/V)
V

                  REPORT TO CONGRESS
                               \

               Requested under Section 703 of the
                 "i *                            •
SUPPORT FOR EAST EUROPEAN DEMOCRACY (SEED) ACT OF 1989
                  ENVIRONMENTAL CONDITIONS IN POLAND AND HUNGARY
                          U.S. ENVIRONMENTAL PROTECTION AGENCY
                               '.  «
                                                 t
                                                 If

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                                TABLE OF CONTENTS
EXECUTIVE SUMMARY
CHAPTER 1: INTRODUCTION
       The Dilemma of Development
       The European Context
       The Environmental Legacy of Central Planning
       Prospects for the Future
       Figures and Tables
  9
 10
 12
 14'
 15
CHAPTER 2: POLAND - AN ASSESSMENT OF PROBLEMS AND PRIORITIES
       The Extent of Environmental Degradation
       The Costs of Environmental Damage
       Energy Use and Environmental Quality
       Priorities for Environmental Policy
       The Social Response to Environmental Degradation
       Figures and Tables        •            .
 27
 32
 36
 43
 51
 54
CHAPTER 3: HUNGARY - AN ASSESSMENT OF PROBLEMS AND PRIORITIES
       A Geographic Overview of Environmental Problems
       Energy Use and Environmental Quality
       The BoslGabcikovol-Nagymaros Dam Project
       The Administration of Environmental Protection
       The Social Response to Environmental Degradation
       figures and Tables
 80
 89
 92
 93
 97
101
                                                                                   I.
                                                                                     f
                          I    -  - 15,-
                                                                              f
                                                                             <*

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7,
                            CHAPTER 4:  INTERNATIONAL COOPERATION

                                  Avenues of International Cooperation
                                  Current International Initiatives:
                                     U.S. Government Programs
                                     U.S. Non-Governmental Programs
                                     Multilateral and Other Bilateral Programs
                                  Initiatives of Multilateral Development Banks

                            CHAPTER 5:  POLICY RECOMMENDATIONS
120

124
127
130
132
                                  Underlying Principles for U.S. Government Policy
                                  Priorities for U.S;' Policy
                                  Conclusion               •   *"  •-
137
,146
152
 i-i
                            APPENDICES                              : '.-•*'

                            A:     U.S.* Government Interagency Environmental .and Energy Strategy
                                 . for Central and Eastern Europe
                            B:   . . National Environmental Policy (Poland) .                   •   '
                            C:     Draft of Proposals and Projects for Future.Cooperation in the Environmental Sector (Hungary]
                            Bibliography .  .;.  .
I)  '
                                           HEADQUARTERS LIBRARY
                                           ENVIRONMENTAL PROTECTION AGENCY
                                           WASHINGTON, D.C. 20460

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                                   LIST OF FIGURES
                                                                                    page
CHAPTER 1                   .
Figure 1       Depositions of SO2 hi Europe, ug/m'/mo.                                 16
Figure 2       Average Annual Concentrations of Nitrogen Oxides In Europe. 1985, ugN/m3 17
Figure 3       Average Annual pH Values of Precipitation in Europe, 1986                 18

CHAPTER 2  '
Figure 4       Air Pollution by Sulfur Dioxide                                           55
Figure 5       Industrial Paniculate and Gaseous Emissions, according to Branch of       56
            '"'Industry,  1988             '
Figure 8       Water Quality Protection    .                '                          57
Figure 7     '  Water'Quality In  Polish'Rivers, 1987. According to Physical Chemical        58
              Criteria,
Figure 8       Water Quality in  Polish Rivers, 1987, According to Biological Criteria         59
Figure 9       Industrial Hazardous Waste According to Branch of Industry, 1988          60
Figure 10     Geographic  Distribution of Heavy Metal Contamination In Poland            61
Figure 11     Areas of 'Ecological Hazard' in Poland                                   62
                                                                                   /
Figure 12     Areas of Degradation, Threat, and Protective Activity                       63
Figure 13     Organization Chart of the Ministry of Environmental Protection,             64
              Natural Resources, and Forestry
 CHAPTER 3
 Figure 14      Areas Affected by SO2 Pollution
 Figure 15      Areas Affected by NOX Pollution
 Figure 16      Areas Affected by Paniculate Pollution
 Figure 17      Urban Areas of Poor Air Quality
 Figure 18      Water Use in Hungary, 1970-1984
102
103
104
105
106

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Figure 19      Demand for Water In Industry, 1965-2000
Figure 20      Quality of Surface Water
Figure 21      Trends In QNP and Energy Consumption hi Industry
Figure 22      Air Pollution Monitoring Network In Hungary
107
108
109
110

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                                    UST OF TABLES
CHAPTER 1

Table 1        Per Capita GJP of Selected European Countries, 1980-1987                19

Table 2       Energy Intensity in Selected Industrialized Countries                       20

Table 3       National Emissions of Sulfur Dioxide                                  •  21

Table 4       Emissions of Sulfur Dioxide in Relation to Gross Energy Consumption       22

Table 5       Emissions of Nitrogen Oxides in Selected European Countries, 1985         23

Table 6       Degrees of Forest Damage in Selected European Countries, 1987           24

Table 7       Indicators of Socio-Economic Development:  Poland, Hungary and           25
              Related Groupings of Countries

Table 8       Energy Intensity ~ European Comparisons                               26


CHAPTER 2

Table 9       Polish Emissions of S02, Present and Projected                           65

Table 10      Polish Emissions of NOX, Present and Projected                           66

Table 11      Emissions of SO2 and NOX According to Sector, 1988                     67

Table 12      Demand for Water in Poland, 1975-1988             "   •                  68

Table 13      Water Purity in Polish Rivers, 1967-87                                    69

Table 14      Municipal and Industrial Wastewater Requiring Treatment                   70

Table 15      Industrial Wastewater According to Branch of Industry            .         71

Table 16      Industrial Wastes Generated in Key Regions of Ecological                  72
              Hazard.  1987

Table 17      Characteristics of the 27 Zones of Ecological Hazard                      73

Table 18      Energy Efficiency Improvement in Poland by Scenario                     74

Table 19      Investment in  Environmental Protection, 1976-1988                         75

Table 20      Activity in the  National Environmental Protection Fund, 1985-1988           76

Table 21      Activity in the National Water Resources Management Fund, 1985-1988      77

Table 22      Activity in the National Agricultural Soil Protection Fund, 1985-1988          78

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Table 23      Cost of Meeting Priority Environmental Protection Objectives,
              1991-1995
79
CHAPTER 3

Table 24      Regions of Substandard Air Quality                                       111

Table 25  .   Air Quality in Budapest       ,                                          112

Table 26      Emissions of Air Pollutants from Stationary Sources by Region            -113

Table 27      Wastewater Treatment, According to Method of Treatment, 1986             114

Table 28      Industrial Wastewater Discharged into Surface Waters,  1984                 115

Table 29      Industrial Wastewater Discharged into Public Sewers, 1984        .          116

Table 30      Energy Supply, According to Source of Energy, 1950-1986, %              117

Table 31      Share of Fuels in Electricity Generation                                   118

Table 32      Energy Demand, According to Sector of the Economy, 1970-1986, %        119

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                                EXECUTIVE SUMMARY
       Environmental degradation in Eastern Europe has reached alarming levels. . Human health
and ecological stability are threatened across significant portions of the region.  The economic
costs of degradation are significant.  The environmental legacy of more than four decades of
                                                                                      *
centrally planned economies and a communist political system will not be overcome quickly or
easily.  There is, however, tremendous motivation on  the part of the citizens and new
governments of the region to  address environmental problems.
       The dramatic events of 1989 attracted the world's attention as historic changes swept
through Europe.  The President and  Congress quickly responded to the needs and opportunities
presented by democratic reform in Poland and Hungary with offers to help in many areas,
including the environment.  The nations of Western Europe, the European Community, and other
industrialized countries joined forces to coordinate assistance programs to speed and smooth the
region's transition to democracy and free market economies.
       As a further step in this ongoing effort, this report to Congress is designed to provide .
guidelines for U.S.-sponsored environmental programs in Poland and Hungary.  Many of the  •
observations and  policy  recommendations are equally relevant for other countries of the region,"
particularly Czechoslovakia.  The major components of the report include a brief description and
assessment of environmental problems in Poland and Hungary, a review of ongoing international
environmental  programs for the region, and a discussion of recommended principles and priorities
for future'U.S. initiatives to improve environmental quality in Eastern Europe over the next five
years.

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                  ENVIRONMENTAL CONDITIONS IN POLAND AND HUNGARY

        Materials for the sections dealing with assessment of environmental pollution and causes
 of degradation were drawn largely from Polish and Hungarian sources and from observations by
 Western specialists who have worked extensively with East European environmental issues.  The
 description of environmental conditions is not intended as a comprehensive treatment — both due
 to constraints on the length of the document and^the fact the  conditions are changing rapidly.
.with new,information becoming available almost daily.   .  '•   '

        Poland and Hungary suffer from1 severe pollution of air, water and soil as a result of a
 combination of factors: rapid industrialization in the  post-war period, with a pronounced bias
 toward heavy industry; extensive reliance on coal, particularly in Poland, as the primary source of
 energy and important export commodity; inadequate  treatment facilities for municipal and
 industrial waste;  and inappropriate agricultural practices.
        Both economic and political factors contributed to environmental deterioration in Eastern
Europe.  The Marxist economic model failed to assign realistic value to production inputs (e.g.,
energy, raw materials,  water) and measured economic success in terms of fulfillment of
quantitative objectives for use of inputs and gross output.  Ministries of Industry and Energy were
largely responsible for implements*:™ of environmental regulations, in their own enterprises, and
tended, to simply .augment enterprise budgets to pay environmental fees and penalties when
imposed,  Manufacturing or importing pollution control equipment was considered "non-
productive" and thus accorded  very tow priority.  This approach not surprisingly resulted in
intensive resource use  per unit  of output and largely uncontrolled pollution from industrial sources.

        Information concerning environmental conditions was frequently kept from the public as
classified state secrets.. The political system, characterized by a lack of-rule of law and top-down
Communist Party power-structure, effectively prevented citizens and communities from meaningful
participation in decision-making on environmental  issues and Other topics.  However, mounting
public concern about the environment was. expressed  with greater frequency and effect   »  •
throughout the 1980s.  Poland's environmentat activism, centered in Krakow's Polish Ecology

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 Club, grew rapidly in the early 1980s as part of the .Solidarity movement.  Opposition in Hungary
 to the construction of the Nagymaros-Gabcikovo dam oh the Danube led to the first public
 demonstrations and  mass petitions on any topic since 1956.

