June 2017
Study on biodiversity financing and tracking
biodiversity-related
expenditures in
the EU budget
Final Report
Study on biodiversity financing and tracking biodiversity-related expenditures in the EU budget
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Study on biodiversity financing and tracking biodiversity-related expenditures in the EU budget Project number: ENV.B.2/ETU/2014/0031
Final Report June 2017
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LEGAL NOTICE
The information and views set out in this report are those of the authors and do not necessarily reflect
the official opinion of the Commission. The Commission does not guarantee the accuracy of the data
included in this study. Neither the Commission nor any person acting on the Commission’s behalf may
be held responsible for the use, which may be made of the information contained therein. More
information on the European Union is available at http://www.europa.eu.
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Table of contents
Executive summary ........................................................................................ 9 1. Introduction and general approach to the study .................................... 13
1.1 Context of the study 13
1.2 Objectives and general approach 15
1.3 Methodology 16
1.4 Limitations 17
2. Tracking biodiversity-related expenditure in the EU budget ................... 18 2.1 Introduction 18
2.2 Funding instruments under shared management 23
2.2.1 Partnership agreements .................................................................................................... 23
2.2.2 ERDF / CF / ESF biodiversity expenditure tracking ............................................................... 34
2.2.3 EMFF biodiversity expenditure tracking ............................................................................... 44
2.3 Funding instruments under central management 47
2.3.1 Biodiversity tracking under centrally managed instruments (excluding EAGF) ......................... 47
2.4 Funding instruments for the Common Agricultural Policy 59
2.4.1 EAGF biodiversity expenditure tracking ............................................................................... 61
2.4.2 EAFRD biodiversity expenditure tracking ............................................................................. 75
3. Absorption of EU funds for biodiversity – biodiversity funding in MFF 2007-2013 90
3.1 Biodiversity funding in MFF 2007-2013 (ex post analysis at EU level) 91
3.2 Absorption of EU funds for biodiversity – biodiversity funding in MFF 2007-2013 in selected Member States 99
3.3 Discussion: Challenges and obstacles for absorption of funds for biodiversity and options for increased funding uptake 117
4. Private financing ................................................................................ 120
4.1 Introduction 120
4.2 Methods 137
4.3 Results 138
4.4 Conclusions 187
5. Annex ................................................................................................. 194 5.1 Current tracking approaches in the EU budget (Draft Budget 2017) and share of biodiversity contributions per fund 194
5.2 Annex to section ERDF / CF / ESF biodiversity expenditure tracking 200
5.3 Annex to section Programme for the Environment and Climate Action (LIFE) 203
5.1 Detailed analysis of partnership agreements 205
5.2 Annex to section EAGF biodiversity expenditure tracking 207
5.3 Detailed tables for EAGF analysis 210
5.4 Detailed tables for EAFRD analysis 216
5.5 Annex to section on absorption capacity 221
5.6 Annex to section on private financing 224
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Table of figures
Figure 1 - Biodiversity-related expenditures in 2016 EU budget (M€) ............................................................... 9
Figure 2 - Biodiversity-related expenditures in Draft Budget 2017 (M€) .......................................................... 22
Figure 3 - Funding allocations (M€) ............................................................................................................ 25
Figure 4 - Fraction of the total ESI fund amount for 2014-2020 allocated to TO6 for each Member State ........... 25
Figure 5 - ESI funds allocations to TO6 per Member State over the 2014-2020 budget period .......................... 26
Figure 6 - Share of the total ESI fund for TO6 allocation in relation to Member States’ main land area (in km2) .. 27
Figure 7 - Number of occurrences of biodiversity-related notions at fund-level ................................................ 29
Figure 8 - TO6 allocations including biodiversity and biodiversity-related notions ............................................ 31
Figure 9 - Funding allocation for Thematic Objectives under biodiversity-relevant intervention fields .............
Figure 10 - Biodiversity-relevant expenditure of centralised direct management instruments in 2015 and 2016
(estimates) ............................................................................................................................................... 48
Figure 11 - Environmental instruments under the Common Agricultural Policy ................................................ 60
Figure 12 - Simplified scheme of the biodiversity tracking for EAGF starting from 2015 (EY) ............................ 62
Figure 13 - Proposed approach to refine tracking for biodiversity expenditures under the greening payments
illustrated on the example of ex post estimate for 2015 (detailed explanation in the text) ................................. 71
Figure 14 - Proposed refined tracking of biodiversity-relevant expenditure under green direct payments (EY) .... 74
Figure 15 - Contribution of focus areas to biodiversity-related expenditures under current tracking approach and #5
tracking level, and the gap analysis ............................................................................................................ 83
Figure 16 - Priority 4 analysis: contribution of each sampled RDP to the gap (left) and the gap per each sampled
RDP expressed as % of the current tracking approach estimate (right) .......................................................... 84
Figure 17 - Gap analysis: isolated effect of ANC measure vs. all other measures for P4 .................................. 85
Figure 18 - Effect of each measure (except M13) on the analysed gap for P4 ................................................ 86
Figure 19 - Distribution of measures’ contribution to the P4 biodiversity budget according to the current tracking
approach ................................................................................................................................................. 86
Figure 20 – EY proposition for enhancing ex-ante tracking approach for biodiversity-relevant expenditures under
the EAFRD 2014-2020 (illustrated scenario with M13 included) ..................................................................... 89
Figure 21: Contribution of ERDF and CF to biodiversity in MFF 2007-2013 by intervention field (left) with indicated
absorption rates (right) .............................................................................................................................. 92
Figure 22: Direct contribution of EAFRD to biodiversity in MFF 2007-2013 by measure (left) with indicated
absorption rates (right) .............................................................................................................................. 95
Figure 23: Indirect contribution of EAFRD to biodiversity in MFF 2007-2013 by measure ................................. 96
Figure 24: Direct (left) and indirect (right) contribution of EFF to biodiversity in MFF 2007-2013 by measure/action
............................................................................................................................................................... 98
Figure 25: Contribution of EFF to biodiversity in MFF 2007-2013 by axis (left) with indicated absorption rates (right)
............................................................................................................................................................... 99
Figure 26: Contribution of EAFRD to biodiversity in MFF 2007-2013 in Poland by measure (left) with indicated
absorption rates (right) ............................................................................................................................ 102
Figure 27: Contribution of EAFRD to biodiversity in MFF 2007-2013 In Greece by measure (left) with indicated
absorption rates (right) ............................................................................................................................ 108
Figure 28: Contribution of EAFRD to biodiversity in MFF 2007-2013 in Romania by measure (left) with indicated
absorption rates (right) ............................................................................................................................ 111
Figure 29: Contribution of EAFRD to biodiversity in MFF 2007-2013 in Denmark by measure (left) with indicated
absorption rates (right) ............................................................................................................................ 115
Figure 30 - General framework of PES programme .................................................................................... 125
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Figure 31 - General cartography of public political instruments for environment, position of PES and their variations
(adapted from (Laurans, Lemenager, and Aoubid 2011).............................................................................. 127
Figure 32 - The scope of payment for environmental services ..................................................................... 129
Figure 33 - The choice of publicly funded or privately funded PES ............................................................... 131
Figure 34 - Overview of Financing Natures of PES Projects in EU ............................................................... 138
Figure 35 - PES projects by EU Member States......................................................................................... 139
Figure 36 - Overview of the Geographic Scale of PES Project in the EU ...................................................... 139
Figure 37 - Overview of Development Stages of PES Project in EU ............................................................. 140
Figure 38 - PES Projects Distribution on Basis of Main EcoS Targeted......................................................... 140
Figure 39 - Overview of the Methodologies Used to Evaluate the Amount Disbursed in PES Projects in EU .... 141
Figure 40. Disbursement Mechanisms of PES Projects in EU .................................................................... 141
Figure 41 - Economic Sectors Involved in PES Projects ............................................................................. 142
Figure 42 - Success levels of PES Projects in EU ...................................................................................... 142
Figure 43 -Relations between Main EcoS Targeted by PES Projects and their Development Stage ................ 143
Figure 44 - Framework of the Vittel PES Programme ................................................................................. 144
Figure 45 - Framework of the Evian PES case........................................................................................... 145
Figure 46 - Field edge adopters visiting their adopted lands ..........................................................................
