at  the  Commission  is  Intended  to 
provide  a more  comprehensive overall  picture. 

-  38 -

Between  1989  and  1992,  the  STEP  programme  (Science  and  Technology  for 
Environmental  Protection)  will  provide  ECU 75  million  of  Community 
funding  for  research  In the  following  nine  areas: environment  and  human 
health,  assessment  of  risks  associated  with  chemicals,  atmospheric 
processes  and  air  quality,  water  quality,  soil  and  groundwater 
protection,  ecosystems,  protection  and  conservation  of  the  European 
cultural  heritage,  technologies  for  environmental  protection  and  major 
technological  hazards. A  new  1991  to  1994  programme  Is  In  the  process 
of  being  adopted. 

Between  1989  and  1992  the  EPOCH  programme  (European  Programme  on 
Climatology  and  Natural  Hazards) will  provide  ECU 40 million  Community 
funding  for  research  in  the  following  four  areas:  past  climates  and 
climate  change,  climate  processes  and  models,  climatic  impacts  and 
climate-related  hazards, seismic  hazard. 

Between  July  1989  and  June  1992  the MAST  programme  (Marine  Science  and 
Technology)  will  provide  ECU  50  million  in  Community  funding  for 
research  into  basic  and  applied  marine  science,  coastal  zone  science 
and  engineering,  marine  technology  and  supporting  initiatives.  A  new 
1991  to 1994 programme  is  In the process of  being  adopted. 

In  addition,  RDT  programme  of  the  Joint  Research  Centre  has  provided 
ECU  137  million  between  1987  and  1990  for  research  Into  environmental 
protection,  remote  sensing  monitoring of  land  and  sea  environments  and 
industrial  hazards.  Over  the  same  period,  ECU  17 million  was  spent  on 
scientific  and  technical  support  activities  In  several  environmental 
fields. 

The  third  framework  programme  for  RDT  Community  action  (1990-94) 
adopted  by  the  Council  on  23  April  1990  foresaw  a  specific  action  In 
the environment  field  and estimated  its cost  at  518 Mécus  (227  in 1990-
92,  291  In  1993-94),  including  the  direct  action  research  of  the  JRC. 
On  3rd  May  1990,  the  Commission  presented  proposals  for  specific 
environmental  RDT programmes whose basic objectives are : 

participation  in global  change  programmes; 
technology  and engineering  for  the environment; 
economic  and  social  aspects of environmental  problems; 
Integrated  research  projects. 

The proposal  is before  the Council. 

11.2 Action by  the Community  relating  to the environment  (ACE) 

ACE  is a  demonstration  programme  through  which  support  may  be  granted 
In the  following six  areas: 

- 39 -

1.  Demonstration projects aimed at developing  new clean technologies, 
i.e. which cause  little or no pollution and which may also be more 
economical  in their use of natural resources. 

2.  Demonstration  projects  aimed  at  developing  new  techniques  and 
methods  for  measuring  and  monitoring  the  quality  of  the  natural 
environment. 

3.  Projects  providing  an  incentive  towards  the  maintenance  or 
reestablishment  of  seriously  threatened  blotopes  which  are  the 
habitat  of  endangered  species  of  birds  and  are  of  particular 
importance to the Community under Directive 79/409/EEC. 

4.  Demonstration projects aimed at developing techniques for recycling 

and re-using waste, Including waste water. 

5.  Demonstration projects aimed at developing  techniques for  locating 
and  restoring  sites  contaminated  by  hazardous  waste  and/or 
hazardous substances. 

6.  Projects  providing  an  Incentive  towards  the  protection  or 
restoration  of  soils  threatened  or  damaged  by  fire,  erosion  and 
desertification. 

Over the four years from July 1987 to June 1991, the ACE programme will 
have received funding totalling ECU 24 million. 

The paucity of  funds  in relation to the broad  field of action covered 
by  the  ACE  programme  has  recently  prompted  the  Commission  to  submit 
three  proposals  to  the Council  intended  to  focus Community  action on 
certain priority areas while at the same time stepping up the means at 
Its disposal.  These proposals relate to MEDSPA, ACNAT and NORSPA. 

11.3 Specific action  in the Mediterranean (MEDSPA) 

In 1984 the Commission presented a communication  indicating that over a 
period  of  five  years  It would  take  a  series of  specific  measures  to 
protect the environment  in the Mediterranean basin. 

Between 1986 and  1990 the Commission did  indeed provide ECU 16 million 
for demonstration projects. 

In  March  1990  It  sent  the  Council  a  proposal  for  a  regulation 
establishing the conditions  in which priority action on the environment 
could be financed  in the Mediterranean basin. 

The  sums  estimated  to be  needed  for  the  first  three  years  Is ECU 37 
million,  to  be  used  to  finance  Incentive  and  sensitization  measures 
complementary  to  the  Investment  operations  financed  by  the structural 
Funds. 

-  40 

In the Member  States, MEDSPA will  cover  not only  demonstration  projects 
under  ACE  but  all  other  pilot  or  demonstration  projects  aimed  at 
solving  a  specifically  Mediterranean  problem  or  transferring  know-how 
from  the North  to the South. 

MEDSPA  Is  also  intended  to  provide  technical  assistance  and  the 
expertise needed  to prepare  plans and working  programmes  being  proposed 
at national  or  local  level. 

The  Commission  proposal  also  provides  for  support  for  action  to  help 
non-member  Mediterranean  countries.  Such  action  should  help  those 
countries  to  set  up  sound  administrative  structures  to  deal  with  the 
environment  and  should  provide  technical  assistance  enabling  them  to 
establish  consistent  policies and  action  programmes  In that  field. 

11.4 Nature  conservation  (ACNAT) 

On  16 August  1988  the  Commission  sent  the  Council  a  proposal  for  a 
directive  on  the  protection  of  natural  and  semi-natural  habitats  and 
wi Id fI ora and  fauna. 

During  Council  discussions  on  the  proposal  it  became  apparent  that  a 
greater  financial  commitment  by  the  Community  would  make  it  easier  to 
Implement  rules  in this  field  satisfactorily. 

At  the  beginning  of  the  year  the  Commission  therefore  sent  the Council 
a  proposal  for  the  creation  of  a  specific  financial  Instrument  for 
nature  conservation  (ACNAT).  This  instrument, with  estimated  budgetary 
commitments  of  ECU 60 million over  the  first  three  years, would  enable 
the  Community  to  take  broader  action  than  under  the  ACE  programme, 
including  the protection  of  species other  than  birds. 

11.5 Specific  action  In the North of  the Community  (NORSPA) 

The Commission  recently sent  the Council  a proposal  for  a regulation on 
action  to  protect  the  coastal  areas  and  coastal  waters  of  the  Irish 
Sea,  the North  Sea, the Baltic  and  the north-eastern  Atlantic. 

This  programme,  the  northern  counterpart  of  MEDSPA,  would  grant 
financial  support  to demonstration  projects  to  reduce  pollution  in  the 
areas  concerned  and  promote  action  encouraging  the use  of  technologies 
beneficial  to the environment  in those  areas. 