        Poland, Hungary, and other countries of the region have begun efforts to develop more
 effective environmental management structures. The situation is complicated by the ongoing
 evolution of laws and regulations governing  broad economic and social issues, too few
 environmental professionals for the task at hand, continuing changes in senior personnel in the
 ministries, and lack of funds for major investments in environmental infrastructure.  Current
 cooperation and assistance programs  sponsored by the U.S. government,  non-govemmentaI
 organizations (NGOs), other governments, international organizations, and the World Bank have
 already demonstrated the value of working with East European governments and NGOs to address
 this complex set of problems.
                                POLICY-RECOMMENDATIONS

        Policy recommendations for future U.S.-sponsored environmental programs for Eastern
 Europe were developed in response to environmental, economic, and social conditions in the
 region. They are based on a series of guiding principles for improved environment management in
 the unique context posed by Eastern Europe in the. 1990s.  Specialists from Eastern Europe, U.S.
. agencies, the private sector, environmental NGOs, foundations, and the World Bank provided input
 for the principles and recommendations.  The policy, recommendations are also consistent with the
 August 1990 U.S.  Interagency Environment and Energy Strategy for Eastern Europe (Appendix Ai.

        Overall, the recommendations are designed to provide sufficient substantive information so
 that the direction,  purpose, and impact of-U.S. environmental assistance will be clear.  At the
 same time,  rapidly  changing conditions and shifting  priorities in the region, as  well as unforeseen
 opportunities for collaboration with  other donors, require that the U.S. programs retain sufficient
 flexibility to respond as needed to future developments.
        These guiding principles should be understood as fundamental concepts to be suggested

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for consideration by the environmental communities in Poland, Hungary, and other countries of
the region.  U.S.-sponsored programs will be most effective if developed to support the following
principles for sound environmental management that are recommended for East European
countries:     >,   '    ;    '*     ; •         ^;. -;   ;''.'"
1 -       .     •'   '         •'  •      >   . ,'•' ''':'.'-•*    ' "      ' '    ' -
  •»    Adopt sustainable economic and sectoral policies. -Environmental effects must be taken
       into account as a part of transition to a market economy.  The most  significant near-term
             *  '                        -                                *
       improvements in environmental quality will be gained as price reforms cause older.
       inefficient, and polluting industrial enterprises to close, modernize, or be replaced.
       Similarly, policies for other.sectors.such as energy,  agriculture, and transportation will
       have more of an effect on environmental quality in the near term than  will direct
                                      .i*1"
    v  environmental investments per £g. These broad policy areas should be targeted for
       particular attention. .           «               .     •

- •    Establish a decentralized,  integrated  environmental management  system.  Regulatory
       standards should be developed and phased in on the basis of cross-media scientific and  ;
       economic  analyses that use risk information about pollution threats to  human health and
 •    . ecological stability to  establish priorities.  Decentralization is important both  for efficient
       and cost-effective environmental  protection.  Such an integrated environmental
       management system should rety on a balance between "command-and-control" regulatory
       methods and use of market mechanisms.  Decentralization will involve setting  minimum
       national standards and clarifying federal, republic/province and local authorities.
       Develop enforceable environmental laws and regulations.  Credible enforcement of .   '
      . environmental law is the bedrock of every environmental management system, and is
       particularly important in Eastern Europe in order to overcome the historical deficit of
       meaningful regulations., To be  credible, an enforcement system  must be designed so that
       compliance is practically achievable by the regulated parties.  The system must also
       provide for adequate compliance monitoring and procedures for dispute  resolution. Since
       it would be impractical to attempt to'address all source's of poltution at  once, criteria
       should be developed to establish enforcement priorities.  A clear and stable regulatory,
       structure is needed to promote domestic and foreign investments.

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Place particular emphasis on pollution prevention.  Many of the environmental problems
facing Poland,  Hungary, and the rest of Eastern Europe may be best addressed by
preventing pollution rather than investing in costly end-of-pipe controls and waste disposal.
By encouraging the use of processes, practices, or products that reduce or eliminate the
generation of pollutants and wastes and that protect natural.resources,' the countries of
Eastern Europe will be able to move more rapidly toward the goal of improving
environmental conditions in the region.

Encourage effective public participation in. environmental decision-making.. Public trust in
government cannot be achieved without free access to information and ensuring a public'
role in decision-making processes  for key sociahand economic issues.  National
environmental management programs, in Eastern Europe should include clear procedures for
environmental impact assessments prior to major public and private development
decisions, public  review and comment prior to promulgation of significant regulations,' and
systematic access  to data on pollution emissions:-  •  •• •

Develop alternative forms of financing of environmental investments.   Poland and Hungary
will increasingly rely on market based instruments to implement new environmental policy.
Emphasis will be placed on adopting the polluter and user pays principle, internalizing the
environmental costs in  product pricing,  and public financing for environmental services.
This will require a system of effective charges, fines and user fees, and substantially
increasing pollution charges and fines in accordance with a phase-in of  new standards.  It
will be critical to transfer authority to local administrative units to set resource charges,
such as for water,  to meet fully operating and maintenance costs.
.Increase the level of private ownership.  The emphasis on economic instruments to alter
 behavior highlights the importance of rapid movement to private ownership and
 deregulation.  Privatization will limit the need for public financing and permit  producers to
 chose the most cost effective means to meet environmental standards.  Governments and
 companies should, consider developing an Environmental Code of Conduct for all targe
 privatizations that spell out, the responsibilities of all parties, including clarification  of

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       liability for past environmental nested.    t

       Stress regional approaches to common environmental problems. Almost every pair of
       adjacent countries in Eastern Europe shares some transboundary environmental issue of
       major concern. Without coordinated regional solutions, the efforts of indiviudal countries
       to mitigate their domestic environmental problems will be, at best, only partially
       successful.                                 •
                               U.S. ASSISTANCE PROGRAMS

       U.S. assistance programs should support efforts by East European governments to adopt
and implement the preceding principles for sound environmental management. Cooperative-
programs that respond to the profound challenges of macroeconomic restructuring offer the  best
opportunity for improving environmental quality as well as economic prosperity and political
stability.  U.S. industry could play a significant role in partnerships with Polish and Hungarian
firms as they undergo privatization and modernization.  Outreach to governments at federal, state-
equivalent and local levels,  as well as to industry and non-governmental groups in the region
should include programs that help to develop.needed laws and regulations, modernize the
industrial base, promote opportunities for environmentally sound investments for U.S. commercial
interests, and enable public interest groups to participate  constructively in the decision making
process.          .

       Particular emphasis  should be given in U.S. assistance programs to developing and
strengthening indigenous institutional capabilities in several technical and environmental policy
areas:

  •    risk assessment, comparative risk analysis, and monitoring;
  •    legal/enforcement/regulatory mechanisms;
  •    economic and financial aspects of environmental protection;
  •    environmental management;
  •    mitigation of pollution through no cost/low cost measures;
                                             6  -

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   •    energy efficiency;
   •    protection of environmental and human health;
   •    public participation;
   *    privatization of industry and development of environmental services capabilities;
   •    commercial transfer of environmental technologies;
   •    acquisition and. management of information; and
   •    natural resource management, to include conservation and sustainable agricultural
        practices.
        In addition, a limited number of specific geographic areas  that are identified by host
 governments as having either high priority environmental problems or importance for relatively!
                                                                                          •
 pristine, natural conditions should be targeted  for special attention. Examples coutd include
. regional air quality planning and mitigation in Upper Silesia and protection of the Mazurian Lakes
 district in Poland, drinking water or urban air quality improvement measures in Hungary,  and site-
 specific hazardous waste assessment and remediation in either country.

        Selection and development of individual projects should be guided by our ability to make a
 uniquely valuable contribution to a particular problem, opportunities for collaboration and
 leveraging with other assistance sponsors, and host country priorities. Work plans reflecting the
 overall objectives of  U.S. assistance to the region and the principles for environmental
 management outlined above need to be developed with each country.  These country plans will
 facilitate coordination with non-U.S. Government programs as  well as identify priorities for U.S.-
 sponsored projects.

        Ongoing environment and energy projects in Krakow initiated in  1990 under the Support
 for East European Democracy (SEED)  Act of 1989 may be viewed as examples of geographic
 targeting of assistance for a high priority, acute environmental problem area.  The Department of
 Energy has undertaken a project to retrofit a coal-fired utility boiler in Krakow with a clean coal
 technology,  and the  Environmental Protection Agency (EPA) has begun projects to improve air
 quality monitoring capabilities and drinking water quality and supply for the city.
        In keeping  with the high priority placed on regional approaches to environmental problems,
 the Regional Environmental Center for.Central and Eastern Europe in Budapest, also established

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under the SEED Act, has launched a series of programs and activities that promise to make
significant contributions to improved institutional capabilities throughout the region.  The Regional
Center has attracted commitments of financial support from Hungary, the  EC. and several Group
of 24 (G-24) member countries.

       Other current U.S. government-sponsored activities include Agency for International
Development (AID) support for the World Environment Center, which is extending its program of
industrial health, safety and pollution prevention to Poland, Hungary and other countries of the
region.  AID has also sponsored the Environmental  Law Institute's pilot project for consulting and
advisory services to the drafters of new environmental laws and regulations in the region.  EPA
has initiated projects in Poland to promote sustainable development in the Mazurian  Lakes district
and energy efficiency centers in Warsaw and  Katowice.  With support from the U.S.-Hungarian
Science and Technology Cooperation Agreement and the Regional Environmental Center, EPA and
the Hungarian Ministry of Environment held an international workshop on chemical emergency
preparedness,  prevention and response in September 1991.
       U.S. environmental specialists enjoy great credibility in Eastern Europe and have access to
counterparts in government,  industry, the NGO community, and academia.  We have now an
unique opportunity, working  in conjunction with other interested parties, to make a difference in
the quality of life and the environment in a significant region of the world.  Through thoughtful
planning and energetic programs, U.S. environmental assistance to Eastern  Europe will help to
ensure both sustainable economic growth and improved environmental quality in the promising
years to come.

