The analysis is structured in the following way:
If not indicated otherwise, the exchange rates presented on page 6 of this report were used in this analysis. For charge rates, the actual exchange rates (as of September 1994) were used. For total yearly revenues from a specific instrument, the yearly average exchange rates were applied.
| Country | Charge base and rate | Revenue | Revenue spending |
|---|---|---|---|
| Czech Republic "A" | ca. 80 pollutants are specified, the final rates for the main pollutants are:
|
1992: 21.3 mln ECU 1993: 23.3 mln ECU |
Financing programs related to air pollution through the State Environmental Fund |
| Czech Republic "B" | Type of solid fossil fuel used in heating systems with a performance of < 0.2 MW. The yearly fixed charge is up to 290 ECU / source. |
Not known (the implementation of this charge is optional for each municipality) | Environmental expen-ditures of the munici-pality where the charge was levied. |
| Slovak Republic "A" | ca. 80 pollutants are specified, the final rates for the main pollutants are:
|
1992: 2.5 mln ECU 1993: 6.3 mln ECU Note: This charge is in force since 6.5.1992. |
Financing programs related to air pollution through the State Environmental Fund |
| Slovak Republic "B" | Type of solid fossil fuel used in heating systems with a performance of < 0.2 MW. The yearly fixed charge is up to 260 ECU / source. |
Not known (the implementation of this charge is optional for each municipality) | Environmental expen-ditures of the munici-pality where the charge was levied. |
| Poland: SO2 | Direct SO2 emissions: 64.6 ECU/t (1992) 52.9 ECU/t (1993) |
1992: 89.2 mln ECU 1993: 149.0 mln ECU (1993=estimation) |
36% to NEP+WMF 54% to VEP+WMF 10% to LEP+WMF |
| NOx | Direct NOx emissions: 64.6 ECU/t (1992) 52.9 ECU/t (1993) |
1992: 26.6 mln ECU 1993: 28.6 mln ECU (1993=estimation) |
90% to NEP+WMF 10% to LEP+WMF |
| Other air pollutants | More than 50 other air pollutants are subject to charges and non-compliance fees. Charge rates vary from 0.04 ECU/ton for CO2 to 35165 ECU/ton for some volatile compounds. Because of the lack of pollutant-specific statistical reporting, the exact revenues collected from these charges are difficult to estimate. All together, they contribute to approximately 1/4 of the total revenue collected in the environmental funds. | ||
The Czech and Slovak air pollution charges "A" are levied on large and medium sized industrial point sources, while the "B" charges can be levied on small point sources (heating systems) of companies (not households). The "A" charges will gradually increase: for 1994 and 1995, 60% of the final rate is applied. In 1997 (Czech Republic) and 1998 (Slovak Republic) the final rates will apply.
The intention of the Czech "A" charges is to provide economic incentives for pollution reduction measures and to generate revenue. The charges in 1992 - 1993 were quite low (30% of the final rate); the polluters paid as required quite abidingly. There are plans to reduce the list of pollutants and to further decentralize certain charges.
The intention of the Slovak "A" charges is identical. It was reported, however, that at present 2/3 of the companies being subject to the charge are insolvent. In addition to both the Czech and Slovak "A" charge, there is a non compliance fee for air pollution (cf. 1.6), which can be levied if prescribed emission limits are exceeded.
The Polish SO2 and NOx charges are levied on companies. There is a corresponding system of permits. Proposed regulation includes the provision to increase the charges proportionally to the estimated inflation rate for the following year. The main purpose of the Polish SO2 and NOx charges in practice is revenue raising. Target groups and political actors often complain that the charges are too high, while investments in pollution abatement technology seem to be rare. In addition to both charges, non compliance fees can be levied (see 1.6), which are 10 times higher than the regular charges, if the emissions exceed the respective standards. In 1991 - 1993, 50 - 80% of imposed non compliance fees were not paid.
