Clouds gather over European environmental policy – a way ahead

Thirsty for environmental finance

Just as 2023 was declared the hottest year on record, the last few weeks have seen a series of setbacks to essential environmental reforms. 

CAP reform measures are being eroded, there are calls for the EU Deforestation Regulation (EUDR) to be delayed and diluted, massive further funding is recommended for  solid (forest) bioenergy that worsens climate change with higher emissions than fossil fuels. 

Now the Nature Restoration Law (NRL) is also faltering, and the Forest Monitoring Law (FML) is under threat from gross over-simplification.

This article proposes reforms to address the NRL and FML situations in particular.

NRL falters, will the FML follow?

Following withdrawal of support, principally due to shifting position of Hungary, the NRL failed to achieve a qualifying majority required for adoption by the Environment Council on 25th March, and this has now been postponed.

The next, and last, opportunity under the Belgian Presidency to pass the NRL will be at the 17th June Council meeting. Thereafter a post electoral European Parliament may produce a more adverse political landscape. 

Measures to revive a strong NRL

An essential vision, so why the doubts?

Our previous article on the “faltering steps” of the Nature Restoration Law (NRL) was thus too optimistic. Yet the measures it recommended to strengthen those steps are all the more relevant: 

  • Linkage of the NRL with identification and facilitation of funding potential from ecosystem services and other sources, to incentivise land users (principally forest owners, farmers) whose support is crucial for its implementation
  • Further rapid development of the pro NRL alliance beyond environmentalists: engaging consumer, business, hunting, financial and progressive farming interests
  • Systematic appraisal by conservation interests of existing and potential new funding instruments: their effectiveness in support of environmental objectives, with identification and promotion of potential for reforms and development – particularly through engagement of private sector finance (see our article on Business and Biodiversity)
  • For the longer run, growing the capacity of the conservation sector to utilise economic valuation, enterprise implementation and financial management in support of environmental objectives. Equally on the forestry and agricultural ’side’, a clearer understanding is needed of environmental/ecological benefits and how these are linked to economic benefits. Wild Europe is recommending a coordinated programme for this.

Is Forest Monitoring Law next for the chopping block?

The FML can provide only limited support for effective implementation of the EU Biodiversity and Forest Strategy objectives for protection and restoration unless it is applied with detailed rigour, on a standardized and verified basis. 

Yet land user interests and their supporters in government continue to regard FML as an undue administrative expense and undermining rights of derogation.

Wild Europe’s submission to the EC on FML stress the need to highlight that appropriate implementation of FML can enable identification of funding potential, particularly as outlined in the EC Guidance on the Development of Public and Private Payment Schemes for Forest Ecosystem Services (FES)These services could include carbon storage, sequestration flood alleviation, clean water and air provision, ecotourism and grants related to biodiversity enrichment and natural regeneration.

One useful action here would be formal and transparent assessment of the above EC guidance document by the EC’s Forest & Forestry Stakeholder Platform (FFSP) Group, identifying financial potential for development of funding sources from the Forest Ecosystem Services agenda. By the same token, the EC’s 2015 Natura 2000 and Forests  policy and management document should be updated to incorporate more recent developments: eg the raised profile of old growth and primary forest as a strictly protected entity, importance of naturalness in forests, the principles of forest ecosystem services and how to ensure funding from these can be facilitated to incentivise protection and restoration management in the context of addressing degradation and climate change

Alongside this is the need to emphasise the massive and growing economic as well as environmental costs from lack of incentivised adjustment in management of forests, with consequent weakening of resilience and reduction in carbon sinks that aggravates climate change.

There is also scope for development of certified local NGO networks to supplement official monitoring, and share the cost burden, as outlined in Wild Europe’s LEAF proposal, for which we are finalising an updated proposal that specifically incorporates support for the FML.

Further reform measures required

In the medium to long term, five further measures would also help:

1. Lobbying the World Trade Organisation (WTO) for a more flexible approach to infusion of EU/state subsidy for forest ecosystem services provision

2. Assessment of low take-up of European Agricultural Fund for Rural Development (EAFRD) subsidy for protection and restoration of forests by owners and users, whether and how the existing system of subsidy might be improved: simpler administration, more effective promotion including concise background explanation of forest ecology and benefits where needed, adequate levels of support (including realistic valuation) etc

A burning desire to wreck the climate

3. Collation and dissemination of existing best practice here, at local, regional and state level 

4. Establishment of an effective and regulated market place for supply and demand of ecosystem services

5. Identification, promotion and certification of intermediate agencies – both public and private – for identifying ecosystem service funding potential and converting this into cash for relevant land users to support protection & restoration, gaining further income benefits thereafter

6. Cessation and reallocation of harmful subsidies – particularly the massive support given to forest biomass burning, likely to increase substantially if bioenergy with carbon capture and storage (BECCS) is adopted (see our representation to the UK government).

Against a backdrop of low economic growth post Covid, large government deficits, and alternative demands for capital in support of Ukraine, this need for financial realignment in support of essential conservation measures will become all the more urgent.