Figure 47 - Ecologist explaining the role of the edges ...................................................................................
Figure 48 - Framework of Adopt a Field Edge programme .......................................................................... 159
Figure 49. Slovensky Raj National Park .......................................................................................................
Figure 50 - Slovensky Raj National Park .......................................................................................................
Figure 51 - Framework of Slovensky Raj National Park PES concept .......................................................... 163
Figure 52 - Mature forests in Spain ..............................................................................................................
Figure 53 - Mature forests in Spain ..............................................................................................................
Figure 54 - Framework of Mature Forest Reserves PES programme ........................................................... 168
Figure 55 - Flood risk map in Hull City ..........................................................................................................
Figure 56 - Design of a small scale street level PES scheme ..........................................................................
Figure 57 - Framework of Hull Flood Risk PES concept .............................................................................. 172
Figure 58 - HNV landscape in Mara-Cosau-Creasta Cocosului area .................................................................
Figure 59 - PA Rooster's Crest and Morarenilor Lake ....................................................................................
Figure 60 - Cheese-making at a traditional sheepfold ....................................................................................
Figure 61 - Framework of Danube PES - Maramures Heritage Trail Scheme ................................................ 178
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List of tables
Table 1 - Funding allocated to biodiversity in the EU budget for 2015, 2016 and 2017. .................................... 20
Table 2 - Thematic Objectives set in the Common Strategic Framework and associated potential relevance to
biodiversity ............................................................................................................................................... 24
Table 3 - ESI funds contribution to biodiversity (2016 Budget) ....................................................................... 32
Table 4 - TO6 allocations for MFF 2014-2020 by ESI fund and Partnership Agreement .................................... 33
Table 5 - Intervention field with a Rio marker 2............................................................................................. 34
Table 6 - Intervention field with a Rio marker 1 ............................................................................................ 35
Table 7 - Examples of Intervention fields where application of Rio markers is challenging ................................ 35
Table 8 – Allocated budget by Member States to biodiversity-relevant intervention fields in the OPs ................. 36
Table 9 – Comparison of funding allocations under biodiversity-relevant intervention fields between regional OPs
and ETC programmes ............................................................................................................................... 37
Table 10 - Funding allocations (biodiversity relevant intervention fields 22, 85, 86, 87 and 91) under different TOs
(in EUR million) ........................................................................................................................................ 38
Table 11 - Target values for indicator CO23 (Nature and biodiversity: Surface area of habitats supported to attain a
better conservation status), in hectares, in each Member State ..................................................................... 41
Table 12 - Planned ESF expenditures under the secondary theme ‘Supporting the shift to a low-carbon, resource
efficient economy’ ..................................................................................................................................... 42
Table 13 - Estimation of contribution of ERDF and CF to financing biodiversity (2014-2020)............................. 42
Table 14 - Contribution of ERDF and CF to financing biodiversity in DB 2016 ................................................. 43
Table 15 - EMFF measures contributing to biodiversity and proposed associated Rio marker ........................... 45
Table 16 - EAGF Biodiversity budget for 2015-2016, and share of EAGF biodiversity budget in total EU biodiversity
budget and in total EU budget .................................................................................................................... 62
Table 17 - Cross compliance requirements and their relevance to biodiversity ................................................ 64
Table 18 – EAGF biodiversity expenditures related to green direct payments – comparison of various approaches
(MFF 2014-2020) ..................................................................................................................................... 72
Table 19 - Possible levels of analysis for tracking biodiversity-related ex ante expenditures in the 2014-2020 EAFRD
budget ..................................................................................................................................................... 76
Table 20 - Potential relevance for biodiversity of each focus area .................................................................. 77
Table 21 - Sample of RDPs for detailed analysis, including EU commitments and sample coverage rates (September
2015)....................................................................................................................................................... 79
Table 22 – Allocation of Rio markers to {focus area ; measure} pairs for Priority 4 and focus areas 5E and 5D, based
on the sample of RDPs (EY) ...................................................................................................................... 81
Table 23 - Outcome of the RDP sample analysis at different levels, including extrapolation to EU-28 level for #2 and
#5 tracking levels ...................................................................................................................................... 82
Table 24 – Difference between EY proposal (two scenarios) and the current tracking approach ........................ 88
Table 25 - Types of absorption capacity, adapted from P. Wostner (2008) ....................................................... 90
Table 26: Biodiversity-relevant intervention fields under ERDF and CF in MFF 2007-2013 ............................... 91
Table 27: Biodiversity financing under ERDF and CF in MFF 2007-2013 (EUR billion) ..................................... 93
Table 28: Biodiversity-relevant measures under EAFRD in MFF 2007-201392 ................................................. 94
Table 29: Biodiversity-relevant measures/actions under EFF in MFF 2007-201392 ........................................... 96
Table 30 : Biodiversity financing under ERDF and CF in Poland in MFF 2007-2013 (EUR million) .................. 102
Table 31 : Biodiversity financing under ERDF and CF in MFF 2007-2013 in Greece (EUR million) .................. 107
Table 32 : Biodiversity financing under ERDF and CF in MFF 2007-2013 in Romania (EUR million) ............... 110
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Table 33 : Biodiversity financing under ERDF and CF in MFF 2007-2013 in Denmark (EUR million) ............... 115
Table 34: Overview of biodiversity financing under ERDF, CF, EAFRD and EFF in MFF 2007-2013 ................ 117
Table 35 - Classification of Project Category .............................................................................................. 124
Table 36 - Example of analysis of the relevance of private PES to solve ecosystem mismanagement for water quality
............................................................................................................................................................. 132
Table 37 - The five PES case-studies analysed in-depth ............................................................................. 156
Table 38 - Analysis of the relevance of PES for each of the 5 in-depth case studies ...................................... 182
Table 39 - Current methodological options in the EU budget (Draft Budget 2017) and share of biodiversity
contributions per fund.............................................................................................................................. 195
Table 40 - Rio markers applied on Intervention field ................................................................................... 200
Table 41 - Detailed set of gathered data - presence of explicit biodiversity related objectives within PA fund-specific
objectives .............................................................................................................................................. 206
Table 42 - Greening payments studied ..................................................................................................... 207
Table 43 - Estimation of land share impacted by the greening payments ...................................................... 208
Table 44 - Estimation of implementation cost of the greening payments ....................................................... 209
Table 45 - Application arrangements on greening payments at MS level ....................................................... 210
Table 46 - Application arrangements on Ecological focus area at MS level ................................................... 211
Table 47 - Application arrangements on Ecological focus area at MS level ................................................... 213
Table 48 - Selection criteria for the sample of Member States to investigate absorption issues (EY)................ 221
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List of acronyms
AAP Annual Action Programme GHG Greenhouse gas
ANC Area of Natural Constraints IMP Integrated Maritime Policy
BPS Basic Payment Scheme M Measure
CAP Common Agricultural Policy MAWP Multiannual Work Programme
CF Cohesion Fund MEA Millennium Ecosystem Assessment
CFP Common Fisheries Policy MFF Multi-annual Financial Framework
CRIS Common Relex Information System MIP Multi-annual Indicative Programme
CSDF Conservation and Sustainable Development Fund NGO Non-governmental Organisation
DCI Development Cooperation Instrument OECD Organisation for Economic Co-operation and Development
DG R&I Directorate general for Research and Innovation OP Operational Programme
DG REGIO Directorate general for Regional policy P Priority
EC European Commission PA Partnership Agreement
EAGF European Agricultural Guarantee Fund PAF Prioritised Action Framework
EAFRD European Agricultural Fund for Rural Development PES Payment for Ecosystem services
EcoS Ecosystem Services PI Partnership Instrument
EFA Ecological Focus Area PSF Policy Support Facility
EFF European Fisheries Fund RDP Rural Development Programme
EMFF European Maritime and Fisheries Fund SAPS Single Area Payment Scheme
ENM Engineered Nanomaterial SFS Small Farmer Scheme
ERDF European Regional Development Fund SMEs Small and medium-sized enterprises
ES Environmental services service SMRs Statutory Management Requirements
ESF European Social Fund TO Thematic Objective
ESIF European Structural and Investment Funds VCS Voluntary Coupled Support
ETC European Territorial Cooperation
EU European Union
FA Focus areas of the EAFRD
FSC Forest Stewardship Council
GAEC Good agricultural and environmental conditions
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Executive summary
Context and objectives of the study
A lack of financing was identified as one of the major sources of failure to reach the 2010 EU biodiversity objectives.
