Commission staff working document accompanying the Proposal for a Regulation of the European Parliament and of the Council on the European Earth observation programme (GMES) and its initial operations (2011 – 2013) - Impact assessment and ex ante evaluation {COM(2009) 223} {SEC(2009) 640}
Date: 2009-05-20
Institutions: European Commission
Subjects: EU programme, environmental protection, fact-finding mission, observation, research and development, satellite

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COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels, 20.5.2009 
SEC(2009) 639 

COMMISSION STAFF WORKING DOCUMENT 

accompanying the  

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on the European Earth observation programme (GMES) and its initial operations 
(2011 – 2013) 

IMPACT ASSESSMENT AND EX ANTE EVALUATION 

{COM(2009) 223} 
{SEC(2009) 640} 

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IMPACT ASSESSMENT AND EX ANTE EVALUATION 

1. 

PROCEDURAL ISSUES AND CONSULTATION OF INTERESTED PARTIES 

1.1. 

Organisation and timing 

This Impact Assessment accompanies a legislative proposal for a Regulation of the European 
Parliament  and  the  Council  on  the  European  Earth  observation  programme  (GMES)  and  its 
initial  operations  (2011  –  2013)  and  constitutes  an  ex  ante  evaluation  in  line  with  Article 
21(1)  of  the  Implementing  Rules  of  the  Financial  Regulation1.  It  was  elaborated  in 
consultation with a Steering group consisting of representatives of the following DGs: ENV, 
BUDG, RTD, AGRI, ESTAT, JRC, RTD, TAXUD, DEV, AIDCO, ECHO, INFSO, TREN, 
RELEX,  MARE,  REGIO  and  JLS,  following  the  publication  of  a  Communication  entitled 
"GMES: we care for a safer planet" (the "2008 Communication")2 that describes an approach 
for  the  establishment  of  a  stable  financing  and  governance  framework.  The  Steering  group 
met twice and was consulted on the draft submitted herewith. 

Following the opinion of the Impact Assessment board, the following parts of this report were 
modified: 

•  regarding  the  justification  of  the  for  the  proposed  Community  budget  spending,  section 
2.1.3 has been amended. Additionally, more details on the overall financial arrangements 
are given in Annex V; 

•  the  rationale  for  additional  government  financial  support  is  explained  in  more  detail  in 
section 2.1.3. User charges are discussed in more detail in section 4.2.3. Additionally, the 
description of the baseline in section 2.2. was strengthened; 

•  the  temporary  nature  of  the  proposal  was  made  more  explicit  in  chapter  3  and  in  the 
assessment of the options in chapter 5. The nature of the benefits is substantiated in Annex 
V. 

•  the assessment of governance issues is covered in the new section 4.2.2, and chapter 5.4. It 
is  made  clear  in  chapter  6  that  it  is  unlikely  that  regulation  concerning  GMES  will  enter 
into force before 2014.  

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2 

Commission  Regulation  2342/2002  of  23  December  2002  laying  down  detailed  rules  for  the 
implementation of Council Regulation 1605/2002 on the Financial Regulation applicable to the general 
budget of the European Communities, OJ L 357 of 31.12.2002, p. 1., as last amended by Commission 
Regulation 478/2007 of 23 April 2007, OJ L 111 of 28.4.2007, p. 13. 
COM(2008)748 final of 12 November 2008. 

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1.2. 

Stakeholders consultation 

This Impact Assessment is based on a consultation of external stakeholders that was launched 
with  the  Communication  entitled  "GMES,  from  concept  to  reality"3,  and  on  a  number  of 
external studies (see Annex I).  

Furthermore, since its creation in 2006, the GMES Bureau is organising a wide consultation 
process with stakeholders, including: 

•  thematic workshops with users of the future service; 

•  establishment  of 

'Implementation  Groups'  composed  of  user  representatives.  The 
Implementation Groups prepared recommendations concerning the scope, architecture and 
implementation  plans 
infrastructural 
requirements; 

for  each  service, 

the  necessary 

including 

•  the consultation of national GMES coordinators in the framework of the GMES Advisory 

Council; 

•  regular  bilateral  meetings  between  the  European  Commission's  GMES  Bureau  and 

stakeholders from industry, regions and other players; and 

•  the organisation of conferences dedicated to GMES by successive EU Presidencies. 

1.3. 

Key issues emerging from the stakeholders consultation 

The  stakeholder  consultation  has  clearly  demonstrated  that  users  cannot  rely  on  research 
projects  only.  They  need  access  to  reliable  and  accurate  data  and  information  that  is  made 
available in a timely fashion or, for emergency services, even in rush mode.  

To achieve this goal, it is necessary according to stakeholders to: 

•  take  the  necessary  steps  to  expand  the  preparatory  operational  budget  line  introduced  in 

2008 in order to cover initial operations of GMES services; 

•  to  define  the  scope  of  activities  to  complement  existing  financing  and  programmatic 

schemes; 

•  establish partnerships with the different partners in order to ensure sustainable operational 

services; 

•  ensure that, as a user-driven initiative, service specifications correspond to user needs; and 

•  facilitate market uptake by the value-adding service industry (including SMEs) by ensuring 

an open data and information policy.  

A  more  detailed  overview  of  the  outcome  of  the  stakeholder  consultation  can  be  found  in 
Annex III hereto. 

3 

COM(2005)565 final of 10 November 2005. 

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2. 

WHAT IS THE CHALLENGE? 

2.1. 

Overall context and objectives 

2.1.1.  Objectives of the initiative 

GMES  is  an  Earth  observation  system.  Earth  observation  allows  for  the  collection  of 
information  about  planet  Earth’s  physical,  chemical  and  biological  systems,  or,  more 
generally,  the  monitoring  of  the  natural  environment.  It  is  based  both  on  space  based  (i.e. 
satellites)  and  non  space  based  facilities,  including  airborne,  seaborne  and  ground  based 
installations  (referred  to  as  "In  situ").  Data  collected  through  satellites  and  In  situ 
infrastructure  are  processed  to  enable  the  provision  of  information  services,  for  a  better 
management of our environment and enhanced security of the citizens. This will allow e.g. to 
manage  natural  resources  and  biodiversity  more  efficiently,  monitor  the  state  of  the  oceans 
and the chemical composition of our atmosphere - important factors for climate change – to 
respond  to  natural  and  man-made  disasters  including  tsunamis,  and  to  ensure  border 
surveillance in a more effective way. 

In  the  last  thirty  years,  substantial  R&D  efforts  in  the  field  of  Earth  observation  have  been 
made by the EU, the European Space Agency (ESA) and their respective Member States, with 
a view to developing infrastructure and pre-operational Earth observation services. 

Data  provided  through  the  currently  existing  services,  however,  either  do  not  cover  all  the 
parameters needed by policy makers4, or are not provided on a continuous basis, in particular 
because the lifetime of the service or the underlying observation infrastructure is limited due 
to  budgetary  and/or  technical  constraints.  In  other  words,  many  of  the  existing  Earth 
observation  services  in  Europe  are  unreliable  due  to  infrastructural  gaps  and  lack  of 
guarantees on their availability in the long term. This represents a concern for final users like 
public authorities, but also for downstream service providers, as they are not likely to invest 
significantly  in  non-mature,  risky  markets  and  would  be  facing  additional  difficulties  in 
raising capital. 

In this context, the overall objective of GMES is to 

•  enable Earth observation services on a sustainable basis, and tailored to the needs of users, 
including public policy makers and private citizens. The GMES services will allow public 
policy makers in particular to 

–  prepare national, European, and international legislation of environmental matters, 

including climate change; 

–  monitor the implementation of this legislation; 

–  access comprehensive and accurate information concerning security matters (e.g. 

for border surveillance). 

•  ensure the sustainability of the observation infrastructure necessary to provide the GMES 
services.  This  will  be  done  either  through  the  establishment  of  partnerships  with 

4 

In particular, information aggregated at European or global level with a sufficient quality is currently 
not available to European policy makers.  

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infrastructure  owners,  or  through  the  development  of  new  infrastructure  in  the  event 
existing infrastructure is not sufficient to produce the data needed for the GMES services; 

•  create  opportunities  for  increased  private  sector  usage  of  information  sources,  thereby 
facilitating market uptake by value-adding service providers, many of which are small and 
medium enterprises (SME). 

2.1.2.  Financing and timeline 

GMES are currently and will continue to be co-financed at European, intergovernmental and 
national  levels,  based  on  partnerships  among  the  different  players.  This  is  because,  the  EU 
will not finance the cost of the development and operations of all the space based5 and the in 
situ installations providing data for the GMES services, as the financing of the total costs for 
all  the  necessary  infrastructure  elements  could  violate  the  proportionality  and  subsidiarity 
principles. The EC will rather concentrate on domains where a Community intervention will 
provide a clear added value. 

The EU will both coordinate these partnerships and manage its own contribution to GMES, 
which consists of development activities and an operational phase. 

Regarding development activities, this contribution currently consists, in particular, of the co-
financing following research activities under FP 7 und FP 6: 

•  a  co-financing  of  space  infrastructure  developments6  that  are  carried  by  the  European 

Space Agency (ESA) in order to fill gaps in existing space infrastructure; 

•  in situ research; 

•  funding of pre-operational demonstrator services. 

Within  FP  6,  the  EU  has  spent  100M€  on  GMES   projects,  whereas  ESA  invested  another 
100M€ in the GMES Service Elements projects.  In the space theme of the specific programme 
"cooperation" of FP 7, the EU will make available approximately 430M€ for GMES service 
projects  and  procurement  of  data  for  these  Services  between  2007  and  2013.  Additionally, 
624 M€ from the space theme of FP 7 will be us ed to contribute  to the development of the 
ESA Space component programme, which amounts to 2246 M€ (2008 e.c.) in total (including 
funds contributed by ESA Member States.  

First  operational  services  in  the  field  of  emergency  management  and  land  monitoring  are 
financed under preparatory actions in addition to some other operational elements in the land 
domain (Corine Land Cover, Urban Atlas).  

In the beginning of the next decade (2011 – 2013), operational services could be provided at a 
larger  scale.  Investments  could  be  needed  to  set  up  the  appropriate  infrastructure  for  the 
required service processing chain and the roll-out of products based on prototypes developed 
in the previous research actions. The operational processing chain would have to be designed 
to  meet  the  demands  of  data  volumes  to  be  processed  for  full  pan-European  or  global 

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6 

Existing  space  missions  that  will  provide  data  for  GMES  include  Spot,  TerraSAR-X,  EUMETSAT 
satellites, CosmoSkymed, DMC Deimos, Ikonos, GeoEye, Quickbird, and ENVISAT.  
ESA is currently developing 5 "Sentinel" missions under its GMES Space Component Programme. 

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coverage, as well as a steady-state operation on a 24/7 basis, with shortest response times. The 
funding  would  mainly  be  needed  for  servers,  workstations,  backup-systems,  network 
infrastructure,  software,  installation  of  infrastructure,  maintenance,  integration  and  testing, 
long-term archiving, help-desk functions and the like. 

FP7 is an R&D tool and thus not designed to support GMES Initial Operations to the extent 
that  these  need  to  be  ensured  on  a  more  permanent  basis.  It  is  thus  necessary  to  establish 
appropriate  mechanisms  for  a  Community  intervention.  This  is  the  main  challenge  that  the 
proposed ic Act is intended to address, and is further elaborated in section 2.2. The full GMES 
programme,  under  which  the  EU  contribution  to  the  overall  GMES  initiative  could  be 
financed in the long run, is expected to be in place during the EU's next multiannual financial 
framework (from 2014). The overall financing needs of GMES after 2013 will be subject to 
future analysis led by the Commission, on the basis of defined cost-sharing principles and a 
cost assessment based on the scope of services. This will include a more detailed analysis of 
costs at Member State level. 

In  this  context,  it  should  be  recalled  that  the  long-term  GMES  funding  approach  should  be 
developed in a modular way. This means that new expansions in the scope of GMES services 
and  every  new  evolution  of  GMES  will  be  assessed  against  the  criterion  of  cost  efficiency 
user needs and the EU policy interests. 

Since 2005, the Commission has thus led a prioritisation process for GMES through its 2005 
and 2008 Communications. This has been fully supported in Council orientations (in 2005), 
resolutions (in 2007 and 2008) and conclusions (in 2008). Already in 2005, there was political 
agreement to base the implementation of GMES on a phased approach and to focus on three 
fast-track  services  (land  monitoring,  emergency  response  and  marine  services).  In  2007  and 
2008 respectively, a R&D phase was launched for atmospheric monitoring as well as security 
and climate change services. For the period 2011 – 2013, this prioritisation process has led to 
the  selection  of  activities  of  the  following  fields  in  the  framework  of  GMES  Initial 
Operations. 

(a) 

emergency response services;  

(b) 

land monitoring services; 

and auxiliary activities including: 

(c) 

measures supporting the uptake of services by users; 

(d) 

data access; 

(e) 

GMES space component. 

The  following  specific  criteria  were  used  for  the  selection  of  activities  for  GMES  Initial 
Operations.  

•  sufficient technical maturity; 

•  continuity with the Preparatory Action 2008-2010, and other existing activities outside the 

RTD framework programmes, such as Corine land cover; 

•  proven potential for the development of downstream services; 

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•  service  providers  are  industry  players  and  would  therefore  cease  activities  without 
additional  intervention  from  the  EU,  whereas  in  the  field  of  marine  and  atmosphere, 
services are provided mainly by public institutions that will be able to continue activities 
(albeit probably at a less ambitious scale) before 2013 without Community support; and 

•  regarding  emergency  services,  it  is  clear  that  it  would  be  preferable  to  make  available 
emergency maps on an operational basis to civil protection authorities already in 2011, and 
not 2014. 

These  priorities  have  been  discussed  extensively  with  in  the  aftermath  of  the  Lille  GMES 
Forum  organised  by  the  French  presidency,  including  consultations  within  the  GMES 
Advisory  Council.  Stakeholders  agreed  that  it  will  be  necessary  to  complement  existing 
research funds in the period 2011 – 2013 in order to launch services on an operational basis in 
areas  where  there  is  a  risk  of  service  interruption.  They  also  acknowledged  that  the  marine 
and  atmospheric  monitoring  activities  are  on  good  track.  Owing  to  the  institutional  or 
scientific nature of the European actors involved in their implementation, FP7 seems adequate 
enough,  at  this  stage,  both  in  volume  and  as  a  legal  instrument,  to  allow  establishing  a 
capacity which is very close to operational conditions for marine and atmosphere services. 

2.1.3.  Auxiliary activities 

Auxiliary activities, in particular data access, are an indispensable input for the provision of 
operational emergency and land monitoring services. This is because without access to Earth 
observation  data,  the  provision  of  operational  GMES  services  is  impossible,  as  the  services 
consist in an interpretation and processing of available Earth observation data.  

The GMES Space Component consists of space observation infrastructure addressing service 
data  needs  with  missions  observing  land,  atmospheric  and  oceanographic  parameters, 
including: 

•  existing or planned European space infrastructure mainly satellites of ESA, EUMETSAT 

and Member States; and 

•  space infrastructure co-financed by the EU and ESA. 

Within  the  Space  Component,  different  functions  need  to  be  covered  for  all  space 
infrastructure  types  (demonstration  missions,  initial  and  recurrent  elements  of  operational 
missions). Currently, following a gap analysis conducted by ESA, ESA and the EC are jointly 
developing space observation infrastructure in the frame of the ESA GMES Space component 
Programme. This programme aims at developing a number of satellite missions known as “the 
Sentinels”.  The  ESA  GSC  programme,  however,  only  covers  the  development  of  the 
Sentinels,  but  not  their  operation  following  in-orbit  validation.  As  outlined  in  the  2008 
Communication,  the  Community  Programme  should  contribute  to  the  sustainability  of  the 
space  infrastructure,  notably  to  the  in-orbit  availability  and  operations.  The  space 
infrastructure  relevant  for  land  and  emergency  services7  will  be  operated  by  ESA,  until  an 
operator has been selected8.  

7 

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This includes Sentinels 1 and 2, carrying radar and multispectral imaging sensors, and the land part of 
Sentinel 3. 
See the 2008 Communication, p 3, 6 and 8.  

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Other auxiliary activities (i.e. a support to the uptake of other operational services) are only of 
marginal importance in financial terms in the period 2011 – 2013.  

Consequently,  the  problem  definition  and  the  analysis  of  options  will  focus  on  land 
monitoring and emergency services. 

2.2. 

Problem definition 

The  stakeholder  consultation  has  confirmed  the  environmental  and  policy  need  for  GMES 
services9.  Nevertheless,  the  market  seems  to  fail  in  providing  the  services  without  public 
intervention. This is mainly due to intrinsic high fixed costs, while at the same time slow and 
gradual returns normally make the investment not sustainable for the private sector, as a very 
long span of time is required to reach the break-even point of the investment10. Additionally, 
it  should  be  recalled  that  most  of  users  of  GMES  services  will  be  public  policy  makers. 
Stakeholders  widely  agree  that  a  public  intervention  in  core  operational  services  is  a 
prerequisite for wide-ranging operational services to emerge. Without such intervention, there 
are serious concerns about the extent to which operational services useful for policy makers 
and  others  would  become  available11.  As  outlined  in  section  2.3.1  below,  this  public 
intervention should take place at EU level.  

A  lack  of  operational  services  in  the  field  of  emergency  response  and  land  monitoring 
provided under EU coordination in the period 2011 – 2013 would thus result in the following 
problems: 

•  there is a risk that once existing research projects end (i.e. in 2011), in the period covered 
by the proposed Regulation, civil protection authorities would either not have access at all 
to the maps referred to under chapter 2.2.1., or would continue to produce  them  on their 
own in an uncoordinated manner. In the latter case, civil protection authorities would have 
to rely on data purchased at very high prices, which is also one of the major barriers for the 
development of the downstream sector. The production of the maps would take place, if at 
all, at Member State level, which means that it would be much more difficult to achieve 
economies of scale; 

•  users  of  land  monitoring  services  (e.g.  environmental  agencies)  would  face  comparable 
problems between 2011 - 2013, including a lack of continuous availability of the products 
referred to under 2.2.2., and the lack of availability of Earth observation data (in particular 
satellite data) at reasonable conditions; 

•  the downstream sector, which depends on a continuous  input of information produced in 
the framework of GMES services, could not develop its full potential without an assurance 
that  the  GMES  services  will  be  available  on  a  continuous  basis.  There  is  consequently  a 
risk that the lack of operational services in the period 2011- 2013, which would leave an 
important  gap  between  the  end  of  research  activities  and  fully  fledged  operations  after 
2014,  would  significantly  deteriorate  the  boost  to  the  industry’s  competitiveness  and  the 
emergence of commercially viable solutions between 2011 - 2013. This boost could have 

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See e.g. Section 7 of Annex III hereto. 
See  also  the  Impact  Assessment  accompanying  the  Commission  Communication  on  the  European 
Space policy, SEC(2007)505 of 26.4.2007, p. 10.  
See Section 3 of Annex III hereto.  

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been  expected  to  result  from  the  Community’s  extensive  support  to  the  R&D  phase  of 
GMES. For a more detailed description of the downstream sector, see Annex II; 

•  Without a Community intervention in the period 2011-2013 with a view to enabling initial 
operational land monitoring and emergency response services, there is a risk that there will 
be  un  unacceptable  interruption  between  the  research  projects  providing  pre-operational 
services and the services provided in the framework of a fully fledged GMES programme 
starting  in  2014.  Concretely,  this  could  mean  that  industrial  teams  disintegrate,  which 
could  make  efficient  service  provision  already  at  the  beginning  of  the  next  financial 
framework difficult or impossible.  

