CELEX: 51991PC0028
Language: en
Date: 1991-01-31
Title: PROPOSAL FOR A COUNCIL REGULATION (EEC) ESTABLISHING A FINANCIAL INSTRUMENT FOR THE ENVIRONMENT ( LIFE )

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