In Hungary it is planned to introduce an air emission charge together with the adoption of new air legislation which is in preparation at present.
| Country | Charge base and rate | Revenue | Revenue spending |
|---|---|---|---|
| Bulgaria | Households: as a % of value of the dwelling Firms: as a % of value of company or building |
10.9 mln ECU (Jan-July 1994) |
goes to overall budget of resp. municipality |
| Czech Republic | Households: Actual measurement Firms: Actual measurement |
not known | goes to waste treatm. plant operators |
The Bulgarian municipal waste user charge has been in force since 1951. The charge level per year is determined as a percentage of the value of a dwelling (for households); or as a percentage of the net value of a company or an institutional building. The yearly charge for an average Sofia household in 1994 is (based on 0.04% of the rateable value of the dwelling) 1.1 ECU (70 leva). There are some major shortcomings concerning the effectiveness of the charge. It is possible to use the revenue of this charge for purposes other than treatment of household waste (public health, education etc.). Due to the heavily restricted budgets of the municipalities, this practice has become almost standard. The method of calculating the charge level is not directly related to the volume of waste produced. Data on total revenue on national level are only collected since 1994. Proposals for a new Local (Municipal) Taxes and Charges Act are under discussion. It is expected that the new act will only set out the obligations for payment of taxes and charges, while leaving their level to be determined completely by the municipalities.
In the case of the Czech waste charges, it must be noted that charges for other types of waste such as special waste, dangerous waste etc. are similarly determined through the waste disposal charges. The municipal waste user charges were set up in many cases even before World War II, however, in 1992, charge levels have been fundamentally raised. The charge in Prague for instance, was ECU 14.53/ton in 1993, while rates in other municipalities are within 60% of this. The significant price increase since 1992 led to inconsistent effects: the number of illegal dumps has increased, as well as the number of citizens who are not willing to pay for this service; also, though it is not possible to quantify exactly the amount of solid waste produced, it seems to have decreased. Solid municipal waste production in the Czech Republic was ca. 5 mln tons in 1993.
| Charge base and rate | Revenue | Revenue spending | |
|---|---|---|---|
| Czech Republic | Imposed on operators of waste dumps. 5 categories of waste are distinguished. Two rates with different levels for each ca-tegory exist. Rate I is for financial compen-sation of the municipality where the dump is located; rate II is to stimulate to dispose the waste along the required criteria. |
Revenue of rate II: 1992: 3.28 mln ECU 1993: 4.94 mln ECU |
Rate I: revenue to municipal budget for environmental exp. Rate II: revenue to SEF (support of projects with respect to national waste policy) |
| Poland | 1.20 - 14.7 ECU/ton (1992) 0.90 - 11.0 ECU/ton (1993) The charge applies to different waste categories such as: pitch, sludge, motor oil, smears, packages, ashes, etc. The charge can be imposed on companies. |
1992: 44.7 mln ECU 1993: 50.4 mln ECU (1993=estimation) |
20% to NEP+WMF 30% to VEP+WMF 50% to LEP+WMF |
| Slovak Republic | Imposed on operators of waste dumps and waste producers. 5 categories of waste are distinguished. Two rates with different levels for each ca-tegory exist. Rate I is for financial compen-sation of the municipality where the dump is located; rate II is paid by waste produ-cers, who store waste in landfills that do not fulfill the required criteria. |
Revenue of rate II: 1992: 0.05 mln ECU 1993: 0.51 mln ECU (charge is in force since 6.5.1992) |
Rate I: revenue to municipal budget for environmental exp. Rate II: revenue to SEF (support of projects with respect to national waste policy) |
An example for the rates of the Czech charge on waste disposal is: Rate I for communal waste (category 3) is 0.58 ECU/ton, while rate II is 6.10 ECU/ton. For dangerous waste (category 5), rate I is 7.27 ECU/ton, while rate II is 145.35 ECU/ton. Rate II was phased in over 3 years. In evaluating the effectiveness of this charge (introduced in 1992) a problem is that still no exact evidence of dumps is existing. However, the introduction of these charges positively motivated the establishment of new dumps in accordance with the strict requirements concerning storage of waste. Also, the charges led to an often significant increase for waste storage, which makes waste producers implement rational waste policies. In line with significant changes related to the creation of a consistent waste management policy, the present charges will also be affected.