Additional  problems  common  to  both  emergency  and  land  monitoring  services  before  2014 
include  (i)  the  lack  of  common  catalogue  and  archiving  facilities,  and  (ii)  the  lack  of  the 
harmonisation  and  interoperability of data and service results. The first point is problematic 
because e.g. the parameters necessary to understand climate change have to be observed over 
a longer time period. If information produced by operational services is not archived properly, 
it might simply be lost and thus not available for long term studies. Lack of harmonisation of 
data  is  a  problem  because  it  may  lead  to  the  incomparability  of  information  produced  in 
different member States. This would mean that e.g. the production of pan-European maps for 
the purpose of a Europe-wide monitoring would be impossible.  

It  is  considered  that  for  other  GMES  services,  existing  research  and  development  funding 
under FP 7 can sufficiently address the needs between 2011 and 2103. It is for this reason that 
GMES  initial  operations  focus  on  emergency  response  and  land  monitoring  services12.  All 
GMES services could be financed on an operational basis from 2014, provided that decisions 
for funding and organisational arrangements after 2013 will have to be determined as part of 
the next multiannual financial framework.  

In the following, problems related to emergency response and land monitoring services will 
be analysed. 

2.2.1.  Problems specific to operational Emergency response services  

Civil  protection  authorities,  at  European,  national,  regional  and  local  level  require  access  to 
accurate  Earth  observation  data  and  information  services  in  order  to  react  to  emergency 
situations. These include: 

•  natural  disasters,  caused  by  the  impact  of  natural  phenomena  on  society  and  the  built 
environment,  including  earth  quakes,  volcanic  eruptions,  floods,  wildfires,  tsunamis, 
hurricanes, droughts, food shortages; 

•  man made disasters, to include industrial accidents, chemical spills and nuclear accidents 

(but not war, terrorism and complex political crises); 

•  complex (political) emergencies: civil war and unrest or armed conflict with widespread 
impact  on  civilian  populations,  often  leading  to  massive  displacement  of  people  across 
regions  and  national  borders.  In  such  cases  the  humanitarian  community  comprises 

12 

See also Chapter 2.1.3 above.  

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assistance, relief and protection operations on a non-discriminatory basis to the victims of 
conflict13. 

Products that are needed concretely by civil protection authorities are (i) emergency maps that 
are produced in rush mode to show the impact of the disaster, (ii) maps covering the whole 
response  cycle,  including  risk  maps  and  mapping  for  the  reconstruction  phase,  and  (iii) 
reference maps providing basic cartographic information on areas affected by hazards. Civil 
protection authorities will use these maps in order to obtain a clearer picture of the disaster, 
which  will  help  them  to  improve  their  capacity  to  react  appropriately  to  the  emergency.  To 
provide an example, in the case of floods or forest fires, emergency maps would allow rescue 
teams to verify which roads are blocked off and therefore cannot be used to reach victims. 

Image 1: flood map for Myanmar 

In order to improve Europe's capacity to respond to disasters, the EU and ESA launched the 
development  of  pre-operational  GMES  services  through  the  ESA  GMES  Service  Element 
programme  and  the  EC  6th  Framework  Programme  for  research  (FP6)14.  Further 
developments  are  financed  through  FP7,  based  on  the  guidelines  developed  by  the 
Implementation Group for the ERCS. 

A further step towards operational services was taken through a preparatory action in the field 
of  emergency  services  (the  “PA”).  The  first  PA  was  launched  in  2008  covering  the  period 
2008-2010.  Its  objective  is  to  complement  the  FP6  and  FP7  activities  referred  to  above  by 
developing  the  operational  interfaces  and  procedures  between  the  users  and  the  service 

13 

14 

GMES Fast Track Emergency Response Core Service, Strategic Implementation Plan, Final Version, 
24/04/2007 ERCS Strategic implementation Plan, available at 
http://www.gmes.info/library/files/5.%20Implementation%20Groups%20Documents/Emergency%20R
esponse%20Core%20Service%20ERCS/ERCS_Strategic_Implementation_Plan_Final.pdf, p 9.  
Namely the projects RISK-EOS and PREVIEW in support of European civil protection authorities, and 
the RESPOND project in the domain of humanitarian aid.  

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providers. In the frame of this PA, DG ENTR has published on 7 June 2008 a call for tender 
“Supporting  the  implementation  of  an  operational  Global  Monitoring  for  Environment  and 
Security (GMES) service in the field of emergency management”15. 

This PA, however, will expire in 2010, at the latest. This means that without further financing, 
no  operational  services  in  the  field  of  emergency  response  management  will  be  available  at 
EU level thereafter. The discontinuity of operational services in the period 2011 – 2013 could 
have a serious negative impact on the launch of operational services in the context of a fully 
fledged GMES programme starting in 2014. 

2.2.2.  Problems specific to operational land monitoring services 

Land  monitoring  is  quite  a  complex  activity  since  it  covers  a  wide  range  of  resources  and 
diversified  policies:  soils,  water,  agriculture,  forests,  energy  and  utilities,  built-up  areas, 
recreation, infrastructures and transports. Better, more frequent and up-to-date information on 
land cover and land use becomes more and more important due to growing changes affecting 
the landscape and environment. Land cover/land use information is thus required to support 
policy implementation and compliance reporting at both European and national level, and at 
international  level16,  taking  into  consideration  that  at  least  80  %  of  the  EU  budget  is  used 
today  to  support  policy  domains  with  a  strong  territorial  impact  (i.e.  agriculture  policy, 
regional  policy,  transport  policy,  forestry  and  biodiversity,  food  security  and  humanitarian 
aid, climate change and emergency planning) for which data and information on land use and 
land  cover  changes  are  indispensable  for  implementation,  monitoring  and  evaluation  of 
effectiveness17. 

Land use/ land cover and land cover change data are therefore essential for a large community 
of  users,  as  well  as  a  better  access  to  Earth  observation  and  reference  data.  Today  many 
initiatives,  applications  and  projects  provide  land  cover  and  land  use  products  (at  local, 
national, European or global level), but they are spread out, and not always compatible. Most 
of them are not regularly updated or delivered in a timely manner. 

In  the  field  of  land  monitoring,  the  added-value  of  GMES  would  be  to  integrate  into  one 
system various types of products at different scales, combining in interoperable and seamless 
way  pre-processed  images,  reference  data  possibly  from  existing  sources  and  land  use/land 
cover data starting with the following service elements: 

•  pan-European land cover products at fine resolution that show e.g. detailed information on 

forests and soil sealing; 

•  very fine resolution maps of cities and other ‘hot spot’ areas (e.g. coastal areas, protected 

areas etc.) 

15 
16 

17 

The document is available on http://ec.europa.eu/enterprise/calls/calls_arc2008.html.  
The EC is party to many International Environmental Agreements including the three Rio Conventions 
(UN Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol; UN Convention to 
Combat  Desertification  (UNCCD),  UN  Convention  on  Biological  Diversity  (UNCBD)),  the  UN-ECE 
Long Range Transboundary Air Pollution Deposition and dispersion modelling, and it is supporting the 
UN Forum on Forest, UN Millennium Development Goals and the Ramsar Convention on Wetlands. 
GMES Fast Track Land Monitoring Core Service Strategic Implementation Plan, Final Version, 
24/04/2007, (« LMCS Strategic Implementation Plan »), available at 
http://www.gmes.info/library/files/5.%20Implementation%20Groups%20Documents/Land%20Monitor
ing%20Core%20Service%20LMCS/LMCS_Strategic_Implementation_Plan_Final.pdf, p 8.  

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•  dynamic  land  monitoring  measuring  parameters  of  importance  to  understand  climate 

change (e.g. vegetation, surface radiation, water, andsnow). 

Image 2: Corine 2000 Pan-European Land cover map 

In  this  context,  the  EU  and  ESA  launched  significant  research  efforts,  including  the  FP6 
GEOLAND  and  Boss4GMES,  FP7  GEOLAND2  and  GSE  projects  (managed  by  ESA). 
Additionally, the Commission will launch a preparatory action in the field of land monitoring 
in 2008. Nevertheless a risk exists that the services delivered in the framework of the research 
projects  and  the  preparatory  action  mentioned  above  will  never  be  made  available  in  an 
operational context between 2011 and 2013 without a Community intervention. 

2.3. 

Does the EU have the right to act? 

The  legal  basis  for  the  Community's  right  to  act  in  this  field  is  Article  157(3)  of  the  EC 
Treaty. 

Article 157(3) provides for the adoption of specific measures in support of actions taken in the 
Member  States  to  ensure  that  the  conditions  necessary  for  the  competitiveness  of  the 
Community's industry exist. The objectives of (i) encouraging an environment favourable to 
initiative  and  to  the  development  of  undertakings  throughout  the  Community,  particularly 
small and medium-sized undertakings, and of (ii) encouraging an environment favourable to 
initiative and to the development of undertakings throughout the Community are of particular 
importance in this regard. 

EN 

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2.3.1. 

Subsidiarity 

As Article 157(3) of the EC Treaty does not establish an exclusive competence of the EC, the 
proposed action needs to be examined in the light of the principle of subsidiarity. This means 
that the Community shall take action only if and in so far as the objectives of the proposed 
action cannot be sufficiently achieved by the Member States and can therefore, by reason of 
the scale or effects of the proposed action, be better achieved by the Community. 

For  the  services  with  a  pan-European  (or  even  global)  coverage,  in  particular  the  pan-
European  land  cover  services  referred  to  under  Chapter  2.2.2,  Member  States  cannot 
sufficiently  achieve  the  objectives  of  the  proposed  action,  as  the  inputs  from  different 
Member  States  have  to  be  aggregated  at  European  level.  The  provision  of  other  services 
referred to in chapter 2.2.1. and 2.2.2 (e.g. emergency maps or thematic land monitoring maps 
of  a  more  limited  geographical  scope)  can  be  better  achieved  by  the  Community  for  two 
reasons. First, a more coherent and centralised management of input data, from space based or 
in situ sensors will allow for economies of scale18. Secondly, an uncoordinated provision of 
Earth observation services at Member State level would lead to duplications and would render 
the  monitoring  of  the  implementation  of  EC  environmental  legislation  on  the  basis  of 
transparent  and  objective  criteria  difficult  or  even  impossible.  If  information  produced  at 
Member State level is not comparable, it will not be possible for the Commission to ascertain 
whether environmental legislation has been implemented correctly in all Member States. 

2.3.2.  Proportionality 

Any action by the Community shall not go beyond what is necessary to achieve the objectives 
of  the  EC  Treaty.  The  action  proposed  for  the  initial  operations  of  GMES  fulfils  this 
requirement  for  several  reasons.  First,  the  operational  GMES  services  in  the  field  of  land 
monitoring and emergency response do not replace existing services, but rather complement 
them or ensure their continuity. Secondly, service provision will be centralised at Community 
level only when indispensable. 

3. 

OBJECTIVES 

3.1. 

General objectives  

The  general  objectives  of  the  proposed  Regulation  correspond  to  the  objectives  of  GMES 
itself, as outlined in chapter 2.1. above. 

3.2. 

Specific objectives 

For the period 2011 – 2013, the specific objectives of the proposed act are to 

•  enable  the  provision  of  the  services  referred  to  in  Chapter  2.2.1.  above  (including 
emergency  maps  and  reference  maps)  to  civil  protection  authorities  between  2011  and 
2013, in order to allow them to respond to emergencies more efficiently and effectively; 

18 

For  this  reason,  procurement  of  space  data  for  FP  7  service  projects  is  coordinated  centrally  by  the 
European  Space  Agency  (ESA)  on  behalf  of  the  Commission  under  a  grant  agreement.  See  also 
ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 12 - 13. 

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13 

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•  enable the provision of the land monitoring services referred to in Chapter 2.2.2 above (in 
particular  pre-processed  data,  land  cover  products,  high  resolution  maps  of  cities  and 
thematic maps) to public authorities (including environmental agencies) in Europe between 
2011  and  2013,  so  that  they  are  better  able  to  perform  their  tasks  of  policy  making, 
implementation and monitoring; 

•  contribute to the production and availability of environmental information to the public, in 
conformity  in  particular  with  the  principles  of  the  Aarhus  convention19,  the  INSPIRE 
Directive and the Shared Environmental Information System (SEIS)20; 

•  stimulate,  by  lowering  the  costs  of  access  to  information,  the  growth  of  the  Earth 
international 

innovation  and 

terms  of 

jobs, 

Observation  downstream  sector 
competitiveness between 2011 and 2013. 

in 

3.3. 

Operational objectives  

The operational objectives for the Regulation are: 

•  to enable the provision of the following operational emergency response services between 

2011 - 2013: 

–  European mapping services for emergency response; 

–  product integration for emergency response; 

•  to enable the provision of the following operational land monitoring services between 2011 

- 2013: 

–  periodic land cover mapping service; 

–  dynamic land monitoring activities including essential climate variables in support 

to climate change monitoring;  

•  to provide auxiliary activities between 2011 and 2013, including measures supporting the 
uptake of operational services by users, data procurement in support of services and GMES 
space component operations21. 

3.4. 

Consistency with other EU policies 

The  Commission  will  ensure  complementarity  and  consistency  with  other  Community 
policies,  in  particular  in  relation  to  competition,  the  European  GNSS  programmes,  the 

19 

20 
21 

The  Convention  on  Access  to  Information,  Public  Participation  in  Decision-Making  and  Access  to 
Justice  In  Environmental  Matters,  of  25  June  1998,  provides  for  the  right  of  everyone  to  receive 
environmental information that is held by public authorities ("access to environmental information"), to 
participate  in  environmental  decision-making,  and  the  right  to  review  procedures  to  challenge  public 
decisions that have been made without respecting the two aforementioned rights or environmental law 
in general ("access to justice"). 
See also Chapter 3.4 below. 
This concerns in particular the Sentinels, i.e. five space missions developed in the framework of an ESA 
optional programme that is co-financed by the EU. For more information, see 
http://www.esa.int/esaLP/SEMZHM0DU8E_LPgmes_0.html. 

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protection  of  personal  data,  the  cohesion  policy22  and  agricultural  policy23.  Additionally, 
GMES should be a tool for cooperation actions linked to development, humanitarian aid and 
emergency situations worldwide, and more specifically with Africa. 

Further, the GMES services are considered essential not only because their more direct users 
are policy makers, but also owing to the fact that they stimulate innovation and growth in the 
downstream sector. GMES is thus fully in line with the Lisbon strategy.  

The Commission will ensure that the proposed action is consistent with and complementary to 
EU  policies  relating  to  research,  development  and  innovation.  Any  potential  Community 
contribution  to  operational  GMES  services  resulting  from  this  Regulation  could  not  be 
financed through FP 7, but would be necessary in order to build on and fully take advantage 
of the substantial R&D support that has been provided to date. 

Consistency  with  specific  existing  policies  directly  related  to  GMES  is  analysed  in  more 
detail for the two services in Annex IV. 

4. 

POLICY OPTIONS 

4.1. 

Definition of the options 

The  policy  options  at  hand  to  address  the  objectives  as  defined  in  Chapter  3  above  are  as 
follows: 

•  Baseline 

•  Option 1: Open method of coordination only 

•  Option 2: Regulatory intervention 

•  Option 3: Community financing 

The content of these options is described in the following sections. 

4.1.1.  Baseline 

Under  the  baseline  scenario,  the  EU  would  not  take  any  specific  measures,  in  addition  to 
existing research activities, in order to ensure the provision of operational services in the field 
of  land  monitoring  and  emergency  services  following  the  research  activities  and  the 
preparatory action referred to in chapter 2.1. above. 

22 

23 

The Community Strategic guidelines on Cohesion 2007 and 2013 underline the need to strengthen the 
links  between  environmental  protection  and  growth  and  make  specific  reference  to  GMES  in  section 
1.1.2. 
In  particular,  the  Commission  will  ensure  coherence  with  the  project  AGRI4CAST,  which  provides 
crop  yield  forecasts,  the  Land  use/cover  area  frame  survey  (LUCAS)  project;  and  the  Urban  Atlas 
project.  

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4.1.2.  Option 1: Open method of coordination only 

Under  Option  1,  the  Community  would  not  support  the  provision  of  operational  land 
monitoring  and  emergency  service  financially,  but  rather  follow  the  "open  method  of  co-
ordination",  as  described  in  the  White  Paper  on  European  governance24.  According  to  this 
White  Paper,  the  open  method  of  co-ordination  "is  a  way  of  encouraging  co-operation,  the 
exchange  of  best  practice  and  agreeing  common  targets  and  guidelines  for  Member  States, 
sometimes  backed  up  by  national  action  plans  as  in  the  case  of  employment  and  social 
exclusion. It relies on regular monitoring of progress to meet those targets, allowing Member 
States to compare their efforts and learn from the experience of others"25. In order to ensure 
overall accountability, 

•  the open method of co-ordination should be used to achieve defined Treaty objectives; 

•  the Commission should be closely involved and play a co-ordinating role; 

•  the data and information generated should be widely available26. 

In the field of operational GMES land monitoring and emergency services, the open method 
of  coordination  would  mean  that  the  EU  would  merely  coordinate  existing  national  and 
intergovernmental  activities.  Concretely,  the  EU  would  create  fora  for  discussion  between 
(mainly  institutional  users)  in  the  Member  States,  elaborate  guidelines,  e.g.  concerning  a 
common  methodologies  for  service  provision  or  quality  assurance,  and  determine 
benchmarks.  The  EU  would  not  manage  auxiliary  activities  such  as  data  procurement,  but 
would  rather  try  to  facilitate  access  to  data  by  national  institutions,  e.g.  through  the 
elaboration of model license agreements and the organisation of workshops. 

4.1.3.  Option 2: Regulatory intervention 

Under option 2, the provision of the services referred to in Chapter 2.2.1 and 2.2.2 would be 
imposed by regulatory means, e.g. by Regulation of the Council and the European Parliament. 
Option 2 would be comparable functionally to legislation that already exists, including  

•  the  Directive  2004/52/EC  of  29  April  2004  on  the  interoperability  of  electronic  road  toll 
systems  in  the  Community27,  which  imposes  the  use  of  specific  technologies  for  all  new 
electronic toll systems brought into service in the Community on or after 1 January 2007; 

•  EU legislative acts concerning environmental monitoring, e.g. the Commission Decision of 
29  January  2004  establishing  guidelines  for  the  monitoring  and  reporting  of  greenhouse 
gas  emissions  pursuant  to  Directive  2003/87/EC  of  the  European  Parliament  and  of  the 
Council28. 

These  examples  demonstrate  that  a  regulatory  intervention  is  not  a  merely  hypothetical 
option,  provided  that  the  conformity  of  the  proposed  act  or  acts  with  the  principles  of 
subsidiarity and proportionality is ensured. 

24 
25 
26 
27 
28 

COM(2001) 428 final of 25.7. 2001.  
See the White Paper on European governance, p 21. 
See the White Paper on European governance, p 22.  
OJ L 200/50 of 7.6.2004.  
OJ L 59/1 0f 26.2.2004. 