The EU approach to finance biodiversity related priorities is mainstreaming biodiversity objectives throughout the
EU budget. Alongside increased and more effective funding from the public sector, financing from the private sector
may contribute to the fulfilment of these needs. Tracking biodiversity-related expenditures is essential to ensure
that spending can be related to policy outcomes in order to improve the effectiveness of EU and national funding,
and to fulfil the EU and Member State reporting commitments under the Convention on Biological Diversity (CBD).
The objectives of the study were to look at lessons learnt on biodiversity financing and tracking in the initial period
of the 2014-2020 budget, and to make recommendations for improvements in the coming period. Four aspects of
the financing of biodiversity were analysed in the study: (i) ex post analysis of opportunities for biodiversity funding
in the EU budget; (ii) opportunities for the private sector to finance biodiversity; (iii) first experiences of biodiversity
tracking in the main EU funding instruments (iv Organise a workshop to collect feedback from Commission services,
Member States and stakeholders on past experience and on suggestions for improvement, with a focus on the EU
budget.
Tracking biodiversity-relevant expenditure in the EU budget
The methodology chosen by the European Commission (EC) to track biodiversity-relevant expenditure in the EU
budget, as well as climate change-relevant expenditure, is to apply OECD Rio-markers to assess the share of any
given budget line, project budget, etc. dedicated to biodiversity. Rio marker 2, 1, or 0 is applied to the budget line,
based on whether the action targets biodiversity as a principal objective, significant objective or doesn't target it at
all (respectively). The relative attributions of 100%, 40% or 0% of the total budget are then used respectively to
generate amounts attributed to biodiversity based on the chosen marker. In the 2016 budget, the estimate for EU
biodiversity-related expenditure amounted to EUR 13,660 million, i.e. 9% of the total EU budget. The
implementation of the ex-ante tracking methodology is ongoing. It covers different levels – Programme Statements,
Work programme, project - of tracking and follows the recommendations of the Study on Tracking Biodiversity
Expenditure in the EU Budget (Medarova-Bergstrom et al. 2015).
Figure 1 - Biodiversity-related expenditures in 2016 EU budget (M€)
Source: EY, based on Draft Budget 2017
The current tracking methodology for centralised management funds requires further improvements
The following centralised management funds (excluding EAGF) include, to a certain extent, activities that can
contribute to the preservation of biodiversity as a principal or significant objective and represent 5% of the EU
biodiversity expenditures: European Earth Observation Programme (Copernicus), The Framework Programme for
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Research and Innovation (Horizon 2020), European Neighbourhood Instrument (ЕNI), Development Cooperation
Instrument (DCI), Partnership instrument for cooperation with third countries (PI), Programme for the Environment
and Climate Action (LIFE). The analysis of the current tracking methodology reveals that the current three levels of
biodiversity Rio markers may sometimes lead to over- or under-estimation and more nuanced application of the
markers would help to refine the process. The biodiversity tracking process is still relatively new and ensuring the
low administrative burden remains highly important, calling for synergies and exchange of knowledge in its
implementation. One potential approach to enhance its accuracy could be the application of markers at project level
through existing IT systems.
For shared management funds, the use of additional information could increase the accuracy of the tracking approach
As regards shared management funds, the European Structural and Investment Funds rely on five instruments:
the European Regional Development Fund (ERDF), the Cohesion Fund (CF), the European Social Fund (ESF) and
the European Maritime and Fisheries Fund (EMFF) and the European Agricultural Fund for Rural Development
(EAFRD). ESIF follow eleven thematic objectives (TO) for the three funds, three of which are strongly related to
biodiversity issues: TO6 (Protecting the environment and promoting resource efficiency), TO4 (Supporting the shift
towards a low-carbon economy) and TO5 (Promoting climate change adaptation, risk prevention and management).
For cohesion policy (ERDF, ESF and CF), biodiversity expenditures are followed at intervention field level which
correspond to specific actions that can be implemented through OPs. Rio markers are applied at Intervention field
level. However, given the diversity of eligible operations, the validity of the marker application for some intervention
fields will be only possible to assess ex-post. In the meantime, the current methodology could take stock of
additional existing information (contribution of the intervention field to the relevant TOs) or the targeted value for
CO23 indicator (Surface area of habitats supported in order to attain a better conservation status).
The analysis of the implementation data indicates a need for a more conservative approach in tracking biodiversity expenditures under the CAP
The contribution of the Common Agricultural Policy (EUR 11.6 billion) accounts for 83% of the total biodiversity
budget. In 2016, the EAGF (direct payments and market measures) contribution to the EU biodiversity budget
amounted to 44%, based on the inclusion of green direct payments and a 10% share of other direct payments.
Based on existing literature and discussions with relevant stakeholders, an alternative tracking approach was
proposed that relies on the land area impacted by the measures that are beneficial to biodiversity. For greening
payments, implementation data show the proportion of arable land and permanent grassland covered by measures
directly relevant to biodiversity, Ecological Focus Areas (EFA) after applying weighting factors and permanent
grassland declared as environmentally sensitive permanent grassland (ESPG), to which Rio marker 2 would apply.
This would results in a more refined, but also more conservative estimate: 2.6% of green direct payments would be
counted as biodiversity-relevant compared to 12% under the current tracking approach (based on current greening
implementation data).. Due to the lack of comprehensive insights into the effects of cross-compliance on biodiversity
and how to account for them, a conservative approach is recommended (Rio marker 0) until adequate information
and evidence necessary to develop a robust quantitative approach becomes available. For EAFRD, an analysis of
a sample of RDPs suggests that, the current tracking approach overestimates the priority 4 contribution. More
accuracy can be obtained by applying different Rio markers to measures, depending on the corresponding focus
area. Based on this refined approach, the EAFRD contribution to EU biodiversity expenditures is 38% lower in
comparison to the current approach.
Absorption and take up capacities within Member States
Funding instruments under the EU budget provide many opportunities for funding biodiversity-related projects and
the actual take-up of funding for biodiversity in each Member State depends on its real, financial,
programming/project and administrative absorption capacity1.
