Greece, Portugal, Spain and Ireland are considered somewhat less developed countries of the European Union. These countries were characterized by a GDP per capita below 75% of the EU average, relatively high dependence on agriculture and tourism and certain tradition of state intervention in the creation and maintenance of monopolistic enterprises. By the decision of the Maastricht Treaty in 1992, a Cohesion Fund was set up with the intention of assisting these countries with the transition to Economic and Monetary Union. Without such assistance they would be unable to afford the measures for environmental protection that are applied for the rest of the EU.In order to develop and monitor an efficient allocation scheme for Cohesion Fund, the European Commission initiated research to estimate cost of approximation of environmental legislation. A study of the Environmental Policy Research Center at the Economic and Social Research Institute in Dublin and the Environmental Institute at UCD entitled "Cohesion Countries: Experience in Countries on the European Periphery" suggests that experience and lessons learnt in Cohesion countries are having high relevance for the CEECs which applied for membership in the EU and are in many ways similar to Cohesion countries.
The study looks at the costs of compliance of Cohesion countries with EU Directives and describes how two main policy instruments, command and control methods and large transfers of the Cohesion Fund have been mobilized. The analysis focuses on the following areas: water and water quality, waste, air and air quality, integrated pollution control, habitat protection and information. For each Directive an attempt was made to determine actions already taken or in the process, and then to estimate what further actions would be required and to cost there. Besides few independent sources, a documentation at central and local governments and data obtained from face to face interviews were used as a source of information.
The results of the investigation showed that the Urban Waste Water Directive was found as a dominant item of expenditure, most likely due to the fact that these countries are all maritime states which have made extensive use of the oceans and seas and dispose various kinds of waste with little or no treatment. Compliance costs of meeting standards of the Directive on Integrated Pollution Prevention Control or the Habitat Directive are also large in some of these countries.
The report summarizes several conclusions and practical recommendations for CEECs. First, operating and maintenance costs can increase sharply as a result of investments in new plants and can pose financial problems and operational constraints. Second, it is essential to institute cost recovery and polluter pays principle to encourage innovation and efficient use. Third, desired ambient quality should be determined first, before emission standards are determined. Fourth, the planning of new measures must involve consultations with customers beforehand, in order to find out their demand for new service, better quality or willingness to pay for improvement.
In order to avoid mistakes done by Cohesion countries, the message to CEECs is that consideration must be given to all the costs of achieving the desired level of environmental quality, rather that just to compliance. The benefits should be commensurate with the costs, which in turn should be paid for in a manner that enables good behavior to be rewarded and promotes more environmental quality for the amount spent.
S. Scott, F. Convery: Cohesion Countries: Experience in Countries on the European Periphery. In: "Green Budget Reform in European Countries", ed. K. Schlegelmilch, Springer Verlag, Berlin, Heidelberg, New York, forthcoming autumn 98, 430 pp.