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-  5
                                            CHAPTER 1:  INTRODUCTION
                                      THE DILEMMA OF SUSTAINABLE DEVELOPMENT
                  f      ' •  *   *                                        '   *
                      Many parts of the world are burdened by environmental pollution resulting from intensive
               industrialization. Recent years have witnessed an accelerating series of acute incidents that
               illuminate the global significance of environmental problems.  The most dramatic of these occurred
               in the USSR (Chernobyl); India (Bhopal), and the United States (Prince William Sound),
               demonstrating that neither national boundaries,  relative levels of development, nor differing ,
               economic systems offer protection from this danger.  Anthropogenic ecological stress damages
               the natural  and  cultural  heritage of nations, threatens human health, and weakens national
              .economies.  Yet, worldwide experience also  shows that development,  if properly managed, can
               provide the resources with  which  to assure both environmental quality and economic growth.
               Therefore, the task before policymakers is to chart environmentally sustainable courses of
               development for all parts of the world.                      •
                           v            t                  1
                      This need is demonstrated nowhere as vividly as in Eastern Europe, where historic political
                r-d economic changes present a unique opportunity to respond to this global  issue in a region
                '.here the natural environment is undergoing severe stress.  However, the region's environmental
               crisis can be addressed  only through a broad-based response that  incorporates social, economic,
               technological, 'and scientific approaches.  Rapid political and  economic changes in Eastern Europe
               make possible a response to the problem that takes these factors  into account.  While this report
               focuses on Poland and Hungary, many of the environmental  problems  and their possible solutions
               are also found in other countries of the region.  The assessment of environmental conditions
               contained in the report should not be  viewed as exhaustive,  given the plethora of new and more
               detailed information that is becoming available.
                                                                  , -j. ,r*  '
                      The  acute environmental problems of Eastern Europe are the result of 40 years of
                                              •»          „
               intensive industrialization carried out with little regard for environmental quality.  The burden
               placed on the environment is further aggravated by the sectoral mix of these former. centrally
               planned economies, strongly biased toward energy-intensive, resource-consuming heavy industry
               with energy and material efficiency levels roughly one-half to one-third that of comparable
               industries in Western  Europe and the United States. The result is crippled economies faced with
               severe ecological stresses that are devastating the region's natural and cultural heritage and
               threatening the health of its people.  Official estimates from  Eastern Europe place the economic
               burden of environmental deterioration and resource loss as high as 15% of the region's annual
               economic product.
                      The countries of Eastern Europe account for a disproportionate share of the world's
               industrially induced pollution when compared to global economic output.  Their future economic

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and social;development, if not carefully planned, could very well increase  re pressure on their
own ecosystems as well as on the biosphere as a whole. ' Such growth ,s .^evitable, whether as a
means to bring countries out of poverty or to respond to the pressure of 
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 The "Continental Divide"     ,                                -                               .

        In recent years, it has become clear that pollution levels in the former socialist countries of
 Central and Eastern Europe are extremely high in comparison with those in Western Europe and
 North America.  However, the industrially-induced ecological stresses affecting these countries are
 not confined to  their territories.  Neighboring countries in Western Europe, particularly Germany
 and the Scandinavian countries, are severely affected by pollution from their eastern neighbors-
 Taken as a  whole,  Europe exhibits  a serious imbalance in environmental quality, as improvements
 in pollution  prevention and control  in the West have been paralleled by acutely deteriorating
 ecological conditions in the East. This situation poses a serious political problem as well as a,
 major environmental challenge that will require international cooperative solutions.

        In the 1980s, a "continental divide" in terms of relative environmental conditions began to
 manifest itself in Europe.  While the Western  countries experienced adverse effects  from pollution
'generated by their eastern neighbors, they were essentially unable to act  in order to improve the
 situation. For their part, the countries of Eastern Europe suffered both from the effects of acute
 environmental deterioration and from the inability of their political systems and inefficient
 economies to respond to the crisis.                    .

        Not surprisingly, the issue of environmental quality has become a point of contention
 among  as well as within the nations of Europe on both sides of the "divide."  In the late 1980s,
 environmental deterioration already affected relations between the two Germanics, between
 Poland  and  Sweden, between Czechoslovakia and the former GDR, between Czechoslovakia and
 Hungary, and between  Bulgaria and Romania.  Nevertheless, the heavily industrialized  and  energy-
 intensive economies of Eastern Europe are poised to continue industrial and economic growth in
 order to meet pressing  consumer aspirations and the  requirements of domestic political stability.
 Without greater consideration given to environmental sustainability in this process, the prospect of
 increasing ecological deterioration on a continental scale looms large.
 Transboundarv Air Pollution

      • Air pollution from power generation, industrial activity,  and automotive transport is a
 recognized problem  in virtually all  regions of Europe.  By the early 1980s, levels of pollution high
 enough to cause widespread damage to forests added a new word in the German vocabulary:
 waldsterben. or "forest death." Yet, the concentrations of pollutants that caused this calamitous
 situation in Germany are modest when compared with levels of the same pollutants in many
 locations  throughout Eastern Europe.

        Sulfur dioxide {S02} is the  noxious by-product of energy production throughout the world;
 however, the extremely high concentrations of.S02 in Eastern Europe place that region in a
 category with only a few others, including parts of the  USSR and China.  Depositions from S0?
 emissions exceed average levels of 1,000 micrograms per square meter (m2) per month in three
                                             11

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areas of Europe:  the Donetsk Basin in the USSR, the region including the southern former GDR
and the northern Bohemia region of Czechoslovakia, and the Upper Silesian industrial region in
southwestern Poland.  Linking the latter two areas is s belrof territory that covers half of Poland,
most of Czechoslovakia and the former GDR, and p^rt of the former FRG in which average sulfuric
deposition is over 500  micrograms per m2 per month.                           ,
Energy Supply and Use

       The source of most of the environmental problems experienced by the countries of Eastern
Europe is the deliberate  concentration of investment in resource- and energy-inefficient heavy
industry fueled  predominantly  by domestic hard and brown coal.  Air pollution control technology
for industrial and electricity generation installations is generally absent or underutilized, and water
treatment facilities for industry and  municipalities are either lacking or ineffective.  These
conditions are exacerbated and perpetuated by economic difficulties that preclude sufficient
production or import of  new productive processes and pollution control equipment.

       The figures and  tables following this chapter suggest that complex interrelationships exist
among energy use, economic productivity, and environmental degradation.  This is best illustrated
by the various data on gross domestic product (GDP) of selected  European countries,  energy
consumption, generation of air pollutants per unit of economic output, and forest damage in
Europe. The  pattern that emerges for the countries of Eastern Europe is one of low overall and
per- capita GDP, growing levels of air  pollution, acutely inefficient  energy use, and notably
unfavorable levels of pollutants emitted per unit of energy used, all of which indicate deficiencies
in  pollution control.
                   THE ENVIRONMENTAL LEGACY OF CENTRAL PLANNING

       The economic patterns prevalent in Eastern Europe, across all sectors, are biased toward
environmentally stressful, heavy and extractive industries that use energy and raw materials
inefficiently.  Past political decisions to boost production regardless of the real economic cost of
production resulted in misallocations of scarce financial resources and low labor productivity.

       These structural characteristics of the economies of Poland and Hungary'reflect
fundamental shifts in focus after World War II.  Although primarily agricultural countries before the
war, both Poland and Hungary emulated the Soviet  Union  in their drive for "extensive
development" that promoted heavy industry and import substitution as the road to socialism.
High nominal rates of growth in national product have been achieved by increasing the quantity of
labor, capital, and resource inputs  into the productive process, but with disruptive social
repercussions.  Traditional farm labor was shifted to industrial employment, and women added to
the workforce, to enable development of heavy industry at the expense of production of
consumer goods and development  of social services.
                                            12

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       In Poland, massive and concentrated investments were made in the coal mining, •
metallurgical, heavy machinery, chemical,  pharmaceutical, leather tanning, and shipbuilding
industries.  Hungary invested in steelmaking and other metallurgical industries despite the fact
that its natural resource base was singularly lacking in ores and hard coal.  Almost all of the
newly created or expanded industries in both countries were heavily capital-,  energy-, and
materials-intensive.                                                            .        •

       The results speak for themselves.  Through the early 1970s, Polish manufacturing and
construction sectors still absorbed almost  half of total investment-twice as much as in most   .
developed countries (Gorka, 1986).  Also, the intensive  and inefficient use of energy left Poland
with one of the most  unfavorable ratios of energy use to GNP in the world (Budnikowski et al.,
1987; Haberstroh, 1984).  In Hungary, national investment policies exhibited  a  similar pattern into.
the late 1980s, -with economic plans giving budgetary priority to the "productive" (industrial!
branches at the expense of services  and, in particular, environmental protection.  Expenditures on
environmental protection in Hungary  actually declined at times in the early 1980s, dropping by
15% in 1981 and 21% in 1982  (Biro, 1988).  And although there was a net increase in
environmental expenditures overall-rising six times from 1975 to the mid-1980s--they still
accounted for only 1 % of Hungary's GNP (Environmental Policy. 1989|.

       The practice of valuing natural resources at levels below their true market value  distorted
production planning and caused energy and raw materials to be used excessively.  Further
complicating the problem were the "soft budget constraints" that permitted enterprises to make
up cost overruns {e.g., for penalty fees) in a given year  by  increasing  budgetary allocations in the
following year.  This practice has been identified as a principal disincentive for East European
managers to price resources appropriately and to assess penalties realistically for polluting
activities, both key elements in the introduction of market forces into  the economy.
Economic and industrial Context                                               -

       Reviewing standard indicators of economic development,, the 1980s found Poland and
Hungary at levels reminiscent of Western Europe in 1970; in terms  of automobiles and telephones
per capita, they had not yet reached West European levels of that time.  A comparision of other
selected  indicators provides a cross-sectional view of the Polish and Hungarian economies relative
to other industrial economies in the mid-1980s.  Poland led Europe  and North America in per
capita production of hard coat, and figured prominently in the per capita production  of brown coal.
Hungary, with little hard coal, figured substantially in brown coal  production.  Electricity
production per capita in both cases was low even by East European standards.

         Figures on energy and materials use illustrate the intense resource utilization of the Polish
and Hungarian economies--as well as Council for Mutual Economic Assistance (CMEA) country
economies in general--in comparison to those of Western Europe.  The economies of the former
                                            13

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CMEA countries used 18% more energy and 30% rv.ore steel per capita than those of Western
Europe, while national income per capita in dollar?. ^-3-3 less than half.  Consumption of steel per
unit of national income was roughly three times tn~  Western European average.
                                PROSPECTS F :;7? THE FUTURE

         It has been often asserted that the transformation of Eastern Europe in 1989 was driven
by three  elements:  political democratization, economic liberalization, and environmental
protection. The  synergistic relationship between political liberalization and environmental activism
in Eastern Europe  highlighted the recognition that sustainable economic growth cannot occur
without attention to conservation and protection of the environment.

         By the same token, significant strides in environmental protection will not be likely in
stagnant economies, either because they cannot make sufficient resources available or because
other unsatisfied social needs divert public attention from environmental issues and resources
away from environmental investments. Nevertheless, the magnitude and severity of
environmental deterioration in Eastern Europe  have attracted substantial attention from
governments  and public alike.