Increasing the current uptake rate of funding for biodiversity-related projects in the EU could increase the
funding available to achieve the EU biodiversity strategy. Evidence from the ERDF demonstrates that
1 P. Wostner (2008), The Micro-efficiency of EU Cohesion Policy, European Policy Research Paper Number 64, European Policies Research Center,
University of Strathclyde, ISBN: 1-871130-70-0, June 2008
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financing opportunities have not been exploited to their full potential by the Member States2. In order to
further investigate the potential for increased take-up across all EU financial instruments, an in-depth analysis was
conducted for four Member States with various absorption profiles. Denmark provided insights from a Member State
with relatively strong absorption capacity for biodiversity. Poland has robust co-financing and administrative capacity
but shows some potential to improve programming. Greece lacks co-financing capacity, while Romania faces
significant challenges particularly regarding administrative capacity.
The analysis highlighted the following five key challenges for absorption of funds for biodiversity in the Member
States and suggested options for increase take up. (1) The lack of preparatory actions (designation of Natura
2000 sites, preparation and adoption of management plans, basic research on the status and threats to biodiversity,
etc.) can limit the absorption of EU funds. Member States who have not yet completed preparatory actions should
step up their efforts and potentially conduct reviews of Natura 2000 sites to tackle inadequate designations, and if
necessary implement legal and governance changes (e.g. to reinforce the legal enforceability of management plans
of protected areas). (2) ESIF was judged broadly adequate for financing biodiversity if properly implemented.
Biodiversity-related projects may however require more flexible administrative management of projects (due to the
constraints of living organism: weather, seasons, etc.) and more open and flexible OPs (including in the formulation
of their objectives) to allow non-conventional biodiversity projects. (3) Biodiversity projects require adjustments
from managing authorities to promote integrated solutions and adapt to the (small) scale of projects. (4)
Communication between departments (ministries, agencies, managing authorities, protected areas
management) is essential to ensure coordination between the real needs of biodiversity conservation and EU
funds’ national or regional programming. Creating intermediate bodies and stepping up communication with national
and stakeholders can improve such communication. (5) The capacity of some beneficiaries, mostly at local and
regional level, needs to be reinforced. Such capacity building could include training activities (including outside
the planning stage of programmes), promotional activities focused on NGOs and SMEs and external application
support cost.
Private financing
Private financing for biodiversity is now contributing to the achievement of the EU targets
The EU and Member States contribute significant financial resources to the conservation of biodiversity. Private
funding for conservation could also contribute to the achievement of the targets of the EU Biodiversity
Strategy to 2020. Recent studies have concluded that nascent business areas beneficial to biodiversity face
considerable implementation and financing barriers3. Financing instruments that can engage private sector
financing include payment for ecosystem services (PES)4, private equities, green bonds, environmental certification,
biodiversity offsets and compensatory measures, licensing rights, sponsorship, etc. PES are being used in many
Member States as well as numerous third countries globally with a good degree of success. PES allow
beneficiaries of ecosystem services to remunerate providers of these services and are a rapidly expanding
approach for some complex environmental issues.
The interest for payment for ecosystem services (PES) is growing in the EU and many new concepts or pilots were identified
The analysis of PES in the EU revealed that public funding is still currently the main financial source for most
PES projects (by number of PES schemes5, 38% involved private funding). Conversely, private businesses and
individuals are the main service providers. Most PES occur at a municipality level (local) or water catchment level
that involves several municipalities (regional), with the number of national level PES schemes limited. The interest
for PES is growing in the EU and many new concepts or pilots were identified (44% of schemes identified are
between the concept and operational stage). PES in Europe tend to focus on water quality, habitats (or other
support services) or target several ecosystem services and the economic sectors involved are those relying
heavily on natural capital: Agriculture and livestock, Forestry, Water utilities, Natural area management and Tourism
and leisure.
2 European Court of Auditors (2014), Is the ERDF effective in funding projects that directly promote biodiversity under the EU biodiversity strategy
to 2020? 3 Dickie et al. (2012), Innovative use of financial instruments and approaches to enhance private sector finance of biodiversity
4 “Payments for Ecosystem Services” are also known as “Payments for Environmental Services”.
5 Data on financial flows were not available for a sufficient number of PES.
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PES can be very efficient tools for biodiversity management provided certain conditions are fulfilled
PES can be very efficient tools to solve ecosystem management issues, for instance to improve water
purification through better watershed management (as illustrated by the Evian and Vittel cases in France).
However, they require several pre-conditions such as an enabling regulatory environment, adequate
capacity to manage the target ecosystem from relevant stakeholders and the existence of demand and
willingness to pay for the ecosystem services at the intended location.
When these pre-conditions are met, a clear business case for the private sector exists when the private
company is dependent on the ecosystem service for its business model. One or a few private companies receive
a significant share of the total ecosystem service benefit decreasing the incentive for others to free ride and
ensuring that transaction costs are manageable.
Several recommendations can be made to enhance the effectiveness of PES on biodiversity and account for their contribution to the biodiversity related expenditures tracking
Several recommendations were formulated by the study. Among them, three of the key recommendations were: (1)
Consider the possibility of establishing quantified EU targets to cover “non-water” ecosystem services in
a manner similar to the Water Framework Directive targets for good ecological status of water bodies. (2) Consider
a refinement or revision of existing instruments of the EU (e.g. the Green Direct Payments in the next reform
of the CAP) to increase their effectiveness to provide specific agricultural related ecosystem services such as
watershed management, pollination, etc. (3) Track ongoing PES programmes at local / regional / national level
and consider developing a database to assess their effectiveness and identify best practices.
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1. Introduction and general approach to the study
1.1 Context of the study
Introduction to Biodiversity financing
Though difficult to assess precisely, the cost of no action to prevent the loss of biodiversity and associated
ecosystem services provides a strong rationale for policy makers to act to prevent this loss. In 2008, the global cost
of policy inaction was estimated at 14 trillion Euros by 20506. In addition, numerous assessments7 indicate that the
benefits of biodiversity actions exceed by far their costs. These facts show the necessity of ensuring adequate and
effective funding for biodiversity conservation and restoration.
A failure to reach 2010 objectives to the 2020 Biodiversity Strategy
The 2006 EU Biodiversity Action plan, organised around 10 main objectives, led to the implementation of
successful actions, with long term achievements and consequences – such as an improvement towards the
completion of the Natura 2000 network and the broadening of the LIFE + Nature & Biodiversity component.
However, the plan was not entirely fulfilled and hence the target of halting the loss of biodiversity by 2010 was not
reached. One of the identified major reasons for not reaching the overall target was a lack of financing. The 2010
Assessment of implementing the EU Biodiversity Action Plan called therefore for more progress to be made on
making available the necessary funding8.
Eventually, missing the 2010 objectives allowed the
European Union to build the starting point for a
stronger, wider set of objectives for 2020,
capitalising on the lessons learnt from the
implementation of the 2006 Biodiversity Action Plan.
The EU 2010 biodiversity baseline will henceforth
act as a reference point for subsequent actions on
strategic plans, providing for measuring and
monitoring progress achieved on the road towards
reaching the targets of the EU 2020 Biodiversity
strategy. The latter is defined through six priority
targets declined in 20 actions.
Target 2 of the strategy requires that 'by 2020,
ecosystems and their services are maintained and
enhanced by establishing green infrastructure and
restoring at least 15% of degraded ecosystems' and
includes actions to implement an EU Green
Infrastructure Strategy and an initiative to achieve no net loss of biodiversity and ecosystem services. Other targets
require full implementation of the EU Birds and Habitats Directives (Target 1), increasing the contribution of
agriculture and forestry to maintaining and enhancing biodiversity (Target 3), ensuring sustainable fisheries (Target
4) and combating invasive alien species (Target 5). In addition, the EU committed to double the international
6 EC report (2008). ‘The Cost of Policy Inaction (COPI): The case of not meeting the 2010 biodiversity target’
7 See analyses and syntheses performed by The Economics of Ecosystems and Biodiversity (TEEB)
8 Report from the Commission to the Council and the European Parliament (2010): ‘The 2010 assessment of implementing the
EU Biodiversity Action Plan’
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resource flows to developing countries allocated to halting the loss of biodiversity, which requires sufficient
resources for EU external instruments (Target 6).
