An important part of the EU approximation process is the adaptation or adoption of national laws, regulations and procedures to give effect to EU legislation. It imposes costs on applicant countries, because it requires them to meet performance and obligations given by EU law. The costs of upgrading environmental laws and policies have been an issue since the beginning of the reform in Central and Eastern Europe in 1989. Recently, also a number of cost estimation studies have been prepared in CEECs in the light of the approximation process and new studies are underway. The European Commission and OECD initiated in 96/97 the elaboration of a report "Compliance Costing for Approximation of EU Environmental Legislation in the CEEC" summarizing data of available studies.The objective was to prepare a background document on recent studies of compliance costs in CEECs in order to identify costs born by the process of approximation that have been seen as an important barrier to implementation. Secondly, an important objective was also to use this information to produce country specific estimates of cost by piece or category of EU legislation.
The report reviews and compares 15 recent studies related to estimating compliance costs of the EU environmental legislation in CEECs. These include studies that cover all environmental sectors (IFO, EBRD-EU), or, focus just on selected sectors (IIASA, TME, EU DGXI, etc.). Several single country studies are also included, some carried by international institutions (WB) or national studies. Three studies from Cohesion countries are also included in order to give a comprehensive comparison. The study focus on total costs of approximation that include investment and annual costs plus operating costs. The results of the review are reported for each of the major environmental sectors, and, best estimates for investment, capital and operating costs for the ten CEECs with Europe Agreement is provided.
The report concludes that total investment costs of bringing environmental protection in CEECs up to the EU level amounts to ECU 100-120 billion or ECU 1100 per capita. This translates to 2.9% of 1994 GDP in CEECs, assuming investments are spread over 20 years. These cost estimates are considerably larger than those projected for the four Cohesion countries, in absolute terms as well as in investment per capita or as a percentage of GDP. The cost estimates cover water supply, sewerage, waste water treatment, air pollution from combustion plants and waste management.
Although the study provides a lot of information, the relevance for the approximation process is limited because several cost studies analyzed in the report are not related to EU approximation, and, different assumptions and cost indicators make results hard to compare. This is mainly because presented total cost probably overestimate the additional costs required to meet EU obligations, and, the presented costs may also overestimate the true economic costs to society because they do not take the economic sectors and environmental improvements into account. In addition, not all environmental sectors are adequately covered by the studies reviewed. The estimates for wastewater are the most reliable investment figures in the study. For air, water supply, industrial pollution and waste less information is available. It was not possible to generate a best estimates for other environmental sectors, such as chemicals, industrial risk, noise and nature protection. There are also some uncertainties about original data. Most of the data from the 15 studies are not based on own research but rather taken from various international, national or local sources. For example some data used for best estimates of total investments for Czech and Slovak Republics were derived from one single number available for former CSFR, using the ratio 3:1. Such a calculation based on the ratio of population, even if successfully used for the split of Czechoslovakia in the economic sector, has a limited application in environmental protection since environmental matters are not exclusively connected to the population factor. Thus the compatibility as well as reliability of the data are in question and additional future cost estimations may correct the picture.
EDC Ltd. and EPE asbl. (April 1997): Compliance Costing for Approximation of EU Environmental Legislation in the CEEC pp109. Commissioned by EC DG XI, unit A4 - Technical Co-operation with Third Countries. For copies contact DG XI at: Fax: +322 299 41 23 or email: kate.schwab@dg11.cec.be