In case of the Slovak charge, rate I is for financial compensation of the municipality where the dump is located. Rate II is paid by waste producers, who store waste in landfills that do not meet the required criteria. Rate I is being phased in over five years (final rate in 1996). Examples for 1994: for solid municipal waste (category 3), rate I is 0.31 ECU/ton, while rate II is 0.36 ECU/ton; for dangerous waste (category 5), rate I is 3.89 ECU/ton, while rate II is 0.34 ECU/ton. No significant amendment of the waste regulations are expected within the next two years.
The main purpose of the Polish waste disposal charges in practice is revenue raising. In 1993, only an estimated 67% of the imposed charges were actually collected (86% in 1992). There are some efforts to collect delinquent charges from the often financially stressed enterprises. However, the inspectorates have limited possibilities for sanctions in case of non-payment and there is also a lack of political support for such action in some cases.
In Bulgaria, concrete proposals were elaborated in 1993 for the introduction of a new user charge for sewage treatment. The main aim of the proposed charge would be fiscal, in order to enable collective financing for building urban waste water treatment facilities. The proposed charge level is based on the estimated costs for treatment of 1m3 waste water resulting in meeting the requirements for second category water receiver. The specific charge level would be calculated on a quantitative basis, while for companies the degree of pollution would also apply. Provisions for inflation linked rate adjustments were made. The charges would be considered as the operating costs of water treatment facilities. The two main reasons for the delay of the governments approval are: 1) problems with the organization of collecting the charges, and, 2) opposition of some ministries to the charge levels.
| Country | Charge base and rate | Method of measurement |
|---|---|---|
| Bulgaria | F: waste water discharge or water usage | AM |
| Czech Republic | H: waste water discharge or water usage F: waste water discharge or water usage |
AM AM |
| Hungary | H: waste water discharge or water usage F: waste water discharge or water usage |
AM AM |
| Poland | H: waste water discharge or water usage F: waste water discharge or water usage |
AM AM |
| Slovak Republic | H: waste water discharge or water usage F: waste water discharge or water usage |
AM AM |
In the Czech Republic, user charges for sewerage and sewage treatment have been in place for decades. Since 1991, these charges have been significantly raised. The charge is usually to be paid together with the price for drinking water and determined by each municipality. In 1993, the charge for sewerage and sewage treatment in Prague was 0.19 ECU/m3, while the charge for drinking water was 0.24 ECU/m3 (charges in other municipalities are within 50% of this). Ca. 7 mln Czech citizens use sewerage. The significant price increases since 1991 have led to a reduction in water consumption. However, the current charges do not cover all treatment costs, and the municipalities provide subsidies in many cases. It is expected that the charges will be further increased.
The Hungarian charges for sewerage and sewage treatment are so called "regulated" prices set by the Ministry of Transport, Telecommunication and Water Management. In practice, the charge is high enough to cover just operational costs of an enterprise. Since the costs for providing waste water treatment varies for different regions, charge levels vary as well (between 0.3 - 1.2 ECU/m3). There are two major problems with the way the charge levels are set. First, the depreciation is based on the "old value" of the equipment; therefore only little accumulation is possible for replacement. Second, in those rare cases where the effluent is properly treated the cost and correspondingly the charge is high. Meantime Waterworks with no treatment costs charge less. These pay sewerage fines for their high level of pollution, but the level of that fine is far too low to provide any incentive to lower the pollution content of the effluent.
The Slovak user charges for sewerage and sewage treatment have been significantly raised since 1991. The charge is usually to be paid together with the price for drinking water and determined by each municipality. In 1993, a typical example for the sewerage and sewage treatment charge was 0.08 ECU/m3, while the charge for drinking water was 0.11 ECU/m3. Ca. 2.7 mln Slovak citizens use sewerage. The significant price increases since 1991 have led to a reduction in water consumption. However, the current charges do not cover all treatment costs, and the municipalities provide subsidies in many cases. It is expected that the charges will be further increased.
The Polish waste water effluent charges also utilize a system of permits. The main purpose of these charges in practice is revenue raising. In 1992 and 1993 only about half of the imposed charges have been actually paid. There are some efforts to collect delinquent charges from the often financially stressed enterprises. However, the inspectorates have limited possibilities for sanctions in case of non-payment and there is also a lack of political support for such action in some cases.
