Members' Research Service By / February 18, 2015

How the EU budget is spent: LIFE, EU budget for addressing environmental and climate issues

Written by Alessandro D’Alfonso LIFE, the EU’s only funding programme entirely devoted to environmental objectives, is meant to act as…

© Prod. Numérik / Fotolia
Written by Alessandro D’Alfonso

LIFE, the EU’s only funding programme entirely devoted to environmental objectives, is meant to act as a catalyst for developments in this policy area. Responsibility for environmental issues is shared between the European Union (EU) and its Member States. At EU level, the European Parliament (EP) and the Council agree on how to achieve the objectives of the EU’s environmental policy through what is known as the ‘ordinary legislative procedure’. Whilst it is the Member States who finance and implement environmental policy, the EU can also take action in this area.

Whilst LIFE has been running since 1992, the EP and the Council established the programme for the latest period (2014-20) under Regulation (EU) 1293/2013, endowing it with a budget of €3.46 billion, or 0.32% of the EU’s Multiannual Financial Framework (MFF) for the period. LIFE has two components, with three priority areas and specific objectives: ‘Environment’, which gets three quarters of the financial envelope, focuses on ‘resource efficiency’, ‘nature and biodiversity’ and ‘environmental governance and information’; ‘Climate action’, to which the remainder of the resources goes, supports actions aimed at climate change mitigation, adaptation and governance/information.

© Prod. Numérik / Fotolia

During its first four phases (1992-2013), LIFE has co-funded more than 4,170 projects to address environment- and climate-related issues. A number of audit reports and evaluations have highlighted the strengths and weaknesses of past phases. Examples of achievements since 1992 are: improved conservation and restoration of some 4.7 million hectares of land; higher air quality for some 12 million people; waste prevention of around 300,000 tonnes; and annual CO2 emissions reduced by 1.13 million tonnes. According to the European Commission, projects funded by LIFE have also contributed to creating ‘green jobs’, reorienting production processes and developing ‘green skills’. Challenges identified, and which the 2014-20 phase seeks to address, include: the need for more strategic and targeted programming, better and more measurable monitoring and faster selection procedures. A mid-term evaluation of the current programme is due in 2017 with a view to tracking progress against a set of indicators.

For 2014-20, the European Commission has delegated the management of part of the programme to the Executive Agency for Small and Medium-sized Enterprises (EASME). At least 81% of LIFE resources must be spent through action grants, but part of this support may be delivered through financial instruments instead, with the European Investment Bank (EIB) in charge of managing two tools that provide funding opportunities in the form of loans or equity investments. In addition to traditional projects aimed at testing or disseminating environmental techniques and approaches (e.g. pilot, demonstration and best practice projects), Regulation (EU) 1293/2013 introduces a category of integrated projects to implement environmental or climate plans and strategies required by EU legislation over a large territorial scale. In addition to action grants and financial instruments, LIFE can also disburse operating grants to support the operational and administrative costs of non-governmental organisations (NGOs) working on environment and climate issues.

While LIFE is the only EU funding programme entirely focused on environmental and climate objectives, the EU nevertheless mainstreams these objectives into many of its policies and programmes. Following a Commission proposal endorsed by the European Council and the EP, the EU aims to allocate at least 20% of its 2014-20 resources to climate-related expenditure. Various EU funding programmes therefore include expenditure predominantly or significantly related to environmental and/or climate objectives. Examples are Horizon 2020 (the EU framework programme financing research and innovation activities), the European Agricultural Fund for Rural Development (EAFRD) and cohesion policy spending.  Overall, it is estimated that the 2014 EU budget devoted more than €17.5 billion to climate-related expenditure, accounting for 12.7% of the total.

Read the complete Briefing here

This briefing is the first in a new series, ‘How the EU budget is spent’, which aims to provide an overview of the EU’s funding programmes and their key features. 

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