Climate warming requires global money for conservation. Let’s start with Europe

It goes without saying that nature conservation is a pivotal part of the battle against climate warming and the loss of biodiversity. Yet, to this day nature conservation is chronically underfunded. The accessibility to nature restoration funds and tax incentives for nature conservation is a precondition to successfully tackling these issues. But the current complexity of conservation finance across country borders creates a prohibitive and disincentivising environment for investors who want to invest in European nature. To address this issue, the LIFE ENPLC project recently hosted an expert round table in preparation of a webinar scheduled for early 2023.

Most EU member states incentivise donations for nature conservation through tax benefits. As tax policy is not within the remit of the EU’s legislative competences it depends entirely on national legislation. The patchwork of national tax codes within the EU makes tax benefits for trans-boundary donations difficult to obtain for individuals and organisations from abroad, even if they are from a neighbouring EU member state. Surprisingly, despite the lack of a EU single market for charitable transactions European cross-border philanthropy is rising and environmental donations are trending upwards. This is due to the support of networks of charitable organisations such as Transnational Giving Network (TNG) who channel donations across borders while giving donors access to domestic tax deductions.

Benefits of cross-boundary donations for nature

Nature has no borders. Thus, cross-border donations for nature conservation and restoration benefit society as a whole and underscore a united Europe. For instance, a citizen in the Netherlands who lives close to a river may recognise the benefit of healthy upstream catchment areas in providing clean water flowing through Europe because across borders.

Europe is one intertwined ecosystem. Migratory species (not only birds but also butterflies, lynxes, wolves, deer and many more) do not stop at borders. They need healthy ecosystems throughout their routes.

Rivers cross country borders. Photo credit: Wirestock

There is more room in Romania for forest restoration than in Belgium.

This makes even more sense when we think about the EU’s goals. The European Union aims to establish a single market for its member states. The single market seeks to guarantee the free movement of goods, capital, services, and people, known collectively as the “four freedoms”. EU citizens enjoy the freedom of movement inside the bloc, meaning they can live and work in any European country of their choice without restrictions. As a consequence of this European identity, many EU citizens feel connected to more than one country and may want to support and care for nature conservation across the continent. Unfortunately, they still face challenging conditions.

There are valid concerns about cross-boundary donations for nature, which can be perceived as “neo-colonialism” or land grabbing. These concerns need to be addressed by putting mechanisms in place allowing local communities to retain inherited cultural, economic and social structures while profiting from ecologic development and ensuring a sustainable future. In this light, the lack of clear regulations for cross-border donations and investments may even amplify undesirable investment behaviour.

Currently, the biggest obstacles to getting tax deductions for cross-border donations in the EU are liability issues with regard to the donation receipt and the administrative burden of proving the eligibility of the receiving charity. This has created a market for “service providers” that facilitate cross-boundary donations through their network of related charities (foundations and other NGOs), but this workaround is far from satisfactory. To exploit the full potential that organisations like transnational giving offers for nature in Europe, the EU urgently needs a harmonisation of national charity and tax legislation.

Some countries already have promising approaches in place, such as Luxemburg or the Netherlands, where all organisations from any EU member state can get charity status (ANBI) with associated tax benefits.Luxemburg has set up a formal process for donations to foreign charities. The taxpayer must fill in “form 720”, a cross-border donation certificate.

Find an overview of different regulations throughout Europe and beyond here. 

On a global scale, we see similar issues in North and South America, where transboundary donations are hampered by legal and bureaucratic obstacles. There are good reasons for simplifying and harmonising tax systems globally: climate breakdown and loss of biodiversity affect everyone. We need private money to resolve these two issues and conducive tax systems to incentivise investment in nature by the private sector.

How can we improve the current situation in the EU and simplify the process of cross-border donations? To answer this question, we are preparing a webinar on the 25th of January 2023, 15:00 – 16:30 CET. Sign up for our newsletter for updates on the event here

LIFE ENPLC Team

Content Creator

The news items collected on this blog have been written by project partners of the LIFE ENPLC project.