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4.1.4.  Option 3: Community financing  

Under option 3, the EU would contribute to the financing of the provision of the operational 
emergency  and  land  monitoring  services  referred  to  in  chapter  2.2.1  and  2.2.2  above.  In 
practice, in particular two implementation schemes are possible: 

•  the  Commission  concludes  procurement  contracts  with  the  service  providers.  Within  the 
Commission,  the  corresponding  procurement  contracts  could  be  managed  either  by  a 
dedicated internal structure such as the GMES Bureau, or by a standard Commission unit. 
In both cases, the service providers would make available the operational emergency and 
land  monitoring  services  to  users  (including  Commission  services,  civil  protection 
agencies  and  environmental  agencies  in  the  Member  States,  and  downstream  service 
providers)  according  to  the  principle  of  full  and  open  access,  unless  security  restrictions 
apply. Finally, the Commission would assess the quality of the services provided to users. 

•  The Commission awards grant agreements29 to Member States, groups of Member States 
or  specialised  EU  agencies  who  conclude  in  turn  contracts  with  the  actual  service 
providers. These grant agreements would be based on the principle that service providers 
make available their products fully and openly, unless security restrictions apply. 

For the purpose of this Impact Assessment, it is assumed that these two schemes would have 
the same effect in terms of costs and benefits. This assumption is motivated by the fact that in 
both schemes, the Commission would ensure that the operational services correspond to user 
needs through the bodies outlined in the 2008 Communication, including a User Forum and 
the GMES Partners Board. 

4.2. 

Underlying assumptions 

4.2.1.  Complementarity of the options 

The  options  defined  under  Chapter  4.1.  are  not  mutually  exclusive.  It  would  be  possible  to 
combine all three options. For the sake of clarity, however, the impact of these options will be 
analysed  separately.  It  is  thus  assumed  e.g.  under  Option  1  that  no  additional  regulatory 
measures or financial support at European level exist. In this context, the crucial question is 
whether the open method of coordination or a regulatory intervention would be sufficient on 
their own to achieve the objectives defined under Chapter 3, without financial support from 
the EC. In practice, it is unlikely that GMES will be implemented at EU level simply through 
the funding of infrastructure and services, without coordination of existing activities of GMES 
partners.  

4.2.2.  Governance 

Generally  speaking,  the  overall  approach  for  governance  of  GMES  has  been  described  in 
detail in the 2008 Communication, and its Impact Assessment. It is within this framework that 
GMES  Initial  Operations  will  be  implemented,  as  well  as  in  the  framework  of  common 
practices for the management of Community programmes. 

The  activities  of  Member  States,  financed  by  national  budgets,  and  synergies  with  the 
Community  contribution  will  be  coordinated  in  the  GMES  Partners  Board.  A  Programme 

29 

In theory, funds could also be transferred on the basis of delegation agreements.  

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17 

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Committee will assist the Commission in the management of Community funds. Specialised 
Community  agencies,  such  as  the  EEA,  will  support  the  Commission  regarding  user 
interfaces.  ESA  will  coordinate  the  space  component.  Detailed  coordination  arrangements 
will be elaborated within these fora.  

According  to  the  draft  conclusions  from  the  evaluation  study  of  the  GMES  Bureau,  it  is 
advisable to maintain a specific internal Commission management structure. It will be up to 
the  next  Commission  to  decide  what  this  structure  will  look  like  when  the  Regulation  is 
adopted (end 2010 at the earliest). 

The  analysis  of  the  different  options  has  been  carried  out  in  this  context,  taking  into 
consideration  that  the  overall  governance  of  GMES  is  not  part  of  the  Basic  Act  on  GMES 
Initial Operations. 

4.2.3.  Full and open access to GMES data and information 

The  options  referred  to  under  Chapter  4.1.  have  been  defined  under  the  assumption  that 
GMES  services  should  be  fully  and  openly  accessible,  as  long  as  EU  and  Member  States 
security  interests  do  not  suggest  otherwise.  The  principle  of  full  and  open  access  has  been 
approved by the Commission in the 2008 Communication and was welcomed by the Council 
in its Conclusion of 2 December 2008. 

The reason why GMES data and information should be fully and openly accessible is that full 
and  open  access  will  help  to  promote  the  widest  possible  use  and  sharing  of  data  and 
information. Downstream service providers could use GMES information and data as an input 
to  provide  and  market  innovative  services,  but  this  should  be  seen  as  an  opportunity  rather 
than a threat. Studies have identified the cost of data as a major obstacle to the development 
of this market and a barrier to entry. This was also demonstrated also during the review of the 
Directive on the re-use of public sector information (the PSI Directive)30. 

Generally speaking, the GMES Data and Information policy falls under the framework for the 
dissemination of environmental and geospatial information (SEIS and INSPIRE)31 rather than 
the  Community  framework  for  infrastructure  pricing.  Further,  it  is  recalled  that  the 
Community has endorsed the principle of full and open access to Earth observation data when 
it adopted the Resolution of the Third Earth Observation Summit on 16 February 2005. This 
Resolution  includes  a  reference  to  the  10-Year  Implementation  Plan  of  Earth  Observation 
System of Systems (GEOSS), which contains the principle of full and open access. 

Additionally,  it  should  be  noted  that  beneficiaries  of  Community  funding  would  be  mostly 
public  authorities.  This  is  why,  at  least  in  an  initial  period,  it  seems  advisable  to  make 
available data fully and openly, especially considering the current small size of the sector. A 
full and open data policy also means that at least in the short and medium run, the provision of 
GMES  services  will  not  be  based  on  a  concession  or  PPP  scheme.  As  outlined  in  the  2008 

30 

31 

Directive 2003/98/EC of the European Parliament and of the Council of 17 November 2003 on the re-
use of public sector information, OJ L 345/90 of 31.12.2003. Respondents to the public consultation in 
the framework of the review (available 
athttp://ec.europa.eu/information_society/policy/psi/docs/pdfs/online_consultation/report_psi_online_c
onsultaion_stakeholders.pdf) have signalled that the high prices charged for PSI may be limiting the 
economic development of particular sectors.  
See p 5 of the 2008 Communication.  

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Communication, the Commission will continue to explore whether the development of market 
opportunities  and  cost  based  user  charges  could  eventually  allow  the  reduction  of  the 
proportion of public investment after 2014. 

Finally,  it  should  be  recalled  that  the  principle  of  full  and  open  access  applies  to  data  and 
information  owned  or  co-owned  by  the  EC.  Conditions  for  the  access  to  and  the  on-ward 
distribution of other data (e.g. space data from third party infrastructures) will be negotiated 
with data owners. 

4.2.4.  Developments after 2013 

The assessment of the different options is based on the assumption that in the next financial 
framework, the full set of GMES services (i.e. land, emergency, marine, atmosphere, security 
and climate change) will be financed or co-financed by the GMES programme. As outlined in 
section  2.1.2,  the  overall  financing  needs  of  GMES  after  2013  will  be  subject  to  future 
analysis  led  by  the  Commission,  on  the  basis  of  defined  cost-sharing  principles  and  a  cost 
assessment based on the scope of services. As GMES initial operations aim at preparing fully 
fledged  operations  after  2013,  a  complete  lack  of  funding  for  GMES  in  the  next  financial 
framework would limit the usefulness also of GMES initial operations. Assuming that the EU 
will not cease funding of the second flagship programme of its space policy completely, the 
exact  scope  of  activities  will  be  defined  following  a  modular  approach,  taking  into 
consideration available funds.  

5. 

ANALYSIS OF IMPACTS OF OPTIONS 

5.1. 

Baseline Scenario 

5.1.1.  Economic impact of Baseline Scenario 

The  stakeholder  consultation  has  demonstrated  that  potential  providers  of  the  operational 
services referred to in Chapter 2.2. might leave the market due to the absence of perspective 
of EU financing outside research budgets in the period 2011 - 2013. Service providers would 
probably still continue seeking research co-financing and therefore co-investing in GMES for 
a short time, but without a clear perspective concerning operational activities the risk exists 
that  in  particular  smaller  providers  would  not  survive  if  the  Community  intervention  is 
postponed  until  2014  and  beyond32.  Additionally,  providers  of  downstream  services  (i.e. 
providers that use the GMES services financed or co-financed by the EU as an input for their 
own services) might not be able to offer innovative services owing to the lack of affordable 
upstream  services.  This  would  mean  that  the  multiplicator  effect  of  the  EU  investment  in 
operational services would be lost. Consequently, the EU Earth observation might lose out to 
non-European  companies,  in  particular  those  active  in  countries  with  a  proactive  Earth 
observation strategy. In this context, it should be recalled that the downstream sector is still 
dependent to a large extent on public investments33. 

32 

33 

Regarding  the  importance  of  public  intervention,  see  also  ECORYS  (2008),  Study  on  the 
Competitiveness of the GMES Downstream Sector, p. 82. 
As  outlined  in  the  Vega  study  entitled  “The  state  of  the  health  of  the  European  and  Canadian  EO 
industry in 2006“. 

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The value of the benefits arising from a fully fledged operational GMES programme through 
2030 was estimated by PWC at 34.7 € billions, comparable to 0,2 % of the EU GDP at 2005 
prices.34. Although initial operational activities (2011-2013) are limited in scope, a small, but 
not  insignificant  growth  potential  for  the  EU  GDP  would  be  lost  (in  addition  to  the 
multiplicator  effect  referred  to  in  the  previous  paragraph)  if  no  operational  GMES  services 
were financed at EU level. 

As outlined in the 2008 Communication, public investment in GMES would also encourage 
industry to explore innovative ways of integrating observing, communication and information 
technologies.  A  lack  of  EU  investment  would  thus  mean  that  Europe's  potential  for  the 
introduction and dissemination of new production methods, technologies and products in the 
field of Earth observation would not be tapped fully in the beginning of the next decade. As 
the  downstream  sector  is  composed  predominantly  of  SMEs35,  which  are  still  strongly 
dependent on public grants due to the scarce level of maturity of the market, the lack of EU 
action would be particularly detrimental, taking into consideration that SMEs are at the heart 
of the Lisbon Growth and Jobs Strategy36.  

Additionally,  the baseline would indirectly have a negative impact on the budgets of public 
authorities at European, national, regional and local level in comparison with other options for 
the  period  covered  by  the  proposed  Regulation.  Either  the  baseline  would  mean  that  these 
authorities do not have access to the products referred to in chapters 2.2.1. and 2.2.2. above at 
all,  or  that  national  authorities  develop  their  own  systems  In  the  former  case,  it  can  be 
expected  that  the  response  to  emergencies  would  be  less  efficient.  This  would  lead  to  huge 
economic costs, as the damages including loss of human lives would be unnecessarily high37. 
In the field of land monitoring, the lack of thematic maps or land cover products could mean 
that environmental legislation is implemented in a suboptimal way because public authorities 
might not have access to information of a sufficient quality. Even where national authorities 
produce their own maps, the baseline would lead to higher overall costs, mainly owing to the 
lack of economies of scale regarding the access to the space or in situ data needed to produce 
the maps. Further, a purely national approach could lead to fragmentation and duplication of 
efforts in Europe.  

Finally, the baseline would have a negative impact in the field of international relations. First, 
already  in  the  Communication  "GMES  -  From  concept  to  reality"38,  it  was  underlined  that 
GMES would be the major contribution to the Global Earth Observation System of Systems 
(GEOSS)39.  If  the  EU  did  not  move  forward  with  operational  GMES  services  before  2014, 
this  would  limit  its  credibility  within  the  Group  on  Earth  Observation  (GEO).  The  same  is 
true  for  the  "GMES  and  Africa"  partnership.  In  the  field  of  Earth  observation,  the  EU  will 
only be a credible partner for developing countries if GMES delivers operational services in 
addition to existing research projects. 

34 

35 
36 

37 

38 
39 

See the study carried out by PriceWaterhouseCoopers entitled "Socioeconomic benefits analysis of 
GMES, available at http://esamultimedia.esa.int/docs/GMES/261006_GMES_D10_final.pdf , p 180 .  
See ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 88. 
See p 1 of the Communication Think Small First” - A “Small Business Act” for Europe, COM(2008) 
394 final of 19.6.2008. 
Average annual flood damage (calculated for the period 1980 – 2005) was around 2.2 billion € in 2005 
prices,  for wildfire,  the figure  was  around 141  M€. It  is  obvious  that  even a  small  reduction of  these 
numbers would be very beneficial. See also chapter 5.4.2 
COM(2005)565 final of 10 November 2005. 
See also p 5 of the 2008 Communication. 

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5.1.2.  Environmental impact of Baseline 

Although authorities at European, national, regional and local level (including environmental 
agencies)  to  some  extent  already  use  pre-operational  or  operational  Earth  observation 
services,  two  cross-cutting  issues  remain.  First,  existing  pan-European  services  (e.g.  the 
Corine  Land  Cover  service)  do  not  meet  all  the  requirements  of  users.  Secondly,  the 
sustainability of existing services is not ensured, in particular in the case of services provided 
in the framework of research projects. This means that public authorities might not be willing 
to integrate these services into their standard operational procedures, as the relevant research 
projects have a limited duration and a gap of several years between the end of research projets 
and  the  potential  launch  of  a  fully  fledged  GMES  programme  in  2014.  It  is  thus  widely 
acknowledged  among  stakeholders  and  potential  end  users  that  a  more  comprehensive  and 
harmonised approach would be preferable. 

Regarding  emergency  response,  the  baseline  would  mean  (i)  that  the  prevention  of  risks 
relating to natural disasters (including forest fires and floods) would be made more difficult 
owing  to  the  lack  of  precise  risk  mapping  services,  and  that  (ii)  the  response  to  natural 
disasters could be les efficient. This could result in emergencies of a larger scale before 2014. 

The baseline would not allow to meet the main objective of GMES in the period covered by 
the proposed Regulation, namely to provide operational Earth observation services in support 
of environmental policies of the EU and its Member States. 

5.1.3. 

Social impacts of Baseline 

The social impact of the baseline is closely linked to its economic impact. Without operational 
GMES  services,  players  in  the  downstream  sector  might  either  leave  the  market  or  reduce 
their activities in the field of Earth observation. A recent study suggests that the development 
of  downstream  services  requires  to  reduce  the  current  uncertainty  over  the  conditions  of 
access,  price  and  data  policy  for  GMES  data  and  the  real  content  of  core  services  output, 
which has to date represented an important constraint to investments40. A gap of several years 
between  the  end  of  research  projets  and  the  potential  launch  of  a  fully  fledged  GMES 
programme in 2014 could potentially lead to the loss of invaluable know-how in Europe and 
of important opportunities for the creation of jobs in a high tech sector. 

5.2. 

Open method of coordination only – Option 1 

5.2.1.  Economic impact of Option 1 

Option 1 would be instrumental for a better coordination of existing operational activities in 
the  field  of  land  monitoring  and  emergency  response.  This  could  lead  to  non-negligible 
benefits compared with the baseline scenario for the following reasons: 

•  the  open  method  of  co-ordination  could  reduce  the  duplication  of  services  covering  the 

same parameters for the same geographical area; 

•  improvements  in  timing  and  quality  of  delivered  information  could  be  achieved  through 

the exchange of best practices and benchmarking. 

40 

See ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 13. 

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In the Inspire Extended Impact Assessment41 a better harmonisation of data exchange can lead 
to significant benefits, 30% of which are related to better delivery of data. In the following, 
the  impact  and  cost-effectiveness  of  Option  1  is  analysed  for  a  best  case  and  worst  case 
scenario. The best case scenario corresponds to the maximum level of effectiveness which can 
be attained by the option, i.e. the maximum extent to which the specific objectives referred to 
insection  3.2  are  met,  whereas  in  a  worst  case  scenario,  they  are  not  met  at  all.  As  the 
assessment carried out below demonstrates that even the best case scenario is characterised by 
some  cost  inefficiencies  and  limited  effectiveness,  it  appears  that  no  intermediate  scenarios 
need  to  be  analysed.  Consequently,  a  more  comprehensive  sensitivity  analysis  assessing 
intermediate  effectiveness  scenarios  both  in  respect  to  their  outcome  (in  terms  of  cost-
effectiveness) and their probability is not of key importance. 

In  the  best  case  scenario,  the  open  method  of  coordination  would  enable  the  provision  of 
almost  all  the  emergency  and  land  monitoring  services  referred  to  in  section  2.2  and  would 
thus solve the problems defined in section 3.2 in the period 2011 - 2013. Consequently, the 
impact  and  the  benefits  would  be  comparable  to  those  specified  for  Option  3  in  Annex  V 
hereto. Regarding costs, it can be assumed that Option 1 would be less costly for the EU than 
a  financial  community  intervention,  as  the  EU  budget  would  mainly  cover  staff  costs  and 
coordination activities (e.g. organisation of workshops), but not the costs for data access and 
the processing and dissemination of data. Nevertheless it is likely that overall costs of service 
provision, including the costs incurred at Member State level would be higher than in Option 
3 for two reasons: 

•  given that input data needed for the services would have to be procured separately by each 
Member  State,  no  economies  of  scale  could  be  achieved.  Further,  the  buying  power  of 
Member States would be reduced, given that they would all negotiate with data owners on 
their own. Therefore the procurement of data needed to provide the services would be more 
costly; 

•  a  totally  decentralised  service  provision  scheme  will  necessitate  some  duplication,  which 

will also need to higher costs. 

The best case scenario is unlikely for three reasons. 

•  The  efficient  provision  of  services  of  a  pan-European  nature  will  be  very  difficult  to 
implement if inputs from Member States (e.g. national land cover maps) are not aggregated 
at  European  level.  A  mere  coordination  of  efforts  is  not  sufficient  to  adequately  achieve 
this objective. This aggregation rather necessitates a financial intervention from the EU; 

•  stakeholders  widely  agree42  that  a  mere  coordination  at  EU  level  is  not  sufficient  to 
contribute  to  capacity  building  in  the  countries  that  currently  do  not  have  a  sufficient 
expertise or infrastructure to ensure the provision of operational Earth observation services 

•  finally, a lack of sustainability (in particular for budgetary reasons) cannot be remedied by 

simple coordination. 

41 
42 

See http://inspire.jrc.ec.europa.eu/reports/inspire_extended_impact_assessment.pdf. 
See the Impact Assessment accompanying the 2008 Communication, Annex II, section 8.5. 

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These  shortcomings  lead  to  the  conclusion  that  the  worst  case  scenario  is  more  likely  for 
Option 1. This worst case scenario would only be marginally better than the baseline.  

Option 1 in its worst case scenario is unlikely to have a positive impact on the downstream 
sector  (i.e.  providers  that  use  the  GMES  services  financed  or  co-financed  by  the  EU  as  an 
input for their own services) for the time period covered by the proposed Regulation. A mere 
coordination of Earth observation services is not sufficient to allow companies (in particular 
SMEs) to justify investments in innovative value added services. This is because the services 
referred  to  in  Chapter  2.2.1  and  2.2.2.  are  intended  to  improve  the  efficiency  of  the 
downstream  sector  by  providing  access  to  basic  processed  and  modelled  products  more 
cheaply  than  would  be  the  case  if  each  company  had  to  undertake  the  basic  processing  and 
modelling.  With  regard  to  the  competitiveness  in  the  global  market,  downstream  services 
related  to  the  Land  Monitoring  Service  are  currently  regarded  as  those  with  the  “weakest 
positioning  and  lowest  market  perspectives”43.  Moreover,  Land  Monitoring  downstream 
services  are  regarded  as  the  segment  that  will  be  significantly  impacted  by  the  provision  of 
operational  GMES  Services44.  Stakeholders  generally  agree  that  emergency  Response 
downstream services are also seen as significantly impacted by the respective GMES Service 
implementation. 

Additionally, providers of downstream services might not be able to offer innovative services 
owing  to  the  lack  of  affordable  and  cheap  upstream  services  in  the  worst  case  scenario  of 
Option 1. In fact, according to different literature sources45, the high cost of input data can be 
regarded  as  one  of  the  main  barriers  to  the  growth  of  the  EO  downstream  industry.  Other 
concerns on the sustainability of the downstream market are linked to the heterogeneous and 
fragmented  user  community,  insufficient  and  unreliable  access  to  data  for  operational 
applications, and the lack of long term commitment from large institutional customers46.  