The Romanian waste water charge, in force since 1991, has mainly the character of a fund raising instrument. An essential part of the imposed charges is not being paid, mainly because of insolvency of charged enterprises. The charges are not adjusted to inflation.
| Country | Charge base and rate | Revenue | Revenue spending |
|---|---|---|---|
| Czech Republic |
|
1992: 26.2 mln ECU 1993: 37.8 mln ECU |
Revenue goes to SEF, from where projects are being supported with respect to water protection. |
| Poland |
|
1992: 83.6 mln ECU 1993: 59.9 mln ECU (1993 = estimation) |
36% to NEP+WMF 54% to VEP+WMF 10% to LEP+WMF for charges on saline coal mining waters (chlorides and sulfates): 90% to NEP+WMF 10% to LEP+WMF |
| Romania | suspendsion + subst. in solution 0.46 ECU/t oxygen consuming substances 1.86 ECU/t The charge can be levied on enterprises. |
1992: n.a. 1993: n.a. |
5% to Water Funds 95% to WIA |
| Slovak Republic |
|
1992: 10.77 mln ECU 1993: 7.79 mln ECU |
Revenue goes to SEF, from where projects are being supported with respect to water protection. |
| Slovenia | 2.40 ECU/E (for 1994) Emissions are calculated through some elements on the basis of calculating the factor E (population equivalent). |
1992: 3.8 mln ECU 1993: 4.9 mln ECU |
Revenue goes to the General State Budget. |
Regarding Slovenia, it was reported that as a result of the effluent charges the larger polluters have arranged to have their waste water treated on-site or at public waste water treatment facilities. The charge levels are being adjusted to inflation every year. There are plans to adjust the calculation methodology in connection with new production processes (due to privatization).
The Slovak waste water effluent charges are based on a system of permits. The charges are determined based on self measurement of the enterprises discharging waste water into surface water. The specific amount of the charges depends on the quantity of pollutants in the waste water and on the degree to which the quality of the receiving water is detoriated. Various formulas are specified to determine the charge for a specific pollutant. The system functioned quite well, however, nowadays the charge rates do not serve its incentive function anymore, because of the influence of inflation and price liberalization. With respect to the preparation of new legislation on water, the regulations about charges for releasing waste water will be amended.
In Hungary there are plans to introduce a water effluent charge, however, draft legislation is only in an early stage of preparation at present.
Regulations for additional product charges in Hungary have been prepared for tires, CFC content of refrigerators and packaging materials (the latter as a combined system of product charge/deposit refund). These proposals will be submitted for approval together with the new framework environment protection law (planned for the next months). While the proposal for the tire charge is intended as a mere revenue raising tool for the CEPF (1.2 - 2.3 ECU per new tire; the impact of the charge on the environment is rather unclear according to a feasibility study on the proposal). The proposal for packaging materials is including a provision for a mandatory percentage of reuse (if this percentage is reached, the charge would be refunded). The charge would be levied on "package material with volume" out of glass, metal, plastic or laminated material (not paper and wood). The charge rate would depend on the volume; e.g., for a volume of 1 liter, 0.07 ECU per piece and 0.08 per piece in case of material out of PVC. The revenue would be earmarked for support of recycling industries, however, the expected revenue of each of the charges is only about 5 000 - 10 000 ECU.
In Bulgaria, an instrument is in place that has a character similar to that of a product charge. Since 1993, an additional import duty is levied for the import of old cars which were first registered before 10 or more years. The additional duty is 10% of the car's value. The revenue goes to the National Environmental Fund. In 1993, the total revenue from this instrument was about 1 mln ECU and presented one third of the total income of the Fund.
In both, the Czech and Slovak Republic, charges on ozone depleting substances (ODS) are planned to be introduced. Producers and importers of ozone depleting substances would be charged. Czech legislation foresees a charge level of 100 Kc/kg CFC (2.9 ECU/kg at current exchange rate). In Slovak draft legislation, 20 Sk/kg (0.52 ECU/kg) ODS, mainly freons, and, 20-100 Sk per piece of product containing ODS, is proposed. The revenue of these charges would go to the State Environmental Fund in case of both countries. In case of the Czech charge the revenue would be used to support air protection measures, while in Slovakia support would be given to operators who recycle and regenerate ODS.
