Evaluation of Environmental Spending Trends in Europe for Sustainable Development

1. Balkan Environmental Association AN EVALUATION OF ENVIRONMENTAL SPENDING TRENDS IN EUROPE WITHIN THE CONTEXT OF SUSTAINABLE DEVELOPMENT Dr. Caner Zanbak Environmental Advisor, Turkish Chemical Manufacturers Association International Symposium on IMPLEMENTATION OF THE EUROPEAN ENVIRONMENTAL DIRECTIVES: PROBLEMS AND SOLUTIONS 28-29 September 2004 Athenee Palace Hilton Bucharest – ROMANIA

2. DEVELOPMENT SOCIAL IMPROVEMENT in Quality of Life ENVIRONMENT ECONOMICS 1 3 2 Meeting the Needs of Humans Resource CONSERVATION ENVIRONMENT SUSTAINABLE DEVELOPMENT BASIC PRINCIPLES: • DEVELOPMENT • Industrialization • Services ..... • Education .... • Culture-Arts .... • SHELTER and FOOD • Agriculture, • Animal Farming, • Fishing, • Forestry, • Mining, Petroleum, Gas, • Water, • Air • Prevention of Waste • Pollution Prevention (PROTECTION of Human Health and Environment)

3. SUSTAINABILITY of DEVELOPMENT A hard “BALANCING TASK”

4. EKC Concepts Economic Growth without due attention to Environmental Concerns Chemicals Management, Cleaner Technologies + Pollution Implementation of Effective Environmental Protection Measures Developing Countries Current Model for EKC ECONOMIC DEVELOPMENT (per capita Income) Environmental Quality- KUZNET’S CURVE Approach “income inequality first rises and then falls as economic development proceeds” (Kuznets, S., 1955) • Environmental Kuznets Curve(EKC) - a hypothesized relationship between various indicators of: • environmental degradationand • per capitaincome EKC Hypothesis: “level of pollution first rises and then falls as economic development proceeds”

5. Environmental Awareness Developed Countries Developing Countries 1990 1995 1970 1975 1980 1985 2000 YEARS DEVELOPED COUNTRIES Wastewater Treatment, Waste Recovery/Disposal Facilities + Infrastructure Services + Education + Control and Monitoring + Incentives Cumulative Environmental Expenditures DEVELOPING COUNTRIES 1990 1995 1970 1975 1980 1985 2000 YEARS ENVIRONMENTAL AWARENESS AND ENVIRONMENTAL EXPENDITURES

6. and • such efforts necessitate allocation of adequate funding for investment and operational costs. ENVIRONMENTAL SPENDING The environmental quality,irrespective of development level of the countries, • is directly related to: • integrated protectionand resource conservationefforts of the communities

7. $400 Austria, UK, Germany, France, Netherlands, Finland per capita $ $300 $200 Portugal Greece Expenditure, Spain Poland $100 Slovakia Turkey $50 Slovenia Estonia $0 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 per capita GDP AnnualCountry Total Environmental Expenses 1996-2000 period averages EU-15 Average Data Source:EUROSTAT data http://europa.eu.int/comm/eurostat/newcronos/queen/index.html)

8. $400 $350 PUBLIC $300 INDUSTRY $250 TOTAL Germany, France, Netherlands, Austria, Finland $200 Expenditure,per capita Portugal Greece $150 $100 $50 $0 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 per capita GDP Annnual TOTAL Environmental Spending in Europe Data Source: EUROSTAT

9. Environmental INVESTMENTExpenditures • Investments made towards purchasing of: • end-of-pipe pollution prevention units • process-integrated pollution reduction • (such as, wastewater treatment plant and • production technology improvement) Environmental OPERATIONALExpenditures • Expenditures towards provision of: • own environmental operational services • environmental services • operational goods from the market • (such as, wastewater treatment plant operation, • waste disposal, air filters, analytical testing ..) Annnual Environmental Spending in Europe Data Source: EUROSTAT