The downstream market is, at present time, a relatively small market, especially as compared 
to the US downstream market which is between two and three times the size of the European 
Industry, and has in average larger and more profitable companies47. A recent study suggests 
that the development of downstream services requires to cut-off the current uncertainty over 
the  conditions  of  access,  price  and  data  policy  for  GMES  data  and  the  real  content  of  core 
services  output,  which  has  to  date  represented  an  important  constraint  to  investments48.  To 
sum  up,  it  is  unlikely  that  under  the  worst  case  scenario  of  Option  1,  GMES  would  give  a 
significant  boost  to  the  Earth  observation  industry  in  Europe  before  2013.  The  cost 
effectiveness of the worst case scenario of option 1 is thus low. 

5.2.2.  Environmental impact of Option 1 

The analysis of environmental impacts for the period 2011 – 2013 depends on whether a best 
case or worst case scenario is assumed. 

43 
44 

45
46 
47 
48 

ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 36. 
A mapping of the downstream application segments according to GMES Core Services influence can be 
found in ECORYS, Study on the Competitiveness of the GMES Downstream Sector, p.27. 
ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 37. 
ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p.38. 
ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 11 - 12. 
ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 12. 

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In the best case scenario, the open method of co-ordination would allow for efficiency gains 
regarding  existing  services.  Nevertheless,  authorities  at  Member  State  level  would  have  to 
manage  their  own  mapping  services  on  the  basis  of  expensive  Earth  observation  data  (in 
particular satellite data) procured separately by each authority or member State. 

In the worst case scenario, option 1 but would not be sufficient (i) to ensure the provision of 
new  services,  or  (ii)  the  sustainability  of  existing  services.  In  the  field  of  land  monitoring 
services  this  means  that  public  authorities  would  (i)  either  not  have  access  to  land  cover 
products  at  all,  or  (ii)  would  not  have  products  of  a  sufficient  quality  at  their  disposal. 
Regarding emergency response, this option would mean that some civil protection authorities 
would not have access to mapping services at all, which would make the response to natural 
disasters (including forest fires and floods) much more difficult. In a worst case scenario, the 
environmental impact of option 1 would correspond to the baseline. As states above, a worst 
case scenario is likely to materialise. 

5.2.3. 

Social impact of Option 1 

As Option 1 entails the risk that the sustainability of operational services is not ensured in the 
likely event the worst case scenario occurs, companies in he downstream sector might not be 
willing  to  invest.  This  would  also  mean  that  job  creation  remains  suboptimal  for  the  period 
2011 – 2013. Although nominal revenues of the downstream sector have increased by around 
2%  per  annum  on  average  between  2002  and  2006,  while  employment  evolved  in  a  lower 
pace, slight under 1%49. It is questionable whether Option 1 would substantially improve this 
trend. Consequently, the full long-term business potential of GMES and related job-creation 
mentioned in section 5.1 would not be achieved under option 1. 

5.3. 

Regulatory intervention – Option 2 

5.3.1.  Economic impact of Option 2 

The  political  and  economic  impact  of  option  2  depends  on  the  way  a  regulatory  measure  is 
implemented  in  the  Member  States.  If  a  Regulation  imposing  the  provision  of  the  services 
referred to in Chapter 2.2.1 and 2.2.2 is implemented fully in all the Member States (best case 
scenario  for  Option  2),  the  specific  objectives  defined  in  Chapter  3.2.  would  most  likely  be 
achieved for the period 2011 - 2013. This would lead to gross benefits comparable to those 
specified  in  Chapter  5.4./Annex  V.  It  can  be  assumed,  however,  that  a  provision  of 
operational GMES services at Member State level would be costly, in particular if the access 
to  Earth  observation  data  is  not  centralised  at  EU  level50.  As  in  Option  1,  Member  States 
would  have  to  procure  the  data  and  to  ensure  the  provision  of  the  services  in  a  fragmented 
way, which would lead to inefficiencies related to the conditions at which the required data 
and services are procured. The implications of this fragmented buying power would be of the 
same type of those analysed in the case of Option 1. 

Given  the  technical  complexity  of  the  services  in  question,  it  is  however  likely  that  some 
Member States would not be in a position to implement fully a regulatory measure imposing 
the  provision  of  the  services  referred  to  in  Chapter  2.1.1  and  2.1.2.  Without  financial 
assistance with the objective of capacity building in Member States with less know how, it is 
thus possible that operational emergency and land monitoring services would not be available 

49 
50 

ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p.23. 
Regarding data access, the situation would thus be comparable to Option 1, see chapter 5.2.1. 

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at all, or with an insufficient quality. In a worst case scenario, a regulatory intervention could 
produce  effects  only  in  the  countries  that  have  started  developing  their  own  services  in  any 
event. 

The best case scenario described in the first paragraph of this subchapter is rather unrealistic 
for reasons largely comparable to those used assessing the likely outcome of Option 1: 

•  Assuming  that  GMES  services  will  be  made  available  fully  and  openly  to  users,  the 
aggregation of inputs from Member States with a view to providing pan-European services 
necessitates  funds  used  to  outsource  processing  and  distribution  activities  at  Community 
level; 

•  regulation alone could be insufficient if national, regional and local authorities do not have 

the expertise to implement services; 

•  regulatory measures are not enough if Member States do not dispose of sufficient funds to 

finance data access and service provision. 

The political and economic impact of the worst case scenario of Option 2 is to a large extent 
comparable to the political and economic impact of Option 1. In other words, a boost to the 
downstream  sector  is  not  realistic  for  the  period  2011  -  2013.  Additionally,  Option  2  might 
reinforce  geographical  disparities  of  the  downstream  sector.  Currently,  the  main  operational 
centres of EO activity in 2006 are the UK and Germany. Additionally, France, Italy, Belgium 
and Spain also have a relatively strong downstream industry. These countries also account for 
the  largest  concentrations  in  employment,  which  is  obviously  related  to  the  number  of 
organisations established in a country. Almost all EO downstream organisations are located in 
the EU15, plus Norway and Switzerland. Regarding the new Member States, only the Czech 
Republic  accommodates  a  few  EO  downstream  organisations51.  The  risk  exists  that  a 
regulatory intervention at EU level that is not accompanied by supporting measures would not 
strengthen  the  Earth  observation  industry  in  countries  that  do  not  yet  dispose  of  a  strong 
industrial base in the sector, which would require financial assistance. 

5.3.2.  Environmental impact of Option 2 

The  environmental  impact  of  Option  2  depends  on  the  level  of  implementation  of  any 
regulatory measure. As mentioned above, the best case scenario of full implementation in all 
Member States is unlikely owing to the lack of know how in particular in the new Member 
States. In a worst case scenario, the environmental impact would correspond to the baseline. 
The uncertainty associated with the environmental outcome is a key concern also for option 2. 

5.3.3. 

Social impact of Option 2 

Taking into consideration the links between social and environmental impact, Option 2 entails 
the risk that in the worst case scenario, job creation in the Earth observation sector would only 
take  placed  in  the  countries  that  have  developed  national  services  without  Community 
intervention,  whereas  in  may  countries  (in  particular  the  new  Member  States)  a  regulatory 
intervention  would  not  contribute  to  an  increase  of  employment  in  the  Earth  observation 

51 

ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 23.  

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sector. Consequently, the full long-term business potential of GMES and related job-creation 
mentioned in section 5.1 might not be achieved under option 2 either. 

5.4. 

Community financing - Option 3  

5.4.1.  Economic impact 

The  financial  intervention  of  the  EU  under  Option  3  would  mean  that  the  provision  of 
operational  emergency  and  land  monitoring  services  would  be  supported  by  a  EU  financial 
contribution. This financial Community intervention could mean that the objectives referred 
to in section 3.2 above are fully met (best case scenario), partly met, or not met at all (worst 
case scenario). It can reasonable be expected that the financial Community intervention will 
meet the objectives defined for the proposed Regulation for the following reasons: 

•  the  Commission,  which  will  be  responsible  for  the  overall  management  of  GMES  on 
behalf of the Community, has acquired a robust expertise in the management of initiatives 
comparable  to  GMES,  including  Corine  land  cover,  and  research  activities  relating  to 
GMES; 

•  the technical management of GMES Initial Operations will be delegated to entities with a 
proven expertise, including ESA for the GMES space component, and the EEA for in situ 
infrastructure coordination; 

•  the  financial  Community  intervention  in  the  period  2011  -2013  will  concentrate  on 

domains where a Community intervention will provide a clear added value; 

•  the  areas  where  the  Community  co-finances  activities  will  be  closely  coordinated  with 
GMES  partners  in  the  framework  of  the  GMES  Partners  Board52  in  order  to  ensure  that 
overall results are line with the objectives of GMES and the GMES data and information 
policy; 

•  the  exact  scope  and  content  of  the  activities  that  will  be  financed  or  co-financed  will  be 
determined  in  a  way  that  avoids  crowding  out  of  private  investment,  based  (i)  on  an 
intensive  consultation  of  all  relevant  players,  including  users  and  downstream  service 
providers, and (ii) interaction with Member States through a comitology procedure; 

•  the  implementation  mechanisms  of  GMES  will  allow  avoiding  overcompensation.  In 

particular 

–  the  beneficiaries  of  the  Community  contribution  on  services  would  be  mostly 
public  sector  users.  In  other  words,  through  the  Community  action  public 
authorities will be able to improve their own services related to land monitoring 
and  emergency  response.  This  benefit  will  partly  include  some  Community 
financing  to  stimulate  the  integration  of  GMES  in  these  domains  which  already 
exist in Member States. The private sector would be an indirect beneficiary of this 
funding  mostly  as  subcontractor  of  public  authorities.  Contracts  with  private 
entities will contain provisions ensuring a rigorous control of costs. 

52 

See also Chapter 6.2. of the 2008 Communication.  

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–  regarding data procurement, the long-standing experience of ESA and JRC will be 

fundamental in assessing cost estimates. 

–  regarding the initial operations of the Sentinels, there will be continuity with the 
current budget implementation approach through ESA, which provides for robust 
scrutiny mechanisms. 

Given  that  it  is  unlikely  that  the  financial  Community  intervention  will  not  achieve  its 
objectives in the period 2011 - 2013, it is justified to focus the following assessment on a best 
case scenario of Option 3. 

It is envisaged that the indicative financial Community intervention could amount to 150 M€ 
for the period 2011 – 2013, including 43 M€ for  research activities from the space theme of 
FP 7 for research actions accompanying GMES initial operations. A detailed assessment of (i) 
the activities to be financed and the corresponding costs, and (ii) the benefits of the best case 
scenario  of  Option  3  can  be  found  in  Annex  V.  The  assessment  of  benefits  is  based  on 
conservative assumption. In other words, the quantitative impact of the best case scenario is 
estimated at the bottom range of possible benefits.  

According  to  stakeholders  and  an  external  study,  it  can  reasonably  be  expected  that  the 
Community  financing  would  have  a  positive  impact  on  the  competitiveness  of  EU  firms  in 
comparison with non-EU competitors, as the private sector, including downstream companies 
would  have  planning  certainty  concerning  the  availability  of  GMES  services53.  This  is  of 
paramount importance for SMEs, which form the backbone of the Earth observation industry 
in Europe54. 

Further, the making available of data and information produced by services that are supported 
financially by the Community according to the principle of full and open access could most 
likely  lead  to  innovations  in  the  downstream  sector,  which  depends  on  a  flow  of  data  at 
reasonable conditions55. This, in turn, would significantly contribute to job creation in a high 
tech  sector  of  strategic  importance  in  the  period  covered  by  the  proposed  Regulation.  The 
probability  of  reaching  the  full  potential  the  GMES  programme  mentioned  in  section  5.1 
would be significantly higher under option 3. 

Another, albeit more indirect, economic impact of option 3 would be that the cost associated 
with a number of environmental problems such as flooding, wildfire and urban management 
is likely to be reduced if operational services are guaranteed. This aspect is elaborated in more 
detail  the  next  section  of  this  chapter.  Another  indirect  economic  impact  is  that  Member 
States  and  other  users  would  have  less  need  to  develop  their  own  solutions,  implying  cost 
savings and avoidance of duplications. These aspects are discussed in greater detail in section 
5.1.1.  The  overall  cost  benefit  assessment  of  option  3  will  have  to  take  these  indirect 
economic impacts into proper consideration. 

Finally,  it  is  recalled  that  EU  financing  of  operational  services  would  constitute  a  political 
message  of  paramount  importance  also  for  the  external  relations  of  the  EU,  and  would 

53 

54 
55 

See, in particular, ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 
812. 
See ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 93. 
See ECORYS (2008), Study on the Competitiveness of the GMES Downstream Sector, p. 13. 

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reinforce  the  credibility  of  the  EU  as  a  partner  in  the  GEOSS  and  the  strategic  EU-Africa 
partnership. 

5.4.2.  Environmental impact 

Regarding emergency services, Option 3 would allow civil protection authorities throughout 
Europe  in  particular  to  have  access  to  accurate  emergency  response  maps  including  maps 
produced  in  rush  mode  already  in  2011.  These  maps  would  beter  enable  civil  protection 
authorities  to  prevent  and  respond  to  crises  throughout  the  whole  response  cycle,  both 
allowing  better  assessment  and  management  of  risk  in  the  prevention  phase,  and  better 
management of the response during the crisis and in the post-crisis phase. This could reduce 
the scale of environmental risk, including floods and forest fires. 

An  external  study  has  demonstrated  that  floods  have  caused  average  annual  damages 
(calculated for the period 1980 – 2005) of around 2.2 billion € in 2005 prices, owing to loss of 
life,  effects  of  flood  morbidity  and  damage  to  property56.  GMES  can  help  to  reduce  these 
damages  on  the  assumption  that  precise  flood  maps  could  enable  a  much  more  efficient 
response  by  civil  protection  authorities.  Stakeholders  suggested  that  GMES  could  reduce 
damage,  by  improving  the  efficiency  in  managing  and  responding  to  crises,  from  the  pre-
event phase to the post-event phases, and noted that in the context of extreme events, inputs to 
planning and risk management, this assumption is regarded as conservative by the consultant 
that carried out the assessment (PWC). This would correspond to net economic benefits of 
around €135 million in 2012, based on conservative assumptions 57. 

Average  annual  wildfire  damage  (calculated  for  the  period  1980  –  2005)  was  around  141 
million  €  in  2005  prices 58.  GMES  services  could  provide  civil  protection  authorities  with 
inputs  for  all  stages  of  action  in  relation  to  wildfires,  including  a  fast  appraisal  of  the  fire 
situation  which  in  turn  allows  authorities  to  optimise  the  fire  fighting  facilities  at  their 
disposal.  Stakeholders  consulted  thought  that  GMES  could  deliver  a  1%  reduction  in 
mortality, morbidity and property damage. This would correspond to net economic benefits 
of around 9 million € in 2012 59, based on conservative assumptions. 

A Community financing would enable the provision of the land cover products referred to in 
Chapter  2.2.2  on  a  reliable  basis.  These  products,  mostly  of  a  generic,  multipurpose  nature, 
would make possible the development of tailored downstream services in a large number of 
areas,  including  soils,  water,  agriculture,  forests,  energy  and  utilities,  built-up  areas, 
recreation,  infrastructures  and  transports.  In  the  following,  the  benefits  of  selected  products 
that  would  be  based  on  the  generic  land  cover  products  above  are  discussed,  including  (i) 
agriculture and rural development, (ii) urban  and  regional policies,  and  (iii) ecosystems and 
biodiversity – forest monitoring. 

In  the  field  of  agriculture  and  rural  development,  GMES  would  potentially  support  the 
CAP information requirements between 2011 and 2013, through the providing of land use and 
land  cover  data  at  more  frequent  intervals,  at  higher  spatial  resolution,  and  with  continuity 
over  time.  Other  applications  of  GMES,  including  for  example,  irrigation  pressure  mapping 

56 
57 
58 
59 

For more details see PWC, Socio-economic analysis of GMES benefits, p 138 – 139, and Annex V.  
See PWC, Socio-economic analysis of GMES benefits, p 146 – 147. 
See PWC, Socio-economic analysis of GMES benefits, p 140 – 141, and Annex V. 
See PWC, Socio-economic analysis of GMES benefits, p 148 – 149. 

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and  soil  sealing  mapping  also  offer  the  potential  for  landowners  to  enhance  yields  through 
better predictive tools to manage scarce resources such as water60. 

Regarding  Urban  Management,  GMES  could  enable  local  authorities  and  other  users  to 
understand  the  impacts  of  land  use  policy  better,  anticipate  trends,  develop  policies  to 
minimise  urban  sprawl/soil  sealing  and  enable  them  to  manage  the  urban  environment,  and 
the urban-rural interface in a more effective way61. The main monetary benefits identified in 
an  external  cost  benefit  analysis  derive  from  efficiency  gains  within  city  and  regional 
administrations and an improved means of impact assessment at EU institutions level, notably 
the evaluation of the implementation of the EC Structural Funds. For the period 2011 – 2013, 
the study foresees total benefits of around EUR 168 million, including estimated benefits 
of EUR 56 million in 201262. 

In  the  field  of  biodiversity  and  ecosystem  services,  including  forest  monitoring,  the 
products  referred  to  in  chapter  2.2.2  could  be  used  to  provide  services  improving  the 
management  of  forests  grown  for  logging;  increase  regeneration  through  monitoring 
disturbances  and  re-growth;  and  provide  information  on  forest  indicators  and  land  cover  to 
improve  policy  making.  The  benefits  of  GMES  can  be  calculated  through  avoided 
deforestation  (attributable to GMES) on  the  basis that GMES could reduce deforestation  by 
5%-10%.  Valuing  tropical  forest  at  €105/ Ha,  the  global  annual  economic  costs  of 
deforestation  is  calculated  as  €1.5  billion  (200 5  prices).  Net  economic  benefits  would  thus 
amount to between €75-150 million per a nnum (in nominal undiscounted terms)63. 

5.4.3. 

Social impact 

The above analysis for operational GMES emergency and land monitoring services does not 
cover the impact on the downstream sector. It is assumed that EU financing would lead to the 
provision of sustainable services that will be the basis for innovative value added services in 
Europe already between 2011 and 2013. This could reverse the trend of very slow growth in 
employment in this key high tech sector64. Additionally, the availability of operational GMES 
services could be instrumental in reducing the disparities between old and new Member States 
in the field of Earth observation. This is because downstream services market development, in 
particular in countries with a weaker industrial base, will most likely accelerate only with the 
full and open access to inputs from operational GMES services. 

60 
61 
62 

63 
64 

See PWC, Socio-economic analysis of GMES benefits, p 96. 
See PWC, Socio-economic analysis of GMES benefits, p 96 – 97. 
See the Cost Benefit Analysis for the GMES Urban Services, prepared by Indra, available at 
http://esamultimedia.esa.int/docs/GMES/URBAN_C2_Ph2_V2%5B1%5D.0_00_12_04_Final.pdf., p. 
42.  
See PWC, Socio-economic analysis of GMES benefits, p 107, and Annex V. 
See also chapter 5.2.3.  

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6. 

COMPARING THE OPTIONS 

The following table contains a comparison of the options in the light of the objectives defined 
in chapter 3, and the principle of cost-effectiveness. 