         Poland and Hungary face simultaneous demands for improved living conditions, a cleaner
environment,  and economic growth.  The systemic  inefficiencies of energy and resource use in
Polish and Hungarian industry not only weaken the  economy but cause significant environmental
problems in both countries.  The following chapters  present a detailed assessment of  the causes
and effects of these problems in Poland  and Hungary,  an overview of current international support
for environmental programs,  and targeted recommendations for U.S. technical assistance and
training for Poland, Hungary, and potentially other emerging democracies of Eastern Europe.

         In view of the fluctuating exchange rates for  Polish and Hungarian currencies in the past
several years, average exchange rates for zloties (Poland) and forints (Hungary) over the period
1985-1990 are presented  below to assist the reader in converting  foreign currency costs cited in
the following chapters to U.S. dollar equivalents.
                                            14

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AVERAGE EXCHANGE RATES
Polish zloties per U.S. dollars in:
                                June   Dec  Mar
             1986  1987  1988   1989  1989 1990

$1.00 = zl    175   265   430    850   4900 9500
Hungarian forints per U.S. dollars in:
                                            May
             1985  1986  1987   1988  1989  1990
$1.00 = ft    50.1   45.8  47.0   50.4   60.8 63.9
                                15

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Figure 1. Deposition of Sulfur from SO2. (Source:  EMEP, 1988)
                           16

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Figure 2.  Average Annual Concentrations of Nitrogen Oxides in Europe,
              1985, mgN/m3. (Source:  EMEP, 1988)
                              17

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        NOTE:  pH values for natural rainfall range from 5.0 to 5.6.
Rgure 3. Average Annual pH Values of Precipitation in Europe, 1986.
                     (Source: EMEP, 1988)
                               18

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                             \TABLE1

     PER CAPITA GDP OF SELECTED EUROPEAN COUNTRIES, 1980-1987
                         (in current US$ prices)

Austria
Czechoslovakia
FRG
Hungary
Poland
Spain
USSR
1980
10,267
2,881
13,237
' 2,069
.' 1,357
5,665
2,368
198S
8,657
5,274 . •
10,197.
1,938
1,569
4,264
2,468
1987
15,548
6,324
18,290
2,460
1,333
7,396
3,296
1987 as% of
'151.4
219.5
138.2
.118.9
98.2
130.6
139.2
Source: Hungarian industry, 1990
                                 19

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                                  TABLE 2
        ENERGY INTENSrTY IN SELECTED INDUSTRIALIZED COUNTRIES
Belgium
FRG
Spain
Hungary
Poland
Yugoslavia
GDP, tn
million S
79,080
624,970
164,250
20,560"
70,439
44,730
Gross Energy
Consumption,
MICE
60.02
381.28
105.53
*• 42.42
180.67
62.62
Energy
Intensity,
MtCE/bllllon $
0.77
0.61
0.64 "
2.06
2.56
1.41
NOTE:   Energy intensity is a comparative measure of energy use per unit of economic output.



        MtCE = Million Tons Coal Equivalent           .< •               ^'
                                                                               v.
Source: World Bank, 1988, and UN ECE, 1986
                                     20

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                              TABLE 3

               NATIONAL EMISSIONS OF SULFUR DIOXIDE
                         (in 1000 tons per year)
Country
Belgium
Spain
FRG
Hungary
Poland
Yugoslavia
1980
799
3,250
3,200
1,633
4,100
1,175
1985
467
3,250
2,400
1,420
4,300
1,800
1990
506
3,053
•
1,400
4,900
—
1995 est.
. 544
•
1,100
1,140
—

Source: UN ECE, 1987
                                 21

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                EMISSIONSOFSULR  '  OXIDE IN RELATION
                    TO GROSS ENERGY CONSUMPTION
                 (tons/year SOg per mil;, -,\ tons coal equivalent)
                       Belgium

                       FRG

                       Spain

                       Hungary

                       Poland

                       Yugoslavia
 7,656

 6,299

30,660

33,800

23,757

28,571
Source: UN ECE, 1987
                                    22

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                                   TABLES

 EMISSIONS OF NITROGEN OXIDES IN SELECTED EUROPEAN COUNTRIES, 1985
              (in 1000 tons per year, kg. per capita, and tons per km2)
     Austria

     Czechoslovakia

     France

     FRO

     Hungary

     Poland

     Spain

     UK
1000 tons/yr

    208

   1,120

   1,600

   3,000

    400

   1,500

    942

   1,837
Kg per capita

    27.5

    72.3

    29.0

    49.0

    37.6

    39.7

    24.4

    33.4
Tons per km2

    2.5

    8.9

    2.9

   12.3

    4.3

    4.8

    1.9

    7.6
Source: O.S. 1989
                                     23

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                                                                    r -
                             TABLES

  DEGREES OF FOREST DAMAGE IN SELECTED EUROPEAN COUNTRIES, 1987
                            (% of Total)

Austria
Czechoslovakia
France
FRQ
Hungary
Poland
UK
Yugoslavia
Slight
29.9
36.7
22.0
35.0
9.0
29.0
34.0
22.7
Moderate
3.2
10.5
8.5
16.2
5.0
17.0
18.0
6.7
Severe
0.4
5.1
1.2
1.1
1.0
3.4
4.0
2.8
Source: O.S. 1989; "Forest Damage...," 1988
                                24

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                                 TABLES
                                            * '           s
              ENERGY INTENSITY - EUROPEAN COMPARISONS

     Market Economies
Belgium
FRG
Units
GDP
% Industry
Energy consump.
'gross
final
Energy intensity
gross
final
Planned Economies
GDP
% industry
Energy consumption
gross , •
final
Energy intensity
gross
final
'79,080
;, 33
60.82
41.71
0.77
0.53,
', •' Yggo. -
44,370
33
62.62
31.86
1.41
0.72
164;250 ;
n.a.
105.53
63.12
0.64
0.38
' Hungary
20,560
41
' 42.42
28.97
2.06
1.41
624,970 ' :
40
381.28
254.73
0.61
0.41
Poland •.
70,439
49
180.67
109.44
' 2.56
1.55
mil. US$
. MtCE
MtCE/bilUS$
•Units
mil. US$
MtCE
MtCE/bilUS$
     MtCE = Million Tons Coal Equivalent
Source:    World Bank, 1988, after World Development Report 1987. and UN ECE, 1986
                                    26-

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                                CHAPTER 2:  POLAND
                 AN ASSESSMENT OF PROBLEMS AND PRIORITIES
                     THE EXTENT OF ENVIRONMENTAL DEGRADATION

       The following chapter reviews the nature and extent of environmental degradation in
Poland, the quality of its water resources under industrial, agricultural, and urban pressures, and
the scope of its hazardous waste problem.  The chapter also addresses the official designation of
areas of "ecological hazard" and "ecological disaster" which frames Poland's regional development
and environmental protection policies.  Also discussed are the various economic and social costs
of environmental degradation in Poland, including assessments of the impact of pollution on
agriculture and forestry, human health, and cultural property.  A discussion of the relationship
between  energy use and environmental degradation in Poland is followed by an overview of
current Polish national policy on environmental protection and management.
Air Pollution                           ,              •       .

       In terms of concentrations of sulfur dioxide (SO2) pollution in East-Central Europe, the
region is among the most polluted in the world, and includes the only three zones in Europe where
depositions of sulfuric compounds exceed average levels of 1,000.micrograms per square meter
(m*)  per month, i.e., the Donetsk Basin in the USSR, the area in the south of the former GDR
adjoining Czechoslovakia's Northern Bohemia region, and the Upper Silesian industrial region of
Poland.  Linking the latter two areas is a belt of territory that covers half of Poland, most of
Czechoslovakia and the former GDR, and part of the former FRG in which average deposition is
over 500 micrograms per m2 per month.  This densely populated and heavily industrialized zone is
a major source of Europe's air pollution and contains most of Central Europe's damaged forests.

       Poland is the only country in Europe in which emissions of S02 have been -projected to rise
into  the 1990s and beyond.   Over the last ten years, Poland's S02 emissions  rose from 4.1
million tons per year in 1980  to 4.3 million tons in 1985, then stabilized at 4.2 million tons.  In
the absence of preventive programs, emissions were projected to go as high as 5.5 million  tons in
the year 2000. Table 9 surveys S02 emissions by source  in 1985, with projections for 1995.
Accounting for 10% of Europe's total emissions, Poland is the continent's third largest emitter
(after the USSR and the former GDR) and the seventh largest in the world (UN ECE, 1987).
Emissons of NO, are also projected to increase, based on 1988 estimates (Table  10).

       At the root of this problem is Poland's heavy reliance on coal, comprising nearly 80% of
its primary energy supply.  Poland uses  160 million  tons of hard coal and nearly 60 million  tons of
                                           27

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brown coal each year, almost all of which is burned without pretreatment or benefit of sulfur
removal technology-  While current national policy calls for aggressive action to conserve energy,
official estimates until recently showed the use of coal for energy production actually increasing
over the next decade with a concomitant increase in air pollution.

       Methodologies employed over the 1980s arrived at two different estimates for S02
.emissions in  Poland.  Statistics compiled by the government's Main Statistical Office (GUS) placed
emissions of S02 from the country's principal stationary sources at 2,824 million tons in 1986.
However, later research based on calculations  of sulfur content of total fuel use resulted in a
considerably  larger estimate of over 4 million tons, including emissions from smaller, diffuse
sources such as the millions of homes and buildings in Poland that are heated by individual
coal-burning  units (Juda and Chrosciel, 1986).  These estimates also predicted that increased air
pollution'due to increased coal use would continue into the next century. Table 11 summarizes
SO2 and NO, emissions by sector as of 1988.

         Such high levels of air pollution constitute a  serious threat to Poland's natural and
man-made environment as well as the health of its population.  Approximately one-half of
Poland's territory is considered to be at  risk from  air pollution by S02  (see Figure 4j.  The
industrial zones of the southwest and Konin in central Poland register the most acute levels,  with
only the northeast part of the country free of any serious risk to forests.  As noted previously,
industry--particuiarly-the fuel-energy and metallurgical  sectors-is the chief producer of gaseous
emissions. These two sectors, along with the chemical  and mineral industries and domestic
heating, are also principal sources of particutates  (Figure 5).
Water Resources and Water Quality

         Roughly 5,000'km2, or 1.6%  of Poland's land area, is covered by surface water;  lakes
account for 3,200 km2 of this amount.  The country's lakes and  reservoirs have a capacity of 33
km3 and  ponds hold  an additional 1 km3. The most important  river systems in the country are the
Vistula with a basin  of 194,000 km2 and the Oder, with a basin  of 110,000 km2 (Gromiec, 1990P

        •With an average available water supply of 24  billion m3 per year, Poland's annual water
resources equal 1,800 m3 per person as compare to the European average of 2,800 m3 per
person.  Poland ranks twenty-second on the continent in terms of available water resources,  on a
par with  Egypt (Gromiec,  1990; Kozlowski, 1986).  In terms of per capita daily water
consumption,  Poland falls within European norms for water use.

