Strategic Moves - Regional Environmental Center for Central and ...
Strategic Moves - Regional Environmental Center for Central and ... Strategic Moves - Regional Environmental Center for Central and ...
Introduction This chapter gives an overview of the main challenges in relation to developing environmental investment projects in SEE countries. The challenges outlined here are then explored in greater depth in subsequent chapters. Financing environmental infrastructure projects in compliance with the EU environmental acquis is a serious legal, financial and institutional challenge for any country. It requires the establishment of a clear legal and strategic framework — through the transposition of the EU water and waste acquis — that creates sufficient incentives and pressure on both the state administration and municipal project proponents to result in concrete actions for the reform of all relevant systems, both institutional and financial. The process necessitates significant financial allocations as well as the political will to reform the main institutions — the water and waste utilities — so as to make them capable of implementing the investments. “Constraints” and “challenges” are used here interchangeably, since all the factors discussed below hamper and slow down environmental infrastructure investments and thus need to be overcome. The authors use two criteria to classify the constraints/challenges to environmental infrastructure financing. The first criterion is administrative level: that is, national or municipal. This classification allows us to look at environmental infrastructure investment from the point of view of national governments and ministries, but also from the point of view of the municipalities that are responsible for the practical implementation of the relevant water and waste acquis. The main policy and planning work is carried out on the national level through the transposition of EU legislation and through the drafting of strategic documents that set out priorities and timeframes. On the other hand, local governments have the difficult task of implementing obligations that have been devolved to them following the process of decentralisation. They are faced with the obligation to implement investments that far exceed their budgetary means. In addition, they have to balance these investments with other, competing priorities linked to social and regional development. It is also the local governments that have to embark on a programme to reform the utilities that will be responsible for the investments in water and waste. The second criterion is the nature of the challenge/constraint, that is, political, economic, financial, legal, institutional, planning, or project preparation. Obstacles to environmental infrastructure financing — national level Political Low level of political will One of the main constraints to environmental infrastructure investments in SEE is the insufficient political drive for reform in connection with environmental financing. The level of political will is generally in direct correlation with the sta- S T R AT E G I C M O V E S 57
58 C H A P T E R 3 C H A L L E N G E S T O E N V I R O N M E N TA L F I N A N C I N G I N S E E TABLE 1: Key challenges and constraints at national level TYPE CONSTRAINTS DESCRIPTION ADDRESSED IN GREATER DETAIL IN Political Low level of political will This is in direct correlation with the status of the country regarding EU accession Chapter 2 Economic Low levels of GDP Leads to relatively low nominal amounts for environmental infrastructure investment from the national budget Chapter 2 Budgetary deficit in Leads to suspension of Chapter 2 times of economic crisis infrastructure projects Financial High level of investments Due to poor-quality water and Chapter 2 needed for full compliance waste infrastructure; long years of under-funding; and obsolete water and waste systems Legal Planning for approximation Missing in most countries Strategic documents Missing in certain countries and sectors Transposition Relatively low level of transposition of key directives Chapter 2 Enforcement Lack of capacity for the enforcement of newly transposed directives Chapter 2 Institutional Capacity of ministry Relatively low number of staff Chapter 2 and specialised agency for an increased body of environmental legislation Lack of specialised Few of the countries have Chapter 2 institutions (environmental specialised institutions, e.g. fund, national regulators) environmental funds Coordination Insufficient coordination among line ministries — competition for scarce funds and power, associated political influence on the process of project selection Chapter 2 Investment Lack of national environmental Necessary to properly map planning and investment strategies funding needs, available funding project by sources, as well as other issues identification such as institutional approaches Weak pipeline management Lack of proper coordination and communication between institutions in managing pipelines of environmental investment projects Lack of key sectoral Some sectoral plans and strategies and plans programmes for the implementation of directives are missing S T R AT E G I C M O V E S
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58<br />
C H A P T E R 3<br />
C H A L L E N G E S T O E N V I R O N M E N TA L F I N A N C I N G I N S E E<br />
TABLE 1: Key challenges <strong>and</strong> constraints at national level<br />
TYPE CONSTRAINTS DESCRIPTION ADDRESSED IN<br />
GREATER DETAIL IN<br />
Political Low level of political will This is in direct correlation with<br />
the status of the country<br />
regarding EU accession<br />
Chapter 2<br />
Economic Low levels of GDP Leads to relatively low nominal<br />
amounts <strong>for</strong> environmental<br />
infrastructure investment from<br />
the national budget<br />
Chapter 2<br />
Budgetary deficit in Leads to suspension of Chapter 2<br />
times of economic crisis infrastructure projects<br />
Financial High level of investments Due to poor-quality water <strong>and</strong> Chapter 2<br />
needed <strong>for</strong> full compliance waste infrastructure; long years<br />
of under-funding; <strong>and</strong> obsolete<br />
water <strong>and</strong> waste systems<br />
Legal Planning <strong>for</strong> approximation Missing in most countries<br />
<strong>Strategic</strong> documents Missing in certain countries<br />
<strong>and</strong> sectors<br />
Transposition Relatively low level of<br />
transposition of key directives<br />
Chapter 2<br />
En<strong>for</strong>cement Lack of capacity <strong>for</strong> the<br />
en<strong>for</strong>cement of newly<br />
transposed directives<br />
Chapter 2<br />
Institutional Capacity of ministry Relatively low number of staff Chapter 2<br />
<strong>and</strong> specialised agency <strong>for</strong> an increased body of<br />
environmental legislation<br />
Lack of specialised Few of the countries have Chapter 2<br />
institutions (environmental specialised institutions, e.g.<br />
fund, national regulators) environmental funds<br />
Coordination Insufficient coordination among<br />
line ministries — competition<br />
<strong>for</strong> scarce funds <strong>and</strong> power,<br />
associated political influence on<br />
the process of project selection<br />
Chapter 2<br />
Investment Lack of national environmental Necessary to properly map<br />
planning <strong>and</strong> investment strategies funding needs, available funding<br />
project by sources, as well as other issues<br />
identification such as institutional approaches<br />
Weak pipeline management Lack of proper coordination <strong>and</strong><br />
communication between<br />
institutions in managing pipelines<br />
of environmental investment<br />
projects<br />
Lack of key sectoral Some sectoral plans <strong>and</strong><br />
strategies <strong>and</strong> plans programmes <strong>for</strong> the<br />
implementation of directives<br />
are missing<br />
S T R AT E G I C M O V E S
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