Part of Our EU-27 Green Tax Wiki

History and Current Role

The EU LIFE program was founded in 1992 as an all-encompassing environmental protection organization. LIFE is the only EU funded program where environmental and climate mitigation is its primary focus. Other programs consider the climate; however, it is often seen as an afterthought. Therefore, LIFE plays an important role in funding and promoting environmental and climate mitigations projects for companies, universities, research centers, local governments national governments, and NGO’s. LIFE’s primary role is to act as a catalyst for environmental change in the EU. LIFE is not the first of its kind in Europe; previously, the combination of the ACE, MEDSPA, NORSPA, and the ANCAT performed a similar role to that of LIFE today. However, each organization focused on one or two policy measures, such as the development of “green” technology, or a specific region of Europe. The LIFE program was created as a way to combine these programs to form an efficient environmental protections organization that worked with the EU as a whole. LIFE’s original goals were to promote sustainability, the quality of the environment, the protection of natural habitats, administrative actions for the environment, climate awareness, and increased climate actions and awareness outside of the EU. Within the first 3 years of its inception, LIFE helped fund 731 projects related to these goals.

Today, LIFE is on its fourth funding phase and has a budget of €3.4 billion. To date, LIFE has contributed €3.1 billion in funding 3954 environmental protection projects. In its current phase, the LIFE program can be divided into two major subcategories: the environmental subgroup representing 75% of LIFE’s funding and climate mitigation representing the last 25% of LIFE’s budget. The environment subgroup aims to fund projects that raise awareness about the environment; increase biodiversity and preserve natural habitats; fund projects that reduce pollution of all types (noise to chemical); fund cross country environmental action required by the EU; and to promote new and future policy regulations. In terms of biodiversity and natural preservation, LIFE focuses on funding projects that aim to increase the protection status of nature reserves or specific species. Further, these projects often work across borders. For example, the LIFE provides funding for the Natura 2000 which is a series of nature protections across the EU. The climate mitigation subgroup supports projects related to renewable energy, energy efficiency, farming, land use, and wetland management. Further, LIFE funds projects that help prevent natural disasters, such as fires and floods, and projects that help protect natural resources. The climate mitigation subgroup also acts as a catalyst to promote EU policy on climate change adaptations. Lastly, similarly to the environmental subgroup, the climate mitigation group helps promote climate change education and the funding of future policy recommendations.

Funding and Budget

The LIFE program acts as the EU’s primary source of funding for environmental projects. LIFE’s current phase 4 (2014-2020) budget is €3.4 billion and is funded by the EU and a number of stakeholders. Under regulation from the EU, LIFE must spend at least 81% of its budget on action related grants. Therefore, the majority of LIFE’s budget is spent on funding projects that lead to immediate climate action. LIFE accepts roughly 11% of all projects proposal and co-funds accepted projects 50%-75%. The specific break down of LIFE’s budget is shown below in Figure 1.

Fig. 1. As shown in the chart, the majority of the LIFE budget is spent towards funding traditional projects and integrated projects (cross environmental and climate mitigation projects). The rest of the budget is primarily spent on operating costs.

Pilot Projects

As part of a recent development, LIFE has helped fund and provide risk collateral for the Natural Capital Financing Facility (NCFF) and Private Finance for Energy Efficiency (PF4EE). The NCFF role is to prove that sustainable projects can be viable economic projects in order to attract future investors. PF4EE partners with banks to provide financial support for EU states to implement energy efficient policy. PF4EE has taken LIFE’s initial €80 million investment and produced over €1 billion in project funding. By partnering with these organizations, LIFE has effectively increased their reach in mitigating climate action and greatly increased the value of their initial investment.

Effectiveness

Based on the midterm evaluation by the EU parliament, economic and social committee, and the committee of the region, projects funded by LIFE during the current financing phase are extremely effective at aiding the environment and climate mitigation. Projects during this phase have: improved conservation status of habitats, species, and Natura 2000 sites; reduced adverse effects of chemical on health and the environment for 1.6 million people; reduced energy consumption and in turn increased the production of energy from renewable sources. Further, the study sites strong evidence that LIFE is acting as a catalyst for accelerating policy directed at combating climate change.

Further, LIFE programs are economically viable. LIFE is facilitating the sharing of knowledge on best financial practices in relation to climate action. Projects funded by LIFE focus on increasing employment in the EU; greatly increasing the economic value added by LIFE. Lastly, 83% of projects funded by life are financially sustainable even after LIFE funding runs out; demonstrating the astonishing long-term implications of LIFE projects on climate action in Europe.

References

“LIFE - Environment Sub-Programme.” EASME - European Commission, 30 Oct. 2018, https://ec.europa.eu/easme/en/section/life/life-environment-sub-programme.

“LIFE – Climate Action Sub-Programme.” EASME - European Commission, 30 Oct. 2018, https://ec.europa.eu/easme/en/section/life/life-climate-action-sub-programme

“LIFE – History of LIFE.” EASME - European Commission, 30 Oct. 2018, https://ec.europa.eu/easme/en/section/life/life-history-life.

“Private Finance for Energy Efficiency (PF4EE).” European Investment Bank, 3 Oct. 2019, https://www.eib.org/en/products/blending/pf4ee/index.htm.

“Report from the Commission to The European Parliament, The Council, The European Economic and Social Committee, and The Committee of The Regions; Accompanying the Mid-Term Evaluation of the LIFE Programme.” EUR-Lex, https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=COM:2017:642:FIN.