Option  Likelihood of reaching objectives 

and corresponding benefits65 

Total Costs (including Community budget 
and Member State budgets) 

Cost 
effectiveness 

1 

2 

3 

65 

66 

67 

68 

69 

70 

71 

+66 

+ 

+++70 

Community budget: 

Costs in MS  

•Appropriations 

•Human Resources 

-67 

+ 

•Administrative exp.  + 

++++68 

Community budget: 

Costs in MS  

•Appropriations 

•Human Resources 

- 

+ 

•Administrative exp.  + 

++++ 

Community budget:71 

Costs in MS 

+69 

+ 

•Appropriations 

•Human Resources 

++ 

+ 

•Administrative exp.  + 

+++ 

+++ 

The  likelihood  of  reaching  the  objectives  has  been  discussed  in  section  5.2.1,  5.3.1,  and  5.4.1.  The 
benefits  that  are  quantified  in  section  5.4  and  Annex  V  are  those  which  would  materialise  if  the 
objectives  defined  in  section  3.2.  are  fully  met.  In  the  reference  year  2012,  annual  benefits  linked 
directly to GMES include 135 M€ for flood services , 9M€ for wildfire services, a minimum of 75 M€ f 
in  the  field  of  deforestation  and  56  M€  for  urban  planning,  taking  into  consideration  (i)  that  these 
numbers  are  based  on  conservative  assumptions,  and  (ii)  do  not  include  benefits  e.g.  relating  to 
emergency response  to volcano  eruptions  and  Earth quakes, nor benefits  linked  to  efficiency  gains  in 
the field of agriculture and rural developments. 
It is considered to be unlikely that options 1 and 2 will allow to reach the specific objectives of GMES 
Initial  Operations  owing  to  (i)  problems  with  the  provision  of  pan-European  services,  (ii)  the  lack  of 
capacities and know-how in some of the Member States, and (iii) a lack of sustainability (in particular 
for budgetary reasons). In such a worst case scenario, Option 1 and 2 would be better than the baseline 
only marginally. 
Appropriations include funds spend through grants, procurements or delegation agreements. In Options 
1 and 2, no significant EC budgets would be spent through appropriations  
Although  no  detailed  numbers  concerning  the  costs  incurred  by  the  Member  States  are  available, 
previous experience in the field of Corine land cover and data submitted by the EEA shows that these 
costs are higher than EC costs by a factor of 3, meaning that total costs could be higher than EC costs 
by a factor of 4. It is assumed that both options 1 and 2 would lead to higher overall cost for the EU and 
its  Member  States  due  to (i) higher  costs  for  the  procurement  of data  needed  to  provide  the  services, 
given  the  lack  of  economies  of  scale  and  countervailing  buying  power,  and  (ii)  the  necessity  to 
duplicate infrastructures in a totally decentralised service provision scheme. 
Given  the  likelihood  that  Options  1  and  2  will  not  allow  reaching  the  specific  objectives  of  GMES 
Initial Operations, cost-effectiveness of these options is low.  
Section  5.4.  explains  in  detail  why  for  Option  3,  it  can  reasonably  be  assumed  that  the  objectives 
defined in Section 3.2. are fully met. Consequently, the quantified benefits would fully materialise.  
Detailed cost figures for the EC have been included in the legislative financial statement. For option 3, 
in  the  reference  year  2012,  total  commitment  appropriations  would  amount  to  41  M€,  0,4  M€  for 
administrative  expenditure,  and  2,5  M€  for  human  resources.  In  options  1  and  2,  the  cost  of  human 
resources would be lower, as no staff members would be needed to manage appropriations.  

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The likelihood of reaching the objectives has been discussed in section 5.2.1, 5.3.1, and 5.4.1, 
which  contain  a  discussion  of  the  impact  of  the  different  options  depending  on  whether  the 
specific  objectives  of  GMES  are  fully  met  (best  case  scenario),  or  not  met  (worst  case 
scenario). The benefits that are quantified in section 5.4 and Annex V are those which would 
materialise if the objectives defined in section 3.2. are fully met. In the reference year 2012, 
annual benefits linked directly to GMES include 135 M€ for flood services, 9M€ for wildfire 
services, a minimum of 75 M€ f in the field of  deforestation and 56 M€ for urban planning, 
taking  into  consideration  (i)  that  these  numbers  are  based  on  conservative  assumptions,  and 
(ii) do not include benefits e.g. relating to emergency response to volcano eruptions and earth 
quakes,  nor  benefits  linked  to  efficiency  gains  in  the  field  of  agriculture  and  rural 
developments. 

It is considered to be unlikely that options 1 and 2 will allow to reach the specific objectives 
of  GMES  Initial  Operations  owing  to  (i)  problems  with  the  provision  of  pan-European 
services, (ii) the lack of capacities and know-how in some of the Member States, and (iii) a 
lack  of  sustainability  (in  particular  for  budgetary  reasons).  In  such  a  worst  case  scenario, 
Option  1  and  2  would  be  better  than  the  baseline  only  marginally.  Section  5.4.  explains  in 
detail why for Option 3, it can reasonably be assumed that the objectives defined in Section 
3.2. will be fully met. 

Regarding costs, it is not sufficient to focus on EC costs only, which would amount to 150 M€ 
for the whole period covered by GMES Initial Operations (2011 – 2013), including 43 M€ for 
research  activities  from  the  space  theme  of  FP  7  for  research  actions  accompanying  GMES 
initial  operations.  Costs  at  Member  State  level  must  also  be  taken  into  consideration. 
Although  no  detailed  numbers  concerning  the  costs  incurred  by  the  Member  States  are 
available,  previous  experience  in  the  field  of  Corine  land  cover  and  data  submitted  by  the 
EEA shows that these costs could be higher than EC costs by a factor of 3, meaning that total 
costs  could  be  higher  than  EC  costs  by  a  factor  of  4  in  option  3.  It  is  assumed  that  both 
options 1 and 2 would lead to higher overall cost for the EU and its Member States due to (i) 
higher  costs  for  the  procurement  of  data  needed  to  provide  the  services,  given  the  lack  of 
economies  of  scale  and  countervailing  buying  power,  and  (ii)  the  necessity  to  duplicate 
infrastructures in a totally decentralised service provision scheme. 

Option 3 is thus considered to be the preferred option for the period 2011 –  2013,  as  it  has 
been  demonstrated  that  this  option  would  (i)  entail  a  high  likelihood  that  the  specific 
objectives  of  GMES  initial  operations  are  met,  and  (ii)  could  allow  reducing  overall  costs, 
including through a centralised procurement of data needed for the services. Option 3 would 
also  give  a  boost  to  the  downstream  sector,  which  would  have  better  access  to  data.  As 
foreseen  in  the  Communication  "GMES  -  We  care  for  a  Safer  Planet",  in  any  event  EU 
financing  should  be  accompanied  by  co-ordination  activities.  Additionally,  the  Commission 
will  continue  analysing  whether  a  regulatory  intervention  (e.g.  with  a  view  to  establishing 
common  methodologies  for  land  cover  products)  is  necessary.  In  the  period  covered  by  the 
proposed Regulation, it is unlikely that EC regulation specifically targeted at GMES will enter 
into force. 

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7. 

MONITORING AND EVALUATION 

7.1. 

Evaluation 

Evaluation tasks will be carried out in three phases (ex ante, interim and ex post). In addition 
to this Impact Assessment, which constitutes an ex ante evaluation in accordance with Article 
21(1)  of  the  Implementing  Rules,  the  Commission  will  carry  out  evaluations  of  i)  the 
preparatory action in the field of emergency management and land monitoring referred to in 
Chapter  2.1.1  above,  and  (ii)  data  access  activities,  in  order  to  prepare  the  first  work 
programme  for  operational  activities.  Additionally,  an  interim  evaluation  report  will  be 
prepared no later than the end of 2012. Finally, an ex post evaluation will be prepared after 
the end of initial operational activities. 

The interim and ex post evaluation will focus on the following indicators: 

•  achievement  of  the  operational  objectives  referred  to  in  chapter  3.3.  In  particular,  it  will 
have  to  verified  whether  (i)  service  quality  is  in  conformity  with  applicable  technical 
specifications, (ii) whether service specifications correspond to user requirements and thus 
ensure the widespread use of the services provided; 

•  impact  of  operational  emergency  and  land  monitoring  services  on  the  Earth  observation 
industry in Europe, in particular in terms of relevance, utility, effectiveness and efficiency 
of services. 

7.2.  Monitoring 

The  Commission  will  ensure  that  contracts  and  grants  concluded  in  the  framework  of 
operational  emergency  and  land  monitoring  services  provide  for  supervision  and  financial 
control  by  the  Commission,  if  necessary  by  means  of  on-the-spot  checks,  including  sample 
checks, and audits by the Court of Auditors. If need be, the Commission could be assisted by 
external  technical  experts  when  monitoring  the  implementation  of  the  programme.  On  the 
basis of the results of the on-the-spot checks, the Commission will ensure that, if necessary, 
the scale or the conditions of allocation of the financial contribution originally approved and 
also the timetable for payments are adjusted. 

In addition to financial supervision, the Commission will put in place mechanisms to ensure 
the  continuous  quality  of  the  services  provided.  Finally,  the  Commission  will  organise  user 
for a in order to ascertain that services are user-driven. 

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ANNEX I 

REFERENCE STUDIES AND DOCUMENTS 

PriceWaterhouseCoopers, October 2006, Socio-Economic Benefits Analysis of GMES, prepared for 
ESA 
http://www.esa.int/esaLP/SEMJZ10DU8E_LPgmes_0.html 
Impact Assessment of the European Space Policy, including GMES 

http://ec.europa.eu/enterprise/space/off_docs_en.html  

GOSIS study (funded under FP6) on GMES governance models 
http://ec.europa.eu/enterprise/space_research/pdf/gosis.pdf 
SEIS Impact Assessment: Towards a Shared Environmental Information System (SEIS) 

http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:52008SC0112:EN:HTML 
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=COM:2008:0046:FIN:EN:PDF 
http://eurlex.europa.eu/Notice.do?val=464212:cs&lang=en&list=464212:cs,&pos=1&page=1&nbl=1
&pgs=10&hwords=&checktexte=checkbox&visu=#texte 

Impact  Assessment  relating  to  the  Economic  and  Governance  Evolution  of  Space  in  Europe,  RPA 
February 2007, prepared for EC DG Enterprise & Industry 

http://ec.europa.eu/enterprise/calls/files/08_004/rpa_study.pdf 

European  Commission  Green  Paper,  European  Space  Policy,  COM(2003)17  final  (21.1.2003)  - 
http://eur-lex.europa.eu/LexUriServ/site/en/com/2003/com2003_0017en01.pdf 
European  Commission  White  Paper  Space:  a  new  European  frontier  for  an  expanding  Union: 
An action  plan  for  implementing  the  European  Space  policy,  COM(2003)673  (11  November  2003) 
http://ec.europa.eu/comm/space/whitepaper/whitepaper/whitepaper_en.html 
European Commission 'European Space Policy - Preliminary Elements' COM(2005) 208 final 
(23.May 2005) 
http://ec.europa.eu/enterprise/space/doc_pdf/pep.pdf 
SPASEC March 2005: Report of the panel of experts on space and security, prepared for EC DG 
Enterprise & Industry 
http://ec.europa.eu/comm/space/news/article_2262.pdf 
ECORYS / ESYS 2006: SATMAC – Satellite Communication Market Assessment and Cost Benefit -, 
Market Characterisation Report and Satellite Communication Application and Services, prepared for 
EC DG Enterprise & Industry 
http://ec.europa.eu/enterprise/space/doc_pdf/impact_assessment_en.pdf 
BICEPS report - Building an Information Capacity for Environmental Protection and Security 
(European Commission, DG RTD, 2004) 
http://www.gmes.info/library/index.php?&direction=0&order=&directory=6.%20Cross-
Cutting%20Studies%20Documents 
DPAG  report  -  Data  Policy  Assessment  for  GMES  (European  Commission  DG  RTD)  - 
http://www.gmes.info/library/index.php?&direction=0&order=&directory=6.%20Cross-
Cutting%20Studies%20Documents 
INSPIRE  Extended 
http://inspire.jrc.it/reports/inspire_extended_impact_assessment.pdf 

–  European  Commission, 

Impact  Analysis 

SEC(2004)980 

– 

http://inspire.jrc.it/reports/AANSDI_Italy_FinalApproved_v12en.pdf 

Costs for monitoring and reporting 
GINIE  (10/2003):  Geographic  Information  in  the  Wider  Europe,  DG-INFSO  Contract  IST-2000-
29493 
http://www.ec-gis.org/ginie/doc/ginie_book.pdf 

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PIRA (09/2000): Commercial Exploitation of Europe’s Public Sector Information © European 
Communities, 2000 
ftp://ftp.cordis.europa.eu/pub/econtent/docs/2000_1558_en.pdf 
Craglia M and J. Nowak (2006): “Assessing the Impacts of Spatial Data Infrastructures - Report of the 
International Workshop on the Cost to Benefit and Return on Investment Ratios of SDIs”. 2006, Ispra, 
Italy 
http://www.ec-gis.org/sdi/ws/costbenefit2006/reports/report_sdi_crossbenefit%20.pdf  
European  KNOWLEDGE  INTENSIVE  Services  based  on  Earth  Observation:  “Doing  business  with 
the help of GMES” by S.Galant, T.Pagano, A.Vaféas, TECHNOFI, October 2007 (copy available) 
Geospatial Interoperability Return on Investment Study, National Aeronautics and Space 
Administration (NASA): Geospatial Interoperability Office, April, 2005. 
http://www.ec-gis.org/sdi/ws/costbenefit2006/reference/ROI_Study.pdf 
OECD Environmental outlook to 2003 

http://www.oecd.org/dataoecd/29/33/40200582.pdf 

OECD(2005): Space 2030 – “Tackling society’s challenges” 
http://www.oecd.org/document/13/0,2340,en_2649_34815_35059341_1_1_1_1,00.html 
Space for GeoInformation, The Netherlands (02/2003) 
http://www.ravi.nl/ruimte/index.htm 
MICUS (01/2003): The market for geospatial information: potential for employment, innovation and 
added value, study for the Germen government 
http://www.micus.de/pdf/micus_study_broadband.pdf 
P.Weiss (NOAA, 02/2002): Borders in Cyberspace – conflicting public sector information policies and 
their economic impacts (for the EU/US comparison) 
http://www.weather.gov/sp/Borders_report.pdf 
Environmental Performance Index 2008, Yale and Columbia, http://epi.yale.edu/Home  
Euroconsult 2007, Assessment of the downstream value-adding sectors of space-based applications 
VEGA and Booz Allen and Hamilton, 2004, The state and health of the European and Canadian EO 
service industry 
VEGA, 2008, The state and health of the European and Canadian EO service industry in 2006 
ECORYS, 2008, Study on the competitiveness of the GMES Downstream Sector, prepared for DG 
Enterprise and Industry

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ANNEX II 

THE DOWNSTREAM SECTOR IN EUROPE 

At  downstream  level,  the  relevant  GMES  sector  can  be  defined  as  those  organisations  that 
offer value added services based on Earth Observation data, but also large industrial sectors 
which  integrate  information  derived  from  Earth  observation  in  their  service  offer  or 
production processes, according to the model of meteorological or geographical information. 
Within the downstream sector, two distinctions should be made: 

•  Companies  that  use  EO  data  and  derived  information,  the  provision  and  availability  of 
which would be affected by the introduction of GMES services, versus those that use other 
EO data; 

•  Public entities versus private actors. 

The  economic  performance  of  the  GMES  downstream  sector  has  been  reported  in  three 
studies:  a  study  by  Euroconsult  in  200772,  and  two  studies  by  VEGA,  from  200473  and 
updated in 200874. 

Euroconsult assessed the downstream value-adding sectors of space-based applications. This 
concerned earth observation (EO), communication and navigation. An overview of the world 
and  European  revenues  and  the  compound  annual  growth  rate  (CAGR)  is  provided  in  the 
following table. 

Sector 

World revenues 
2005 

European revenues 
2005 

Europe % 

2000-2005 CAGR 
Europe 

Telecom 

€54.3 billion 

€18.1 billion 

Navigation 

€17.3 billion 

€2.3 billion 

Earth observation 

€1.3 billion 

€0.4 billion 

Total 

€72.9 billion 

€20.8 billion 

33% 

13% 

31% 

29% 

6.5% 

22% 

4% 

11% 

Table 1: Revenues of the downstream value adding sectors of space-based applications for 
2005. Source: Euroconsult (2007). European data include Canada, an associate member of 
ESA, which accounts for around 10%. 

The  table  indicates  that  EO  is  the  smallest  of  the  three  value  adding  space  segments  in 
absolute numbers. European revenues take up around one-third of world revenues. European 
revenues  from  EO  amount  to  approximately  2%  of  total  European  revenues  of  downstream 
value adding sectors, which is equal the share that world EO revenues have in world value-
adding revenues. 

72 
73 

74 

Euroconsult, 2007, Assessment of the downstream value-adding sectors of space-based applications. 
VEGA  and  Booz  Allen  and  Hamilton,  2004,  The  state  and  health  of  the  European  and  Canadian  EO 
service industry 
VEGA, 2008, The state and health of the European and Canadian EO service industry in 2006 

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The revenue figures above are for EO value adding activity undertaken on a contracted basis 
including public sector revenues, which account for around €150 million, mostly coming from 
Meteorology  and  Met-ocean.  European  data  quoted  above  include  Canada,  an  associate 
member of ESA, which accounts for around 10% of the total. The following table provides as 
split of total European revenues per segment, and additionally provides the growth rate in the 
period 2000-2005. 

Segment 

Meteorology 

Defence and security 

Oceanography 

Natural Resource Monitoring 

Land Monitoring 

Total  

Revenue in 2005 

CAGR 2000-2005 

€ 211 million 

€ 65 million 

€ 49 million 

€ 52 million 

€ 13 million 

€ 390 million 

2% 

5% 

10% 

2% 

2% 

4% 

Table 2. European revenues EO value adding industry per segment in 2005. Source: 
Euroconsult (2007). European data include Canada, an associate member of ESA, which 
accounts for around 10%. 

Euroconsult  also  indicated  that  EO  value  adding  industry  is  the  only  segment  where,  in 
commercial  activity,  the  downstream  sector  is  smaller  than  the  upstream  sector  (Satellites, 
launches, operations and ground equipment). 

The  Euroconsult  figures  as  mentioned  above  can  be  compared  with  the  figures  provided  by 
VEGA. VEGA reports the total revenue in Europe and Canada for EO value adding industry 
at  €  285  in  2002,  growing  2%  per  annum  on  av erage  to  €  306  million  in  2006.  This  figure 
does  not  entirely  match  with  the  €  390  million  in  2005,  as  presented  by  Euroconsult. 
However,  these  revenues  include  public  sector  revenues  from  meteorology  and  met-ocean, 
while we understand that this is excluded in the VEGA study. If we correct for this, there is a 
‘gap’  of  around  €  60  million.  Part   of  this  can  be  explained  by  the  difference  in  base  year 
(2005  for  Euroconsult,  and  2006  for  VEGA),  but  not  all.  The  difference  may  arise  from 
methodological differences. 

VEGA indicates that about 30% of all revenues are from National/ESA/EC grants, hence not 
from  customers  paying  for  services.  This  figure  rises  to  50%  for  small/medium  sized 
companies. 

VEGA  estimates  employment  in  the  sector  to  have  risen  from  2,900  employees  in  2002  to 
3,000 in 2006.An overview of employment and revenue is presented in the following table. 

