Mati Raidma, Minister for the Environment in the Republic of Estonia explains why environmental charges are crucial to help reduce the effects of climate change
The purpose of imposing environmental charges is to prevent or reduce the possible damage relating to the use of natural resources, emission of pollutants into the environment and waste disposal. Areas covered include ambient air protection, water resource management and pollution control, mineral resource extraction, waste management, climate control.
Environmental charges are a supplementary instrument to other regulatory means. Their more specific purposes are:
- Sustainable use of natural resources;
- The use of environmentally friendly material and fuel;
- Renewable energy and reuse solutions;
- Users of the environment to apply protective measures to limit the extent of damage to the environment and human health.
To assist in
- Internalising environment related external costs to production cost.
To gather finances for
- The restoration and sustainable use of natural resources, environmental protection and maintaining the state of the environment and to finance ecological diversity protection.
The proceeds from environmental charges are divided between the state budget and the budgets of the local authorities where the environmental use is located. Charges to local authorities compensate for the environmental impacts inflicted on the region, and charges to the state budget enable environmental tax reforms and transfer taxation from labour to resource use and pollution.
Part of the state budget revenue obtained from environmental charges is also allocated to the Estonian Environmental Investment Centre, for the purposes of maintaining the environment, restoration of natural resources and remedying environmental damage, using a project-based financing model.
Environmental regulation and charges are important in order to reduce environmental impacts. A short overview of environmental usage in the year 2013 is given below:
- Charged emissions into the ambient air: 1.255m tons of CO2, 4,000 tons of volatile organic compounds, 17,000 tons of NOx, 36,000 tons of SOx, 12,000 tons of particulates;
- Mineral extraction: 983,000 tons of peat, 2.16m m3 of sand, 750,000m3 of clay, 2.9m m3 of limestone and dolomite, 773,000m3 of gravel, almost 16m tons of oil shale;
- Water abstraction: water from mines and quarries 167m m3, 1.49bn m3 of cooling water, 82m m3 of water from aquifiers;
- Water pollution: 119 tons of phosphorous compounds, 11,000 tons of suspended particles, 81,000 tons of sulphates, 1.38 tons of monophenols, 2,500 tons of nitrogen compounds, 60.1 tons of oil products and 30,124 tons of other hazardous substances;
- Waste disposal: 1.87m tons of mine waste from oil shale extraction, 8.3m tons of oil shale fly ash, 406,000 tons of oil shale semi-coke, 102,000 tons of municipal and non-hazardous waste.
In 2006 these quantities were much higher in some cases.
Environmental regulation has thus made an impact, but environmental usage in these amounts still takes place every year. One also has to take into account, that most of this takes place in one specific location in Estonia called Ida-Virumaa, which is where the oil shale industry is located.
Estonia has national goals that have to be achieved by 2020:
The ambient air:
- SO2 – reduce emissions 32%
- NOx – reduce emissions 18%
- PM2,5 – reduce emissions 15%
- VOC – reduce emissions 10%
- NH3 – reduce emissions 1%
- The good state of all water sources;
- Cut emissions to the Baltic Sea by 1,800 tons for nitrogen oxides and 320 tons for phosphorus.
- 50% of recycling for municipal waste.
Environmental charges are a market-based incentive for enterprises to change their pollutive activities and take measures for cleaner production.
It has been concluded in many research papers, that there is little evidence to suggest that strengthening environmental regulations deteriorates international competitiveness. The costs of environmental regulations need to be weighed up against the benefits they provide and which justify those regulations in the first place. The benefits are often important and severely underestimated.1
That is also the reason why in years to come, the external costs of the greatest environmental impacts in Estonia will be calculated to better take into account the benefits and costs to society.
1 OECD. Sustainable Bioeconomy Horizons, flash note 2015/01. Smart Bio-Green Tape.
Minister for the Environment
Republic of Estonia, Ministry of the Environment