         Overall demand for water in Poland appears to have stabilized over the 1980s, and  per
capita consumption figures are quite modest.  Demand  for water overall and  by sectors is
summarized in Table 12.  The quanititative  limitations of the water supply become a matter of
great concern, however,  when considered against levels of pollution,  where the lack of good
quality water constitutes a fundamental ecological barrier to development.
                                            28

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         According to Poland's Water Resources Law, surface water is officially categorized in
three classes of purity.  Class I is suitable for use in municipal water supply; Class II for animal
consumption and agricultural and recreational uses; and Class III for industrial use.  In current
usage, there is also an unofficial term for a fourth class, ooza kateqoria. or "beyond categories."

         The quality of surface water in  Poland has declined  over the last two decades.  In the
period 1967-1987,  the proportion of overall river length falling into Class I fell from 31% to 5%
and the proportion so polluted as to be unfit for any use rose from 29% to 42% (Table 13).
According to this "four-class" system, long stretches of the Vistula and Oder Rivers, Poland's
major rivers, are polluted beyond Class III by  large  volumes of municipal and  industrial wastewater
originating at Katowice, Krakow, Warsaw, Lodz, Szczecin,  Poznan, and Bydgoszcz. The Vistula,
monitored for 980 of its  1,047 kilometers,  carries no water of Class I or II quality and only 432
kilometers are of Class III purity, i.e., suitable for industrial use (Gorka, 1987) (see figures  6-8).
Near Krakow, the acidity (pH) of Vistula  water fluctuates between 4.2 and 8 and its salinity is so
high that it is too corrosive to use even as industrial washwater.

         The problem of  low water quality  in Poland has conventional causes.  Sewage and
industrial wastewater introduced into Poland's surface waters contain large quantities of
pollutants, including organic matter (fecal material), phenols,  detergents, cyanides, ether, chrome,
hydrosulfuric acid, sulfides, and lead.  Roughly 80% of Poland's urban population, accounting for
691  of its 812 cities, is served by municipal  sewage systems.  Only 13% of the rural population
has sewage  service. As  a result, some 4.5 million city dwellers and 13 million in rural areas  (out
of a  total population of approximately 40 million) do not have sewage service.  Roughly 40%  of
alt industrial  wastewater  requiring treatment does not receive it (Table  14).  This water, along
with the additional 33.8% of wastewater that receives only physical-mechanical treatment, is
discharged directly into Poland's rivers and streams (Kabala,  1989; Kindler, 1989).

         Another major factor responsible for rendering so  large a  share of Poland's river water
unfit for even industrial use  is the discharge of saline mine water directly into surface waters.
The magnitude of this .source of pollution is illustrated by the fact  that, since 1985, over 7,000
tons of dissolved salts were discharged per day into Polish surface waters.  This figure  is .
projected to rise to between  11,000 and 13,000 tons per day in the year-2000 (Muszkiet, 1986;
Grodzinski and Kaczmarek, 1986).

         During the past decade, only 50% of wastewater has been treated.  The locales
generating the greatest amounts are the  contiguous Krakow-Upper Silesian area in southern
Poland and the Warsaw and Lodz areas  in the center of the country.  As was the case  with air
emissions, the fuel-energy, metallurgical,  and chemical industries are the source of an
overwhelming share of industrial wastewater  (Table 15).

         Poland's two principal rivers, the Vistula and the Odra, empty into the  Baltic Sea  after
draining basins that together comprise almost the entire land mass of Poland and parts of
                                            29

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Czechoslovakia and eastern Germany.  Poland therefore contributes a substantial share of
pollution to the Baltic:  some 232,000 tons of nitrogen, 18,000 tons of phosporus, andf358,000
tons of BODS equivalent per year, making it the Baltic's largest source of nitrogen and phosphorus
pollution.  (Kindler,  1989; Stan.  1989, HELCOM,  1987).
                                                                                 &.
        The overall effect of discharges from Poland and other Baltic Sea countries has been
increasing deterioration of water quality in the Baltic.  Commercial fishing and recreational  use of
coastal zones have  been  negatively effected.   In recognition of the need to halt and reverse Baltic
Sea pollution, Poland counts Gdansk Bay, at the mouth of the Vistula, as one of the five officially
designated areas of "ecological catastrophy."  Poland is also party to the 1974 Helsinki
Commission on Protection of the Marine Environment of the Baltic, which is committed to  •
reducing pollution of the  Baltic (National Environmental Policy. 1990). To meet the pollution
reduction goals, domestic policy calls for construction of forty major sewage treatment plants in
the Vistula basin during 1990-1995,  and two new plants at Gdansk and Gdynia on the coast.  '
These  facilities  are expected to have a significant effect on Poland's pollution load on  the Baltic,
reducing BOD5 by 45%, nitrogen by 20%, and phosphorus by 48%.  (Kindler, 1989).
Solid and Hazardous Waste Issues

        Nearly 1,400 billion tons of industrial solid waste has been dumped in Poland.  Over 150
million tons is typically generated each year; however, the volume generated in 1988 was 185.9
million tons, including 2 million tons of hazardous waste. Three types of industrial activity
account for the vast majority of this waste.  Mining of coal, lignite, sulfur, lead, copper, and zinc
accounts for 46%; electricity generation accounts for 19%; and ferrous and non-ferrous
metallurgy  account for approximately 7% (see Figure 9) (Quality. 1990; Q.S..  1989):

        A total of 11,000 hectares is devoted to waste disposal in Poland. Approximately 90%
of this total waste is stored in the 27 officially designated zones of "ecological hazard," which are
discussed in detail below.  In 1988, three of these zones contained 67% of disposed wastes and
accepted 75% of new wastes generated each year.  These are  Upper Silesia,  with 304 million
tons stored and 55.4 million tons added, Legnica-Glogow, with  203 million tons stored and 25.6
added; and Rybnik,  with 175 million tons stored and 31.9 added. The presence and continuing
generation  of such volumes of solid waste poses a basic problem in land use, as waste is often
disposed of in areas  of the country where population and development pressures place  a  premium
on all usable land. For example, in the coal region of Upper Silesia,  mine tailings must  be
transported as far as 80 kilometers for disposal (see Table 16).

        In 1988, roughly 46 million cubic meters of municipal  waste was disposed of  in Poland,
virtually all of  which was deposited in the country's 1,760  permitted landfills, covering  a total of
2,500 hectares.  However, it is estimated that there are also approximately 5,500 uncontrolled
dump sites in  use, as well.
                                            30

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         Information on the toxic waste situation in Poland is limited.  The volume of hazardous
.wastes reported to be detoxified appeared to have  doubled from 234,000 tons in 1982 to
 465,000 in 1986, but neutralized wastes still accounted for only a small fraction of total
 hazardous  wastes generated-0.23% in 1986 versus 0.15% in 1982 (Rocznik Statvstvcznv.
 1987; Terry, 1988).   ,

      x           •                                              ••••'•
         The importation of hazardous wastes into Poland has become a problem of serious
 proportions.  Although Poland banned the import of hazardous wastes  in July 1989, the State
 Environmental Protection Inspectorate found that some 46,000 tons of toxic waste were
 transported into Poland for disposal in 1989.  At the root of this problem is the fact that customs
 inspectors  lack technical  skills needed to identify wastes that  should have been refused entry.  A,
 report from Greenpeace International documented approximately 64 schemes for the disposal of
 22 million tons of foreign toxic waste in Poland, involving  nearly 80 firms from. 13 countries. The
 most frequent country of origin for the waste shipments was  Germany, which accounted for
 50%; Sweden, Austria, Switzerland, and Italy accounted for an  additional 33%.  These wastes
 included solvents, paints, metal, electronic scrap, sewage sludge, and incinerator residues
 (Greenpeace, 1990).                                 -      '    .    •

         The most alarming aspect of this situation is  the way in which these wastes are handled
 upon arrival in Poland, since they are often mislabeled and stored in inadequate facilities. This
 problem is  likely to grow in the future if not addressed in  a comprehensive manner, as the planned
 devolution  of environmental regulatory authority to local governments would place responsibility
 for regulation of hazardous materials in the hands of authorities  who are ill-equipped to handle it.

         With regard  to heavy metals, concentrations  of lead, cadmium,  zinc, and arsenic
 pollution over a large  part of southwestern  Poland's industrial  areas have been well documented
 (Molski, 1990; Kabala, 1985).   Numerous  sources have repeatedly referred to severe localized
 contamination of soil  and water by these toxic substances. Instances  include chromium
 production residues entering ground water in the Wroclaw area, contamination of  soil and water in
 the Legnica-Glogow copper region, and residues of chlorine and  fluorine pollution from the
 Skawina alumina works in Krakow.  Circumstantial evidence points to a link between
 contamination by heavy metals and other toxic  substances and acute long-term health problems
 (Figure 10).
 The Geographic Pattern

         The geographic pattern of environmental degradation in Poland is most clearly illustrated
 by the official designation of 27 zones of the country as "areas of ecological hazard."  This policy
 tool, a milestone in national environmental management, was instituted in March 1983 by order of
 the Council of Ministers. These officially designated areas account for 35,220 km2, or 11.3% of
 the country's total territory, and are inhabited by 12.9 million people, or 35% of the population.
                                            31

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        The 27 areas are divided into three categories according to level of environmental
degradation:  five severely affected "areas of ecological disaster;"  18 regions "experiencing
serious environmental damage from multiple sources"; and Tour regions "experiencing serious
environmental damage primarily from air pollution."  The five zones of "ecological disaster" are
Gdansk on the Baltic coast, Legnica-Glogow in west central Poland,  and the linked areas of Upper
Silesia, Krakow,  and Rybnik in the southwest (Kassenberg, 1990;  Kassenberg and Rolewicz,
1985}.  Figures 11 and 12 and  Table 17 further characterize these regions.  The use of these 27
areas as a basis  for environmental policy in Poland will be discussed separately below.
                         THE COSTS OF ENVIRONMENTAL DAMAGE
Economic Losses
         Since 1987, Polish officials have estimated losses due to environmental deterioration and
misallocation of resources at 10% to 15% of national  income,  constituting a massive drain on the
economic potential of the country.   More recently, however,  work carried out in cooperation with
the World Bank to assess these estimates concluded that the earlier estimates should be revised
downward to between 2.5% and 3%  of GDP.

