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Environmental taxes: current priorities in Albania |
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Since the early 1990s, Albania has undertaken a
number of reforms to transform and stabilise its economy. It faced strong economic and political
crises in 1997-98, however, and despite efforts
to conform to European Union legal standards, the country is now
characterised by
institutional instability, general economic weakness and high dependence on
foreign aid.
In addition, rapid and uncontrolled urbanisation has resulted in negative impacts on the environment, particularly in areas associated with water and waste. In view of the high level of pollution, environmental issues began to draw attention in the 1990s. In 1991 the country decided to establish the Committee of Environmental Protection. In 1993, it adopted the first Law on Environmental Protection, the first National Environmental Strategy and the first National Environmental Action Plan (NEAP). The new constitution of Albania, which was adopted in November 1998, highlighted the principle of sustainable development (article 59).
Despite these efforts, however, the
economic and political crises make it difficult to implement
the proposed NEAP. Although badly needed, environmental investments are
currently low on the nation's agenda. The few
environmental economic instruments that are in place today are mainly symbolic. Few economic instruments in place today Environmental economic instruments are still underdeveloped; the government mainly uses command and control instruments. Existing economic instruments are generally conceived as user charges that raise funds for the state budget, as there is no proper earmarked environmental fund. In addition to the first National Water Strategy (formulated in 1996), a law for water resources was adopted in the same year, establishing a number of regulatory instruments, including effluent charges, drinking water fees and non-compliance fees. Despite this law, only drinking-water fees are in place today, and at very low levels. Water abstraction charges, effluent charges and sewage charges have not been introduced yet. A similar situation exists in the waste sector. A National Waste Management Plan was formulated under the 1993 Phare programme. Basic principles have been laid down in this document, but in reality the extremely low user charges fail to cover actual waste management costs. A deposit-refund system for glass and metal is in place, but more for economic reasons than environmental concerns. Other economic instruments cover mining and forest activities. The 1994 Mineral Law of Albania provided for mining and raw material charges, included in the licenses issued both for exploration and exploitation. As far as forests are concerned, Law no 8302, adopted in 1998, established the management of incomes generated in state-owned forests and pastures. This law took an important step towards a system of
earmarked funds that are independent from the state budget. Seventy percent of the income
generated from the sale of wood, pasturing and hunting fees are to be
managed directly by the General Directorate of Forestry and Pasture, with
only the remaining 30 percent going to the state budget. Funds collected are to be
used for reforestation, watershed management, control of erosion, forest
protection, flora and fauna protection, among other activities. Proposed draft law in the pipeline since 1995 As detailed above, few environmental economic instruments are in place today. A draft law on environmental charges and creation of a National Environmental Fund was prepared back in 1995. However, it still awaits approval by Parliament. The law was meant to introduce pure environmental taxes and charges, as well as to redirect existing environmental economic instruments towards a comprehensive earmarked fund. The new charges proposed included effluent charges, product charges (carbon tax, pesticide, herbicide and chemical fertiliser user charges, and differentiated custom duty for imported used vehicles), natural resource user charges, and non-compliance and administrative fines. A National Environmental Fund was to be created to collect these funds and spend them on major environmental issues. However, this project does not seem to be a priority in Albania today. |
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