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Estimate of Time required to Develop Harmonized Lawsa and Related Costs
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7. Estimate of time required to develop harmonized laws AND related costs
It is possible to speak with reasonable certainty about the schedule and financial costs associated with realizing the first stage of the adaptation (approximation) of EU directive regulations to national legislation. This stage, known as transposition, can be realized in two ways. The first, which is the shortest and the most effective in terms of rapid reform, can be called the “revolutionary” way. The second is the “evolutionary” way, for which more time is required for transposition and which could pose problems for further implementation and application of legislative regulations.
The revolutionary approach follows the one applied in the EU. A framework directive is passed that establishes the basic requirements and the foundation for the subsequent “subsidiary” directives. These requirements are then incorporated into national legislation. In a similar way, each country of the Dnipro River basin could pass a law closely approximating the relevant EU directive, i.e., its national counterpart, adapted to current national conditions and constraints. Adoption of such a law would automatically revoke all the related legal regulations currently in force with which it conflicts. This law would also establish a schedule for introducing the necessary changes and amendments to laws currently in force, as is accepted in the customary practice for amending legislation. This mechanism is well developed in each state and works effectively. Regulations of national legislation that are not at variance with the provisions of the directive would remain unchanged. In any case, the possibility of duplicating requirements in various national laws should raise no cause for concern because of the absence of adverse consequences, as evidenced by the several cases of duplication in laws currently in force.
The evolutionary approach to adapting national legislation differs from the revolutionary by not requiring the adoption of a directive’s national counterpart. In this case, however, all of the directive’s regulations without exception should be incorporated into current laws, which could render them overly cumbersome. The size of the Water Code, for example, could increase several times, thereby making it difficult to apply. At the same time, if there is a lack of will to realize adaptation in a short period of time, it could be extended over several years and divided into stages. Thus, everything depends upon legislative strategy.
It is therefore possible to speak of the minimum term required for accomplishing every activity associated with transposing each directive if the revolutionary approach to adaptation is taken. That schedule is presented in Table 5.1 (section 5).
According to expert opinion, the minimum time required for accomplishing the work related to the three top-priority directives is as follows:
Comparing each directive article with the relevant regulations of national legislation, using the tables of concordance (conducted within the project framework) – from 6 to 8 months
Development of a draft national law identical to the EU directive – from 12 to 18 months
In other words, provided there is appropriate financing, the first version of the three top-priority draft national laws corresponding to the above-mentioned directives could be developed in 2004, and the final version in 2005. Considering the necessary labor inputs, the estimated costs for Ukrainian experts to accomplish this work are tentatively as follows:
Directive 2000/60/ЕС, which establishes guidelines for activities in the area of water policy – EUR 150–180 thousand
Directive 96/61/ЕС on integrated prevention of pollution and control – EUR 100–120 thousand
Directive 91/271/ЕЕС on municipal sanitary water treatment – EUR 100–120 thousand
According to Ukrainian expert opinion, total costs could total EUR 350–420 thousand. According to the Russian expert estimate, however, the costs could be somewhat less, at EUR 300–400. Assuming the average of these two independent estimates to be the most reliable, the total costs for transposing the first three EU directives could therefore total EUR 325–410 thousand.
According to Russian expert opinion, which was based on an over-estimation, the approximate costs of implementation and realization of the requirements of the first three selected directives could total EUR 380–500 million. The Belarus and Ukrainian experts did not submit estimates.
At the same time, according to Golubovskaya [11], a most cautious estimate for the total cost of harmonizing environmental legislation with EU standards would be billions of EUR. In particular, harmonizing environmental legislation with EU standards and strengthening the institutional capacity of the environmental component of public administration would cost an average of EUR 500 million per year over the next decade. That article, however, casts little light on the methodology that was applied to obtain the estimate, which is very important. (The author of the Final Consolidated Report notes that Golubovskaya evidently did not mean harmonization (bilateral approach), but approximation or adaptation (unilateral approach).
It should be noted that the estimate for the total financing associated with developing the institutional, regulatory, methodological, informational, and manpower base necessary for implementing EU directives requires special calculations that can only be executed with input information not available at the moment. Estimating this financing with the use of approved methodology should be conducted later as a separate task in parallel with the development of the three draft national laws.
Estimating the costs of realizing the new requirements of these laws is even more complicated. This third and final stage of legislative approximation (adaptation) is known in the West as enforcement. A preliminary rough estimate of these costs is possible only after determining the general form of a system that would ensure application of the laws at the implementation stage, and after establishing a schedule for achieving their goals. At the same time, while estimating these costs and determining the sources of financing, it would be necessary to define the economic and other benefits resulting from the application of the requirements contained in these laws. Obviously, adherence to the new requirements would reduce the risks and extent of damage, and also enhance the value of the various components of the natural environment. This would also mean a more efficient use of natural resources for recreation, tourism, human health purposes, etc. The reduction of economic losses associated with an increase in the mortality rate and work-related time lost due to sickness would also be very significant.
A comparison of projected costs and benefits would enable a determination of the economic effectiveness of implementing the new legislation. However, this is not a simple task, so it might not be advisable for the Dnipro River countries to spend the time and money it would otherwise require. Rather, it would be easier and less expensive to study previous EU experience, namely, its records of the impact and effectiveness of new legislation. One might assert with certainty that the EU does not adopt laws that are unfavorable to the community. Thus, the risks for the Dnipro River countries of negative consequences from following the EU example are not substantial, although it would be necessary, of course, to follow the EU example in a prudent manner, taking into account the national features and specific conditions of each state.
The third recommended document of the Environmental Agency of Great Britain, published in August 2003, provides useful information on this very point. For example, there is a cost-benefit analysis of implementing Framework Directive 20000/60/ЕС on water policy issues in England and Wales. The expected costs (in sterling) are as follows:
Point sources of pollution (per year) – GBP 192–704 million
Agricultural sector (per year) – GBP 80–209 millionNon-recurring expenses for the enhancement of river habitats – GBP 143–668 million
The expected benefits are as follows:
Improvement of water quality in the rivers (per year) – GBP 105-522 million
Recreation in estuaries (lakes, wetlands, riverside water) (non-recreational benefits not taken into consideration) – GBP 1.5 million
Incidental benefits as a result of landscape improvement – GBP 1410–3508 million
As the above demonstrates, total annual costs are approximately twice as much as projected annual benefits. At the same time, non-recurring expenses are approximately 10–20% of expected benefits. One may therefore expect positive economic effects from the implementation of Framework Directive 2000/60/ЕС in England and Wales. In subsequent implementation stages of Framework Directive 20000/60/ЕС on water policy issues, the estimates will be determined with greater precision. It is recommended that the Dnipro River countries keep a record of changes in these estimates on a regular basis, not only in England and Wales, but also in other European countries.
References
A. Golubovskaya-Onisimova. “European Union and Ukraine before and after the Kyiv conference.” Information and analytical bulletin “Kyiv 2003,” No.6, May–July 2003, p.11.