Estimated  budgetary  requirements  for  1991  to 1992  total  ECU  10 million, 
but  additional  amounts  are  foreseen  for  the new German  Lander. 

-  41  -

11.6 Forest  protection 

Under  the  common  forestry  policy  the  Council  adopted  two  regulations 
designed  to  protect  forests  against  acid  rain  and  fires.  ECU 37 
million has been spent  in this way  between  1987 and 1990. 

III.  INSTRUMENTS WITH NON-ENVIRONMENTAL  PURPOSES 

111.1 Technological  research  and development  programmes 

Several  research  programmes  can  provide  funding  for  projects  relating 
to  the  environment.  However,  It  is  not  easy  to  determine  what  funds 
are  actually  earmarked  for  this  type  of  project.  The  programmes  with 
the  most  obvious  environmental  links,  whether  direct  or  indirect,  are 
the fol lowing: 

The  ECLAIR  programme  (technological  research  and  development  in  the 
agro-industrial  field) has been allocated  ECU 80 million over  the five-
year  period  from  1988  to  1993  and  can  provide  funding  for  research 
projects on  farming methods which  are  less harmful  to the environment. 

The  agricultural  research  programme  has  been  allocated  ECU 55  million 
for  the  five-year  period  from  1989  to  1993  and  includes  research 
activity  in fields  linked to the protection of  the environment, such as 
reduced  use  of  fertilizers,  fungicides  and  pesticides,  the  effects  of 
residues, toxins and other  harmful  substances, etc. 

The  JOULE  programme  (non-nuclear  energy  and  rational  use  of  energy), 
1989-92,  allocates  a  part  of  Its  budget  to  the  elaboration  of  models 
concerning  energy  and  the  environment.  These  models  enable  quantified 
analyses  and  forecasts  of  interactions  between  energy  use,  the 
environment  and  the  economy.  Research  covered  by  the  JOULE  programme 
aims,  inter  alia,  at  the  reduction  of  gases  linked  to  the  greenhouse 
effect.  A  new  1991  to  1994  programme  Is  In  the  process  of  being 
adopted. 

The  radiation  protection  programme  has  been  allocated  ECU 21  million 
to  increase our  knowledge 
for  1990 and  1991  and will  serve,  inter 
of  the effects of  radiation on man and  his environment. 

alia, 

The  radioactive  waste  management  programme  and  the  programme  for  the 
decommissioning of  nuclear  installations will  further  contribute  to the 
protection of  people and  the environment. 

The  raw  materials  and  recycling  programme  has  been  allocated  ECU 45 
million  for  the  period  from  1990  to  1992  and  includes  research  into 
improving  the  competitiveness  of  European  businesses  In  the  sampling, 
analysis  and  classification  of  waste,  in recycling  technologies  and  in 
the production of  energy  from waste. 

-  42 -

The DRIVE programme  (road transport  Informatics and  telecommunications) 
has  been  allocated  ECU 60  million  for  the  period  from  June  1988  to 
May  1991  and  includes  among  Its objectives  the  development  of  modern, 
intelligent  technologies  to  make  road  transport  safe  and  reduce 
pollut ion hazards. 

The  EURET  programme  (European  research  for  transport)  has  been 
allocated  ECU 25 million  for  the  period  from  1990  to  1993 and  will  use 
some  of  those  funds  towards  reducing  harmful  external  effects  (noise 
and  pollution)  by  making  the  best  possible  use  of  transport  networks 
and  logistics. 

The  MONITOR  programme  (strategic  analysis,  forecasting  and  evaluation 
in  matters  of  research  and  development)  has  been  allocated  ECU 22 
million  for  the four-year  period  from  July  1989 to June 1993. 

The  strategic  analysis  part  of  the  programme  (the  sub-programme  SAST) 
will  include  a  survey  on  how  scientific  and  technological  strategy 
might  help overcome  the environmental  problems  relating  to transport. 

Other  analyses  will  cover  topics  relating  to  the  environment,  e.g. 
Identifying  ways  in which  the  new  Information,  telecommunications  and 
modelling  technologies  might  help  improve  environmental  management 
capacity. 

The  ECSC research programme  includes projects on air  pollut ion control, 
utilization  of  waste,  impact  studies,  etc.  Between  1986  and  1990 
ECU  12.8 million has been spent on  this work. 

The  third  framework  programme  1990-94  Includes  other  specific  RDT 
domains  for which  the Commission  has  already  put  forward  proposals  for 
Council  Decisions  and  which  will  have  direct  repercussions  on  the 
environment.  These  are  the  programmes  for  telematlc  systems,  research 
on  recycling  technologies  and  Integrated  projects  such  as  the  "clean 
car";  the  programme  for  industrial  and  materials  technologies, 
measurements  and  trials  for work  in areas  such  as  pollution  monitoring 
In the North  Sea or methods  to determine  the chemical  form of  polluting 
substances;  marine  science  and  technology;  the  biotechnology  RDT 
programme;  agriculture  and  agro-Industry; blomedeclne  and  health;  life 
energies; 
sciences 
radioprotection  and  reactor  safety  in  the  nuclear  fission  field; 
aspects  of  security  and  environmental  protection  in  the  demonstration 
of  the  feasibility  of  energy  from  controlled  thermonuclear  fusion,  as 
well  as  the  "human  capital  and  mobility"  programme.  Together,  these 
confirm  the  high  priority  given  to  the  environment  In  Community  RDT 
actions  in 1990-94. 

technologies 

non-nuclear 

LCDs-, 

and 

for 

-  43 -

The  EUREKA  European  cooperation  programme  of  research  and  Industrial 
technology  Includes  projects  such  as  Eurotrac,  Euromar  and  Eurocare, 
which  deal  respectively  with  troposphere/stratosphere  chemistry,  air-
sea  interchanges  and  the  processes  by  which  monuments  are  damaged.  It 
Interests non-Community  European countries as well  as  the Community. 

111.2 The Structural  Funds 

Between  1985 and  1988 the ERDF  provided  ECU  135 million  towards  the co-
financing  of  various  projects  with  a  bearing  on  environmental 
protection.  In  1985  the  ERDF  also  began  co-fInane Ing  multlannual 
programmes  containing  measures  relating  to  environmental  protection. 
The  programme  approach  means  that  the  environmental  nature  of 
individual  projects  cannot  necessarily  be  identified.  However,  we 
estimate  that  some  ECU 70  million  was  spent  on  environmental  work 
between  1985 and  1987 and  ECU 55 million  in 1988. 

The  reform  of  the  structural  Funds  meant  that  assistance  was 
concentrated  on  those  regions and sectors  hit  by  development  problems. 

Four  of  the  structural  Funds'  objectives  are  particularly  concerned 
with  the Community's environmental  policy: 

the development  of  less-developed  regions  (Objective 1 ); 
the  conversion  of  regions  seriously  affected  by  industrial  decline 
(Objective 2 ); 
the  acceleration  of  the  adaptation  of  agricultural  structures 
(object ive 5 a ); 
the development  of  rural  areas  (Objective 5 b ). 

Between  1989  and  1993  objectives  1,  2  and  5b  should  be  receiving 
ECU  38 300 
million 
respectively.  The  total  amount  provided  under  objective  5a  amounted  to 
ECU  2406 million  1987 to 1989. 