10. PUBLIC Spending $70 $60 Air $50 $70 per capita Wastewater Waste $40 $60 Other Air $30 $50 per capita Wastewater Expenditure, $20 $40 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 Waste per capita Other GDP $10 $30 Expenditure, INDUSTRY Spending $0 $20 $10 $0 $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 per capita GDP Annnual Environmental Spending in Europe by environmental Domains(Air, Waste, Wastewater, other) Public spending shows a generally increasing trend both for investment and operational costs as the economic wealth increases (except for Air Domain).. Industry’s spending increase rapidly after $10,000 per capita GDP level (except for Air Domain) Data Source: EUROSTAT

11. 1999 ENVIRONMENTAL EXPENDITURES of the EU INDUSTRY AB’de SANAYİNİN 1997 YILI ÇEVRE HARCAMALARI EU TOTAL Environmental Expenditures: 0,8 - 1.2% of the GNP(~70 – 80 billion € ) Germany : 19,1 billion€ France : 19,5 billion € Greece : 680 € Environmental Expenditures of the EU Industry: 0,3 - 0,6% of the GNP (~25 – 30 billion € ) % 1.5 - 2.5 % of the Gross Added Value of the Industry Germany : 7,9 billion€ France : 9,7 billion€ Greece : 280 € Main Environmental Spending Areas in the EU: Public : Water+Wastewater, Waste Industry : Water+Wastewater, Air, Waste Reference: EUROSTAT

12. Environmental Domains Waste Wastewater 3 3 3 3 3 3 3 Investments Air Other protection of soil and GW, noise, biodivers. radiation, gen. admin 2 2 2 1 1 1 1 1 1 Waste Wastewater Operational Expenses Air Other protection of soil and GW, noise, biodivers. radiation, gen. admin SPENDING TRENDS in EUROPE by Environmental Media

13. vs Share in GDP 2.56% $500 2.50% $450 per capita, $ % of GDP $400 2.00% $368 $350 per capita $ 1.66% $300 1.50% $274 $250 Expenditure, % of GDP 1.04% 1.23% $195 $200 1.00% 0.88% 1.10% 0.84% Expenditure, 0.98% $150 $132 $100 0.50% $84 $52 $38 $50 $41 $0 0.00% $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 per capita GDP Environmental Spending In comparison to the Developed Countries, the burden of Environmental Protection is much larger for the Developing Countries. Data Source: EUROSTAT

14. In other words, In cases where the PUBLIC SECTOR does not do adequate environmental expenditures (sewer system, wastewater treatment, waste disposal facilities...) Environmental protection efforts and investments done by the INDUSTRY ONLY For the success in ENVIRONMENTAL PROTECTION efforts, the Public Sector should do adequate spending on Infrastructure and its Operational Expenditures, along with the required industry spending. WILL NOT BE EFFECTIVE !!!!

15. An old saying goes as: IN SUMMARY If we want a Cleaner Environment: • Conserve Resources • Don’t Pollute To reach Cleaner Environmental conditions: • Educate people Money required !!! • Manage waste • Clean apparent contamination you GET what you PAID FOR !! NO money spent on Environmental Protection, NO CLEAN ENVIRONMENT !!

16. $2,000 Total $1,500 Public GDP, Env. Spending Industry perCapita per capita $1,000 $1,500 $38 Expenditure,per capita $2,500 $42 $5,000 $52 $500 $10,000 $84 $0 $0 $2,000 $4,000 $6,000 $8,000 $10,000 $12,000 per capita GDP Based on a mathematical model developed by C. Zanbak EUROSTAT base data 1996-2000 (REFERENCE : http://europa.eu.int/comm/eurostat/newcronos/queen/index.html) AnnualENVIRONMENTAL SPENDING ESTIMATE for a COUNTRYwith 23 million population

17. Education, • Investment, • Enforcement, • Incentives, • ......... ! ! ! Science SUSTAINABILITY of DEVELOPMENT A hard “BALANCING TASK”

18. Turkish Chemical Manufacturers AssociationTürkiye Kimya Sanayicileri Derneği www.tksd.org.tr Değirmen Sok. Şaşmaz Sit. No:19, Duranbey İşhanı K.3, D.9 Kozyatağı– 81090 Istanbul, Turkey Tel : +90 216 416-7644, +90 216 416-94 39 Fax: +90 216 416-9218 e-mail : tksd@tnn.net