EU Biodiversity Strategy - Business Perspective
Updated: May 26, 2020
The European Commission long-awaited Farm2Fork and 2030 Biodiversity strategies were released yesterday. This is a great step forward in the EU Green Deal that was announced in late 2019 by new Commission’s President Ursula Von der Leyen. The Commission made an essential breakthrough in its biodiversity sustainability and farming policies ambitions. Amid the COVID 19 crisis, this paper could not have had better timing. Indeed, we have all seen on Twitter or Facebook these pictures of dolphins in Venice canals or these videos of birds tweeting in Paris. These, ironically bizarre scenes are happening for one simple reason, we stopped our cars, we are polluting less, and we are less noisy. We can now witness nature’s incredible resilience, and we realised that all hope is not gone yet. We can still save biodiversity if we try.
Although the adoption of these policies during the crisis is not a coincidence, the two strategies will be central to the EU’s green recovery plan. The Biodiversity Strategy is articulated around 5 significant branches, namely, A Coherent Network of Protected Areas; An EU Nature Restoration Plan; Enabling Transformative Change, and the European Union for an Ambitious Global Biodiversity Agenda. But what does the biodiversity strategy properly entails for European businesses overall?
Legally Binding Papers
While not yet legally binding, the Commission is setting up a new European biodiversity governance framework sharing the responsibility and ownership of the commitments outlined in this paper. Through monitoring and assessment, the Commission will come up in 2023 with a final decision on the legal character of this proposal.
Indeed, previous proposals that were not respected resulted in dramatic loss both for biodiversity and economy. The cost of non-implementation of EU recommended policy is estimated at €50 billion per year. Therefore, full implementation is central to the strategy, “the Commission will strive to improve compliance assurance, working closely with the Member States and European networks of environmental agencies, inspectors, auditors, police, prosecutors and judges”. Further, environmental crimes and non-respect of these policies could have more severe repercussions. Improved access will be granted to justice in national courts in ecological matters for individuals and NGOs.
On the business side and to make sure that societies and companies’ interests are compatible, the Commission will put forward a new legislative proposal on corporate sustainability governance. It will address human rights, environmental responsibility and overall commitment as economic value chains in a proportionate way according to different sizes of enterprises. This will surely reward companies transitioning to green and sustainable practices and overall boost the speed of transition in the EU. “Particular attention will be paid to measures to incentivise and eliminate barriers for the take-up of nature-based solutions, as these can lead to significant business and employment opportunities in various sectors and are the key to innovation for economic or societal needs that rely on nature”.
Taxation and Investment
To properly confront the biodiversity challenge, the Commission is planning a series of funding opportunities to support biodiversity-friendly investments. The needs for investments have been evaluated at €20 billion a year to achieve the laid-out targets. By all accounts, this is a relatively small investment compared to the evaluation of the loss of earning from no implementation of the recommendations.
Under the flag of the European Green Deal investment plan, a dedicated “natural-capital and circular economy initiative” will aim at gathering at least €10 billion for the next ten years in a mixed public-private finance scheme. Although, to attract private investors, the EU must find a way to provide long term certainty and return on investments and embed sustainability in the financial market. The Horizon 2020 program should provide the necessary tools to make sustainability a profitable market thanks to these ever-so-needed investment platforms.
Further, the EU sustainable finance taxonomy will be re-shaped to allow more profits for sustainable investments. This will significantly stimulate the investments mechanism. It will also profit alternative sources of energy as well as sustainable innovation. “In 2021, the Commission will adopt a delegated act under the Taxonomy Regulation to establish a common classification of economic activities that substantially contribute to protecting and restoring biodiversity and ecosystems”. By promoting tax systems and pricing that reflect environmental costs, the EU is taking a great step forward in changing our whole economy. Hopefully, there will not be too much national pressure to keep a more archaic tax system based on saddling labour instead of pollution. However, if there is, the 2023 revision of the legal obligation along with the renewed sustainable finance strategy will surely help resistant states jump forward.
Protected and Green Areas Development
To kick-start the EU’s green recovery, the Commission is planning an extensive web of protected areas and focusing investments and job-creating in critical areas. “The plan will create jobs, reconcile economic activities with nature growth and help ensure long -term productivity and value of our natural capital”. This policy avoids the pitfall of sustainability by addressing pressing economic needs and not focusing entirely on environmental sustainability.
The main plan is to extend its network of nature protected areas by attracting investment in critical areas identified as clusters for biodiversity. The current Natura 2000 is already incredibly valuable to the EU; its benefits for the EU are valued at between €200-300 Billion per year. By extending and massively attracting investment, the EU is aiming to support the creation of an additional 500,000 jobs.