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Revenue* 

Employees* 

Labour productivity (revenue per 
employee) 

2002 

2006 

CAGR 

€ 285 million 

€ 306 million 

1.8% 

2,900 
€ 98,000 75 

3,000 

€ 102,000 

0.85% 

0.93% 

Table 3. European revenue and employment. Source: VEGA. *Does not include revenue or 
employment generated by the public sector 

The  table  indicates  that  revenues  have  increased  by  around  2%  per  annum  on  average 
between  2002  and  2006,  while  employment  evolved  in  a  lower  pace,  slight  under  1%.  This 
implies that the productivity per employee has grown. 

These figures from both Euroconsult and VEGA are for all EO activity, even if the company 
concerned  is  not  in  the  “space  sector”.  Hence  they  include,  for  example,  the  EO  related 
revenues of large engineering /survey companies that use EO as part of their overall business. 
VEGA also estimated that the value adding products and services provided by the EO value 
adding industry are made up for 80% from a combination of spaceborne plus aerial or ground 
borne data. The OECD76 indicates that in the total EO downstream sector (commercial remote 
sensing, including data sales), the revenues amounted to € 2 bill ion worldwide (satellite plus 
aerial  component)  in  2003.  It  was  estimated  that  the  satellite  component  amounted  to  one 
third of the total. 

Conclusion 

The  GMES  direct  downstream  sector  employs  around  3,000  persons  in  2006.  The  total 
revenue in Europe amounts to € 250 - 300 million in 2006, excluding revenues by the public 
sector,  which  amount  around  €  150  million.  These  values  include  revenues  from  grants; 
corrected for this, revenues from paying customers amount to € 175 -210 million, excluding 
revenues by the public sector. 

According to VEGA, there are 151 companies in Europe and Canada which can be defined as 
value  adding  companies  (2006),  excluding  the  public  sector.  In  2002  there  were  162 
companies  identified.  The  decrease  can  be  explained  by  consolidation  activities  that  have 
taken place. 

The  sector  is  primarily  made  up  of  small  and  medium  sized  companies.  The  distribution 
among categories is presented in the following table. 

75 

76 

VEGA reports revenue per employee being € 107,000, which is based on a correction for outliers in the 
survey sample. However, these outliers were not excluded when calculating total revenue, which does 
not seem methodologically sound. Therefore this table presents the ‘raw’ figures without correction for 
outliers. 
Space 2030, Tackling society’s challenges, OECD, 2005 

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Size class 

Small (0-10 employees) 

Medium (11-60 employees) 

Large (>60 employees) 

Total 

Number of companies 

87 

68 

6 

151 

Table 4. Size distribution of value adding companies (Europe and Canada). Source: VEGA 

On average, the sector employs 20 persons per company and generates a turnover of around € 
2 million per company. VEGA notes that profitability is highly concentrated with 89% of the 
profits coming from just 5 companies.  VEGA indicates that the main  operational  centres of 
EO  activity  are  in  the  UK  and  Germany,  with  France,  Italy  and  Spain  also  making  a 
significant contribution. 

Conclusion 

The  GMES  downstream  sector  is  a  relatively  small  sector,  composed  of  around  150 
companies. More than half of these companies are small companies employing less than 10 
persons.  The  average  turnover  amounts  to  €  2  million  per  company.  Note  that  the  public 
sector is not included in these figures. 

The  use  of  GMES  information  in  large  industrial  sectors  such  as  energy,  agriculture,  water 
resources, etc  should be comparable  to those of  similar  information  such  as  meteorology  or 
cartography and remains to be assessed. 

VEGA  indicates  that  about  30%  of  all  revenues  of  the  EO  value  adding  sector  is  from 
National/ESA/EC grants, hence not from customers paying for services. This figure rises to 
50% for small/medium sized companies. 

The European EO value adding sector takes up around one-third of global revenues. Both the 
below  revenue  and  non  weighted  revenue  tables  give  a  picture  of  the  geographical  market 
reach  of  companies.  The  graph  indicates  that  the  majority  of  the  users  or  customers  of 
European  value  adding  companies  are  located  in  the  country  of  the  company  itself.  The 
revenue weighted analysis shows that where there are activities outside Europe, the market is 
dominated  by  the  activities  of  large  companies  operating  in  Asia  and  North  America 
according to VEGA. 

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Figure : User locations for EO companies. Source: VEGA 

Overall,  nearly  10%  of  all  European  products  are  also  sold  to  global  users  (VEGA  2008). 
Historical  comparisons  of  growth  in  EO  Services  by  customer  location  shows  that  in  the 
period 2003 – 2006 there was a growth in products sold globally. 

In terms of profitability trend of the EO service industry as a whole, profitability is typically 
below 10% and concentrated in a few larger companies, with only 89% of profit value across 
the  sample  companies  from  the  VEGA  survey  (VEGA  2008)  being  delivered  by  five 
organisations. In 2006, a significant profit (greater than 1 million Euros) is limited to just five 
companies in the research sample77, including all the large respondents and just one medium 
sized organisation. 

Whilst  it  is  not  directly  related  to  profitability,  the  current  ratio78  of  the  industry  has  been 
analysed in the literature. Whilst the trend is upwards in the EO value adding industry, many 
companies remain below the ‘safe’ level of 1 (for the current ratio) and the industry remains 
below benchmarks. For example, current ratios for engineering companies in the EU are 1.5 
and in the US 1.1, while the EO industry as a whole is 0.89 (Galant 2007). 

Despite  issues  with  funding  relating  to  support  from  the  public  institutions79,  the  EO  sector 
shows above average investment in R&D compared with other sectors, with the average R&D 
expenditure  accounting  for  27.5%  of  EO  revenue.  It  is  important  to  note  that  technical 

77 

78 

79 

Source: VEGA (2008). It should be noted that profitability of EO companies is shown by this study to 
be typically presented in low single figures as percentage of revenue, variable between companies and 
volatile year on year. 
An indication of a company's ability to meet short-term debt obligations; the higher the ratio, the more 
liquid the company is. Current ratio is equal to current assets divided by current liabilities. 
Issues  being  that  revenues  are  primarily  generated  from  operational  services  but  revenues  grants  still 
comprise  about  a  quarter  of  company  revenues  on  average  (VEGA  2008).  Organisations  awarding 
grants  to  the  EO  sector  included  National  public  grants,  European  public  grants  -  ESA  EC  &  other 
(VEGA 2008) 

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development activities in the EO sector are funded by clients / public funds and not direct by 
internal investment (VEGA 2008). 

GMES  aims  at  the  delivery  of  information  services.  At  global  level,  a  recent  study  of  total 
revenues for meteorology, airborne and satellite remote sensing estimated global revenues of 
the order US$ 7B for 2007 rising to approximately US$ 10B in 2012. These figures include 
the  larger  airborne  remote  sensing  data  market.  Concentrating  only  on  EO,  the  projected 
growth is approximately 8% per annum. These estimates are consistent with an independent 
study  by  Euroconsult  as  well  as  related  studies  of  the  market  for  Geographic  Information 
Systems. 

Since  1995,  total  revenue  of  the  European  and  Canadian  EO  service  industry  has  been 
regularly  assessed  by  a  series  of  independent  studies  commissioned  by  both  EC  and  ESA. 
Three  snapshots  of  annual  revenues  within  the  industry  (including  both  R&D  grants  and 
commercial  sales)  were  compiled  in  1995,  1998  and  2001  followed  by  two  detailed 
assessments of the state and health of the EO service industry in 2004 and most recently in 
2007. These studies show a consistent picture – Europe earns between 33% and 50% of the 
global commercial market for EO based services and this market is growing at approximately 
7 – 8 % per annum. The most recent assessment estimates total European and Canadian EO 
service  revenue  (not  including  data  sales)  as  approximately  €306  M  for  2006.  In  addition, 
combined  data  sales  and  ground  station  procurement  revenues  were  estimated  to  be 
approximately €106M. 

Historic evolution of total revenue in the European EO service industry – source ESYS and 
Vega 

In  comparison, 
satellite 
telecommunications and navigation service sectors are estimated at approximately US$ 55 B 
per annum and US$ 21 B per annum respectively. 

the  global  commercial 

the  much 

revenues 

larger 

in 

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ANNEX III 

RESULTS OF THE STAKEHOLDER CONSULTATION 

1. 

INTRODUCTION 

In 200480 the Commission underlined the strategic role of GMES, identified elements for its 
implementation and the next year defined the strategy to move from concept to reality notably 
through a phased implementation approach81. The Space Council supported this approach and 
at the same time stressed the need for a consolidation of the overall GMES architecture, and 
the identification of appropriate governance and financing schemes. 

In 2006, the Commission set up the GMES Bureau to strengthen the management of GMES. 
The  Bureau  is  tasked  to  prepare,  in  close  coordination  with  the  relevant  stakeholders  and 
users, the Commission proposals and requirements on GMES. 

The  following  chapters  provide  a  synthesis  of  the  input  received  by  the  Commission  in  the 
last  two  years  from  expert  groups,  stakeholders  and  Member  States,  and  highlight  the 
consensus achieved  on  the  main issues where it is necessary to act to ensure an  operational 
implementation of GMES. 

2. 

TOWARDS AN OPERATIONAL EU GMES PROGRAMME 

So far, GMES has been a European initiative that has drawn political attention to the need to 
preserve and strengthen service and infrastructure elements. Substantial R&D effort has been 
invested by the EU, ESA and their respective Member States. In the future, it is considered 
that GMES should be the product of a series of partnerships that need to be defined at the EU 
level,  taking  into  consideration  the  role  of  agencies,  Member  States,  value  added  services 
industry (including SME’s) and user communities. 

The variety of partnerships, infrastructure and services involved in GMES is linked with the 
areas  of  interest  of  the  different  partners,  notably  Member  States.  Consequently,  in  the 
operational phase of GMES, this should be reflected  in  the programmatic, management and 
financing schemes. 

As a user-driven initiative, GMES should be designed in such a way that there is continuous 
user uptake through constant consultation with users and integration of their changing needs 
in an iterative process. 

Financial and programmatic schemes should be designed to guarantee long-term sustainability 
of  GMES  and  the  efficient  management  of  Community  funds,  and  to  support  scientific  and 
technical service evolution. 

80 

81 

Global  Monitoring  for  Environment  and Security (GMES):  Establishing  a  GMES  capacity  by  2008  – 
Action Plan 2004-2008 (COM (2004) 65 Final). 
Global Monitoring for Environment and Security (GMES): from concept to reality (COM (2005) 565 
Final). 

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3. 

DEFINITION OF THE EU GMES PROGRAMME 

Following various Council Orientations and Resolutions, the EU has been assigned a leading 
role  in  the  development  of  GMES,  with  ESA  being  the  implementing  agency  for  its  space 
observation component. The roles of all actors need to be consolidated. It is imperative that 
the  EU  defines  the  overall  vision  for  GMES  and  uses  its  available  instruments  such  as 
coordination,  financing  and  regulatory  measures  for  the  governance  of  the  different 
components  of  GMES.  Those  financial  and  programmatic  instruments  should  guarantee  a 
long-term sustainability of services and infrastructure. 

Building  on  existing  operational  activities,  previous  and  current  R&D  activities  and  the 
Preparatory Action, the GMES programme should contain a definition of its overall objectives 
and the areas where EU action is required, and indicative budgetary resources. It should have 
a  clear  scoping  complementing  the  actions  at  national  and  intergovernmental  levels  and 
ensuring the user driven character of GMES. 

The GMES architecture consists of several individual components. Each of these components 
has  its  own  characteristics  in  terms  of  ownership,  facilities,  decision-making  process, 
financing model, industrial and economic set-up and management. Where lacking, dedicated 
governance mechanisms should be implemented for each of these GMES components taking 
into  account  existing  and  future  technical  and  institutional  specific  characteristics  and 
structures. 

The  overall  governance  scheme  will  aim  at  establishing  a  sustainable  institutional  and 
financial  framework  for  GMES  and  integrating  GMES  actors  with  a  view  to  establishing 
genuine partnerships. It should allow for the interaction of the individual GMES components 
and their associated sub-governance schemes, and should ensure the efficient management of 
Community  funds  allocated  to  the  programme,  the  management  of  necessary  contractual 
relations  for  the  operation  of  GMES,  and  legal  representation  towards  external  actors  and 
international  communities  and  coordination  bodies, 
the  Group  on  Earth 
Observations (GEO). 

including 

Within the overall governance of the programme, mechanisms able to bring together actors of 
different  institutional  nature  should  be  defined,  ensuring  a  proper  representation  of  the  EU 
Member States. The specific issue of countries who are not members of the EU and who are 
involved in the implementation of GMES has to be addressed in this context. 

Key issues raised by Stakeholders 

•  Ensuring that the EU and its Member States have the level of engagement and incentive to 
commit to the long-term availability of institutional observation and service infrastructure 
and resources for GMES. 

•  The  EU  GMES  Programme  should  be  defined  in  such  a  way  that  it  adequately 
complements existing financing and programmatic schemes, thereby becoming a decisive 
factor  for  the  establishment  of  a  partnership  between  the  EU  and  national  and 
intergovernmental actors. 

•  Decision-making should be streamlined with clear roles and responsibilities involving all 
different actors, and especially funding bodies, and putting users at the forefront. The role 
of mandated bodies in this process is particularly important. The process at the operational 

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phase  should  be  transparent  and  binding  on  reaching  consensus  and  on  implementing 
decisions including the evolution of GMES. 

•  To ensure transition to a governance system for an operational GMES architecture, robust 
programme  management  is  needed,  particularly  to  ensure  integration  between  existing 
GMES  components,  coherent  management  of  key  programme  elements,  and  full 
involvement of all players. 

•  User communities should be involved in governance and management at overarching and 
component  level,  so  as  to  promote  a  continuing  dialogue  between  the  entities  defining 
user  requirements,  observation  and  service  infrastructure  and  service  operators,  and  the 
bodies deciding on the future evolution and funding of GMES. 

4. 

FUNDING 

GMES  is  essentially  a  shared  and  distributed  system  and  therefore  it  is  expected  to  be  co-
financed at European, intergovernmental and national levels. 

The  costs  of  GMES  during  its  operational  phase  depend  on  the  scope  of  the  services,  the 
consolidated cost of the observation infrastructure needed to provide these services, and the 
extension of the international cooperation. 

The share of the EU budget in the overall amount will depend on the scope for the activities 
funded  and  managed  at  EU  level.  According  to  the  additionality  principle,  the  EU 
contribution  will  not  replace  existing  and  planned  national  investments  but  will  rather 
complement them in order to ensure a long-term sustainability for GMES. There is a need for 
continuity of EU R&D budgets as well as for the establishment of new budgets at EU level to 
support the operations of GMES. 

Key issues raised by Stakeholders 

•  Preparing  an  operational  funding  line  in  the  European  Union  budget  by  2014  while 
ensuring  the  phased  operational  implementation  of  GMES  in  line  with  Space  Council 
orientations at the same timeframe. 

•  Taking the necessary steps to expand the preparatory operational budget line introduced in 
2008  in  order  to  cover  expenses  required  for  the  finalisation  of  the  build-up  and  early 
operation of GMES services and the GMES observation component. 

•  The long-term GMES funding approach should ensure a smooth transition between three 
stages  that  partly  overlap:  demonstration  stage  to  be  funded  from  R&D  appropriations, 
pre-operational  stage  with  mixed  R&D  and  operational  funding,  operational  stage  with 
operational  funding  from  EU  and  national  operational  budgets,  bearing  in  mind  that 
demonstration  activities  and  future  operational  elements  will  continue  to  require  R&D 
funding during the operational stage. 

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5. 

THE DOWNSTREAM SECTOR 

GMES has been selected as one of the quick start projects in the Commission’s Initiative for 
Growth82. It should stimulate the industrial sector to expand its service offer and to develop 
the  innovative  integration  of  observing,  communications  and  information  technologies  that 
will  create  opportunities  for  increased  private  sector  usage  of  information  sources.  The 
European  industrial  base  will  be  an  important  asset  in  maintaining  a  European  autonomous 
capacity and political independence in decision making. 

The  stimulation  of  the  downstream  sector  should  also  be  facilitated  by  the  mobilisation  of 
traditional EU instruments in support of competitiveness and innovation. Full, equal and open 
access to GMES data and information will contribute to the Lisbon growth and job strategy 
and preserve the competitive market in the value adding sector. 

Key issues raised by Stakeholders 

•  The GMES data and information policy should be based on the principle of “full and open 
access” to the extent allowed by the overall financial model and other legal and security-
related constraints. 

•  Structured user support measures, with special focus on capacity building for shared needs 

among different Member States and for different application sectors. 

•  Structured business support measures with special focus on small and medium enterprises 

should stimulate growth and job creation. 

•  In  order  to  support  the  continued  development  of  innovative  services,  primarily  in  the 

downstream sector, R&D funds must continue to be made available. 

6. 

INTERNATIONAL COOPERATION 

Although  European  autonomy  for  GMES  services  is  of  key  importance,  the  EU  recognises 
that  international  cooperation  in  Earth  Observation  is  imperative  to  fulfill  the  need  for 
information based on global in-situ and remote sensing data. This cannot be pursued without 
exchanging  equivalent  observation  data  through  cooperation  schemes,  thereby  sharing  the 
burden and cost of an expensive observation infrastructure with major non-European partners. 

Further, only a coordinated approach bringing together the main actors in the world can lead 
to  efficient  counteraction  facing  global  threats.  The  joint  development  of  shared  or 
complementary Earth observation tools has led the major actors in the world to recognise the 
reality and criticality of the on-going climate change process. 

International  cooperation  should,  when  appropriate  and  efficient,  build  on  existing 
cooperation  schemes  developed  by  European  national  and  intergovernmental  actors  with 
international counterparts. 

82 

“A  European  initiative  for  growth:  Investing  in  networks  and  knowledge  for  growth  and  jobs:  Final 
report to the European Council” COM(2003) 690 final/2 (21.11.2003) 

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Among those is the GEO process. GMES will be the main European contribution to the global 
10-year implementation plan for the Global Earth Observation System of Systems (GEOSS). 
By  registering  GMES  components  in  the  GEOSS,  GMES  will  contribute  to  increasing  the 
knowledge  of  the  Earth  processes,  enhance  the  prediction  of  the  Earth  systems,  and  will 
encourage the increased use of Earth observation, the development of a system of worldwide 
observation  systems,  and  collaborative  tools  for  observation  and  analysis  with  international 
partners. 

Key issues raised by Stakeholders 

The strategy regarding possibilities of international cooperation linked to GMES should be 
built along the following lines: 

•  Balanced cooperation on observation infrastructure that does not compromise the GMES 
objective  for  European  autonomy  in  information  generation,  access  and  control  and 
technological capacity in key areas;  

•  R&D cooperation to prepare the future and foster interoperability; 

•  Cooperation,  in  line  with  EU  external  relations  policies,  especially  for  contributing  to 
sustainable  development,  as  well  as  for  European  solidarity  and  capacity  building 
approach including for instance support to food security, humanitarian aid, management 
of emergencies and crises. 

•  Strengthening the existing political mandate to support a co-ordinated European approach 
within  the  current  development  of  the  GEO  process  to  implement  the  GEOSS  data 
sharing principles and to define the European contribution to this international endeavour. 

7. 

IMPLEMENTING GMES: CONSOLIDATED VIEWS AND OPEN ISSUES PER COMPONENT 

Following  the  wide  consultation  notably  through  the  GMES  Advisory  Council  and  in 
accordance with the Munich Roadmap, there is now a shared vision on the scope, architecture, 
and  governance  principles  for  GMES.  The  following  sections  summarise,  starting  from  the 
existing stakeholders’ consensus where available, the main issues raised by Stakeholders and 
linked to the different components of the GMES architecture. 