ECU 7 205  million 

ECU  2 795 

million, 

and 

The main  types of  programme  put  forward  by  the Member  States  deal  with 
sectoral  development,  generally  multi-regional,  and  regional  or  local 
multi-sectoral  development.  They  vary  considerably  in size, from  a few 
million  ecus  to  a  billion  ecus,  reflecting  the  diversity  both  of  the 
territory  involved  and  the objectives  in question. 

Regional  development  plans  put  forward  by  the  Member  States  under  the 
four  objectives  mentioned  have  included  proposals  for  financing 
operations  relating  to  the environment  at  the  same  time as  to  economic 
and  social  development. 

The Community  support  frameworks which  are based on  the Plans provide a 
major  financial  contribution  to  such  operations.  Six  of  the  seven 
Objective  1  countries  have  made  environmental  Improvement  a  priority 
development  axis. 

Assistance  from  the  structural  Funds  for  environmental  work  In  these 
Objective  1  regions  is  estimated  at  ECU  1 967  million  for  the  period 
from  1989  to 1993, representing  6% of  Community  aid. 

-  44 -

As  for  the  Objective  2  and  Objective  5b  areas,  the  contribution  Is 
estimated  at  ECU 535  million  and  ECU  310  million  respectively, 
representing  15% and  12% of Community  aid. 

Community  participation  on  environmental  measures  in  the  framework  of 
objective  5a  (Article  19  of  Regulation  EEC  797/85)  Is  put  at  ECU  39 
million  for  the period  1989-1993, or  1% of  the  total  allocation. 
The  table below gives a breakdown  of  these  amounts  by Member  State: 

Assistance  from  the structural  Funds  (ECU million) 

obj 1 

obj 2 

obj  5a 

obj  5b 

Total 

Greece 
Spain 
France 
Ireland 
Italy 
Portugal 
United  Kingdom 
Denmark 
Germany 
Netherlands 
Be I g I urn 
Luxembourg 

202 
675 

19,5 

228 
622 
168 
53 
- 
- 
- 

- 

94 
72,5 

43 

90 
53 
108 
3 

9 

12 
2 
20 
1 

79,5 
73 

22 

26 

110 

202 
849,5 
165 
228 
690 
168 
181 
55 
238 
4 
9 

TOTAL 

1967,5 

537 

39 

310,5 

2854 

The main  areas covered  are: 

the protection  of  natural  resources,  including  water  resources, and 
their  exploitation; 

management 
prevention of erosion  and  fires; 

environmentally 

of 

sensitive 

areas 

(biotopes), 

environmental Iy-sensitive agrI cultural  practices; 

infrastructure  supporting  development,  especially  in  Industrial  and 
tourism  areas  (pubIic  transport, networks,  etc.); 

management  of  household,  Industrial  and  toxic waste; 

water  treatment; 

aid  for  clean  technologies,  including  demonstration  projects; 

training  as a complement  to the abovementloned  operations. 

45  -

The  reform  of  the  structural  Funds allows  the Commission,  acting  on  its 
own  initiative,  to  launch  operations  of  Community  Interest  which  are 
not  covered  or  are  inadequately  covered  by  the  development  plans of  the 
Member  States  which  were  mentioned  earlier.  These  initiatives  can 
contribute  either  to  the  resolution  of  serious  problems  directly  linked 
to  the  Implementation  of  other  Community  policies  which  affect  the 
regions'  socio-economic  situation, or  to encourage  regional  application 
of  Community  policies,  or  again  to  contribute  to  resolving  problems 
common  to certain  categories of  region. 

regions  of 

the  Community 

The  ENVI REG  Community  initiative,  launched  on  9th  May  1990,  concerns 
the environment  and  answers  all  three objectives.  It alms  to assist  the 
least-favoured 
their 
environmental  problems  In  order  to  place  their  social  and  economic 
development  on  a  sustainable  base.  In  addition  It  ought  to  encourage 
the  realisation  of  certain  aspects  of  Community  environmental  policy 
(notably  the  management  of  water  and  of  urban  and  Industrial  waste) by 
helping  the  least-favoured  regions  to overcome  these  problems.  Special 
attention  is  given  to  reducing  pollution  in  coastal  areas,  especially 
Mediterranean,  whose  economy  depends  on  tourism  to  a  significant 
extent. 

to  deal 

with 

In 

the 

co-financing 

participates 

and 
ENVI REG 
infrastructure  (or  of  their  modernisation)  which  are  necessary  to 
achieve  the objectives.  At  the  same  time  it supports  and  encourages  the 
development  of  the  regional  authorities'  institutional  capacity  In 
Is  given  to  the 
environmental  protection.  Particular  attention 
development  of  environmental  management  know-how,  to  the  setting  up  of 
operations  destined  to  improve  depollution  Installation  management,  to 
expertise  on  the  choice  of  solution  to be envisaged  and  on  the  transfer 
of  technology  at  the  regional  and  Community  levels. 

equipment 

of 

The  structural  Funds'  overall  contribution  to  ENVIREG  for  the  period 
1990-93  is estimated  to  be  ECU  500 million.  The  Community  contribution 
to  each  operational  programme  put  forward  by  the  Member  States 
concerned  is  a  function  of  need  in  the  relevant  sectors  as  well  as  of 
the  quality  of  the  programmes  submitted.  One  of  the  quality  evaluation 
criteria  which  has  been  specified  is  the  state  of  application  of 
Community  environmental  policy  In  the  sectors  to  be  funded  through 
ENVIREG,  chosen  for  their  relevance  to economic  development. 

-  46 

The  operational  programmes  have  all  been  submitted,  the  Commission  Is 
examining  them  and  is  collaborating  with  national  authorities,  In  the 
partnership  framework!,  to  Improve  the  definition  of  the  measures 
foreseen. 

Apart  from  ENVIREG,  other  Community  initiatives  adopted  since  the 
reform  of  the  Funds  programmes  can  provide  financial  support  for  work 
to  improve  the  environment: 

RECHAR  can  fund  the  rehabilitation  and  reuse  of  spoil  heaps  and  the 
creation  of  green  areas  in  areas  severely  degraded  by  coal  mining 
actIvity. 

INTERREG  can  encourage  cross-border  cooperation  on 
control, waste  disposal  and  environmental  protection. 

pollut ion 

STRIDE  can  be  of  importance  for  research  linked  to  natural 
resources  and  environmental  conditions  In the  regions  concerned. 

REGEN  funds  gas  networks  in peripheral  regions  and  thus  contributed 
to  reducing  pollution  linked  to energy  production. 

In  the  regions  it  concerns,  REGIS  foresees  the  establishment  of 
"discovery  tourism"  beyond  the  areas of  tourism  concentration  which 
is  well  integrated  into  the  local  fabric  and  which  does  not 
endanger  biologically  fragile  areas. 

Other  programmes  of  Community  interest  launched  before  the  reform  of 
the  Structural  fund  and  now  in  the  course  of  execution  also  include 
certain  environmental  aspects  (RESIDER,  RENAVAL  and  VALOREN). 