         Roughly one-half of the economic cost was attributed to lost worker productivity as a
result of illness due to participate pollution generated by fossil fuel combustion  for domestic
heating.  The second largest factor  was the acute salinization of surface waters due to the
discharge of minewater into rivers, which results in higher water treatment costs and degradation
of industrial equipment.  However,  even in terms of the more modest estimate, the economic cost
of environmental degradation is still two or three times that of  OECD countries  generally and thus
severely impedes Poland's prospects for development.
Agriculture and Forestry

         Losses in agriculture due to environmental deterioration have been estimated at
approximately three times the figure for losses in forest assets, which generally receives more
attention (Symonowicz, 1985; Kassenberg, 1990). These agricultural losses reflect an estimated
2% drop in productivity as a result of water shortages, the cost of de-acidifying soils
contaminated  by depositions of air pollutants, loss of arable land diverted to other purposes, as
well as the cost of recultivating degraded land.

         Damage to Polish forests from air  pollution is part of a larger problem affecting all of
Central Europe.  However, the estimated value of this damage in Poland alone was approximately
50 billion zloties per year  in 1988 (Kassenberg,  1990), while other estimates indicated the real
cost of damage  would increase by two to three times by the year 2006 if emissions trends
continued at current levels.
                                            32

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         Estimates in 1987 placed 680,000 hectares, roughly 10% of Poland's forests, under
stress from air pollution, constituting a 50% increase over 1982 figures, released by the Main
Statistical Office (Godzik,  1990; Grodzinski, 1987). Approximately 180,000 hectares of
threatened forests are located in the southwestern industrial voivodships. or provinces {Terry,
1988).  Based on the assumption that gaseous emissions over the 1985-1995 period would be
only 30% greater than in  1980, conservative estimates in the early 1980s projected that the area
of threatened forest  in 1995  would be approximately two million hectares.  Other projections
assuming greater increases in emissions placed the threatened area at a total  of four million
hectares,  roughly one-half of  the country's forested area (Patalas, 1986).

         The threat to*Poland's forests is particularly acute because 80% are coniferous and
therefore  more severely affected by pollutants than deciduous species (O.S.i G.W.. 1987).  The
deposition level at which coniferous forests begin to show damage from air pollution is roughly
7.5 tons per km2, which corresponds to annual mean concentrations of sulfur deposition from SO?
of 20 micrograms per m3. At any rate, substantial areas  of Poland experience levels of pollution
over 60 micrograms  per m3, threatening human health as well as forests (Narodowy Program.
1988; Kozlowski, 1986).               '

         Even tree stands in national parks are being affected.  Forests in the Ojcow National Park
near Krakow and the Karkonosze National  Park in the Carpathian Mountains near the
Czechoslovak border show notable signs of deterioration as a result of industrial emissions of SO,.
In the latter park, harmful pollutants  originated in the GDR and Czechoslovakia as well as within
Poland.                                     "
The Threat to Human Health

         Since the beginning  of the 1980s, efforts by Polish analysts to calculate both the
economic and material costs of environmental degradation in Poland were accompanied by
attempts to assess effects on public health.  These attempts have been hindered by inadequate
public health statistics and incomplete environmental monitoring.

         Establishing a causal link between environmental factors and the demographic
characteristics of illness is often not possible with  available data.  In general, the adverse  effects
of acute  pollution cannot be segregated geographically between points  of origin and other
affected  areas as the discharge of effluents into flowing waters and the "tall stack" dispersal of
air pollutants spreads pollution far beyond its source.  Therefore, determining the health
consequences of pollution remains a complex undertaking which in many cases must rely  on
indirect and circumstantial evidence.     •                        •

         For example,  Polish  analysts have pointed out that epidemiological data on the health .
effects of pollution excluding  deaths have been consistently deficient (Gibinski,  1986).  In
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particular, reliable data are lacking on the impact of pollution on quality of life, adult productive
capacity beyond simple expectancy,  developmental problems in children beyond .infant mortality
figures, and procreative illnesses (e.g., spontaneous abortions, miscarriages, birth defects, etc.).
This problem is compounded by the fact that many suspected health effects of pollution have
long gestation periods, and Poland's severe pollution is of relatively recent origin, i.e., post World
War II.                                  .-•'••

         In another example, statistics on cancer mortality in Poland, which is often linked to
environmental causes,  are distorted by the extremely high rate of smoking among Poles; lung
cancer is the second most common cause of cancer death in Poland and is obviously highly
correlated with smoking.  Despite these limitations, however, the circumstantial evidence relating
increased pollution .to declining human health in  Poland has mounted considerably in recent years.

         Circumstantial evidence of the effects of pollution on human health began to appear in
health statistics.  Overall mortality rates in 1.985 were up 27% from 1970 (8.1 to 10.3 per 1,000
people) and 35.5% from 1960 (7.6 per 1,000).  While this change among women was partially
due to the genera! aging of the population, for men death was at earlier ages. A 1983 study by
the Polish Academy of Sciences reported  that post-infancy male life expectancy in Poland was
lower than it was in the early 1960s; for  males  aged 40 to 60 it had fallen to 1952 levels
(Committee "Poland 2000", 1983).  Statistically significant changes appear starting with the
45-54 age group, for which the male mortality rate rose from 7.6  to 11.2 per 1,000.  In the
55-59 age group, this rate rose from  15.6 to 19.9 per 1,000 and, in the 60-64 age group, from
25.5 to 29.1 per 1,000 (Gibinski,  1986).  The Polish Academy of  Sciences study noted that even
the stabilization of then-current acute levels  of pollution would continue to worsen public health.

         Figures on the contamination of  air and water in the Krakow region include a pertinent
although unofficial estimate that over 130 kg of heavy metals enter the city's drinking water
supplies every day from a single diversion point.  The resulting average combined concentration.
level of heavy metals  is 0.31 mg/liter (Bajsarowicz, 1988).. Other  figures from the Nowa Huta
steelworks outside of Krakow showed that, from 1970 to 1980, 69%  of the plant's 35,000
workers received disability pensions and 21.4%  entered retirement normally, while after  1980,
80%  left on disability pensions with  only  12.5% retiring normally.

         Poland's most heavily industrialized area,  the Upper Silesian industrial region, provides a
vivid illustration of the impact of severe pollution.  Approximately one million of the region's three
million inhabitants were reported to be living in "daily health hazard" conditions in 1984
{Rostowski, 1984). A joint report prepared by the Institute for Environmental Engineering in
Zabrze, Upper Silesia, and the Environment Center of  Berlin determined that  residents of the
region have a 155% higher incidence of circulatory illnesses, 30% more cancer, and 47% more
respiratory illnesses than the population of Poland  overall.  Similar  research by the Polish Academy
of Sciences indicated that the Upper Silesian industrial region had  higher adult and infant mortality
rates  and a higher incidence of birth  defects, and noted that 25%  of all pregnancies experienced
medical difficulties (Frackiewicz, 1985).
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         The well-known 1984 report of the Polish Chemical Society entitled "Chemical Pollution
 of the Environment" cited an "appalling" increase in the number of retarded school-age children in
 Upper Silesia attributed to concentrations of heavy metals, particularly lead, in the air, water, soil,
 and food in the region (Pawlowski and Kozak, 1984).  The Society's 1988 follow-up report stated
 that the coefficient of mortality was 1.5 times higher in the regions of highest mortality than in
 those of lowest mortality.  Highest mortality rates were found in the Katowice, Jelenia Gora,
 Lodz, Walbrzych, and Szczecin voivodships (provinces)--among the most polluted in the country--
 while lowest mortality was found in the less developed voivodships of Eastern Poland such as
 Bialystok, Rzeszow, Krosno, and  Zamoysk.  The report also noted that occupational diseases,
 particularly those related to the respiratory tract, were markedly higher in the industrialized (and
 polluted) areas of Katowice, Krakow, Bieisk, Walbrzych, and Lodz (Pawlowski and Kozak, 1988).

         With regard to heavy metal contamination, a  study  by the Institute for  Environmental
 Engineering in Zabrze (Katowice voivodship) estimated that some 700,000 people in the region
 eat fruits and vegetables grown in home garden plots contaminated by unsafe levels of heavy
 metal concentrations in the soil (Godzik, 1990). In certain heavily impacted locations in the .
 region, garden soil samples registered  concentrations of lead, zinc, cadmium, and mercury that-
 exceed World Health Organization norms by 30% to 70%.  Measurements of lead and cadmium in
 the soil of the  Upper Silesian industrial towns of Olkusz and  Slawkow  recorded the highest
 concentrations ever found in the  world.

         It is important to note that, while the most harrowing statistics and anecdotal  evidence
 tend  to focus attention on the Krakow-Upper Silesia-Rybnik industrial belt in southern Poland and
 other acutely polluted areas such as Plock and the  Legnica-Glogow copper region, spatial
 diagnoses of pollution in Poland show that as much as one-half of the country is affected by S02
 and heavy metal pollution due to long-range transport  of pollutants (Molski, 1990; Kozlowski,
 1986).
 Damage to Cultural Assets

         Another adverse impact of air pollution in Poland is the damage to physical infrastructure
 and national cultural assets-historic structures, monuments, and pieces of art-which physically
 degrade and deteriorate as the result of SO, and particulate deposition. The most heavily
• impacted site is the historic and architecturally significant Old Town of Krakow, which has been
 designated by UNESCO as  a monument of World Cultural  Heritage. Fluoric and sulfuric acids in
 air pollution are progressively destroying the surfaces of the historic medieval and Renaissance
 buildings and even damaging  medieval window glass and precious tapestries inside of buildings.
 Where restoration is possible, its pace is far exceeded  by that of deterioration,  as priceless
 architectural elements deteriorate over decades to degrees  that once took centuries.

          In response to this situation,-Krakow city authorities have developed a program for the
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preservation of the city's historical heritage that is supported by financial and technical aid from
all over Poland as well as from many other countries. Over 800 structures have been restored as
part of an ongoing program; however, officials have concluded that restoration alone cannot
address the steady damage being done by chronic, high-level concentrations of pollutants
generated by regional industry and coal-fired home heating.  The same pattern of acid deposition
corrodes buildings, industrial facilities, automobiles and equipment, with significant economic
costs for repairs and replacement of structures.

                        ENERGY USE AND ENVIRONMENTAL  QUALITY

         Energy supply and use in Poland causes  a significant part of the environmental
degradation from which the country suffers.  As noted previously, Poland's reliance on coal for
over 75% of its energy needs and the slow introduction of pollution control technologies
inextricably links energy policy and  environmental degradation.
Importance of Coal as Primary Energy Source

         Poland's heavy reliance on coal in its energy supply mix'derives from several historical
factors during the  post-World War II period. The most important influence was the availability of
extensive domestic deposits of high quality coal and the virtual absence of substantial reserves of
other fuels.  Second, in the 1950s and  1960s, the extreme  influence exerted by the Soviet
development model, stressing national economic self-reliance and import substitution, resulted in
stunted exports and a constant shortage of foreign exchange currencies for fuel purchases on the
world market.  The further constriction  of hard currency reserves due to the economic collapse of
the late 1970s and early 1980s forced  Poland to rely even more heavily on the only available
source of fuel-domestic coal.