7.1. 

The GMES Service Component 

Through its service component, GMES will ensure regular observation and monitoring of the 
sub-systems  of  the  Earth–  including  its  atmosphere,  oceans  and  continental  surfaces  –  and 
will provide reliable, validated information in support of a broad range of environmental and 
security  applications  and  decisions.  According  the  current  analysis  of  the  user  needs,  the 
scoping of these services is as follows: 

•  Land monitoring 

The Land Monitoring Core Service (LMCS) addresses a wide range of resources and policies 
(concerning  soils,  water,  agriculture,  forestry,  biodiversity,  transport,  regional  development 
etc.) involving very diverse user communities at global, European, national, regional and local 
level,  requiring  different  types  of  information,  from  common  multi-purpose  up  to  specific 
information in terms of thematic or geographical area. 

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The  LMCS  will  offer  a  portfolio  of  data  and  products,  with  different  levels  of  elaboration 
(from pre-processed images to elaborated information), finding a compromise between multi-
purpose  requirements  and  specific  thematic  requirements,  that  are  important  for  addressing 
European policies and for land management support. 

Multi-purpose  products  will  include  pre-processed  spaceborne  and  airborne  observation 
products,  specific  reference  data  complementing  existing  reference  data  (e.g.  European 
Digital  Elevation  Model),  bio-geophysical  parameters  (dynamic  vegetation  and  surface 
parameters in real-time at global level); a set of land use / land cover and land cover change 
products. 

Thematic products at European or global levels such as crop forecasts, agricultural statistics, 
water  models  (quality,  irrigation),  environmental  indicators,  carbon  fluxes,  soil  degradation 
and  desertification  models,  urban  and  industrial  areas  and  hot  spots,  will  address  more 
specific thematic requirements. 

•  Marine 

The  objective  of  the  Marine  Core  Service  (MCS)  is  to  establish  an  integrated  European 
capacity  for  ocean  forecasting  and  monitoring  allowing  a  systematic  delivery  of  forecasts 
(from  one  day  nowcasting  to  one  month  seasonal  forecasting),  re-analysis  (time  series)  and 
scenario simulations (for climate change impact assessments): 

–  on sea state and dynamics (e.g. 3D currents, temperature, salinity) and primary ecosystem 

(surface phytoplankton and primary production) characteristics; and 

–  at global scale (all world ocean) with daily updates on 5-10 km horizontal grids and over 
European regional seas (Baltic, Mediterranean, North Sea, North East Atlantic Basin), with 
daily updates at customised space resolution (1-5 km horizontal grids). 

As oceanographic models form the basis of its global and regional forecast services, the MCS 
depends  on  observation  data  from  space  and  in-situ  infrastructure  and  weather  analysis  and 
forecast information from numerical weather prediction models. Thematic Assembly Centres 
will  be  responsible  for  specific  pre-processing  of  different  parameters  to  be  used  as 
observation  time-series  and  input  to  the  global  and  regional  Monitoring  and  Forecasting 
Centres.  Regional  models  are  foreseen  for  the  Baltic,  Mediterranean,  Black  Seas,  Arctic 
Ocean, Northwest Shelf and the North Atlantic. 

•  Atmosphere 

The GMES Atmosphere Core Service (GACS)  provides products for three main application 
areas: (i) air quality, including long range transport of pollution, (ii) climate forcing and (iii) 
stratospheric ozone, UV and solar radiation. These products cover short term (including near 
real-time) to long term information needs (especially through reanalysis). 

The  atmospheric  service  will  fill  existing  gaps  in  accessible  information  on  atmospheric 
chemistry and composition. This will include: 

–  provision  of  Global  Climate  Observing  System  (GCOS)  Essential  Climate  Variables 

(ECV's) compliant with Global Climate Observing System (GCOS) requirements; 

–  gridded information on atmospheric composition; 

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–  long-term databases in order to clearly establish trends;  

–  reanalysis at regular intervals; 

–  ensuring  effective  access  to  in-situ  and  satellite  observation  data,  including  in  near  real 

time for services, e.g. in the field of solar energy; 

–  forecasting  and  assessment  capabilities  for  policy  development,  health  and  other 

applications. 

•  Emergency management 

The  objective  is  to  deliver  a  set  of  basic  services  to  improve  the  capability  of  users  to  face 
major emergencies at national, European and global levels either within or outside Europe. It 
will  cover  information  relating  to  natural  disasters  including  meteorological-driven  hazards 
(e.g.  storms,  fires,  floods),  geophysical  hazards  (e.g.  earthquakes,  tsunamis,  volcanic 
eruptions, landslides and subsidence), and man made disasters and humanitarian emergencies. 

The initial scope of the GMES Emergency Response Core Service (ERCS) is to provide rapid 
mapping  services,  delivering  reference  maps  and  assessment  maps  with  a  synthetic 
representation  of  anomalous  events,  their  impact  following  effects  and  their  time  and  space 
evolution,  as  well  as  the  distribution  in  space  and  time  of  the  available  resources  (rescue 
teams,  equipment,  material  etc.),  assets,  and  the  actual  damage.  The  ERCS  will  expand 
beyond the emergency response part of the crisis cycle and evolve to cover the entire crisis 
cycle  (crisis  prevention,  early  warning,  post-crisis  reconstruction  and  situation  assessment). 
The  products  will  be  diversified  (mapping  services,  forecasts  and  early  warning  systems, 
scenario preparation). 

•  Security 

Preliminary discussions with different stakeholders have shown that security users should be 
offered the same rights as other user users of GMES services bearing in mind that GMES is a 
civil system under civil control. Experienced security actors underlined the sensitivity linked 
to the acquisition, handling and dissemination of geospatial information. Security users have 
specific needs which justify the creation of specific services. 

In  order  for  GMES  services,  data  and  information,  to  be  used  for  public  decision-making, 
most particularly but not solely for what concerns security-related services, they should fulfil 
basic security criteria in terms of confidentiality, anonymity, traceability as well as security of 
infrastructure  and  processes.  These  requirements  will  need  to  be  considered  by  GMES 
services in general without hindering their overall development. 

With  the  aim  to  raise  stakeholder's  awareness  and  to  obtain  guidance  for  scoping  and 
implementation,  the  EU  Institute  for  Security  Studies  held  a  seminar  on  the  security 
dimension  of  GMES  in  March  2007.  The  discussions  at  the  seminar  identified  a  number  of 
areas  where  GMES  could  have  a  relevant  role  to  play  in  facilitating  monitoring  or 
implementation  of  policies,  including  e.g.  maritime  and  border  surveillance  and  global 
situation  awareness.  Following  the  coordination  between  the  Commission  and  the  General 
Secretariat of the Council, a number of action areas meeting policy requirements have been 
identified  including:  border  surveillance,  maritime  surveillance  and  support  to  EU  external 
action. 

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The specific support of GMES to security applications as well as the importance of correctly 
addressing  security  of  information  produced  by  GMES  is  currently  being  elaborated  by  the 
Commission. The results of ongoing analyses will be communicated at a later stage. 

Key issues raised by Stakeholders 

•  Ensure in the definition of the initial scope for GMES services that their deliverables meet 

user needs (including the needs of downstream sector). 

•  Establish  a  mechanism  for  approval  and  continuous  management  of  user  feedback  and 

requirements as well as for the validation of their implementation. 

•  Appropriate balance among coordination, financing and regulatory actions by the EU. 

•  Establish operational financing sources and associated procurement policy. 

7.2. 

The GMES Space Component 

The  GMES  Space  Component  (KSC)  shall  ensure  sustainable  provision  of  satellite  derived 
Earth observation data to the GMES service component. The KSC  architecture is driven by 
and derived from service requirements provided by the user communities represented in the 
overall GMES governance scheme. This requires that any investment in the space component 
needs to correspond to user requirements aggregated by the Commission. 

The  KSC  is  subject  to  a  space  infrastructure  mission  lifecycle  which  is  driven  by  service 
requirements  and  which  determines  the  roles  and  responsibilities  of  the  various  actors, 
funding sources and decision-making process. This lifecycle includes the following stages: 

•  demonstration stage through missions or technologies implemented with R&D funding; 

•  pre-operational stage with initial elements of an operational series through a mix of R&D 

and operational funding; and 

•  operational stage with recurrent elements of an operational series83. 

Stakeholders  agree  that  the  main  challenge  today  is  to  ensure  the  implementation  of  the 
second  and  third  stages  mentioned  above.  This  is  true  for  a  major  part  of  KSC  missions, 
including the ESA Sentinels and most of the national missions in Europe. 

The current situation presents gaps and cannot guarantee the availability and continuity of the 
whole  KSC  mission  range  and  mission  lifecycle  described  above.  The  availability  of  KSC 
missions  covering  the  third  stage  of  lifecycle,  i.e.  recurrent  elements  of  operational  series, 
should  be  specifically  considered.  This  would  imply  organising  different  funding  and 
associated procurement policies. 

83 

For instance, regarding the Sentinel missions, the recurrent units are defined as those units that follow 
after  the  completion  of  the  full  operational  capability.  In  addition,  it  is  essential  that  also  during  the 
operational  stage  R&D  elements  are  implemented,  e.g.  for  the  development  of  the  next  generation 
Sentinels, which will incur the need for R&D funds. 

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Moreover,  it  is  clear  that  at  least  four  major  functional  roles  are  required,  including 
coordination  of  infrastructure  availability,  procurement  and  operations  of  the  operational 
infrastructure,  and  R&D  for  future  infrastructure.  These  functions  need  to  be  further 
developed  or  created  for  sustaining  an  operational  European  capacity  as  shown  in  the 
following paragraphs. While the operation of national assets will clearly remain in the hands 
of respective national and commercial operators, the EUMETSAT and ESA capacities will be 
operated  by  European  public  entities  that  have  the  appropriate  mandate  and  are  technically 
capable of providing such operational services. 

There is need to identify a decision-making process which brings together all relevant GMES 
Space  Component  partners  in  Europe.  This  process  should  build  on  the  distributed 
architecture  of  the  GMES  Space  Component.  It  should  start  with  the  definition  and 
prioritisation of GMES service requirements through the general GMES governance scheme. 
Subsequently,  these  service  requirements  should  be  translated  into  mission  and  architecture 
requirements taking into consideration especially the available resources and plans for Earth 
Observation space infrastructure. ESA, as coordinator of this GMES component, should then 
develop an implementation plan to be steered and approved by the general GMES governance 
which will allocate its resources, if necessary with prioritisation decisions. At this stage, the 
GMES  Space  Component  partners  coordinated  by  ESA  should  then  proceed  with  the 
implementation following the most appropriate programmatic scheme. 

The  decision-making  process  should  take  into  consideration  the  implementation  process, 
including decision making and funding, of individual partners. Nevertheless, there is a need to 
establish a process linking the various partners enabling to reach consensus and to drive the 
implementation (including financing) process. 

Regarding financing, as the KSC capacities gradually reach the third stage of the operational 
lifecycle  (i.e.  recurrent  elements  of  operational  series),  one  major  issue  linked  to  the  long-
term  continuity  of  the  KSC  is  the  availability  of  operational  funding  sources,  notably  the 
possibility to establish operational funding from the EU budget completing future operational 
funding sources at national level. 

The precise content and costing of the KSC will drive the establishment of new operational 
budgets.  Such  issues  are  carefully  examined  in  the  long-term  implementation  plans  for  the 
GMES  Space  Component  to  be  elaborated  by  ESA  with  EUMETSAT,  Member  States  and 
other stakeholders. This process is expected to be finalised by 2009 to allow the Commission 
to fulfil its commitment to prepare proposals on the necessary EU operational budget. 

Key issues raised by Stakeholders 

•  Ensure that the KSC corresponds to the requirements of GMES services 

•  Ensure an overall programmatic approach for a full mission lifecycle with special focus 

on a sustainable approach for recurrent elements of operational series. 

•  Identify  how  Member  States  can  contribute  to  the  GMES  Space  Component  with  their 

national missions and how the continuity of these missions can be ensured. 

•  Finalise content and costing of the KSC through overall consensus of the long-term KSC 

implementation plans to be coordinated by ESA. 

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•  Identify  the  steps  towards  the  establishment  of  operating  entities  and  the  definition  of 

their role. 

•  Establish decision-making processes within the GMES Space Component and identify its 

involvement in the GMES overall governance. 

•  Establish  operational  financing  sources  and  the  associated  industrial  policy  for 

infrastructure and data. 

7.3. 

The in situ Component  

The  in-situ  observation  component  is  based  on  an  observation  infrastructure  owned  and 
operated to a large degree by the Member States, in some cases coordinated in the frame of 
European or international networks. In-situ observation activities and associated infrastructure 
derive from a range of national, EU and international regulatory requirements and agreements 
or form part of research processes. None were created to meet the needs of GMES, and they 
generally  cover  a  much  wider  field  than  the  requirements  of  GMES  services.  In-situ  data 
flows,  and  products,  are  often  inconsistent  between  different  collection  bodies,  incomplete, 
not  well-adapted  to  GMES  service  needs  (e.g.  for  near  real  time  data),  subject  to  usage 
conditions  that  can  affect  their  ready  availability,  and  dependent  on  research  funding.  They 
therefore do not have the necessary operational sustainability. 

In-situ observation data provide data not available from space sources (e.g. in the marine area, 
data  from  submersible  floats)  or  essential  reference  data  (e.g.  topographic  maps),  and  could 
also be used for calibration of space data or validation of space-based derived parameters. 

The  existing  observation  infrastructure  is  subject  to  a  complex  pattern  of  ownership  and 
management,  responds  to  a  range  of  national,  EU  and  international  regulatory  requirements 
and from numerous research processes. Many national, European and international networks 
coordinate monitoring and the analysis and consolidation of data. 

In-situ  observation  data  flows  are  highly  fragmented;  there  are  significant  gaps  in  the  data; 
there are inconsistencies between data collected by different bodies; and systems are not well 
adapted  to  GMES  service  needs  (e.g.  for  near  real  time  observation  requirements  in  some 
cases). 

Each  service  Implementation  Group  (IG)  has  produced  its  own  list  of  essential  in-situ  data 
flows.  This  process  has  demonstrated  wide  differences  between  the  requirements  of  the 
services.  Given  the  complexity  of  the  in-situ  observation  component,  the  European 
Environment  Agency  (EEA)  has  been  tasked  by  the  Commission  to  analyse  and  coordinate 
the in-situ observation data requirements of GMES. 

Discussion  among  stakeholders  of  how  to  realise  these  requirements  has  brought  to  the 
surface a number of issues, including: 

•  concerns  that  Member  States  might  not  in  practice,  and  for  various  reasons,  be  able  or 
willing to guarantee the provision of in-situ observation input and that EU funding might 
need to be considered; 

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•  a  need  for  more  clarity  about  what  environmental  communities  might  gain  from  GMES 
services in return for the provision of input, particularly as in practice their interest would 
often be in downstream services; 

•  what some regard as lack of transparency in the development of the initiative so far, and 

inadequate engagement of national authorities; 

•  the importance of quality control for input data for services. 

A service-driven approach based on the evolving GMES Services needs to be followed. This 
will require close engagement with bodies in Member States and international and European 
coordinating  bodies,  which  are  key  players  in  the  management  of  data  provision;  global  in-
situ  observation  networks;  and  channels  of  user  focus,  especially  in  ensuring  that  data  and 
products delivered by GMES services to which they contribute genuinely meet their needs – 
including for downstream services. 

The  financial  responsibility  for  most  in-situ  observation  data  gathering  and  management  is 
outside  the  EU  framework,  and  GMES  should  not  change  this.  But  funding  issues  for  new 
elements may need to be addressed in the framework of GMES funding. 

Key issues raised by Stakeholders 

•  Reviewing organisational structures and ensuring adequate engagement of environmental 

bodies as both providers of data and products, and users of services. 

•  Identifying  possible  instruments  of  coordination,  regulation  or  funding,  shared  between 

the EU and Member States, to facilitate the provision of in situ input. 

•  Identification  of  content  and  costs  of  GMES  in  situ  observation  component  through 
overall  consensus  on  the  medium  and  long  term  scenarios  under  the  coordination  of 
relevant European institutions. 

•  Identification  and  co-ordination  of  the  European  approach  on  global  in-situ  observation 

networks. 

•  Contributing  to  the  continuity  of  data  provision  and  a  mechanism  for  assessing  data 

quality. 

8. 

GMES DATA AND INFORMATION POLICY AND DATA MANAGEMENT 

The complex GMES architecture includes data and information flowing among the different 
components and from/to sources outside the GMES perimeter. In particular, the observation 
infrastructure component produces and delivers data of various processing levels and sources. 
Data from this component are regularly processed by the GMES Service component (in this 
case, there is a flow of data between the components) in order to generate information made 
available to users, including the downstream sector. 

Due  to  the  complexity  of  an  operational  GMES  architecture,  a  two-step  process  should  be 
envisaged for elaborating a GMES data and information policy, based on (i) the definition of 

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objectives  and  principles  of  a  GMES  Data  Policy,  and  (ii)  the  implementation  of  these 
objectives and principles. 

The principles of the GMES data policy are to promote the widest possible use and sharing of 
GMES  data,  to  strengthen  markets  using  Earth  Observation  (and  especially  the  European 
downstream sector) and consequently to enable growth and job creation, to contribute to the 
sustainability  of  the  provision  of  GMES  data, to  ensure  adequate  protection  of  GMES  data, 
and to support the European public sector, including its research communities. An objective 
should  then  be  that  GMES  data  should  therefore  be  fully  and  openly  accessible,  within  the 
constraints  and  exceptions  (e.g.  security  issues)  deriving  from  the  overall  GMES  legal  and 
policy  environment.  This  principle  is  not  only  compliant  with  the  INSPIRE  rules  and  in 
accordance  with  the  GEOSS  Data  Sharing  Principles,  but  also  targets  the  objective  of 
promoting the widest possible use and sharing of GMES data. 

GMES  data  are  provided  in  a  complex  legal  and  financial  environment.  Data  flows  will  be 
subject  to  binding  rules  at  national,  Community  and  international  level.  The  detailed 
implementation mechanisms for a GMES data and information policy will not only depend on 
these  legal  constraints,  but  also  on  the  governance  framework  and  financing  model  for  the 
GMES Service in question. 

Key issues raised by Stakeholders 

•  Achieve  consensus  on  the  high-level  objectives  and  principles  for  GMES  data  and 

information policy and the related financial model. 

•  Identify ways to implement data policy objectives and principles. 

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ANNEX IV 

CONSISTENCY WITH SPECIFIC COMMUNITY POLICIES  

This Annex contains an analysis of the complementarity of GMES with other EU policies in 
the field of emergency response and land monitoring.  

1. 

SUPPORT TO EMERGENCY RESPONSE SERVICES 

Monitoring and Information Centre (MIC) of the Directorate General for Environment 

The MIC, operated by the European Commission in Brussels, is the operational heart of the 
Community Mechanism for Civil Protection. Any country affected by a major disaster – inside 
or outside the EU – can launch a request for assistance through the MIC. The GMES services 
may  be  triggered  by  the  MIC  or  directly  by  the  civil  protection  authorities  of  EU  Member 
States.  The  MIC  will  be  informed  of  the  information  requested  and  received  by  civil 
protection authorities. The MIC is thus fully involved in the provision of GMES services. 