111.3  Energy 

As  in  a  lot  of  other  cases,  it  Is  virtually  impossible  to  determine 
whether  it  Is the economic  or  the environmental  dimension  which  has  the 
upper  hand  In  research  work  and  demonstration  projects  relating  to 
energy.  Such 
indirect 
activities 
contributions  to environmental  protection. 

therefore 

provide 

mainly 

Nonetheless,  between  1987  and  1989  ECU  7.2  million  was  spent  In  the 
coal  research  programme  on  the  reduction  of  air  emissions,  the 
gasification  of  coal  to  produce  a  cleaner  fuel  and  more  acceptable 
forms of  disposal  of  mining  waste  and  ash. 

As  regards  demonstration  projects,  ECU  74.2  million  has  been  spent  on 
the  gasification  of  solid  fuels  and  on  Improving  the  combustion  of 
those  fuels. 

-  47 -

The  THERMIE  programme  (European  technologies  for  energy  management) 
will  back  projects  Implementing  new  energy  technology.  Work  will  be 
carried  out  In such  fields  as  the  rational  use  of  energy, use  of  solar 
energy,  blomass,  geothermal  energy,  hydro  power  and  wind  power  and 
ecological  techniques  for  processing  coal  and  other  solid  fuels  where 
the estimated  necessary  budget  for  1990-92  is ECU  350 million. 

111.4 The  European  Investment  Bank  (EIB) 

The  EIB  can  finance  projects  in a  large number  of  fields  provided  that 
they  are  technically  and  economically  viable.  They  must  contribute 
directly  or  indirectly  to  Increased  economic  productivity  and  assist 
regional  development  or  present  a Community  Interest  to  several  Member 
States or  the Community  as a whole. 

In  the  environmental  field,  public  and  private  investment  projects 
eligible  for  funding  Include  infrastructure  for  water  supply  -
installations  to  supply  water,  to  collect  and  treat  waste  water,  to 
remove  effluent  and  produce  drinking  water  -  site  restoration,  waste 
treatment  or  installations  to  protect  sea  waters.  The  EIB  can  also 
fund  specific  pollution  control  projects. 

According  to  the  1988  annual  report,  EIB  funding  for  Investment 
projects  Intended  specifically  to  protect  or  Improve  the  environment 
rose  to  over  ECU  1.2  billion,  i.e.  14.3% of  all  financing,  against  an 
average of 9.3%  between  1984 and 1987. 

In  1989  assistance  for  investments  designed  specifically  to  protect  or 
improve  the  environment  and  living  conditions  rose  to  ECU  1.7  billion, 
representing  some  15% of  the  Bank's  funding.  Other  investments  also 
had  a beneficial  effect  on  the environment. 

-  48 

The  table 
countrles: 

below  shows  a  sectoral  breakdown  In  the  eleven  recipient 

EIB  funding  in 1989  (ECU million) 

Water  conservation  and  management 
Waste  management 
Atmospheric pollution control 
Soi I conservât ion 
Other 

Similar  urban  development  projects 

Total 

899 
150 
337.4 
61.3 

102 

178.3 

1  728 

Following  an  agreement  negotiated  with  the  Commission,  the  EIB 
automatically  assesses environmental  impact when examining  the  projects 
it  receives,  checking  that  they  comply  with  national  and  Community 
legislation  In this  field. 

In 1988 the European  Investment  Bank  and  the World  Bank worked  together 
on  drawing  up an environmental  programme  for  the Mediterranean  in order 
that  they might  increase  the scope and effectiveness of  their  work. 

This  programme  has  resulted  in  a  regional  study  which  has  determined 
the  main  problems  and  allowed  the  Identification  the  main  areas  of 
prlor ity act ion. 

At  the  beginning  of  1990  the  operational  phase  of  this  Joint  action 
began  with  the  creation  of  a  specific  Instrument  to  provide  technical 
assistance  (the METAP  programme), bringing  together  the  EIB,  the  World 
Bank,  the  Commission  of  the  European  Communities  (via  MEDSPA)  and  the 
United  Nations Development  Programme. 

As  regards  demonstration  projects,  ECU 74.2  million  has  been  spent  on 
the  gasification  of  solid  fuels  and  on  improving  the  combustion  of 
those fuels. 

IV. FINANCIAL  INSTRUMENTS  PROVIDING ASSISTANCE  IN NON-MEMBER  COUNTRIES 

Mention  should  also  be  made  of  the  financial  Instruments  which  have 
provided  or  could  provide  assistance  for  environmental  work  In  non-
member  countries. 

- 49  -

IV.1 Non-member  countries  In the Mediterranean 

(a) The  financial  protocols  to  the  bilateral  agreements  between  the 
Community  and  Mediterranean  non-member  countries  countries  were 
renewed  in  1987. These  protocols  expire  on  31st  October  1991. One 
of  the  components  of  the  renewed  Mediterranean  policy  concerns  the 
fourth  generation  of  financial  protocols  with  the  Southern  and 
Eastern Mediterranean countries.  In the  Indicative programmes which 
fix  the  specific  objectives  of  financial  and  technical  cooperation 
as  well  as  actions  foreseen  under  the  protocols,  the  use  of 
budgetary  resources  for  environmental  protection  Is only  foreseen 
in  a  number  of  cases  (for  example  sewerage  and  waste  water 
treatment  in Egypt). 

In  addition,  Egypt  has  invoked  its  financial  protocol  with  the 
Community  In a project  to set up and manage a nature  reserve on  the 
Red  Sea;  Malta  has  planned  a  general  pollution  control  project, 
through which  it would  install  pollution control  equipment. 

(b) The  Community  budget  also  includes  specific  appropriations  to 
support  scientific  cooperation  within  the  framework  of  the 
Community's agreements with non-associated countries which  have not 
signed  a financial  protocol. 

This  Instrument  has  funded  several  environmental  research  projects 
and  exchanges  of  researchers  with  the  two  eligible  countries: 
Israel  and  Yugoslavia  which  have  benefitted  from  ECU  0.6  and  1.7 
mill Ion respectIvely. 

(c)  In  December  1990,  the  Council  adopted  the  Commission's  proposals 
for  a  revamped  Mediterranean  policy  (1992-1996)  which  actions  in 
favour  of  the  environment  are  included  amongst  the  priority 
object Ives. 

For  operations  promoting  multilateral  and  regional  or  sub-regional 
cooperation  in  the  Mediterranean,  the  Council  has  accepted  an 
indicative  five-year  financial  perspective  of  at  least  ECU  230 
million  of  which  an  important  part  will  be  given  to  environmental 
operations  such  as  demonstration  projects  or  training  and 
information activities. 

- 50  -

Lastly,  as  regards  the  ElB's  work  outside  the  protocols,  the 
Council  has  accepted  a  global  financial  enveloppe  of  ECU  1-8 
billion  of  which  at  least  ECU  350  million  will  be  for  the 
environment.  These  loans may  also enjoy  interest  rate subsidies of 
3% from  appropriations available outside  the protocol. 

