ASSESSMENT OF THE NATURA 2000 CO-FINANCING ARRANGEMENTS OF THE EU FINANCING INSTRUMENT A project for the European Commission Noo070307/2010/567338/ETU/F1 March 2011 FINAL REPORT M. Kettunen, O. Carter, S. Gantioler & D. Baldock (IEEP) P. Torkler, A. Arroyo Schnell, A. Baumueller & E. Gerritsen (WWF) M. Rayment, E. Daly & M. Pieterse (GHK) Citation and disclaimer This report should be quoted as follows: Kettunen, M., Baldock D., Gantioler, S., Carter, O., Torkler, P., Arroyo Schnell, A., Baumueller, A., Gerritsen, E., Rayment, M., Daly, E. & Pieterse, M. 2011. Assessment of the Natura 2000 co-financing arrangements of the EU financing instrument. A project for the European Commission – final report. Institute for European Environmental Policy (IEEP), Brussels, Belgium. 138 pp + Annexes. The contents and views contained in this report are those of the authors, and do not necessarily represent those of the European Commission. The Institute for European Environmental Policy (IEEP) is an independent institute with its own research programmes. Based in London and Brussels, the Institute’s major focus is the development, implementation and evaluation of EU policies of environmental significance, including agriculture, fisheries, regional development and transport. 2 TABLE OF CONTENTS EXECUTIVE SUMMARY ....................................................................................................................... 5 1 INTRODUCTION....................................................................................................................... 11 2 OBJECTIVES OF THE STUDY ..................................................................................................... 15 3 APPROACH AND METHODS ..................................................................................................... 16 3.1 ASSESSMENT OF THE CURRENT LEVEL OF EU CO-FINANCING .............................................................. 16 3.2 EXISTING EVIDENCE ON THE IMPACTS OF EU CO-FINANCING .............................................................. 18 3.3 OVERALL ASSESSMENT OF THE CURRENT EU CO-FINANCING FRAMEWORK ............................................ 19 3.3.1 Case studies illustrating the uptake of EU co-financing in practise ................................ 20 3.3.2 Gaps in financing different Natura 2000 related management measure ....................... 21 3.3.3 Shortcomings in the overall implementation of the EU co-financing framework ........... 22 3.4 ASSESSING POSSIBLE MEASURES TO ADDRESS GAPS AND SHORTCOMINGS IN THE EU CO-FINANCING FRAMEWORK.......................................................................................................................................... 23 3.5 IDENTIFICATION AND ANALYSIS OF OPTIONS FOR THE FUTURE EU CO-FINANCING OF NATURA 2000 ......... 23 4 FUNDING AVAILABLE FOR NATURA 2000 ................................................................................ 24 4.1 EU CO-FINANCING FOR NATURA 2000 IN 2007-2013 ................................................................... 24 4.1.1 European Agricultural Fund for Rural Development (EAFRD) ......................................... 24 4.1.2 European Fisheries Fund (EFF) ........................................................................................ 32 4.1.3 Structural Funds and the Cohesion Fund ........................................................................ 35 4.1.4 LIFE Programmes ............................................................................................................ 38 4.1.5 7th Framework Programme for Research (FP7) ............................................................. 44 4.2 PROJECTED EU FINANCING VS. ACTUAL EXPENDITURE ...................................................................... 45 4.3 LEVEL OF EU FINANCING VS. ESTIMATED FINANCING NEEDS FOR NATURA 2000 .................................... 46 4.4 NATIONAL FUNDING AVAILABLE FOR NATURA 2000 ........................................................................ 50 4.5 CONCLUSIONS .......................................................................................................................... 59 5 EXISTING EVIDENCE ON THE IMPACTS OF FINANCING NATURA 2000 ..................................... 59 5.1 PRELIMINARY OBJECTIVE: FINANCING NATURA 2000 TO SAFEGUARD BIODIVERSITY ............................... 59 5.2 BROADER ENVIRONMENTAL AND SOCIO-ECONOMIC BENEFITS OF NATURA 2000 FINANCING ................... 60 5.3 CONSIDERATION OF THE OVERALL COSTS AND BENEFITS OF FINANCING NATURA 2000 NETWORK ............. 65 5.4 THE ROLE OF DIFFERENT EU FUNDS IN DELIVERING ENVIRONMENTAL AND SOCIO-ECONOMIC BENEFITS VIA NATURA 2000 ....................................................................................................................................... 