All of these targets, and the actions within them, are dependent on securing resources for natural capital
investments. One of the barriers to halting the loss of biodiversity and ecosystem services is however a shortage
of finance for investment in natural capital.
EU finance for natural capital investment has focused in the past on grant funding, through the LIFE programme
and other funds such as the CAP and European Structural and Investment Funds. However, closing the funding
gap depends on attracting new sources of finance, including private sector finance, through means such as
Payments for Ecosystem Services and finance for business models that enhance biodiversity and ecosystem
services. In this sense, the conclusions of the European Council of October 14th, 20109 recalled that the
implementation of the post-2010 policy framework will require increased resources including ‘the use of innovative
financial mechanisms both for public and private funding such as the reform, elimination and reorientation of those
subsidies harmful to biodiversity, payments for ecosystem services, […]’. In this context, a study was lead in 2012
proposing a set of possible policy interventions on the EU scale to lower market barriers that make financing
biodiversity and ecosystem services poorly attractive for private investors. It explored innovative financing
instruments in cooperation with other institutions such as the European Investment Bank (EIB). The establishment
of the Natural Capital Financing Facility (NCFF) by the EIB and the EC came in response to these previous
analyses, addressing the barriers to the uptake of natural capital projects by demonstrating how biodiversity
preservation can generate revenues or cost reductions.
How to use the EU budget for biodiversity in the most efficient manner – the importance of tracking public expenditures
In addition to the provision of increased resources, another necessary condition to achieve the 2020 Biodiversity
Strategy goals is the efficient and effective use of these resources, be it via the main funding instruments or through
external action funding. Evaluating the effectiveness of the current state of biodiversity expenditures (such as the
level of absorption of a fund) is a prerequisite for determining where changes and improvements are needed in
terms of additional spending (including private), different frameworks and increased take-up in other policies. As
shown in previous studies based on the 2007-2013 budget period10, there is a need to improve the effectiveness of
the EU funding model, in particular the uptake of the existing possibilities at the Member State level show potential
for improvement.
Indeed, in a vital need of getting the most for biodiversity out of each euro, tracking how much is spent is necessary
in order to evaluate the effectiveness of spending and correctly prioritize future expenditures.
Policy makers are widely used by organizations and countries in order to track specific policy elements and the
related expenditures and help fulfil international reporting requirements. An example for policy makers are the ‘Rio
markers’, used by the OECD to track aid targeting the Rio conventions. Making a tracking system operational for
the EU Budget is a matter discussed also for other policy areas. The current European Commission's tracking
approach is based on a modified version of the OECD Rio markers methodology. The 2014 study supporting DG
CLIMA in further developing the methodology for tracking climate change related expenditure11 underlines a set of
important issues to be taken into account while creating an appropriate methodology, compatible with stakes,
external financing and the level of information and control expected to reach. With other DGs working on the same
methodology and obtaining experiences of tracking, the sharing of good practice, limitations and desirable evolution
will allow the tracking method for biodiversity-related expense to quickly grow in accuracy and relevance. The
quoted study stresses the potential difficulty to implement an ex-post system able to capture the actual effects of
9 Council of the European Union (2010): ‘Preparation of the tenth meeting of the Conference of the Parties to the Convention on
Biological Diversity (Nagoya, Japan, 18-29 October 2010) – Council conclusions’ 10
Examples: IEEP for the WWF (2009): ‘Biodiversity & the EU Budget – making the case for conserving biodiversity in the context of the EU Budget Review’. ENEA-MA Working Group on Biodiversity and Cohesion Policy – Final Reporting, Presentation Budapest April 2011.
11 IEEP et al. for the European Commission, DG CLIMA (2014): ‘Tracking system for climate expenditure in the post-2013 EU
budget: Making it operational’
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the activities and projects funded, by linking financial data and relevant environmental indicators. A strong expertise
allying private finance, public expenditures and environmental management knowledge then appears inevitable in
order to capture the complexity of the problem examined. The fact that different DGs are currently implementing
tracking methods for their expenditures implies a need for common rules on how to track different issues-related
expenditures, so that the tracking tool is compatible with shared-management funds' issues. Hence the construction
and evolution of the tracking systems is a central challenge towards better biodiversity financing.
1.2 Objectives and general approach
Objective of the study
The objectives of the study is twofold:
to look at lessons learnt on biodiversity financing and tracking in the first months of the 2014-2020 budget,
and
to make recommendations for improvement in the coming period.
This assignment follows up the 2014 study12 which outlined an approach for tracking the biodiversity related
expenditure in the EU budget across different EU funding instruments. This complementary study evaluates
experience of tracking so far. It looks at the first results of the tracking approach in the MFF 2014-2020, based on
the available data regarding the programmes' implementation. It also looks back at the MFF 2007-2013 and takes
stock on biodiversity financing and analyses the absorption of available funding streams, where the availability of
data permitted. Finally, the study also investigates the potential of private financing for biodiversity.
The expected result is to propose potential avenues to improve and refine the current tracking approach for the
coming years.
If the general objective is to improve the tracking of biodiversity expenditures in the EU budget and enhance
understanding biodiversity financing opportunities, three aspects of the objective were investigated during the
study:
Track biodiversity related expenditures in the EU budget: the study lists the EU opportunities to finance
actions with benefits to biodiversity and analyses the accuracy of the current approach to track biodiversity
(chapter 2);
Funding opportunities for biodiversity in the EU budget and avenues for an increased uptake in Member
States and their absorption capacity: although opportunities to finance biodiversity exist in the EU
budget, Member States’ capacity to seize them depend on many factors (section 2.5 of chapter 2
“Absorption of funds for biodiversity and take up in the Member States”).First, a general overview of the
funding uptake is provided at the EU level for biodiversity-relevant shared-management funds (ESIF) in
MFF 2007-2013 followed by an analysis for selected Member States to look more deeply at absorption
and potential avenues for increased uptake.
Identify opportunities in the private sector to finance biodiversity: alongside public funding
opportunities, the study explores the potential of private sector regarding payments for ecosystem services
(chapter 4).
Structure of the report
Chapter 2 explores biodiversity expenditures for each funding instrument of the EU budget. A section of
this chapter is dedicated to the CAP;
Chapter 3 focuses on absorption and take up of biodiversity funding in the Member States.
Chapter 4 investigates opportunities from the private sector to finance biodiversity.
12
a. Kettunen, M., Illes, A., Hart, K., Baldock, D., Newman, S., Rayment, M., Sobey M. and Medarova-Bergstrom, K. (2014) Tracking Biodiversity Expenditure in the EU Budget, Final Report for the European Commission – DG ENV, Institute for European Environmental Policy, London/Brussels
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Annexes of the document present the detailed analyses for each section.
1.3 Methodology The study was based on a variety of tools to feed the analysis:
- An in-depth literature review;
- Data mining based on ESIF data;
- Interviews with EU services responsible for tracking biodiversity;
- A workshop on private biodiversity financing collecting information from stakeholders and discuss the
preliminary results (29 participants from private sector and civil society organisations);
- A general workshop presenting preliminary study results to wide range of stakeholders (80 participants
from public administration, academia and civil society organisations).