IV.2 Countries of Central  and  Eastern  Europe 

Under  the  PHARE  programme,  which  received  ECU 500  million  in  1990, 
ECU  102.5 million  will  be  spent  on  environmental  projects, broken  down 
as fol lows: 

Poland 
Hungary 
ex  East  Germany 
Budapest  regional  centre 
Czechoslovakia 
Bulgaria 

ECU  22 ml I I ion 
ECU  25 million 
ECU  20 million 
ECU  2 million 
ECU  30 mi 11 ion 
ECU  3.5  million 

The  operations  Involved  deal  principally  with  pollution  control  of  the 
air  In  Poland,  air,  water,  waste  and  energy  In  Hungary  and 
Czechoslovakia and water, air  and waste  in the  former  GDR. 

In  1991  PHARE  will  receive  ECU 820  million,  not  yet  broken  down  by 
country  or  by  activity. 

IV.3 Countries of  Latin America  and Asia  (LAA) 

Funds  allocated  to  the  environment  as  part  of  the  Community's 
cooperation  with  the  LAA  countries  come  from 
the  budgetary 
appropriations earmarked  for: 

cooperation on development  aid; 
economic cooperation; 
ecology  in the developing  countries. 

It  is  impossible  to  estimate  how  much  is  spent  on  environmental 
protection  from  these  budgetary  appropriations,  it  being  difficult  to 
the 
separate 
environment. 

those  dealing  with 

development 

activities 

from 

As  for  the  future  direction  of  cooperation  with  the  LAA  countries,  as 
defined  In  the  Commission's  communication  to  the  Council  covering  the 
period  1991-2000,  priority  has  been  given  to  Increased  environmental 
protection.  To  this  end  at  least  10% of  the  economic,  financial  and 
technical  cooperation budget  should  be used  for  environmental  purposes, 
i.e. some  ECU  275 mi it ion.  It should  also be stressed  that  cooperation 
projects will  automatically  be subject  to  impact  studies. 

-  51  -

IV.4 The countries of Africa,  the Car I bean  and  the Pacific  (ACP) 

Ever  since  the  decision  to  give  food  security  the  priority  in  the  3rd 
Lomé Convention, the Community  placed  emphasis  in  Its assistance  to ACP 
countries  on  environmental  and  natural  resource  protection  which  forms 
the  basis  of  their  development  potential.  Unfortunately,  it  has  not 
been  possible  to  distinguish  clearly  between  projects  designed  to 
protect  the  environment  and  natural  resources  and  those  aimed  at  rural 
development  and  thus  to establish  environmental  expenditure. 

In  any  event,  projects  funded  between  1986  and  1989  which  included  a 
"fight  against  desertification  and  environmental  protection"  component 
represented  commitments of  about one billion  ECU. 

For  the  future  Lomé  IV  contains  a  strong  Joint  commitment  by  the 
Community  and  the  ACP  states  to  increasing  the  attention  given  to  the 
environment  in the allocation of  the  12 billion ecu available under  the 
Convention. Lomé  IV  identifies five major  environmental  priorities;  the 
protection of water  resources, the preservation  of  tropical  forests  and 
biological  diversity,  the  promotion  of  a  better  balance  between  urban 
and  rural  areas,  urban  problems  and  appropriate  control  of  locusts. 
Already  the  environmental  priority 
in  the 
négociations  on  National  Indicative  Programmes  being  conducted  with 
each ACP  state. 

is  being  reflected 

IV.5 Ecology  in the developing  countries 

Between  1988 and  1990, ECU 20.8 million were  committed  in the  framework 
of  the  "Ecology  In developing  countries" budget  line. These  commitments 
cover  research,  feasibility  studies  and  demonstration  projects 
concerning 
biodiversity 
conservation, marine environment, urban  and methodological  problems. 

desertification, 

forests, 

tropical 

V. NATIONAL  BUDGETARY  RESOURCES 

Data  on  national  budgetary  resources  for  environmental  protection  has 
been  taken  from  a  compendium  published  by  the  OECD  in  1986  and  from 
further  data  taken  from  the  statistical  offices  of  certain  Member 
States. 

The  minimal  data  available,  recalculated  in ECU  at. 1985  prices,  is set 
out  in Annex  3. 

These  data  do  not  take  account  of  measures  in  the  form  of  direct  tax 
incentives  favouring  environmental  investments  widely  used  by  certain 
States, notably  Germany, Belgium, France and  Luxembourg. 

-  5 2-

This  data  should  be  treated  with  extreme  caution: 

(a) the  definition  of  environmental  expenditure  varies  from  country  to 
country,  which  makes  comparison  quite  arbitrary,  even  If  figures 
are  available  for  the  same year-, 

(b)  It  is  impossible  to  extrapolate  a  tendency  from  Table  3  for  those 
Member  States  on  which  no  data  Is  available,  since  the  nature  of 
the  problems  involved,  the  priorities  attributed  and  the  funds 
available  vary  widely  from  one  country  to  another; 

(c)  it  is difficult  to pinpoint  Community-wide  trends  given  the  limited 
amount  of  data  on  annual  expenditure  from  only  a  limited  number  of 
countrles. 

Subject  to  the  above  reservations,  it  appears  that  overall  national 
environmental  expenditure  (national  budgets  plus  private  or  business 
expenditure)  rose  between  1985  and  1988  both  In nominal  value  and  as  a 
percentage  of  GNP.  The  same  trend  is generally  apparent  in  respect  of 
the  share  borne  by  State  budgets. 

VI. CONCLUSIONS 

Even  though  expenditure  has  often  only  been  programmed  rather  than 
committed  for  many  of  the  operations  cited,  the  following  conclusions 
can  nevertheless  be  drawn. 

The  procedures  in  force  and  the  degree  of  synthesis  inherent  in  the 
programming  process  sometimes  make  it  difficult  to  assess  the  sum 
allocated  to  environmental  measures.  For  example,  "the  rehabilitation 
of  industrial  wasteland"  heading  found 
in  several  objective  2 
programmes  of  the  Regional  Fund  includes  an environmental  element  which 
is  the  restoration of  land  to make  it usable,  but  often  also  comprises 
other  costs  associated  with  site  re-use  (service  infrastructure  and 
superstructures).  Similarly,  a measure  to exploit  water  resources  in an 
objective  1  region  Includes  an  environmental  part  concerning  the 
protection  of  water  quality  and  resource  management  as  well  as  water 
collection  and  abstraction  operations  which  account  for  most  of  the 
expenditure. 

general 

findings 

review  nevertheless  enables  certain 

The 
and 
considerations  to  be  given,  especially  as  concerns  the  evolution  of 
expenditure. What  it does  not  allow  so well  Is to  appreciate  the  impact 
of  the  Community  Support  Framework  obligation  to  give  priority  to  the 
achievement  of  the  objectives  of  environmental  legislation  where  it  is 
lacking.  This  provision  is  seen  as  an  answer  to  the  obligation 
expressed  in  Article  130R  of  the  Treaty  to  Incorporate  the  needs  of 
environmental  protection  In  the  Community's  other  policies.  However, 
the  tightness  of  the  timetable  for  the  preparation  of  funding 
applications  mean  that  the  Monitoring  Committees  will  have  special 
responsibility  in this  respect. 