Flood and Fires Alert and Monitoring Systems 

Some  Member  States  have  developed  national  alert  systems  for  floods  and  fires.  In 
complement to those activities, two alert systems, developed by the EC Joint Research Centre 
in  collaboration  with  Member  States,  are  working  at  European  level:  the  European  Flood 
Alert  System  (EFAS)  and  the  European  Forest  Fire  Information  System  (EFFIS).  This 
information is delivered through the MIC.  

Global Disaster Alert and Coordination System 

Jointly  with  the  United  Nations,  the  Joint  Research  Centre  of  the  European  Commission 
coordinates  the  Global  Disaster  Alert  and  Coordination  System  (GDACS),  which  is  a  near 
real-time  alert  system  for  natural  disasters  (earthquakes,  tsunamis,  cyclones,  floods  and 
volcanic  eruptions)  and  a  tool  for  disaster  response.  GDACS  has  a  global,  rather  than 
European, scope and is therefore especially relevant to support external actions. Following the 
users’ requirements review at Commission services level, operational GMES services should 
interface with GDACS. 

International Charter on Space and Major Disasters ("the Charter") 

The Charter aims at providing a unified system of space data acquisition and delivery to those 
affected by natural or man-made disasters through authorised users. Each member agency has 
committed  resources  to  support  the  provisions  of  the  Charter  and  thus  helps  mitigate  the 
impact  of  disasters  on  human  life  and  property.  Unlike  operational  GMES  services,  the 
Charter  is  a  purely  voluntary  mechanism  and  therefore  cannot  replace  operational  GMES 
services in support of emergency response. 

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2. 

LAND MONITORING 

Shared Environmental Information System (SEIS) 

GMES  will  contribute  to  and  benefit  from  the  SEIS.  First  GMES  contributes  to  the 
availability  of  relevant  data/products  provided  through  its  services.  Secondly,  SEIS  will 
contribute  to  in  situ  data  flows  for  GMES  by  enabling  near  real  time  availability  of  data 
(starting with data covered by environmental legislation, the initial focus of SEIS, and later on 
EEA Reportnet datastreams, which are partly voluntary).  

Infrastructure for Spatial Information in Europe (INSPIRE) 

INSPIRE  is  based  on  a  Directive84  that  covers  spatial  data  held  by  public  authorities  in  the 
Member  States.  As  outlined  in  the  Communication,  GMES  need  to  be  compliant  with  the 
INSPIRE framework. It should be reiterated that INSPIRE does not oblige Member States to 
create new geo-spatial data sets, whereas the objective of GMES is to ensure the continuous 
availability of operational Earth observation services. 

84 

Directive 2007/2/EC of 14 March 2007. 

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ANNEX V 

ASSESSMENTS OF THE COSTS AND BENEFITS OF COMMUNITY 
INTERVENTION CONCERNING OPERATIONAL EMERGENCY 
RESPONSE AND LAND MONITORING SERVICES 

1. 

COST ASSESSMENT 

If it is assumed that the Community finances the full set of operational activities in the field of 
emergency  response  and  land  monitoring  described  in  sections  2.2.1  and  2.2.2,  the  costs  of 
GMES  initial  oeprations  for  EU  part  would  amount  to  150  M€  for  the  period  2011  –  2103, 
including  43  M€  for  research  activities  from   the  space  theme  of  FP  7  for  research  actions 
accompanying GMES initial operations (see the cost table below). 

Activities 

TOTAL 2011-2013 (in M€) 

Emergency Response services 

Land Monitoring services 

Uptake of the services by the 
users 

Data access 

GMES Space component 

TOTAL COSTS  

TOTAL COSTS FOR 
RESEARCH ACTIVITIES 
UNDER THE FP7 SPACE 
THEME ACCOMPANYING 
INITIAL OPERATIONS  

TOTAL (including FP 7) 

12 

26 

5 

24 

40 

107 

43 

150 

This envelope complements the following funding for GMES within FP 7: 

Development of Services (Marine, Atmosphere, Climate, Security),  
including data access for FP projects 

215 MEUR 

Development of Space infrastructure co-funded with ESA 

460 MEUR 

A full analysis of the total costs of GMES (including costs for national and intergovernmental 
activities and total infrastructure cost) is not possible in practice for the period 2011 – 2013, 
as  it  is  difficult  to  obtain  detailed  input  from  Member  States  in  the  available  timeframe. 
Nevertheless,  past  experience  in  previous  Corine  Land  cover  exercises  demonstrates  that 
depending on the services, the leverage of EU funding in the Member States might be up to 
1:3 (in terms of the ratio of Community budgets and national budgets). 

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A more detailed explanation of the activities that will be financed can be found below. The 
proposed  Regulation  is  targeted  at  public  and private  organisations  and  businesses  active  in 
the provision of Earth observation-based services. Following the general principle that GMES 
must  avoid  duplication  of  existing  capacities,  the  services  financed  in  the  framework  of 
GMES  Initial  Operations  complement  existing  services  based  on  US  satellite  capacity.  US 
satellite capacity could be used in certain cases to provide data for GMES services. 

1.1. 

Emergency response services 

Land  monitoring  services  include  European  mapping  service  for  Emergency  Response,  and 
product integration for emergency response. 

1.1.1.  European mapping service for Emergency Response  

European mapping service for emergency response will offer a combination of maps and/or 
various levels of pre-processed data produced at European level upon request from users: 

•  Rapid  mapping  activated  on  demand  by  users  in  case  of  crisis  event,  showing  the  extent 

and impact of the events during crisis and post-crisis phase.  

•  Other mapping on demand covering the other phases of the response cycle: risk mapping in 
support  to  the  prevention  phase,  mapping  for  the  reconstruction  phase,  or  thematic 
mapping. 

•  Reference  mapping  providing  basic  cartographic  information  as  routine  background 
production  (not  ‘on  demand’)  on  ‘hotspot  risk  areas’  to  allow  rapid  delivery  in  case  of 
crisis (less than 6 h). 

•  Validation  and  quality  control  activities  of  the  maps,  which  correspond  to  10%  of  the 

mapping production costs. 

•  Data archiving, catalogue and dissemination functions  

1.1.2.  Product integration for emergency response:  

Some user communities in the  MS have already  developed  activities  in  the  field  of  Remote 
Sensing  applied  to  Emergency  Response,  which  can  be  enhanced  with  data  provided  at  EU 
level.  This  action  will  focus  on  specific  dedicated  information  for  national  or  regional  end-
users, on the basis of raw-prep-processed data provided by EU level. 

1.2. 

Land monitoring services 

Land  monitoring  services  will  focus  on  Periodic  Land  Cover  mapping  service  on  the 
European, regional and national level, and dynamic Land monitoring activities incl. Essential 
Climate Variables in support to Climate Change monitoring. 

1.2.1.  Periodic Land Cover mapping services 

Periodic  Land  Cover  mapping  services  will  comprise  a  combination  of  three  types  of 
information (pre-processed images, reference data and multiple land cover/land use mapping 
products). It will cover: 

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•  Image pre-processing. 

•  Access  to  reference  data  at  European  level  (mainly  topographic  data  at  various  scales, 

DEM, and possibly orthophotos). 

•  Multiple Land cover/land use and land cover change products 

•  Pan-EU Land cover products  

•  Urban Atlas maps at VHR  

–  Validation and quality control activities of the  

–  Data archiving, catalogue and dissemination functions 

•  For the Pan-EU land cover/land cover change activities, an approach based on the synergy 
with activities at national or regional level could be developed. The objective would be to 
better harmonise and synchronise regional, national and European activities, and to derive 
European  products  from  the  aggregation  of  national  and  regional  inventories,  using  a 
common  object-oriented  model  based  on  the  INSPIRE  data  specifications  for  land  cover 
datasets. 

1.2.2.  Dynamic Land monitoring activities incl. Essential Climate Variables in support to 

Climate Change 

For dynamic Land monitoring activities include monitoring of Essential Climate Variables in 
support to Climate Change monitoring. It is expected to produce on an operational and daily 
basis a set of bio-geophysical parameters, in  support to the implementation of the terrestrial 
ECV's (Essential Climate Variables) defined by GCOS (Global Climate Observation System) 
and  GTOS  (Global  Terrestrial  Observing  System).  These  parameters  (Vegetation,  Surface 
radiation, Fire, Water, Snow, permafrost, soil moisture parameters) will be mostly generated 
from low/medium resolution images in Near Real Time.  

1.3. 

Auxiliary activities 

Measure to support user uptake include the following: 

•  The  implementation  of  technical  interfaces  between  users  and  services  adapted  to  the 

specific user environment (IT, procedures etc.) 

•  The validation of these interfaces in operational conditions 

•  Training of users 

•  Communication activities to disseminate information to various user communities. 

Data  access  activities  will  ensure  that  the  services  have  access  to  the  necessary  data  from 
space  mission  and  in  situ  infrastructure.  Activities  within  the  GMES  Space  Component 
include  routine  operations  of  three  space  missions  currently  developed  in  the  framework  of 
the ESAGMES Space Component Programme (Sentinels 1A, 2A, and 3A). 

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2. 

ASSESSMENT OF BENEFITS 

they  cannot  be  considered  as 

Benefits mentioned in the report are linked to the modular implementation of an operational 
GMES starting in 2008-2009 with the preparatory actions on emergency and land monitoring 
services,  and  following  them  up  with  the  2011-2013  programme.  While  they  are  indirect 
benefits,  in  the  sense  that  they  depend  on  the  actual  use  of  GMES  services  by  users  (in 
particular  public  authorities), 
the 
implementation  timing  ("merely  postponed").  A  stop-and-go  approach  (i.e.  products  tested 
with the preparatory actions disappear for a few years before being put again at the disposal in 
2014) would seriously undermine the confidence of users and therefore the materialisation of 
benefits. The Impact Assessment is based on the assumption that the relevant GMES services 
will  be  fully  operational  in  2011.  Benefits  in  this  Annex  have  been  calculated  for  option  3 
(best case scenario). As outlined in the report, the best case scenarii of Options 1 and 2 would 
have  comparable  benefits,  provided  that  the  best  case  scenarii  for  these  options  are  rather 
unlikely.  

independent  from 

2.1. 

Benefits of Emergency response service 

As outlined above, the emergency response services cover the full cycle of risk mapping in 
support to the prevention phase, mapping for the reconstruction phase, or thematic mapping. 
The benefits of operational mapping services in support of emergency service are discussed in 
more  detail  for  two  areas,  namely  response  to  floods  and  forest  fires.  In  both  cases,  the 
primary users are civil protection authorities.  

For flood response, benefits are based on the assumption that total damages can be reduced by 
a  certain  percentage  because  of  the  use  of  flood  maps.  Average  annual  flood  damage 
(calculated for the period 1980 – 2005) was around 2.2 billion € in 2005 prices 85.  

The GMES contribution to reductions in the impacts of flooding needs to be judged against 
the background of existing hydrological networks and warning systems. Such systems involve 
a  network  of  river  gauges  which  have  telemetry  links  to  flood  forecasting  centres.  As  with 
many environmental systems, these work well under normal conditions, but their performance 
can become erratic when faced with extremes.  

Information which can help to characterise the extremes is therefore very important and this is 
one  area  where  GMES  could  make  an  important  contribution.  By  delineating  the  extent  of 
floods  it  is  possible  to  make  improvements  to  the  models  which  in  turn  allow  better 
predictions, as well as improving the baseline for planning flood alleviation schemes. GMES 
could  therefore  make  an  important  contribution  to  flood  hydrology.  It  should  be  noted  that 
although GMES will include in-situ monitoring as well as space based applications, the value 
of  the  pre-existing  river  gauge  and  telemetry  networks  is  not  included  in  the  GMES 
contribution because these would continue to be operated without GMES. 

A  workshop  was  held  with  key  stakeholders  to  assess  the  extent  to  which  GMES  could 
contribute to flood forecasting and ultimately, damage cost reduction. Stakeholders suggested 

85 

To  calculate  this  number,  the  UNITE  methodology  was  used,  which  provides  an  assessments  of  the 
value of a life saved. The Value Of Statistical Life (VOSL) is taken to be €1.5M per capita. The effects 
of flood morbidity are estimated to average about 1.5 months, i.e. 0.125 of a year, allowing for some 
direct injuries and displacement as discussed above. Estimates for property damages are based on the 
EM-DAT data base, see PWC, Socio-economic analysis of GMES benefits, p 138 – 139.  

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that GMES could reduce damage, and noted that in, inputs to planning and risk management 
the context of extreme events. This assumption is regarded as conservative by the consultant 
that cirred out the assessment (PWC). This would correspond to net economic benefits of 
around €135 million in 2012 86. 

Also regarding wildfires, the benefits are based on the assumption that total damages can be 
reduced  by  a  certain  percentage  because  of  GMES.  Average  annual  wildfire  damage 
(calculated for the period 1980 – 2005) was around 141 million € in 2005 prices 87. 

GMES services could provide civil protection authorities with inputs for all stages of action in 
relation to wildfires. Prior to events, GMES could provide inputs to assessments of biomass 
available for  burning and  guidance  on  strategies for minimising risk.  During  events, GMES 
provides a fast appraisal of the fire situation which in turn allows authorities to optimise the 
fire fighting facilities at their disposal. The services also allow for damage appraisal. 

The  assessment  of  the  GMES  input  here  centres  on  the  ability  to  contribute  actively  to  the 
management  of  events  which  are  still  in  progress.  Stakeholders  noted  that  the  majority  of 
these  benefits  were  likely  to  accrue  in  Southern  Europe  where  prevalence  of  wildfires  is 
greatest. These improvements are based primarily on improvements in fire-fighting operations 
enabled  by  rapid  and  regular  situation  updates  that  GMES  provides  alongside  other  vital 
information such as weather dynamics. It is also assumed that GMES will contribute to fire 
risk  assessments  and  that  these  will  also  help  with  longer  term  counter-measures. 
Stakeholders  consulted  thought  that  GMES  could  deliver  a  1%  reduction  in  mortality, 
morbidity  and  property  damage.  This  would  correspond  to  net  economic  benefits  of 
around 9 million € in 2012 88. 

To sum up it can be said that the benefits of GMES emergency services exceed the cost 
of service provision at Community level significantly. 

2.2. 

Benefits of land monitoring service 

The  products  described  in  Annex  II  are  mostly  of  a  generic,  multipurpose  nature.  They  are 
intermediate in the sense that normally they would be used to produce more detailed thematic 
services. Consequently, it is difficult to calculate benefits of these products on a stand alone 
basis89. In the following, the benefits of selected products that would be based on the generic 
land cover products above are discussed, including 

•  agriculture and rural development; 

•  urban and regional policies; 

•  ecosystems and biodiversity – forest monitoring. 

86 
87 

88 
89 

See PWC, Socio-economic analysis of GMES benefits, p 146 – 147. 
Again, the Value Of Statistical Life (VOSL) is taken to be €1.5M per capita. Morbidity figures take into 
consideration acute health problems and chronic health problems and are estimated to average about 3 
months, i.e. 0.25 of a year. Estimates for Property damages are based on the EM-DAT data base, see 
PWC, Socio-economic analysis of GMES benefits, p 140 – 141.  
See PWC, Socio-economic analysis of GMES benefits, p 148 – 149. 
For a discussion of potential benefits of generic land cover products, see the Cost Benefit Analysis for 
the  GMES  Service  Element  SAGE  (Soil  and  Water),  prepared  by  ECORYS,  available  at 
http://esamultimedia.esa.int/docs/GMES/SAGE_C2_Ph2_V2%5B1%5D.01_29_08_04.pdf. 

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In the field of agriculture and rural development, GMES, through providing this land use 
and land cover  data  more  frequently, at higher spatial  resolution, with continuity  over time, 
could  potentially  support  the  CAP  information  requirements,  expanding  on  current  MARS 
capabilities. This would include development of indicators and progress monitoring of cross-
compliance,  agri-environmental  and  diversification  measures,  supporting  DG  Agriculture’s 
aim  to  have  a  clear  and  financially  sound  agricultural  policy.  Other  applications  of  GMES, 
including  for  example,  irrigation  pressure  mapping  and  soil  sealing  mapping  also  offer  the 
potential  for  landowners  to  enhance  yields  through  better  predictive  tools  to  manage  scarce 
resources such as water90. 

Regarding  Urban  Management,  GMES  could  enable  local  authorities  and  other  users  to 
understand  the  impacts  of  land  use  policy  better,  anticipate  trends,  develop  policies  to 
minimise  urban  sprawl/soil  sealing  and  enable  them  to  manage  the  urban  environment,  and 
the urban-rural interface in a more effective way91. Potential benefits of urban services were 
discussed  in  more  detail  in  the  Cost  Benefit  Analysis  of  the  project  GMES  Urban  Services 
(GUS)92.  GUS  is  a  predecessor  of  Urban  Atlas,  which  means  that  the  CBA  for  GUS  is  of 
relevance also for initial operational GMES services.  

In  the  GUS  CBA,  the  main  development  trends  affecting  the  future  demand  for  urban 
environmental information and spatial planning include: 

•  Increased  EU  regulation  related  to  urban  areas  impacting  the  need  for  Urban  spatial 
planning combined with increased pressure from citizens to improve life quality in urban 
areas  

•  Implementation  of  geographic  information  systems  (GIS)  and  an  increase  in  the  level  of 
sophistication  regarding  the  use  of  GIS  and  the  Internet  within  the  City  and  Regional 
administrations will continue to facilitate the development of eGovernment services to the 
citizens and indirectly act as an important driver for the use of geographical information in 
a broader sense. 

The main monetary benefits identified in the GUS CBA derive from efficiency gains within 
City  and  Regional  administrations  and  an  improved  means  of  impact  assessment  at  EU 
institutions  level,  notably  the  evaluation  of  the  implementation  of  the  EC  Structural  Funds. 
For the period 2011 – 2013, the GUS CBA foresees total benefits of around 168 million €, 
compared to overall costs of around 21 M€ 93. 

In  the  field  of  biodiversity  and  ecosystem  services,  including  forest  monitoring,  GMES 
could  potentially  help  improve  the  management  of  forests  grown  for  logging;  increase 
regeneration  through  monitoring  disturbances  and  re-growth;  and  provide  information  on 
forest indicators and land cover to improve policy making. This represents a separable impact 
from CO2 sequestration benefits through avoided deforestation. Here, the benefits are related 
solely  to  the  value  of  forest  areas  as  ecosystems  that  provide  a  range  of  direct  and  indirect 
services over the time period under consideration.  

90 
91 
92 

93 

See PWC, Socio-economic analysis of GMES benefits, p 96. 
See PWC, Socio-economic analysis of GMES benefits, p 96 – 97. 
Available at 
http://esamultimedia.esa.int/docs/GMES/URBAN_C2_Ph2_V2%5B1%5D.0_00_12_04_Final.pdf. 
See the GUS CBA, p 1, 32 and 42.  

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The economic benefits of GMES can be calculated through avoided deforestation (attributable 
to GMES) on the basis that GMES could reduce deforestation by 5%-10%. It is important to 
note  that  due  to  the  inherent  difficulty  in  separating  the  contribution  of  GMES  from  the 
potential contribution of other dependencies, this figure represents the total GMES potential 
deforestation  reduction,  rather  than  that  which  may  specifically  be  attributable  to  GMES. 
Valuing  tropical  forest  at  €105/Ha,  the  globa l  annual  economic  costs  of  deforestation  is 
calculated as €1.5 billion (2005 pr ices). Net economic benefits would thus amount to between 
€75-150 million per annum (in nominal undiscounted terms) 94. 

94 

See PWC, Socio-economic analysis of GMES benefits, p 107. 

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