Primary will be included by default as part of the network. Other significant system acting as carbon pits will also see this boost in investment for protection, namely, peatlands, wetlands, grasslands, mangroves and sea-grass meadows. The goal by 2030 is to legally protect 30% of EU’s land, which means an additional 4% of EU’s currently protected lands. The more resilient forest will support a circular bioeconomy and lead to job creations. The EU Forest Strategy is planning to plant 3 billion trees by 2030 with attention to urban green areas.
If the COVID 19 lock-down pointed out one thing is that we need more green urban areas to retreat. The pictures of swarmed parks in big cities reveal that we cruelly lack adequate space. Through the Urban Greening Plan, the Commission wants to systematically promote ambitious urban planning, green infrastructures, and nature-based solution development within cities of at least 20,000 habitats. In 2021 the EU will accordingly set up the EU Urban Greening Platform to support cities and mayor as well as share best practice. Such ambitious development in urban infrastructure will result in increased job creations, investments and call for tenders in concerned cities. The EU Commission, Member States, regional and local authorities will provide technical guidance and help mobilise funding and capacity building.
While not being central to the strategies, marine and coastal areas are clearly outline as capital in the green recovery plan. At least 30% of the EU’s sea areas will, therefore, be legally protected to protect nature and restore species and habitats, this represents an additional 19% of what is currently being done. This is excellent news for all concerned coastal areas as this essentially means stronger monitoring of economic activities and more investment in nature’s protections.
The paper exposes a study on marine systems estimating that “every euro invested in marine protected areas would generate a return of at least 3 euros”. As we all know, money attracts money, especially after a crisis. These statistics will surely attract more investments in the protection of marine resources, and these will have direct repercussions on its economy. When comparing the targets, it comes out that much focus will be put on marine areas. Indeed, seas and oceans were overlooked in the past, and the Commission plans eliminate the gap land protection by giving similar targets so legally protect 30% (+19%) and strictly protect 10% (+9%).
By 2021 the Commission plans to release an action plan for the protection of coastal areas that will endorse all maritime related activities and provide guidelines for more sustainable and less damaging fishing techniques. As for freshwater ecosystems, the biodiversity strategy plans to restore at least 25,000 kms of rivers by getting rid of non-essential barriers blocking the trail of migratory fish through European rivers. By boosting large scale river and floodplain restoration investment, the Biodiversity strategy aims at stimulating the job market in affected areas and increasing economic revenues for the restoration rector and local socioeconomic activities
While for most of the farming industry, new policies are outlined in the Farm2Fork Strategy, the Biodiversity one is also touching upon this sensitive subject. The paper outlines the usual farming dichotomy: farmers play a vital role in preserving biodiversity, and yet certain agricultural policies are a crucial driver of biodiversity decline. For this reason, the Commission plans to support and incentivise the transition to fully sustainable practices. The strategy aims at improving the condition of the agroecosystem through strengthening its resilience to climate change and socioeconomic shocks (which is currently important) all the while creating new jobs which will be critical in the post-COVID 19 recovery phase.
Further, to support this transition to sustainable practices, the Commission wants to reduce by 50% the overall use of chemical pesticides by 2030 and bring back at least 10% of agricultural areas under high diversity landscape features. While both measures have immense benefits for the environment, the agricultural sector will need a massive investment boost to support this transition. Overall, the Commission aims at having at least 25% of agricultural lands being organically farmed. This will create new jobs and should drastically change the European food industry and rural sector. Not only is that plan counting on attracting young farmers and developing this employment market (organic farms attract 10% to 20% more jobs), it also aims at creating new jobs in the rural tourist and recreation sectors.
To overcome the challenge of poor crop genetic diversity, the Commission is planning to revise marketing rules for traditional and home-grown crops. Facilitating the registration and easing up access to the market should support local and established industries and contribute to the conservation and sustainable use of more varied types of seeds.
As per its strategy for green recovery, the Commission is also aiming at increasing the share of renewable energies in the production sector. In lines with its strategy to legally protect and attract investment towards maritime areas, prioritised solutions include Ocean Energy and offshore wind. Both of which have seen some drastic advancement in the past year. Solar panel farms providing biodiversity-friendly soils and sustainable bio-energy are also considered as favoured solutions.
The Revised Energy Directive also endorses advanced bio-fuels based on residues and non-reusable waste. In 2021 the Commission should release its assessment of the use of forest biomass for energy production and a set according to guidelines and regulations so stay tuned.