- 5 3-

1.  The trends  In expenditure 

Until  1987  the  contributions  from  the  various  financial  Instruments 
towards  environmental  measures  totalled  about  ECU  60 million  per  annum, 
half  of  this  figure  being  for  research  and  half  for  the  funding  of 
Regional  Fund  projects  or  programmes. 

Since  1988  there  has  been  a considerable  increase  in expenditure  at  the 
Community  as well  as  the  national  levels. All  the  financial  instruments 
are  concerned  but  the  Increase  is  particularly  significant  in  the 
various  structural  Funds.  Between  1988  and  1993  expenditure  on  the 
is  around 
environment 
ECU  650 million  per  annum,  90%  being  investment  expenditure  and  10% 
funds  for  research  or  demonstration  projects.  In  addition,  annual 
investments  funded  by  the  EIB  could  be  between  ECU  1.5  and  2  billion. 

ECU  4 billion,  that 

total  almost 

should 

The  budgetary  resources  available  to  the  Community  action  programmes 
specifically  aimed  at  environment  policy  remain  marginal.  They 
amounted  to  ECU  19 million  in 1990 out  of  a  total  of  ECU  48 million  for 
the  environmental  part  of  Chapter  66  of  the  Commission's  budget.  They 
will  rise  to  ECU  64,5 million  out  of  104 million  in-1991. 

The  ressources  allocated  to  research,  to  actions  In  favour  of  forests 
(fight  against  acid  rain  and  the  prevention  of  fires),  as  well  as  to 
actions  financed  under  the  live  "Ecology  in the  LDCs  amount  to  some  ECU 
50 mi I I ion per  annum. 

Turning  to  the  national  budgets,  the  fragmentary  data  available,  which 
is  confined  to  a  few  Member  States  only,  would  seem  to  indicate  an 
upward  trend  in the  already  substantial  amounts  committed. 

This  upward  trend  In public  spending  on  the environment  should  continue 
or  even  accelerate  over  the  next  few  years.  It  results  from  the 
growing  awareness  of  the  gravity  of  the  environmental  problems 
affecting  a  large  proportion  of  the  Community's  territory  and  the  rest 
of  the  planet.  This  trend  cannot  be  reversed  until  the  safeguard  of 
the environment  and  the  need  for  more  rational  use of  natural  resources 
are  genuinely  integrated  as  objectives  of  the  various  economic 
policies,  and  when  the  environmental  costs  of  activities  are  passed  on 
in  the  prices,  charges  or  taxes  paid  by  the  producers  and  consumers  of 
goods  and  services. 

It  should  also  be  stressed  that  even  taking  into  account  all  the 
expenditure  at  Community  level  directly  or  indirectly  concerned  with 
the  environment,  the  amounts  Involved  are  no  more  than  marginal  in 
relation  to  the  costs  considered  necessary  to  resolve  all  the 
Community's  environmental  problems. 

54 -

2.  A  large  number  of  funding  sources  and  Instruments  conditioned  by 
the  specific  objectives  and  constraints  of  the  Policies  they 
support 

The  amounts  committed  for  the  environment  at  Community  level  come  from 
numerous  sources  of  funding  which  differ,  sometimes  considerably,  in 
their  conception,  objectives,  geographical  scope  and  Implementation  and 
financial  procedures,  as  well  as  In  the  administrative  arrangements 
for  the  granting  of  aid  and  for  project  or  programme  monitoring.  The 
dispersion  is  often  very  great  for  a  given  financial  Instrument.  For 
example,  In  the  case  of  research,  measures  which  may  have  an 
environmental  impact  are  scattered  among  14 different  programmes. 

Any  operation  financed  by  the  existing  Structurât  funds must  be  part  of 
an  economic  and  social  development  strategy  for  the  sector  of  activity 
or  region  directly  concerned. 

The  activity  of  these  Funds,  especially  that  of  the  Regional  Fund,  Is 
also  largely  circumscribed,  geographically  speaking,  by  the  recognized 
and  legitimate  need  to  channel  a  significant  proportion  of  the  funds 
available  to certain  regions,  in particular  the  less  favoured  regions. 

It  is true  that  an  environmental  measure  is always  based  on  the  concern 
to  guarantee  the  continuity  of  the  economic  and  social  development 
process.  However,  it  cannot  often  guarantee  that  the  benefits  of  a 
given  investment  will  actually  materialize  in  the  region  in  which  it 
has  been  made.  This  is  particularly  true  of  many  of  the  operations 
designed  to  safeguard  the  biological  heritage  or  to  reduce  water  and 
air  pollution.  For  example,  an operation  in the  south  of  the  Community 
to  safeguard  a  biotope  may  constitute  a  handicap  for  the  local  economy 
since  it  limits  the  scope  for  the  development  of  tourism,  but  it may  on 
the  other  hand  be  very  profitable  for  a  pharmaceutical  business  in  a 
country  In  the  north  of  the  Community  which  uses  the  biotope's  plant 
resources.  Where  air  and  water  pollution  is  concerned, 
it  may 
sometimes  be  the  case  that  even  the  Community  level  Is  an  inadequate 
framework  for  coherent  and  effective  action  and  to  ensure  the  balanced 
sharing  of  burdens  and  benefits  between  the  various  parties  concerned. 
That  is why  International  negotiations  have  been  launched  to  coordinate 
action  to  deal  with  problems  such  as  the  greenhouse  effect  and  the 
depletion  of  the ozone  layer. 

Together,  the  expenditure  in  question  makes  a  real  contribution  to 
improving  the  environment,  but  it  is  not  conceived  as  specific 
functional  underpinning  for  Community  environment  policy.  Its  main  aim 
is  not  to  answer  that  policy's  objectives  and  priorities  In  a 
systematic  or  coherent  way. 

- 55 

3.  The  increase  In  environmental  expenditure  LS  Qui  necessar I lY 

synonymous  with  the  Integration  of  environmental  objectives  Into 
other  PQIides 

The  increase  in  expenditure  on  measures  concerning  the  environment 
reflects  a growing  awareness  of  environmental  problems  and  is  therefore 
a  positive  factor.  It  is  also  an  Indication  of  the  will  to  integrate 
environmental  objectives  Into other  Community  policies. 

However,  genuine  integration  cannot  be  confined  to  those  activities 
directly  concerned  with  environmental  protection.  Nor  can  it  be 
confined  to compliance  with  the  provisions  laid  down  by  the  legislation 
in  force.  It  supposes  that  environmental  concerns  figure  among  the 
factors  giving  rise  to  and  determine  the  overall  strategy  for  the 
policy  which  the  financial  instrument  concerned  Is there  to serve.  For 
example,  when  it  comes  to  financing  a  motorway,  it  Is  not  enough  to 
make  sure  that  the  environmental  impact  provisions  in  force  are 
complied  with.  The  decision  should  take  more  into  account  the  balance 
between  various  modes  of  transport  in  terms  of  the  nuisance  they  cause 
or  with  a view  to making  a  better  use of  non-renewable  energy  sources. 