66 5.5 CONCLUSIONS .......................................................................................................................... 68 6 ANALYSIS OF THE CURRENT EU FRAMEWORK FOR CO-FINANCING NATURA 2000 .................. 69 6.1 ASSESSMENT OF THE POSSIBILITIES FOR FINANCING NATURA 2000 UNDER THE CURRENT EU FUNDS ......... 69 6.1.1 European Agricultural Fund for Rural Development (EAFRD) ......................................... 70 6.1.2 European Fisheries Fund (EFF) ........................................................................................ 72 6.1.3 European Regional Development Fund (ERDF) ............................................................... 73 6.1.4 LIFE + ............................................................................................................................... 76 6.2 SUMMARY OF THE KEY INSIGHTS FROM THE NATIONAL LEVEL ............................................................. 77 6.3 GAPS AND SHORTCOMINGS IN THE EU CO-FINANCING FRAMEWORK AND CONSTRAINTS ON USING THE FRAMEWORK FOR NATURA 2000 .............................................................................................................. 83 6.3.1 Gaps and shortcomings in the opportunities available to finance different Natura 2000 management measures ................................................................................................................ 84 6.3.2 Comparing the gaps and the opportunities to finance Natura 2000 management with information on costs ..................................................................................................................... 90 6.3.3 Constraints on using the EU co-financing framework for Natura 2000 .......................... 92 6.4 CONCLUSIONS .......................................................................................................................... 94 7 INNOVATIVE WAYS TO FUND NATURA 2000 – BROADENING & COMPLEMENTING THE EU CO- FINANCING FRAMEWORK ................................................................................................................ 95 3 7.1 KEY TO INNOVATION: IDENTIFYING THE LINKS BETWEEN ECOSYSTEM SERVICE AND MANAGING NATURA 2000 96 7.2 POTENTIAL USE OF NEW, INNOVATIVE FINANCING INSTRUMENTS FOR NATURA 2000 NETWORK ............ 101 7.3 LIMITATIONS OF USING INNOVATIVE INSTRUMENTS ....................................................................... 102 7.4 INNOVATIVE USE OF EXISTING EU INSTRUMENTS ........................................................................... 109 7.5 CONCLUSIONS ........................................................................................................................ 111 8 POSSIBILITIES TO ADDRESS THE GAPS IN AND CONSTRAINTS ON USING THE EU CO-FINANCING FRAMEWORK FOR NATURA 2000 ................................................................................................... 111 8.1 POSSIBLE KEY MEASURES TO ADDRESS THE GAPS IN AND CONSTRAINTS FOR USING THE EU CO-FINANCING FRAMEWORK........................................................................................................................................ 111 8.2 ADDRESSING THE LIMITATIONS AND GAPS IN FINANCING DIFFERENT MANAGEMENT MEASURES .............. 113 8.3 ADDRESSING BROADER SHORTCOMINGS IN THE UPTAKE OF THE EU CO-FINANCING .............................. 115 8.4 CONCLUSIONS ........................................................................................................................ 116 9 IDENTIFICATION AND ASSESSMENT OF OPTIONS FOR THE FUTURE EU CO-FINANCING FRAMEWORK ................................................................................................................................. 117 9.1 OPTIONS FOR THE FUTURE EU CO-FINANCING FOR NATURA 2000 ................................................... 117 9.2 HORIZONTAL OPTIONS TO SUPPORT THE FUTURE EU CO-FINANCING FRAMEWORK ............................... 119 9.3 ANALYSIS OF DIFFERENT OPTIONS FOR NATURA 2000 FINANCING .................................................... 123 9.3.1 Capacity to successfully address gaps and constraints ................................................. 124 9.3.2 Compatibility and synergies with and impacts on the other relevant EU policy objectives 125 9.3.3 Compatibility with the EU budget review & general principles .................................... 126 9.3.4 Capacity to deliver broader environmental and socio-economic benefits .................... 127 9.4 CONCLUSIONS ........................................................................................................................ 132 10 CONCLUSIONS – THE VALUE ADDED OF FINANCING NATURA 2000 ...................................... 134 11 REFERENCES .........................................................................................................................