The danger that should unite us. The future generations will have to pay for environment pollution

It is a novelty to say that environment condition in the Republic of Moldova is critical. The environmental problems we encounter today are deeply rooted and are very old, being a "heritage" from the Soviet regime.

The elderly people still remember the huge livestock complexes and farms that existed in the past during Bodiul's times, which had no "coverage" from the ecological point of view, and were profoundly harmful for the environment and for the health of the inhabitants. Or those chemicals' deposits, the last stocks of which are waiting for European funds and financial assistance from NATO so as to be transported to the waste burning enterprises ...

Hence, we can "boast" with the fact that our country is one the last places in Europe in relation to purity of phreatic water and surface water, high degradation rhythm for soil, forests, and green spaces from urban areas. 

The majority of environmental assets are public assets with an obvious value, but they are not traded on the markets (for instance, clean air, clean water, fishery resources, eco-systems, etc.) and thus there is no price to signal the relative deficit. The Environmental Fiscal Reform can attribute such a price which would reflect the deficit. 

The economic activities generate pollution and waste which imply some costs for others - "externalization" (for instance, increase in health costs due to air pollution associated with respiratory diseases). The Environmental Fiscal Reform may come with a contribution to "internalize" some of such "external" costs. In this context, the acting Minister of Environment, Sergiu Palihovici, stated at the conference organized with the occasion of the Environment Day that "By signing the Association Agreement between the Republic of Moldova and European Union, our country has assumed itself commitments for implementing some new environmental mechanisms and tools, and a sustainable thinking for the long-term in developing public policies. The Environmental Fiscal Reform, which will bring high benefits for the environment at the national and global levels, by adopting some subsidies, taxes, fines, and selected fees as well as other adequate fiscal tools, will have an important contribution to fulfilling these objectives".

Environmental Fiscal Reform

The Environmental Fiscal Reform is a highly-discussed topic, especially in the countries with European aspirations. The Ministry of Environment with the assistance and financial support of GEF and UNDP is implementing the Project "Environmental Fiscal Reform". During this project, in the period of July 2-3, 2015 there was organized a workshop on "Context of economic tools of the environmental policy". The workshop was launched by the Project Manager, Mihai Roşcovan, with a general presentation of the reform principles and objectives.

According to Mihai Roșcovan, the project has two main objectives and namely: to support the Government in implementing the environment protection commitments and setting up a sustainable platform for implementing the Environmental Fiscal Reform, which will be integrated with the policy documents and strategies of the different sectors.

"The Environmental Fiscal Reform is rather complex, complicated and for the time being is not well understood by the decision makers and citizens. The reform is not popular, as it tackles many people and needs essential structural changes in three areas: environmental, social and economic, being very important for citizens. At the same time, it is a necessary reform as without it we will not be able to fulfill the commitments assumed at the international level", said Mihai Roşcovan.

Mihai Roşcovan also mentioned that in order to implement successfully this reform, it is necessary to create a dialogue platform with all stakeholders so as to ensure a better understanding of the problems related to the environment. Moreover, the enforcement of these economic tools in the environmental policies is closely interdependent on the decision-making processes from a number of sectors. 

European experience, worth to be followed

The workshop participants representing the central and local administration, development partners and civil society got familiarized with the context of the economic tools of the environmental policies in our country and European Union .

The first topic on the agenda referred to the revenues from the environmental taxes. Different revenue alternatives were presented during this session for the recycling schemes and environmental funds. Another topic debated during the workshop referred to the share of the environmental taxes in the national public finance and the way in which the ecological funds are used.

During the workshop, the experience of the European countries was shared by the international consultant Marian Mraz from Slovakia, who is involved in the Project "Strengthening capacities to undertake Environmental Fiscal Reform to meet national and global environmental priorities".

This reform should determine the world to think that they have to pay for all the resources they use. The final goal is not only to collect revenues, taxes, but also to determine some changes in peoples' behavior, mentioned the international expert. 

"The reform per se does not mean the change of the fiscal legislation, it actually should lead to reducing certain already existing taxes. For instance, the income tax is rather high. We may try to reduce certain taxes so as to increase other. At the same time, the fiscal basis should be developed so as to not become a bigger burden. Slovakia may serve as a good example of fiscal reform, but not necessarily in the environmental area. In this respect, we can cite Holland, Denmark and Sweden. In the country of Central Europe there existed a strong incentive for environmental fiscal reform in Czech Republic, they succeeded very well to enforce the UN Directive on Energy", mentioned Marian Mraz.  

Environmental taxes in EU

In the European countries, the fines for pollution are very high, hence it is cheaper for the economic units to take measures not to pollute than to be sanctioned. Based on the studies that were carried, it was proved that the "green taxes" are efficient in reducing the impact on environment. In the EU countries, the environmental taxes account for 2.3-2.45% of GDP. In 2012, EU collected revenues of 311.6 billion Euro from environmental taxes or 6.05% of the total revenues. For the next year it is envisaged to have a level of 1.3 billion Euro in Austria, 12.1 billion Euro in France, 10.3 billion in Italy, 2 billion Euro in Romania and in Lithuania - a country comparable to the Republic of Moldova, it will be 0.3 billion.