In all seven countries assessed, there is a tax differentiation between leaded and unleaded petrol.
In Hungary, necessary legal provisions for introducing emission trading are included in the draft versions of new general framework law and air legislation. Possibilities for emission trading in the field of air pollution (energy sector) is under discussion in mainly academic circles.
| Country | Item | Rate (% of price) | Return percentage |
|---|---|---|---|
| Czech Republic | Deposit refund on glass bottles 0.5 l beer bottles 0.7 l wine bottles 1.0 l wine bottles 0.25-0.33 l soft drink bottles 1.0 l soft drink bottles |
0.09 ECU/bottle (20-40%) 0.09 ECU/bottle (5-10%) 0.09 ECU/bottle (20-60%) 0.09 ECU/bottle (40-100%) 0.12 ECU/bottle (15-30%) |
70-80%(for all types) |
| Hungary | Deposit refund on glass bottles 0.7 l wine bottles 0.5 l beer bottles 1 l soft drink bottles |
ca. 0.07 ECU/bottle (<10%) ca. 0.05 ECU/bottle (15-20%) ca. 0.11-0.18 ECU/bottle (30-50%) |
In 1991: ca. 70-80% 103% ca. 70-80% |
| Poland | Dep. ref. on beverage containers 0.5 l cream bottles (glass) 0.5 l beer bottles (glass) 0.7 l wine bottles (glass) 2.0 l soft drink bottles (plastic) |
0.06 ECU/bottle (18%) 0.06 ECU/bottle (12-15%) 0.06 ECU/bottle (5-8%) 0.04 ECU/bottle (34%) |
n.a. |
In Hungary, there are plans to introduce a new product charge/deposit refund system on packaging material, which would influence the deposit refund currently in force. New experience is being gained with returnable PET bottles. While the market shares for beer and wine bottles (ca. 95% and 80% respectively) is high, for soft drink bottles it is ca. 30% and 10% in case of returnable PET bottles. As shown in Table 6, the return rate of beer bottles was 103% in 1991 according to official data. This apparently was due to the contribution of "imported" beer bottles from neighbor countries.
In Poland, the level of deposit rates depends on voluntary negotiations between industry and retailers. The deposit refund on 2l plastic soft drink bottles has been in force since the beginning of 1994. It is expected that the list of containers (e.g. for other beverages) being subject to deposit refund will be extended.
About 70% of the imposed fines are actually collected. The reasons for this shortcoming are legislative gaps with respect to the enforcement of sanctions on delayed payments. The monitoring costs of the Inspectorates to control the compliance with the standards are rapidly growing. The relative cost share of administering the fines is varying up to 30% of the income. The practice of the past few years did not prove the expected effect of the "polluter pays principle". The continued dominance of state owned companies in the most important economic sectors, the extensive capital investments needed for meeting the rather stringent standards, as well as the widening of the private sector mainly in small enterprises, present difficult conditions for the implementation of the fines. It is expected that in the short term the fine levels would be updated again, while in the long term the fines could be replaced by pollution charges.
The importance of the air - non compliance fee is expected to increase with the gradual tightening up of the emission charges. Strict application takes place only for new sources (established in 1992 or later) and at present the number of these is still very limited. It is under consideration to change the air non compliance fee into a fully regional instrument, with the allocation of all revenue to the municipality where the fee was imposed.
The non compliance fee on waste water is determined as a certain percentage of the waste water effluent charge to be added to the actual effluent charge level if water standards are exceeded. This percentage is being calculated by taking into account the extent by which the standards are exceeded and specific deterioration constants given for the five waste water categories on which the effluent charge is also based. The functioning of this fee is affected by several exemptions to levying the fee: the fee is not levied on public institutions (schools, hospitals etc.); only 20% of the calculated fee must be paid by public sewerage operators; and, the maximum fee that can be imposed must not be higher than the respective effluent charge. Along with the preparation of a new Water Act, new methodologies for dealing with the waste water non compliance fee are under consideration; it is even possible that these fees would be abolished.
