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Compliance Costing for Approximation of Eu

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Compliance Costing for Approximation of Eu &203/,$1&(&267,1*)25 $3352;,0$7,212)(8 (19,5210(17$//(*,6/$7,21,1 7+(&((& $SULO ('&/WG (3(DVEO 48 Lower Mount Street 15, avenue des Pléiades IRE-Dublin 2 B-1200 Brussels Ireland Belgium 1 This report has been prepared by Leo De Nocker, Cynthia Whitehead, and Jérôme Woodford, of Environment Policy Europe asbl, Brussels. Prof. Anil Markandya, University of Bath, prepared Chapter 4 Water, Jochem Jantzen, TME, prepared the Chapters 5 and 6 on Air and Waste, and Prof. Frank Convery prepared Chapter 3 on the Cohesion countries. These contributing authors also offered valuable comments to the draft report. Leo De Nocker carried out the scientific management of the report. Any errors are entirely the responsibility of EPE asbl. 2 (;(&87,9(6800$5< This report reviews and compares 15 recent studies that estimate the cost of approximation of EU environmental legislation, in order to identify major issues and best estimates. Although the studies provide a lot of information, their relevance for the approximation process is limited because estimates are not directly linked to approximation and because different assumptions and cost indicators make the results hard to compare. Four major concerns need to be taken into account when using the numbers. First, it is often impossible to single out the impact of EU legislation. The estimates relate to the total cost for the CEECs for upgrading their environmental legislation to ‘western European standards, technologies and approaches’, irrespective whether this is required for EU legislation, local legislation or to meet other international obligations. Although total costs are a better indicator of the real financial effort the CEEC are facing to improve the environment, they overestimate the additional costs required to meet EU obligations. Second, the costs depend on a number of assumptions (economic growth, policies selected) so that no single number indicating ‘the’ costs of approximation’ can be defined. The best estimates given vary depending on the assumptions used. Third, The cost figures overestimate the true economic costs to society because they do not take the economic benefits of related environmental improvements into account. Fourth, not all economic sectors and environmental issues are adequately covered by the studies reviewed. The area of municipal waste water and air pollution is best covered. For water supply, industrial pollution control, waste and nature protection less information is available. The results of the review are reported for each of the major environmental sectors (water supply and waste water, air and waste management ) and a best estimate for investments, capital and operating costs for all CEEC is provided in chapter 8. The best estimate for total investment costs amounts to more then ECU 100 billion or ECU 1000 per capita. This figure covers water supply, sewerage, waste water treatment, air pollution from combustion plants and waste management These investment needs are larger than those projected for the four Cohesion countries, as well in absolute terms, as in investments per capita or as a percentage of GDP. Total annual costs are estimated to range from ECU 8 to 12 billion. (ECU 80-120 per capita) This figure covers capital and operation costs for municipal waste water, air pollution and operational costs for waste management. Although this amount is only two thirds of the average per capita annual environmental expenditure for the EU-15, it corresponds to a much larger share of GDP for the CEEC. These costs and their impacts will depend on the timing of the investments and the selection of the most cost-efficient policy measures. These are important considerations for the CEEC and EU to define a cost-efficient and affordable pathway to approximation. 3 7$%/(2)&217(176 EXECUTIVE SUMMARY.................................................................................3 TABLE OF CONTENTS ..................................................................................4 LIST OF TABLES............................................................................................6 ACRONYMS....................................................................................................8 1. THE ASSIGNMENT.....................................................................................9 1.1 Background...........................................................................................................9 1.2 Objective...............................................................................................................9 2. INTRODUCTION.......................................................................................11 2.1 Structure of the report.........................................................................................11 2.2 Methodological issues ........................................................................................11 2.3 CEEC and EU considerations.............................................................................16 2.4 The CEEC compliance cost studies ...................................................................20 2.5 The studies .........................................................................................................23 3. THE COHESION COUNTRIES AND THE FORMER GDR........................25 3.1 Available information ..........................................................................................25 3.2 Methods used .....................................................................................................26 3.3 Relative importance of different EU legislation...................................................28 3.4 Results of the experience per country ................................................................29 3.5 Eastern Germany (The former GDR) .................................................................32 4. WATER.....................................................................................................34 4.1 EU legislation......................................................................................................34 4.2 Problems and key issues....................................................................................35 4.3 Studies reviewed.................................................................................................36 4.4 Comparison of the study results and costs.........................................................49 4.5 Conclusions ........................................................................................................51 5. AIR ............................................................................................................55 5.1 EU legislation......................................................................................................55 5.2 Problems and key issues....................................................................................56 5.3 Studies reviewed.................................................................................................57 5.4 Findings ..............................................................................................................71 5.5 Conclusion ..........................................................................................................74 6. WASTE .....................................................................................................75 6.1 EU legislation......................................................................................................75 6.2 Problems and key issues....................................................................................75 6.3 Studies reviewed.................................................................................................77 6.4 Findings ..............................................................................................................82 6.5 Conclusions ........................................................................................................83 7. OTHER EU ENVIRONMENTAL LEGISLATION ........................................84 7.1 Chemicals and genetically-modified organisms .................................................84 7.2 Noise...................................................................................................................85 7.3 Nature .................................................................................................................85 7.4 Forests................................................................................................................86 7.5 Horizontal measures affecting industry...............................................................86 7.6 Conclusions ........................................................................................................87 8. CONCLUSIONS ........................................................................................89 4 8.1 Findings.............................................................................................................. 89 8.2 Best estimates for compliance costs in the CEEC............................................. 90 8.3 Recommendations for future work ..................................................................... 98 BIBLIOGRAPHY..........................................................................................100 ANNEX 1 MOSES - A TECHNICAL-ECONOMIC MODEL TO ESTIMATE COMPLIANCE COSTS................................................................................102 ANNEX 2 .....................................................................................................104
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