Discussion Topic 2 Discussions TOPIC 2: Implementation costs

1. Discussion Topic 2DiscussionsTOPIC 2: Implementation costs

2. Initial set-up costs • Consultation with key actors and stakeholders (national and local government); • Establishment of the competent authority (CA) (national government); • Devising quality assurance systems and procedures (CA); • Provision of training (CA); • Preparing initial technical guidance documents (CA); • Setting up a public information and warning system (CA). • Initial set-up costs relatively LOW

3. Capital expenditure • Purchase and siting of network of air quality monitoring stations and associated quality-assurance equipment for assessment and classification (CA, local authorities); • Implementation of improvements to industrial sources (changing materials, processes and/or adding abatement technology) (costs by industry or other owners of the sources).

4. Ongoing running costs - 1 • Updating technical guidance documents and setting up telephone helpline (CA); • Assessment and classification (e.g. operating the network of air quality monitoring stations and associated quality-assurance equipment) • Maintenance of monitoring station network (repairs, spares, consumables, rental of sites, electrical power) (CA, LAs); • Analysis of samples (CA, LAs); • Maintenance of quality-assurance facilities (CA and some LAs); • Modelling of different emissions control scenarios and the subsequent development of plans • costs for local modelling = capital costs of one multi-pollutant monitoring station

5. Ongoing running costs - 2 • Compiling and checking of results from modelling and monitoring (CA, LAs); • Preparation and updating of plans and programmes to achieve compliance with air quality limits (CA, LAs and possibly by major industrial sources); • Fiscal incentives to use less-polluting materials/equipment (nat gov, LAs); • Keeping and updating of inventories • Maintenance of a public information system (CA, LAs); • Production of reports for the Commission (CA). • Evaluations of the technical and economic feasibility of achieving emission reductions to ensure cost-effectiveness.

6. Compliance costs • The costs of achieving compliance by emitters of pollutants that cause exceedances of air quality limit values will probably be the major single cost of compliance. • To be borne by the polluters themselves (industry, householders, motorists etc). • This may require the polluter pays principle to be incorporated into national legislation. • Potential role for subsidies or other economic instruments to reallocate some of these costs to the taxpayer through the national government. • Plans should be made to maximise the mass of pollutant emission abated per euro invested, except where local pollution problems are of prime importance. • The costs of reporting, providing information and consulting are likely to be comparatively low. • Mainly incurred by the competent authority and possibly also by local authorities, depending on exact arrangements for monitoring and assessment. • Potential cost savings by using efficient reporting methods • Compliance costs can also involve: • Modifying fuels (e.g. cleaner fuels for transport, industrial plants) • Modifications to stationary sources (public sources and private sources including power plants, waste treatment facilities, production plants) • Costs are relatively HIGH

7. Some costs related to Directive 2008/50 • Increased costs: • Quality assurance is more formalised and stricter enforcement needed, (examples of quality assurance related expences: reference laboratory, regulations and recommendations) • Costs for implementing PM2.5 values – local, regional and national costs • Decreased costs: • Increased focus on calculations/modelling of concentrations - partly off-set monitoring stations (reduce the number of monitoring stations)

8. Examples from Member States - UK • 2007 Air Quality Strategy for England, Scotland, Wales and Northern Ireland • Interdepartmental Group on Costs and Benefits (IGCB) responsible for the formal economic analysis of air quality policy • Result: „Economic Analysis” detailing assessments of the additional policy measures set out in the strategy: • monetary cost benefit analysis; • quantified impacts on current air quality objectives and ecosystems; and • qualitative assessments such as the effect on noise levels, socio-economic outcomes and competition effects. • One conclusion: the ex-post implementation costs have beenless than the predicted costs ex-ante due: • uncertainities in assessing costs • regulation can spur innovation and that the ex-ante CBA may not adequately predict the impact of innovation on costs

9. Examples for MS – UK (2) • Assessment of benefits should be based on CBA • should also cover all impacts (e.g. exceedences of current limit values, ecosystem effects) • The benefits are then comparedon a consistent basis with the costs associated with the implementation of each of thepolicy measures • There are good benefit to cost ratios for the air quality policies that have beenimplemented in at least two sectors (in this case electricty supply and transport)

10. Swedish estimated costs - adapting to new rules

11. Thank you for your attention! Miriam Markus-Johansson, Project Manager, REC Hungary (mmjohansson@rec.org)