Various possibilities are defined in Czech environmental legislation to levy penalties in case of infringement of special regulations. Such penalties are in the range of 300 ECU - 0.3 mln ECU. In practice, penalties are used rather infrequently and usually the lowest possible rate is levied. This instrument is much more of a enforcement tool than an economic incentive tool. It is planned to assess the efficiency of the penalties and also to gradually unify the penalties for separate areas in order to ensure a consistent system of penalties.
| Country | Type (proportional to) | Revenue | Revenue spending |
|---|---|---|---|
| Bulgaria | Air (emission concentration, working hours, exceedance of standards) Water (emission concentration, working hours, exceedance of standards) Soil (damaged area, dangerousness of polluting substances) |
1992: 0.30 mln ECU 1993: 0.70 mln ECU
1992: 0.49 mln ECU
1992: 0.43 mln ECU (total revenue) |
The revenue of all fines is to be used for environmental expenditures. 30% goes to respective municipalities and 70% to NEPF. |
| Czech Republic | Air (exceedance of standards results in a fine of up to 50% of standard charge) Water (exceedance of standards, in connection with water effluent charges) Penalties on infringement of specific environmental laws |
1992: 0 ECU 1993: 0 ECU
ca. 20% of waste water n.a. |
Revenue goes to SEF Revenue goes to SEF Partly to SEF, partly to municipalities |
| Hungary | Air (exceedance of standards, operating time, regional factors, emission height, etc.) Water (discharge volume, emission conc., type of receiving water, other factors) Hazardous waste (quantity of waste, hazardousness of waste) Others: sewerage, waste import, noise, nature conservation (the latter 3 fines do not generate significant revenues) |
1992: 2.5 mln ECU 1993: 3.3 mln ECU
1992: 2.3 mln ECU
1992: 0.37 mln ECU
(Note: all figures |
Revenue of the fines is used for environmental expenditures. 30% to respective municipalities and 70% to CEPF. (revenue of sewerage fines go to service companies.) |
| Poland | Air (10 times the regular SO2 and NOx charges) Water (depends on quantity, temperature, pH, contents of waste water) Waste disposal (1/20 of the annual disposal charge/ ton and number of days of depositing waste without valid permit) |
1992: 1.46 mln ECU 1993: 0.30 mln ECU
1992: 4.98 mln ECU
1992: 0.27 mln ECU (all 1993 data = est.) |
same as with air emission charges same as with waste water effluent charges same as with waste disposal charges |
| Romania | Air Water Energy consumption Others (waste import, land protection, nature conservation) |
n.a. n.a. n.a. n.a. |
n.a. WIA and Water Fund of Romania n.a. n.a. |
| Slovak Republic | Air (exceedance of standards results in a fine of up to 50% of standard charge) Water (exceedance of standards, in connection with water effluent charges) Other infringement of environmental law |
1992: 0 ECU 1993: 0 ECU
incorporated into revenue
1992: 0.53 mln ECU |
Revenue goes to SEF Revenue goes to SEF Partly to SEF, partly to municipalities |
| Emission charges | User charges | Tax diff. | Product charges | Deposit refunds | Enforcement incentives | ||||
|---|---|---|---|---|---|---|---|---|---|
| air | waste | water | mun. waste | sewerage and sewage | gasoline (lead cont.) | glass bottles* | non-compliance fees | ||
| Bulgaria | (x) | x | x | x | applied in various fields | ||||
| Czech Republic | x | x | x | x | x | x | (CFCs) | x | in connection with emission charges |
| Hungary | (x) | (x) | x | x | fuel (packaging material), (tires), (refrigerators) |
x | applied in various fields | ||
| Poland | x | x | x | x | x | x | in connection with emission charges | ||
| Romania | x | x | applied in various fields | ||||||
| Slovak Republic | x | x | x | x | x | (CFCs) | in connection with emission charges | ||
| Slovenia | x | x | |||||||
Efficient implementation of economic instruments is hindered by the great differences in levels of modernization and profitability of enterprises, and the fast growing number of small new enterprises. Some enterprises have adapted very quickly to the changing circumstances while others are foundering. Data indicating the differences between imposed charges and fines and amounts actually paid show an inability and in some cases an unwillingness of enterprises to pay. Furthermore, inflation, still relatively high in all of the countries (the lowest rate, in the Czech Republic, remains almost three times higher than the EU average) has the effect of eroding the value of fixed charge and tax levels. Only in a few cases are there mechanisms in place to adjust for inflation. In some countries, for instance fine levels have not been adjusted since 1989.