Tracking biodiversity related expenditures in the EU budget
The analysis of the current tracking approach strongly depended on the availability of data. Three categories of
instruments were analysed:
The EU centralized managed instruments: the study explored the current tracking approach and performed
an in-depth review of existing literature for each instrument in order to identify potential risks of over- or
underestimation in the current approach.
The EU shared managed instruments (ESIF): the study took stock of the partnership agreements, OPs
and SFC data to perform quantitative analysis on the contribution of each programme to biodiversity and
identify ways to improve the accuracy of current tracking approach.
A dedicated analysis was performed on CAP funding instruments (EAGF and EAFRD): an in-depth review
of existing literature resulted in proposing potential avenues to improve current tracking approach,
including through an in-depth analysis of a sample of 17 RDPs.
Absorption and take up capacities within Member States
The EU budget provides many opportunities for funding biodiversity-related projects in Member States and the
actual take-up of funding for biodiversity in each of them depend on their absorption capacity. Wostner provided a
useful classification of different level of absorption capacities which was used in this study13. This classification
distinguishes the real absorption capacity (real needs and availability of the production factors), the financial
absorption capacity (capacity of co-financing by the beneficiaries of the funds and the Member States), the
programming/project absorption capacity (relevance of the strategy and programme, preparation of project
documentation) and the administrative absorption capacity (administrative capacity of the public administration
and the applicants to prepare, manage, supervise and implement projects).
A screening of all Member States was conducted in order to select four of them for further investigation. The analysis
aimed to screen Member States interesting in terms of absorption of EU funds to support biodiversity conservation
but very few indicators directly related to take-up of funds for biodiversity were available so proxies were
used. These proxies included the absorption rate of adopted OPs for Cohesion Policy in 2013 and 2015, for 2007-
2013 budget period, the EU Co-financing rates for ERDF and Cohesion Fund in 2007 and in 2013, the share of
environmental expenditure in the expenditure of several instruments, etc.
This preliminary screening was completed with additional criteria to ensure the four Member States selected
would provide a balanced picture in terms of geographical representation across the EU (EU 13 / EU 15), size
of Member State and management types of operational programmes (centralised / regionalised). The choice of
Denmark, Greece, Poland and Romania balanced these criteria and included both Member States with high
absorption rates and lower absorption rates.
13
P. Wostner (2008), The Micro-efficiency of EU Cohesion Policy, European Policy Research Paper Number 64, European Policies Research Center, University of Strathclyde, ISBN: 1-871130-70-0, June 2008
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For each of the four selected Member States, an in-depth literature review was completed by interviews with
key stakeholders among central and local authorities in charge of the programming and administration of EU funds
in their country as well as beneficiaries of such funds (e.g. nature conservation NGOs).
Private financing
An extensive scientific and grey literature review was conducted to produce a “PES database” for the
project: it lists 154 potential PES projects in the EU. Among them, 131 PES and PES-like cases were identified and
kept for the rest of the analysis.
A first screening phase led to the collection of key information for all the identified projects based on the last
publicly available reports identified. The results of this overview provide macro-trends (e.g. rough percentages
should be relatively accurate) but cannot be used for a precise analysis due to data limitations.
Additional data were then collected for a shortlist of projects, based on the following criteria: “Privately
financed” and “Public Private Partnership” projects, economic sectors involved, ecosystems involved and Member
States. Well-known cases such as Vittel and Evian were excluded from the shortlist, although secondary data was
also collected for these projects.
Five projects were selected among this shortlist, in Romania, the Netherlands, Spain, Slovakia and the United
Kingdom. Additional data was collected (including through interviews) to produce five in-depth case
studies.
To further refine the analysis, a workshop on private finance for biodiversity conservation and PES was
organized in the context of this study.
1.4 Limitations The initial aim of the study was to look at first results of the tracking application and to see how closely the current
approach reflects real expenditure on the ground. However due to delayed implementation of programmes, and
therefore lack of ex-post data, the focus was redirected towards fine assessment of ex ante tracking approaches
under certain instruments, based on available programming information at the time of the analysis..
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2. Tracking biodiversity-related expenditure in the EU budget
2.1 Introduction The analysis performed in this chapter addresses the following questions:
a. What have the Member States and the EC planned for biodiversity within the various programmes
(instruments under shared and centralized management)?
b. How are these planned efforts translated into concrete actions by the Member States or regions (e.g. within
the operational programmes for instruments under shared management)?
A preliminary assessment of the funds allows to select most relevant programmes with regard to their potential
effect on biodiversity.
Overview of the current tracking methodology
The European Commission uses Rio markers to assess its biodiversity and climate-relevant spending and provide
statistical reports to the OECD-DAC, like many other donors. The figure below illustrates the Rio-marking procedure
and how to account for the amount of funding allocated to the environmental themes.
The methodology chosen by the European Commission (EC) to track biodiversity-relevant expenditure in the EU
budget, as well as climate change-relevant expenditure, is to apply OECD Rio-markers to assess the share of any
given budget line, project budget, etc. dedicated to biodiversity. Rio Marker 2, 1, or 0 is applied based on whether
the action targets biodiversity as a principal objective, significant objective or does not target it at all (respectively).
The relative attributions of 100%, 40% or 0% of the total budget are used to generate the reported amount attributed
to biodiversity based on the three Biodiversity Rio Markers (respectively).
Ex ante tracking consists of assigning a Rio market 0, 1 or 2 to a given line in the EU budget to calculate the
potential contribution to biodiversity based on its objectives, whereas ex-post tracking take stock of the implemented
projects and policies to adjust the effective contribution of each budget line to biodiversity. Further information on
this methodology can be found in the 2014 report “Tracking Biodiversity Expenditure in the EU Budget” of Institute
for European Environmental Policy14.
14
a. Kettunen, M., Illes, A., Hart, K., Baldock, D., Newman, S., Rayment, M., Sobey M. and Medarova-Bergstrom, K. (2014) Tracking Biodiversity Expenditure in the EU Budget, Final Report for the European Commission – DG ENV, Institute for European Environmental Policy, London/Brussels
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Table 1 summarises the latest figures for fund contribution to the biodiversity budget (columns (A)) for financial
years 2015, 2016 and 2017 (draft budget) based on methodologies which are currently adopted by the European
Commission (current tracking methodology). For a considered financial year, Columns (B) and (C) respectively
show the share of each fund in the total biodiversity budget and the total EU budget.
Historic development of European use of “Rio markers”
Following the Rio Earth summit in 1992 and the establishment of Rio conventions, the
OECD-DAC (Development Assistance Committee) in close collaboration with the
Secretariat of the United Nations Framework Convention on Climate Change
(UNFCCC) introduced “Rio markers” to measure and monitor support to developing
countries to implement the objectives of the Rio conventions: climate change
adaptation, climate change mitigation, biodiversity and desertification. A scoring system
of three values has been designed, in which development co-operation activities are
“marked” as targeting the environment or the Rio Conventions:
- as the “principal" objective (Rio marker 2);
- or a “significant" objective (Rio marker 1),
- or as not targeting the objective.
They indicate donors’ policy objectives in relation to each aid activity.
“Rio-markers” were defined to be descriptive rather than quantitative, however they are
currently used to give an approximation of financial contribution to Rio convention’s
objectives. The European Commission uses the Rio-markers’ methodology to assess
its biodiversity contribution. The following percentages have been assigned to each “Rio
marker”:
A percentage of 100% is used for activity with a Rio marker score of 2
A percentage of 40% is used for activity with a Rio marker score of 1
A percentage of 0% is used for activity with a Rio marker score of 0
The European Commission uses the following definition to describe “principal” and
“significant” objectives:
A “principal” objective “must be explicitly stated as fundamental in the design of, or the motivation for, the action. Promoting the objective will thus be stated in the
activity documentation to be one of the principal reasons for undertaking the action.