Even  when  it  Is  a  question  of  financing  a  measure  which  directly 
concerns  the environment,  compliance  with  the  legislation  In force  does 
not  guarantee  that  Community  environment  policy  guidelines  or 
priorities  will  be  taken  into  account.  Let  us  take  the  example  of  a 
Member  State  which  proposes  to  construct  a  toxic  waste  incineration 
unit.  The  unit  satisfies  an  economic  need  as  a  facility  which,  among 
other  things,  allows  the  establishment  of  new  businesses  which  may 
produce  such  waste. 
However,  if  environmental  concerns  had  genuinely 
been  taken  Into  account,  it  would  have  been  possible  to  combine 
prevention,  recycling  and  reuse  facilities  with  a,  possibly  different, 
waste  disposal  measure. 

Bad  environmental  choices,  just  like  bad  economic  choices,  may 
jeopardize  development  prospects  and  hence  the  long-term  profitability 
of  investments.  Environmental  considerations  are  becoming  Increasingly 
decisive  factors  in  consumer  choice,  whether  In  housing,  tourism, 
leisure  or  consumer  products  are  concerned.  This  is  now  clear  to  the 
more  dynamic  and  far-sighted  businessmen.  Taking  these  factors  into 
account  in the  definition of  development  strategies  reflects  not  only  a 
concern  to  improve  the  environment  in  the  Community  but  also  the 
interests of  countries  and  regions  now  trying  to catch  up. 

-  56  -

As  a  result  It  Is  necessary  to  maintain  the  effort  to  Integrate  the 
environment  into  the  activity  of  the  different  Community  financial 
instruments,  effort  in  which  the  Commission  plays  a  role,  as  well  as 
those  responsible,  nationally  or  regionally,  for  programme  definition 
and  implementation,  such  an  effort  is not  limited  to  the  development  of 
some  new  activities  to  be  undertaken  by  the  different  financial 
instruments,  but  translates  into  a  new  approach  to  the  evolution  of 
these  instruments  activities  as  a whole. 

- 57 -

Annex 1 

ERDF CONTRIBUTION BEFORE THE REFORM 
(ECU million) 

1. Funding of projects 

1985  1986  1987  1988  TOTAL 

Coastal  protection 
Improvement and 
protection of groundwater 
Site protect Ion and 
improvement 
Waste  incineration and 
recyclIng 
Pol lut ion control 

3.8 

1.2 

6.7 

11.2 

22.9 

11.4 

29.5 

6.7 

7.2 

54.8 

0.3 

9.3 

4.4 

9.1 

23.1 

8.0 

2.8 
2.6 

6.1 
1.3 

9.8 
3.7 

26.7 
7.6 

TOTAL 

23.5  45.4  25.2  41 

135.1 

2.  Funding of programmes 

Since  1975  the  ERDF  has co-financed  multiannual  programmes 
measures relating to the protection of the environment. 

ncluding 

The  ERDF  finances  measures  to  improve  run-down  industrial  or  urban 
sites  through  the  "textiles",  "steel"  and  "shipbuilding"  non-quota 
programmes.  In addition, a number  of  programmes  financed  by  the ERDF 
since  1985  Include  a  sub-programme  or  measures  relating  to  the 
protection of the environment. 

However,  the programme  approach  means  that  we  are unable  to pinpoint 
the nature of each of the projects  in this field being financed through 
these  programmes,  though  the  funding  tables  do  give  an  idea  of  the 
ERDF's contribution to environmental  protection through  sub-programmes 
or  measures.  This  estimated  funding  totals  ECU 70  million  for  the 
period from 1985 to 1987 and ECU 55 million for 1988. 

-  58 -

STRUCTURAL  FUND CONTRIBUTION THROUGH THE CSFs 
(ECU million) 

Objective 1 regions 

The  structural  Fund  contribution  towards  environmental  protection 
concerns  the  following  areas  in particular: 

waste  collection  and  treatment, 
water  treatment, 
improvement  of  coastal  areas and  river basins, 
reafforestation  for  protection,  for  production  and  for  groundwater 
protect Ion, 
the  protection,  preservation,  development  and  utilization  of 
natural  resources, 
problems  relating  to expanding  urban  centres,  industrial  zones  and 
areas of major  tourist  concentration. 

The geographical  distribution  of  funds  (in ECU million)  is as  follows: 

%  of  total  Community 
contrI but ion to CSF 

Greece 
Spain 
France 
I re I and 
Italy 
Portugal 
United  Kingdom 

202 
675 

19.5 

228 
622 
168 
53 

3.8 
8.8 
2.7 
8 
10 

2.9 
9.6 

TOTAL 

1 967.5 

6.7 

-  59 -

Objective  2  regions 

Environmental  protection  operations  financed  here  concern  not  only  the 
rehabilitation  of  Industrial  land  and  urban  regeneration,  but  also: 

the  processing  and  recycling  of  industrial  waste, 
water  treatment, 
information,  demonstration,  advice  and  promotion  regarding  clean 
technologies  in SME  and  pilot  projects  in this  area, 
aid  for  "non-polluting"  Investment  or  investment  helping  to  Improve 
the  environment, 
promotion of  public  transport, 
the  creation  and  preservation  of  natural  parks. 

The  geographical  distribution of  funds  (In  ECU million)  is as  follows: 

New 
operations 

Existing 
operations 

Total 

% of  total 
Community  aid 
to  CSFs 

Denmark 
Germany 
France 
Italy 
Netherlands 
United  Kingdom 
Be I g I urn 
S p a in 

53 
108.3 
72.5 
43.1 
2.8 
90.3 
9 
94.1 

2 
8.1 
36.6 
2 
2.6 
51 .4 
5.2 
3.7 

7.3 
116.4 
109.1 
45.1 
5.4 
141 .7 
14.2 
97.8 

24.3 
34.7 
18.1 
20.4 
7 
10.4 
7.9 
13.3 

The  above  figures  are  an  estimate  of  the  Community's  contribution 
towards  environmental  protection.  It  is  very  difficult  to  determine 
the  total  contribution  of  the  structural  Funds  provided  for  in 
Objective  2  CSFs  to  fund 
land  rehabilitation,  urban 
industrial 
regeneration  and  environmental  protection  in  the  strict  sense  of  the 
term.  On  the  one  hand,  new  operations  planned  in  these  fields  are 
spread  among  the  various  priority  sectors;  In  addition,  we  should 
mention  assistance  of  this  nature  being  provided  in  operations  which 
are  already  under  way  (IMP,  NPCI,  I DO  CP,  non-quota)  but  which  form  an 
Integral  part  of  the CSFs  concerned. 

-  60 -

Objective 5b  regions 

Environmental  protection  and  conservation  of  the  natural  heritage 
constitute a development  priority  in rural  areas. 

For  the  same  reasons  as  were  given  In  respect  of  the  Objective  2 
regions,  It  is  very  difficult  to  determine  the  exact  contribution  of 
the  structural  Funds  to environmental  protection. 