Most sectors of society are experiencing economic hardship. The governments in these countries seriously lack financial resources and many of the citizens are also struggling as their buying power and salaries are low in comparison with EU averages. While it is true that incomes in the region have risen they have not kept pace with inflation and the steadily rising costs of living. Most households are facing tight financial situations and this is a decisive factor in political decision making. Citizens are often strongly resistant to paying more (or anything at all) for services like household waste management or sewerage treatment, though it is rational to require the users of those services to bear their costs.
The use of main parts of the revenue collected through economic instruments happens through these funds. All but the Polish Fund, which is an independent institution, are based within the administrative structure of the respective Ministry of Environment. The Fund's revenues are spent on a long term basis according to priorities outlined in the national environmental policies, or in the case of Hungary the Ministry's "conceptual settings". The Fund's attempt to meet the long term objectives of national policies through the formulation of annual budgets or "Programs" in which specific priorities are established. Two examples shall be given at this point: In Bulgaria, in 1993, a total of US$ 2.3 mln was allocated from the Fund, of which 31.7 % were interest free loans to companies, 19.4% as subsidies to municipalities, 40.5 % as grants for improving the environmental monitoring system of the country, and 5.5 % grants for scientific research works related to the environment. In the Czech Republic, in the period of 1992-1993, from a total of US$ 223.4 mln 50.6% was invested in waste water treatment plants, 13.2% in heat plant conversion to gas, 10% in city fuel conversions to gas, and others 26.2%. From these investments, 63.8% went to municipalities, 24.9% to enterprisers, and 11.3% to public and private institutions.
| Key Characteristics | Bulgaria | Czech Republic | Hungary | Poland | Slovak Republic |
|---|---|---|---|---|---|
| 1993 National Fund environmental expenditures | 2.3 mln US$ | 107.0 mln US$ | 27.7 mln US$ | 198.5 mln US$ | 34.7 mln US$ |
| (as a % of total national environmental expenditures) | (7 %) | (10 %) | (11 %) | (22 %) | (20 %) |
| 1993 revenues | 3.6 mln US$ | 101.0 mln US$ | 36.3 mln US$ | 284.0 mln US$ | 30.8 mln US$ |
| Major revenue sources (with % of total value) | - pollution fines (58%) - additional import duty on used cars (33%) |
- water charges (41%) - air charges (30%) - waste charges (13%) - "land" charges (12%) |
- fuel tax (44%) - traffic transit fee (20%) - PHARE support (19%) - pollution fines (17%) |
- air emission charges - wastewater charges - water use charges - waste charges |
- State Budget (37%) - waste water charges (30%) - air emission charges (25%) |
| Primary disbursement mechanisms in 1993 (with % of total expenditures) | - grants (68%) - interest free loans (32%) |
- grants (71%) - loans (29%) |
- grants - interest free loans |
- soft loans(77%) - grants (17%) - interest subsidies (6%) |
- grants |
| Major fields of 1993 expenditures (with % of total value) | - monitoring system (40%) - loans to companies (32%) - subsidies to municipalities (19%) |
- water (58%) - air (33%) |
- air (70%) - waste (15%) - water (11%) |
- air (47%) - water (35%) - other, i.e., soil, nature protection, monitoring, education, emergencies (18%) |
- water (48%) - air (27%) - waste (8%) |
In most of the seven countries studied government environmental decision making is officially based on the national environmental policy or strategy. However, main challenges remain in all countries to evaluate and define concrete and feasible qualitative and quantitative objectives in the short and long term, as well as in harmonizing aims of environmental policies with other sectoral policies. Environmental regulation generally is not as comprehensive or coordinated as it could be and as policy tools, economic instruments should be designed and implemented taking more fully into consideration cross-sector impacts and opportunities for integration of environmental protection and economic development.