In other words, the activity would not have been funded (or designed that way) but
for that objective”.
A “significant” objective “must also be explicitly stated, but is not the fundamental driver or motivation for undertaking and designing the activity. The activity has other
prime objectives but has been formulated or adjusted to help meet the relevant
environmental concerns”.
Source: DG International cooperation and development
http://capacity4dev.ec.europa.eu/public-environment-climate/minisite/2-tools-and-
methods/short-guide-use-rio-markers
http://capacity4dev.ec.europa.eu/public-environment-climate/minisite/2-tools-and-methods/short-guide-use-rio-markershttp://capacity4dev.ec.europa.eu/public-environment-climate/minisite/2-tools-and-methods/short-guide-use-rio-markers
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Table 1 - Funding allocated to biodiversity in the EU budget for 2015, 2016 and 2017.15
Fund
DB2017 DB2017 DB2017 2016 2016 2016 2015 2015 2015
M€ %
biodiversity
% total
M€ %
biodiversity
% total
M€ %
biodiversity
% total
(A) (B) (C) (A) (B) (C) (A) (B) (C)
European Earth Observation and Monitoring Programme (Copernicus)
107,8 0,9% 0,1% 103,7 0,7% 0,1% 8,1 0,1% 0,0%
Horizon 2020 - The Framework Programme for Research and Innovation
51,9 0,4% 0,0% 200,8 1,4% 0,1% 138,4 1,2% 0,1%
HEADING 1a — COMPETITIVENESS FOR GROWTH AND JOB
159,7 1,3% 0,1% 304,5 2,2% 0,2% 146,5 1,3% 0,1%
European Regional Development Fund (ERDF)
861,1 6,8% 0,6% 808,6 5,8% 0,5% 934,9 8,4% 0,6%
Cohesion Fund (CF) 682,2 5,4% 0,4% 660,2 4,7% 0,4% 766,1 6,9% 0,5%
HEADING 1b — COHESION POLICY
1 547,3 12,2% 1,0% 1 468,8 10,5% 1,0% 1 701,0 15,3% 1,1%
European Agriculture Guarantee Fund (EAGF)
6 063,8 48,0% 3,9% 6 030,1 43,2% 4,0% 3 272,7 29,5% 2,1%
European Agricultural Fund for Rural Development (EAFRD)
4251,0 33,6% 2,8% 5 529,0 39,6% 3,7% 5 332,8 48,1% 3,4%
European Maritime and Fisheries Fund (EMFF)
136,0 1,1% 0,1% 134,0 1,0% 0,1% 199,0 1,8% 0,1%
Programme for the Environment and Climate Action (LIFE)
248,2 2,0% 0,2% 236,9 1,7% 0,2% 221,7 2,0% 0,1%
HEADING 2 — SUSTAINABLE GROWTH: NATURAL RESOURCES
10 669,0
84,6% 7,0% 11
930,0 85,5% 7,9% 9 026,2 81,3% 5,7%
European Neighbourhood Instrument (ЕNI)
60,7 0,5% 0,0% 76,2 0,5% 0,1% 51,3 0,5% 0,0%
Development Cooperation Instrument (DCI)
174,3 1,4% 0,1% 177,2 1,3% 0,1% 165,8 1,5% 0,1%
Partnership Instrument for cooperation with third countries (PI)
3,5 0,0% 0,0% 3,4 0,0% 0,0% 7,0 0,1% 0,0%
15
European Commission (2015), Draft General Budget of the European Union for the financial year 2016, COM(2015) 300 available at: http://ec.europa.eu/budget/library/biblio/documents/2016/DB/DB2016_WDIB_en.pdf and European Commission (2016), Draft General Budget of the European Union for the financial year 2017, available at: http://ec.europa.eu/budget/library/biblio/documents/2017/DB2017_WD01_en.pdf
http://ec.europa.eu/budget/library/biblio/documents/2016/DB/DB2016_WDIB_en.pdfhttp://ec.europa.eu/budget/library/biblio/documents/2017/DB2017_WD01_en.pdf
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HEADING 4 — GLOBAL EUROPE
238,5 1,9% 0,2% 256,8 1,8% 0,2% 224,1 2,0% 0,1%
Total 12 644
,5 100,0
% 8,2%
13 960,1
100,0%
9,2% 11
097,8 100,0
% 7,0%
Given total commitments
153 752,8
151
241,6 158
276,0
(A) Funding allocated to biodiversity, in million euros, (B) Fraction of total funding allocated to
biodiversity, in percent, (C) Fraction of total annual commitments, in percent
Budget figures (i.e. ex-ante figures) show a high heterogeneity between instrument contributions compared to the
total biodiversity budget. For instance, the biodiversity-budget of the European Structural and Investment Funds
(ESIF; €13 billion in Draft Budget 2016), and in particular the instruments of the Common Agricultural Policy (EUR
11.4 billion, or 83% of the total biodiversity budget) weigh significantly more than EU centrally-managed instruments,
including the Programme for the Environment and Climate Action (LIFE; EUR 0.2 billion in Draft Budget 2016).
In accordance with the study by Medarova-Bergstrom et al. (2014)16, the methodology for biodiversity-related
budget tracking relies heavily on the use of Rio markers (as defined by the OECD17). Figure 2 provides a summary
of the use of Rio markers in the currently agreed upon methodology used in Draft Budget 2016). A full description
of the current methodologies, as well as a summary of the share each fund has allocated to biodiversity, is provided
in Table 39 the annex.
In-depth assessment of funding instruments’ contribution to biodiversity
The 2017 draft EU budget shows a high heterogeneity between different instruments' contributions to the total
biodiversity budget: the biodiversity-budget of the Common Agricultural Policy (EUR 11.6 billion) accounts for
around 83% of the total biodiversity budget, vs. 11% for the cohesion policy (ERDF and CF). Thus the study zoomed
specifically into tracking approaches under EAGF and EAFRD to provide additional insights into its accuracy and
potential avenues for improvement.
16
Medarova-Bergstrom et al..(2014) Tracking Biodiversity Expenditure in the EU Budget, Part I – Guidance on definition and criteria for biodiversity expenditure in the EU budget, Final Report for the European Commission – DG ENV, Institute for European Environmental Policy, London/Brussels
17 OECD (2009) Measuring and targeting the objectives of the Rio Conventions.
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Figure 2 - Biodiversity-related expenditures in Draft Budget 2017 (M€)
Source: EY, based on Draft Budget 2017
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2.2 Funding instruments under shared management
2.2.1 Partnership agreements
Regulatory context
The European Structural and Investment funds (ESI funds) are governed by a Common Strategic Framework setting
a common approach for the European Regional Development Fund (ERDF), the European Social Fund (ESF), the
Cohesion Fund, the European Maritime and Fisheries Fund (EMFF) and the European Agricultural Fund for Rural
Development (EAFRD)18.
Aside from fund-specific requirements set for the 2014-2020 budget period19, the Common Strategic Framework
required National Authorities to prepare Partnership Agreements (PAs) consisting of strategic plans with investment
priorities covering these five ESI funds, to be submitted before 22 April 201420. Before being negotiated with the
European Commission, the PA shall be the result of consultation at various levels of governance, representatives
from interest groups, civil society and local and regional representatives. The goal is to ensure a more strategic and
complementary use of different sources of EU funding, and to combine and simplify their use for a better impact on
growth and jobs.
The planning schedule however set a submission deadline so early that ESI fund-specific budgets could not be
submitted nor adopted at the time of PA submission.