         Poland's current energy use patterns  not only reflect reliance on indigenous resources
but also lead to investment policies that favor energy-intensive branches of industry. Solid fuels
represent an unusually large share of Poland's primary energy supply.  Both Poland's domestic
energy supply and its exports are dominated by coal. Coat accounts for 78%  of domestic primary
energy consumption, making Poland one of the most coal-dependent countries in the world.
Natural gas  reserves are modest,  while  oi! and hydropower resources are negligible.  As a result,
hard coal and lignite provide almost four-fifths of Poland's gross energy mix.

         Official policy  over the 1980s  gave top priority to producing hard coal to meet internal
demand and to export for hard  currency (Kabala,  1989).  With exports  of coal at 36 million tons
(of which 34 million are hard coal), Poland is the world's fourth largest producer and fourth
largest exporter of coal. 'Production of  coal rose seven-fold  from 1945 to reach a  high of 201
million tons  in 1979 before stabilizing at roughly 190 million tons in 1985.  About 20 million tons
of the best quality coal, with a caloric value of 26 gigajoules (GJ) per ton, is exported for
convertible currency.  The  average caloric value of coal used domestically has fallen from 24.1 GJ
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per-ton in 1978 to 22.5 GJ per ton in 1988 
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that these impacts will increase in severity even if coal production is maintained at current levels.
Prospects for Future Energy Use

         The centrality of coal to Polish energy policy is illustrated by projections laid out for the
1980s and 1990s.  Total inputs for energy use was projected to rise from 176 million tons of
coal equivalent (CE) in 1980 to roughly 200 million tons in  1990, and between 215 and 250
million tons in the year 2000.  These levels would require investments of 8-10 trillion zloties in
1982 prices over the  20-year period and two trillion zloties  (in 1984 prices),  or 7% of national
income, over the 1986*1990 five-year  period (Bojarski, 1986).

         By the mid-1980$ it became clear that investments of this magnitude simply would not
be possible.  Actual allocations for the  1986-1990 period were 1.1 trillion zloties, a rate sufficient
to maintain output of the fuel-energy sector at minimal projected levels, but which precluded
substantial growth in  supply beyond 200 million tons per year. Implicit in these projections was
the inability to meet projected domestic demand and the elimination of coal exports.  Even the
low projection implied negative foreign  trade balances in energy,  with the deficits of billions of
dollars per year in the mid-1990s (Bojarski, 1986}. The end of the era of cheap domestic coal
was foreseen as generating  an energy supply deficit that would present a serious barrier to the
restructuring of the Polish economy (Muszkiet, 1986).

         In addition, because the most productive coal veins in the country (in the Katowice,
Sosnowiec, Chorzow, and Bytom areas) were reaching the end of their usefulness, merely
maintaining coal production  at the 1985 levels of approximately  195 million tons per year required
tapping narrower and more costly veins, some as  small as 1.5 meters.  By the mid-1980s, it was
evident that the damages suffered in the drive for economic gain via a coal-based energy policy
were unacceptable, and that energy policy had to be shifted from increasing  coal production to
modernization and the structural economic change that emphasized increased energy efficiency.
Prospects for Air Pollution Control

         In the mid-1980s, the Polish Government's Sulfur Commission designed a program for
the reduction of sulfur and nitrogen oxide emissions from stationary sources.  The cost of
implementing the 1987 "Program for the Reduction of Airborne Sulfur and Nitrogen Compounds to
the Year 2000"  was estimated at 500 billion zloties at February 1988, pre-inflation prices; or
roughly 25 times the expenditures for air pollution control in the preceding year, 1986. The  1987
program set targets for reduction of S02 through the use of pollution control technologies at
1,775,000 tons by 1995 and  3,400,000 tons  by the year 2000.  NO. emissions were to be
reduced by 380,000 tons by 1995 and by 900,000 tons by the year 2000.  Technologies to be
applied included flue gas desulfurization, conversion to fluidized bed combustion systems, wet and
dry lime injection, and  desulfurization  of over 50 million tons of coal by 1995, with an additional
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60 million tons by the year 2000.

         By 1990, the objective of the 1987 national air pollution abatement program were
considerably downsized in the face of economic constraints.  The air quality provisions of the
Polish government's 1990 National Environmental Policy call for reducing current annual emissions
of S02 of 4.2 million tons by 1.3 million tons by  the year 2000, i.e., less than 40% of the 1987
program goal.  Similarly, NO, emissions are to be reduced from the current level of 1.5 million
tons per year to  1.3 million tons, a decrease of just over 10% and less than one-quarter of the
reduction set out in the 1987 program.
Prospects for Energy Conservation

         The potential for energy conservation in Poland was first assessed in a 1983 report
entitled Long Range Programme of  Energy Use Rationalization UP to 1995. which  investigated
3,500 opportunities for energy-efficiency  improvement and aggregating opportunities by main
industrial activity (Long Range Programme. 1983).

         According to the report, the higher estimate of energy-savings potential is 1,415
petajoules (PJ) per year by the year 2005 and 2,320 PJ per year by the year 2030, equivalent to
40% of total annual energy demand in Poland at the end of the  1980s. (One PJ  is equivalent to
approximately one trillion BTUs.) The extent to  which this savings is actually captured will
depend directly on measures to stimulate  energy conservation by economic incentives as well as
government intervention efforts.  The study concludes that investment of 1.25%  of GDP per year
to the year 2005 will be required to accomplish  the savings of 1,415 PJ by that year, and notes
that this  tevet of investment is lower than the investment cost required to supply  the same
amount of energy (Sitnicki et  af., 1990).

         Studies by the World Bank in the late 1980s indicated that the potential for energy
conservation was great,  with  estimates indicating that merely bringing Poland's industry up to
modern European standards for energy efficiency would reduce overall energy  use by 25% to
30%. Other, more aggressive estimates went further, indicating that potential energy savings by
streamlining Poland's more wasteful industries could be as high as 50% to  65%.  The World Bank
estimated that energy savings of as much as 20% could be achieved by implementing low-cost
management improvement measures, such as better plant maintenance and installation of
improved controls and heat-recovery equipment.  However, the World Bank cited general
administrative intransigence and the unrealistically low price of coal as the greatest obstacles  to
the implementation of otherwise technically feasible energy efficiency improvements (Winiecki,
1988; World Bank, 1987).

         Unfortunately, Polish energy use patterns at the beginning of the 1990s  still involve
inefficient use of primary energy sources and increasing industrial demand.  Coal mining is
extremely capital-, material- and energy-intensive under the best of circumstances, and even
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dismissing expansion efforts and focusing on maintaining current levels of coal output will become
increasingly more difficult due to the deterioration of natural geological formations in Poland.
Nevertheless, in spite of, these limitations and the fact that the Polish economy has  long suffered
from shortages of investment capital, government reinvestment expenditures for coal mining have
remained large  due to the subtantial  political influence wielded by the still powerful ministries
responsible for energy-intensive industries.

         As noted previously, emissions control by targeting increased  energy efficiency in
industrial processes through reduction of fossil-fuel combustion offers great potential for
environmental and economic benefit.  Authorities in Poland have recognized that this objective can
be achieved only through  a combination of technology transfer and economic reform, the latter
requiring fundamental price restructuring to eliminate coal subsidies and thereby encourage
conservation efforts on the part of energy consumers as well as  producers.

         A recent study by Polish analysts found that comprehensive policies of economic reform
could enable Poland to reduce projected energy demand by 50% over 40 years.  According to the
study, aggressive investment in improved industrial processes could reduce current levels of
energy use by 40% at costs lower than those of new power plants  (Carbon Emissions. 1990).
This analysis is examined in detail below.

         As late as  1989, direct government subsidies in Poland amounted to approximately 16%
of gross domestic product (GDP), with cross subsidies adding another 4%, representing
approximately 25% of Poland's total economic output (World Bank,  1989).  It has been
recognized that such subsidies confuse the economic rationale for investment and misallocate
resources.  Thus, investment decisions are made on  the basis of quantitative 'measures of material
needs which generally do not reflect considerations of actual cost.  Similarly, individual wages do
not serve as an incentive  for productive work because  they are so heavily subsidized (Sitnicki et
al., 1990).

         Therefore, both energy supply and energy delivery in Poland have operated under the
influence of heavy subsidies which confused both the economic  value and economic cost of
energy.  Up to the end of the 1980s, energy prices charged by all major  energy carriers were
heavily subsidized, accounting for 49% of the delivery price of coal, 83% for natural gas, and
27% for electricity (World Bank, 1987).

         The fundamental transition  to a market-oriented economy undertaken in Poland since
1989 has a broad range of objectives that include modernization of production capacity, control of
high inflation, inducement of energy and materials efficiency, and stimulation of output of
products with higher value added.  It has been recognized that progressive achievement of these
goals will simultaneously  provide economic resources for environmental protection and while
decreasing adverse environmental impacts  of economic activity.
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Prospects for Nuclear Energy

         Countries typically structure energy supply around some mix of indigenous reserves of
fossil fuels and renewabies and imported electricity or fuels.  Among industrialized Western
countries, the  United States has relied on domestic oil, coal,  natural gas, hydropower, nuclear   ,
energy and energy efficiency and conservation to maintain a  mixed and balanced energy system.
France has pursued the most aggressive program for the use of nuclear power in the West
{Kabala,  1990).                               .

         Poland has not developed a nuclear industry and, in fact, has been the most reticent
among the industrialized former CMEA countries to pursue the nuclear option. Due to the
prominence of coal-based energy,  Poland's nuclear  program has had a  halting history for several
decades.  After the Polish government's announcement in 1971 that it intended to build at least
one nuclear generating station, there was no action on the program until 1982, when plans to
build the country's first nuclear plant at  Zarnowiec, northwest of Gdansk near the  Baltic Coast,
were announced.  These plans called for installation of four reactors of the Soviet VVER-440
type, each with a capacity of 465 megawatts (MW).  The first was scheduled to go on line in
1991, the next two between 1993 and  1994, and  the fourth in the late 1990s.  Estimates in the
mid-1980s projected Poland's installed nuclear generating capacity in the year 2000 as high as
9600 MW, .to  be realized from Zarnowiec and at least two other facilities (World Bank, 1989).