The  following  is an estimate  (in  ECU million) of  contributions  from  the 
varlous  CSFs: 

New 
operations 

Existing 
operations 

Total 

% of  total 
Community  aid 
to CSFs 

Belgium 
Netherlands 
Spain 
Italy 
France 
Germany 
Denmark 
United  Kingdom 
Luxembourg 

- 
- 
79.5 
22.0 
65.3 
99.5 
-
- 

n.a. 
n.a. 
- 
- 
7.8 
10.5 

25.8 

79.5 
22.0 
73.1 
110.0 

25.8 

27.9 
5.7 
10.1 
2.9 

7.4 

TOTAL 

266.3 

44.1 

310.4 

11.9 

-  61  -

CONTRIBUTION  FROM  THF  JOINT  RESEARCH  CENTRE 
(ECU mi II ion) 

Year 

Amount  committed 

Total 

Frame.prog. 

Scientific and 
technical  support 

1987 
1988 
1989 
1990  (forecast) 

29.9 
33.2 
35.8 
38 

0.6 
4.2 
4.8 
7.4 

30.5 
37.4 
40.6 
45.4 

Framework  Programme  activities  relate  to: 

environmental  protection  (air  pollution,  water  quality,  chemicals, 
chemical  waste,  etc.); 

remote  sensing  monitoring of  land and  sea  environments; 

industrial  hazards  (analysis, prevention  and management  of  hazards, 
taking  account  also of  the human  factor). 

The  scientific  and  technical  support  activities  relate  chiefly  to: 

air  quality  and  air  pollution  (management  of  the central  laboratory 
for  the  Implementation of  directives, European  pollutant  evaluation 
system; 

the European  Inventory of existing  chemical  substances; 

the  major  accidents  project,  including  the  preparation  of  a  Major 
Accident  Reporting  System; 

monitoring of background  radiation; 

applications  of  remote  sensing  in  the  CORINE  project  and  In  the 
monitoring of  coastal  areas. 

- 62 -

CONTRIBUTIONS FROM ENVIRONMENTAL R&D PROGRAMMES 

(ECU mi I I Ion) 

Framework prog.  1987  1988  1989 

19901 

1987 - 1990 

1984 - 1987 
1987 - 1991 
1990 - 1994 

26.9  16.4 

- 

- 

3 
9.3 

4.2 
98.5 
0 

TOTAL 

26.9  16.4  12.3 

102.7 

50.5 
107.8 
0 

158.3 

The three specific programmes of technological R&D on the environment 
being financed by the Community are: 

-  STEP, which covers specific research topics relating to 

environmental  protection, cultural  heritage, major  technological 
hazards and fire safety, dealing with them  In the following nine 
research areas: 

. environment and human health 
. assessment of risks associated with chemicals 
. atmospheric processes and air quality 
. water qua Il.ty 
. soil and groundwater protection 
. ecosystem research 
. protection and conservation of Europe's cultural  heritage 
. technologies for environmental protection 
. major technological  hazards and fire safety 

-  EPOCH, which  looks at climatology and natural  hazards  In the 

following four research areas: 

. past climates and climate change 
. climate processes and models 
. climatic  impacts and climate-related hazards 
. seismic hazard 

-  MAST, which deals with marine science and technology and  is intended 

to help create a scientific and technological  basis for the 
exploration, use, management and protection of European coastal and 
regional waters through the following research activities: 

. coastal  zone science and engineering 
. marine technology and supporting initiatives 
. basic and applied marine science research. 

1 Budgetary allocation  Including appropriations carried over from 1989 

- 63 -

CONTRIBUTION FROM ECSC RESEARCH 
(ECU mi 11 Ion) 

Year 

Amount  committed 

Sufrlect 

1986 - 1990 

12.81 

- air pollution 
- pollution of fresh and salt 

water 

- waste problems and waste 

utiIIzation 
-  Impact study 
- noise pollut Ion 

Although activities undertaken within the framework of Article 55 of 
the ECSC Treaty are not primarily environmental  In aim, certain 
research projects do  in fact cover environmental problems. 

The above figures are the best possible estimate and give an  idea of 
the environmental  contribution  from this budget. 

- 64 -

CONTRIBUTION FROM THE "ENERGY" BUDGET 
(ECU mi 11 ion) 

1987 

1988 

1989 

(D  "Coal" research  programme 

-  reduction of gaseous emissions 

0.17 

1.35 

1.41 

and suspended  particles 

- optimal  use of mining waste and 

0.46 

0.18 

0.46 

coal ash 

- gasification of coal 

1.04 

0.92 

1.23 

(2) Demonstration programme 

- combustion of solid fuels 
- gasification of solid  fuels 

15.75 
14.86 

22.48 
3.07 

14.64 
3.45 

The  budget  for  demonstration  programmes  on  energy  and  for  coal 
technology  research  programmes  (ECSC)  provides  only  an  indirect 
contribution  to  environmental  policy.  A  lot  of  demonstration  or 
research  projects on energy  have environmental  implications,  but  it is 
difficult  to say whether  it  is economics or ecology  which  carries more 
weight. 

Budgetary  resources for environmental  actions within the Community  (In ECU millions) 

85 

86 

87 

88 

89 

90 

91 

92 

93 

94 

' 

Research 
-Environmental programmes 

(STEP/EPOCH/MAST) 

-JRC 
-New env. progr. (Including 
JRC direct action) 
-ECSC 

Demonstration for the 
environment 
MEDSPA 
NORSPA 
ACE Technology) 
) 
ACNAT 

Coal 

Structural Funds 
ronr « M 
ERDF  objective 1 
objective 2 
ENVIREG 

EAGGF 5a 
5b 
forests 

Third countries 
Ecology  In developing countries 

Annex 2 

Programmes 

Value 
(Mecus) 

Duration 
(years) 

162 
137 

518 

12,8 

62,6 
13.5 
59.6 

74,3 

260 
1967,5 
537 
500 
39 
310 
58 

20,8 

4 
4 

4 
6 

9 
4 
5 

3 

4 
5 
3 
4 
5 
5 
6 

3 

le total  Identifiable amount  allocated to environmental  actions  Is ECU 4409 million, 
i 1989 (about  ECU 650 million a year  compared  to about  ECU 135 million a  year). 

The  part  commlted  after  1989 is considerably  greater  than  that  commlted  prior 

- 6 6-

Annex 3 

NATIONAL ENVIRONMENTAL EXPENDITURE 

(ECU ml I I Ion) 

1. Total expenditure 

1985 

1986 

1988 
/ 

ECU m  % GNP 

ECU m  % GNP 

ECU m  % GNP 

11 480  1.52 
Germany 
6 950  0.86 
France 
Netherlands 
1 960  1.26 
United Kingdom  7 430  1.25 

- 
7 090 
- 

- 
0.86 
- 

16 610  1.78 
9 910  1.27 
2 680  1.50 

2. Public expenditure 

1985 

1986 

1988 

ECU m  % GNP 

ECU m  % GNP 

ECU m  % GNP 

5 910 
Germany 
620 
Denmark 
4 520 
France 
890 
Italy 
Netherlands 
1 480 
United Kingdom  3 720 

0.78 
0.77 
0.56 
0.13 
0.95 
0.62 

- 
660 
4 630 
1 290 
- 
- 

- 
0.82 
0.56 
0.13 
- 
- 

8 190 

0.86 

5 250 

0.69 

1 680 
-

0.94 

ISSN 0254-1475 

COM (91)28 final 

DOCUMENTS 

EN 

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ISBN 92-77-69219-7 

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