Eleven thematic objectives were defined21, for which Partnership Agreements were required to disclose the following
information, inter alia:
A summary of the main results expected for each of the ESI Funds for each of the selected thematic
objectives;
The indicative allocation of support by the Union at national level for each of the ESI Funds by thematic
objective, as well as the total indicative amount of support envisaged for climate change objectives22.
Limitations for biodiversity-related expenditure analysis at TO level
These requirements involve a quantitative breakdown of Thematic Objectives allocations (TO)
per fund, as well as qualitative information on the expected results for each of the ESI funds. Consequently,
qualitative information is in general insufficiently detailed to consider setting Rio markers at TO level.
A summary of TOs is provided in Table 2. Potential contribution of TO to biodiversity is highly variable: while TO6
“Preserving and protecting the environment and promoting resource efficiency” is directly related to biodiversity, a
number of other TOs (in particular TO4 and TO5, and to a lesser extent TO1, TO3, TO8, TO9) are likely to include
biodiversity measures that would require further examination at an investment priority level (based on Medarova-
Bergstrom et al. - 201523).
The two previous paragraphs imply that based on PA analysis, information on biodiversity-related expenditures can
only be considered with a satisfactory level of confidence from TO6 allocation per Member State for the 2014-2020
budget period. In addition, a comparison between 2007-2013 and 2014-2020 figures would not provide consistent
conclusions, since the breakdown for the ESI fund allocation into TOs evolved from former priority themes (defined
in Regulation No 1826/200624) in the 2007-2013 budget to the eleven TOs in the 2014-2020 budget.
18
Regulation (EU) No 1303/2013; article 10 19
In particular Cohesion Fund: Regulation (EU) No 1300/2013; European Fund for Regional Development: Regulation (EU) No 1301/2013; European Social Fund: Regulation (EU) No 1304/2013; European Agricultural Fund for Rural Development: Regulation (EU) No 1305/2013
20 Regulation (EU) No 1303/2013; article 14
21 Ibid; Article 9
22 Ibid, Article 15.
23 Medarova-Bergstrom et al. (2015) Tracking Biodiversity Expenditure in the EU Budget, Part II – Fund specific guidance documents, Final Report
for the European Commission – DG ENV, Institute for European Environmental Policy, London/Brussels 24
Regulation (EC) No 1828/2006
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Table 2 - Thematic Objectives set in the Common Strategic Framework and associated potential relevance
to biodiversity
Thematic Objective a Potential relation to
biodiversity b c Level of identification
TO1 Strengthening research, technological development and innovation Indirect – Lower probability Investment priorities
TO2 Enhancing access to, and use and quality of, ICT; - -
TO3 Enhancing the competitiveness of SMEs, of the agricultural sector (for
the EAFRD) and of the fishery and aquaculture sector (for the EMFF);
Indirect - Lower probability Investment priorities
TO4 Supporting the shift towards a low-carbon economy in all sectors; Indirect – Higher probability Investment priorities
TO5 Promoting climate change adaptation, risk prevention and
management;
Indirect – Higher probability Investment priorities
TO6 Preserving and protecting the environment and promoting resource
efficiency;
Direct TO
TO7 Promoting sustainable transport and removing bottlenecks in key
network infrastructures;
Indirect – Lower probability -
TO8 Promoting sustainable and quality employment and supporting
labour mobility;
Indirect - Lower probability Investment priorities
TO9 Promoting social inclusion, combating poverty and any discrimination; Indirect - Lower probability Investment priorities
TO10 Investing in education, training and vocational training for skills and
lifelong learning;
Indirect – Lower probability -
TO11 Enhancing institutional capacity of public authorities and stakeholders
and efficient public administration
Indirect – Lower probability -
a Regulation (EU) No 1303/2013 of 17 December 2013; Article 9
b Medarova-Bergstrom et al. (2015) Tracking Biodiversity Expenditure in the EU Budget, Part II – Fund specific guidance documents, Final Report for
the European Commission – DG ENV, Institute for European Environmental Policy, London/Brussels
c “Direct”: TO directly related to biodiversity; “Indirect”: Through Investments priorities, either associated with “higher likeliness“ of identifying biodiversity-
related expenditures in the investments priorities, or with “lower likeliness” ; “-“: low likeliness of identifying biodiversity-related expenditures both through
the TO and associated investment priorities.
Preliminary assessment of partnership agreements
Comparison of contributions of ESI funds to TO6: a strong contribution from EAFRD and CF
Figure 3 provides a comparison between the share of the contribution of each ESI fund to the TO6 allocation and
total allocations for the 2014-2020 budget period. As expected, it highlights important differences in contribution to
TO6 between funds; main results include:
While being a major contributor to the total ESI fund allocation (EUR 83 919 million, i.e. 20%), the
European Social Fund is not associated with any TO6 allocation
The European Agricultural Fund for Rural Development and the Cohesion Fund significantly contribute to
the TO6 (44% and 28% respectively ) in comparison with their overall share in the total ESI allocation (22%
and 14% respectively)
The European Regional Development Fund contributes significantly less to the TO6 allocation (25%) than
to the total ESI allocation (43%)
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The European Maritime and Fisheries Fund is associated with lower contributions; it contributes a share
of 3% to the TO6 and 1% of total ESI funds.
Figure 3 - Funding allocations (M€)
Source: Partnership agreements
Comparison of MS-level allocations to the TO6: the average allocation of budget to the TO6 in partnership agreements amounts to 14%
Figure 4 below displays the fraction of the total ESI fund amount allocated to the TO6 for each Member State in the
2014-2020 Partnership Agreements. Main features include:
TO6 fractions span a wide range of values from 9% (Estonia) to 43% (Finland)
Only two Member States are associated with values above 30% (Malta: 30% and Finland: 43%); the
average EU-28 value amounts to 14%.
Figure 4 - Fraction of the total ESI fund amount for 2014-2020 allocated to TO6 for each Member State
Source: EY based on data collected from Partnership Agreements presented in Table 4 (European Commission DG REGIO website – June 2015)
15 416
184 665
26 723
95 927
083 919
17 064
61 500
1 594 4 256
0%
20%
40%
60%
80%
100%
TO6 Total
EMFF
CF
ESF
EAFRD
ERDF
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Figure 5 shows the absolute amount allocated to the TO6 by each Member State and for each ESI fund in its
Partnership Agreement. It must be underlined that the major contributors do not necessarily have the highest share
of the total ESI budget allocated to TO6 (e.g. on one hand, Romania and France rank second and third respectively
in the EU-28 share, but allocate only slightly less than 20% of their total ESI funds allocation to the TO6; on the
other hand, Poland, Italy and Spain allocate below the EU-28 average and rank first, fourth and fifth respectively
with regards to the total TO6 budget).
While it must be noted that the five first contributors to the TO6 also rank among the largest EU-28 MS, there is no
correlation between the main land area and the share of the TO6 budget among the total ESI fund allocation (cf.
Figure 6).
As a consequence, the underlying factors impacting the share of the total ESI fund allocation dedicated to the TO6
budget likely stem from qualitative reasons, i.e. country-specific context.
This observation supports a call for Member State case studies, allowing examination of each Member States’
strategies within the Common Strategic Framework for ESI funds. These case studies will also allow analysis of the
actual programme definition, implementation and subsequent absorption of available EU funds. Such an approach
would enable identification and weighing of risks and opportunities that Member States are confronted with when
establishing and discussing their ESI fund budget with the EU.
Figure 5 - ESI funds allocations to TO6 per Member State over the 2014-2020 budget period
Source: EY, based on data collected from Partnership Agreements presented in Table 4
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