         Over  the 1980s, however,  financial,  technological,  and political obstacles confronted the
program.  The costs of the>installations skyrocketed as the amounts of both zloties and hard
currency needed for the investment  grew enormously. The World Bank's 1987 economic  study of
Poland indicated that there  were economic grounds for reconsidering plans to complete the third
and fourth reactors at Zarnowiec (World Bank, 1987). In addition to economic considerations,
Polish technical analysts voiced grave concern about the capability  of Polish industry to meet the
engineering standards required for construction of the nuclear facilities. Finally, public opposition
to nuclear energy  grew increasingly  more vocal in the aftermath of the Chernobyl incident and
within the context of increased awareness of  the general ecological disruption and damage.caused
by large-scale  investment projects such as construction  of nuclear plants. Poland may chose to
revisit the development of nuclear power in the next decades, following the introduction of
advanced nuclear  designs.
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Prospects for Future Energy Use

         Energy use in Poland could follow one of three scenarios referred to as the "base case,"
"structural change," and "energy efficiency" variants. The base case scenario proposes an
increase  of 150% in primary energy consumption in Poland by the year 2030, based on the
assumption that no significant changes will take place in the economic structure of the country,
end-use energy patterns, or overall  levels of energy efficiency (Sitnicki  et al, 1990).

         The intermediate,  or structural change scenario, assumes that structural shifts will  .
encourage the more efficient use of energy, and that movement away from energy-intensive
industrial activities will result in a decrease in required energy per unit of economic output. This
scenario  predicts growth in energy  demand moderated by two factors:  the shift from basic heavy
industry  to less energy-intensive manufacturing branches and improvements in industrial energy
efficiency. Still, energy demand under this scenario is projected to increase by 36% over the next
40 years.

         The energy efficiency scenario proposes deeper changes in  economic and social
arrangements by assuming technological  improvements for energy  efficiency in the manufacturing,
construction, and transportation  sectors.  This scenario might require sharing limited investment
capital between  expansion  of energy supply and the modernization of industry, and highlight the
need to focus investment in sectors that will raise the standard of living in response to social
pressure.- The scenario is based on the premise that increased investment in coal mining and
energy generation without  a concomitant reduction in wasteful energy  use is unlikely to bring
about a real increase in GDP.  It would, in fact,  reduce levels of capital available to light
manufacturing branches and delay the-replacement of obsolete and unprofitable production
facilities.  This would in turn preclude the expansion of potentially more profitable  and
environmentally  benign branches of the economy (Kozlowski, 1986).

         While the energy  efficiency scenario projects no growth in total energy consumption, it
does assume substantial interfuel substitution resulting from a shift to less material-intensive
sectors,  significant  energy  efficiency improvements, and the increased  use of imported natural
gas. Per capita  energy demand  would stabilize roughly at 1990 levels, while growth in per capita
income would progress by  2%-3%  per year.

         It should be noted that nuclear power is excluded from this projection on  the basis of  a
complex  set of variables that include high construction costs, long lead times, sophisticated
operation and maintenance requirements, external debt burden issues, safety concerns, and strong
public opposition to  nuclear energy. In contrast, increased reliance on  imported Soviet natural gas
and oil from the Soviet Union and the Middle East form  a key component of the scenario,
although recent  world events have  greatly complicated this element.

         Clearly, the Soviet Union's decision to  trade oil and gas only in  exchange  for hard
                                            42

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currency as of January 1991  will present a formidable obstacle to Polish efforts to obtain fuels
that formerly had been received in exchange for Polish commodities.  The cost to Poland of Soviet
fuels in 1991 alone has been estimated at $4 billion {Wilczynski, 1990).  In addition, access to
Middle Eastern oil has been made more difficult by the rise in world oil prices caused by the Iraqi
invasion of Kuwait, as well, as by Poland's compliance with the United Nations embargo imposed
on Iraq  since that time, which was estimated to cost Poland  an  additional $2.5 billion by the end
of 1990.  In view of this difficult situation, it should be noted that a key component of the World
Bank's energy loan to Poland is intended to support the development of domestic natural gas
resources.      ••          -               -                    -
                          PRIORITIES FOR ENVIRONMENTAL POLICY

National Environmental Policy

        The following section provides a synopsis of National Environmental Policy, a November
1990 publication of the Polish Ministry of Environment, Natural Resources, and Forestry
(MOSZNL) that outlines the legislative and administrative framework for environmental policy in
Poland as well as current approaches to environmental protection.  An abridged version  of the
text of the document appears in Appendix B.
Legislative Basis
                             i          ,      *
         Poland's costitution provides the legal basis for environmental protection.  Article 13 of
the current document (which will soon be revised) states that the nation ensures
"the protection and rational development of the natural environment,  constituting the nationwide
wealth." Article 71 asserts that citizens "have the right to benefit from the values of the natural
environment and the obligation to protect it." Legislative application  of these basic provisions
took shape in the 1949 Statute on the Protection of Nature, the 1974 Statute on Water Resource
Management, and the 1.980  Statute on the Protection and Shaping of the Environment.  Other
relevant statutes address regional planning and development, mining,  industry, and agriculture.

         The 1949 Statute on the Protection of Nature-which included natural resources, living
and non-living elements, and landscape in its purview-established a Ministry of Forestry and
Forest Industries and created a National Council for the Protection of  Nature.  In 1970,  the  Polish
Committee for Environmental Protection was formed, which became the Ministry of Territorial
Management and Environmental  Protection in 1972.

         The 1974 Water Resources Law classified Poland's surface  waters and water uses and
laid the groundwork for water  quality  regulations, the first of which was the November 1975
decree of the Council of Ministers that established three classes of water quality according  to
their use, as was discussed previously (Surowiec et al.,  1981).  Legislation passed in 1974 also
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addressed air quality control, soil conservation, the protection of "nature" and vegetated areas,
and the management of water basins.  A 1978 decree built on a 1953 law concerning
management of environmental issues in mining areas.

         However, environmental legislation .came of age in Poland with the passage in 1980 of a
comprehensive Law on the Protection and Shaping of the Environment (Radziszewski, 1987).
This act defined the environment as the  "totality  of the elements of nature, particularly the soils
of the earth's surface,  mines, waters, air, and the animal and vegetable worlds, as well as
landscape, both in its natural state and as shaped by the activity of man." A 1982 statute on the
protection of agriculture, forest lands, and soils went on to establish regulatory classifications for
all actual and potential agricultural,  horticultural, and forest terrain. Other statutes, such as those
on local self-government and the regulation  of economic activity, also reflected environmental
considerations.

         The 1980 law, which  is the primary legal basis for current environmental policy in
Poland, is based on the theoretical obligation to guarantee  current and future generations natural
conditions favorable for their existence.  Attention is directed to the rational development of  the
environment, measures to counter, pollution  or environmental degradation, rational management
and use of natural resources, and the return of natural elements' to their authentic state.
Regulatory Framework

         Polish air and water pollution regulations are currently based on ambient quality levels.
Air pollution standards are distinguished between those applying to "normal" areas and those
applying to "sensitive" areas, such as natural preserves and parks.  Based on these regulations,
industries are issued permits for specified amounts of emissions and discharges and.assessed
charges for this "economic use of the environment."  Emissions and discharges greater than those
specified in permits are grounds for fines.  Air pollution regulations  include standards governing
the use and discharge of 54 chemical substances  and particulates.  Polish regulatory practice has
been to permit emissions  provided their effects remain within the'ambient quality limits set  in
national regulations.

         The Water Resources Law of 1974 is the. basis for water quality regulation in Poland.  It
requires maintenance of a designated purity level of a receiving body of water according to  three
classes of quality as discussed  above: 'Permits for discharge of pollutants are granted  based on
calculations of the maximum discharge possible without exceeding  the downstream purity level of
the receiving body  (Surowiec, 1981).  Discharges in excess of permit specifications are met with
fines based on the  quantity of discharge and the designated purity  level of the receiving body
(Rada Ministrow, 1987).  The goal of current environmental regulatory policy is to bring Polish
regulations into line with European Community (EC) standards by the.year 2000.
                                                               »
Resource Use  Charges and Pollution Penalties
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         Polish environmental regulatory practice as it developed over the 1980s attempted to
incorporate financial considerations into environmental protection.  The intent of use charges and
pollution penalties was to induce adherence to pollution norms by incorporating the costs of
environmental losses into economic decision making and stimulate the development and use of
low- and no-waste technologies in industry.

        . Environmental legislation and  regulations provided for the granting of permits to engage
in activities involving the  "economic use of the environment," i.e., consumption of water,
disposal of wastewater, discharge of air pollutants, and the generation, disposal, and storage of
solid wastes.  Such activities involved  two types of payments:  basic charges for use of natural
resources (i.e., water, land, soil, forests)  and, when required, fines for violations of permit
conditions that stipulate acceptable levels of air pollutant emissions, water pollutant discharges,
and dumping or storage of solid waste. The system of use charges and pollution penalties
administered  by the Ministry of Environmental Protection,  Natural Resources, and Forestry
included standards for permissible levels of pollution for 54 substances emitted into the air and for
49 discharged into water.

Environmental Impact Assessments

         In cooperation with the United Nations Development Programme (UNDP) and the World
Health Organization (WHO), the Polish  government initiated efforts in the mid-1980s  to
incorporate environmental impact assessment (EIA) methodology into its procedures for  central
economic planning. ElAs were to consider the number of people to be employed, the nature of
production processes  to be used, the type  and construction of buildings,  energy, transportation,
power, and water supply  requirements for investment projects.  The assessment of potential
environmental impacts of a project considered sensitive or valuable agricultural and forest land;
effects on surface water, groundwater, and ambient  air quality; the risk of noise, vibration,
ionizing, and  electromagnetic pollution; the proper use of mineral deposits; satisfactory disposal
and treatment of  wastewater;  protection  of culturally valuable areas, national parks, nature
preserves, and other green space; and  the preservation of favorable environmental conditions for
the population, especially in urban areas. •

Administrative Structure

         The 1980 Law on the Protection and Shaping of the Environment contained two
elements that formed the basis for environmental protection in Poland:

  •      the  establishment of a system of charges for natural resource use and fines for the
         pollutant discharges,  along with the  creation of an Environmental Protection Fund to
         receive monies gathered; and
  .•      the  designation  of the 27 protected zones described earlier, along with a framework of
         provisions governing future development in these areas (see section on national
                                            45

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         development policy, below).

         The Ministry of Environmental Protection and Natural Resources (MOSZN) was created in
 1985; its responsibilities were expanded in  1989, when it became the Ministry of Environment,
 Natural Resources, and Forestry (MOSZNU.  According to its enabling statute,  MOSZNL is
 responsible for protection and shaping of the country's environment, protection of natural
 resources, management of water resources, air and water quality, and management of
 hydrological projects.  Figure 13 provides the. MOSZNL organizational chart as of 1990.

         MOSZNL includes the National Environmental Protection Inspection Service (PIOS) and
 the Institute for Environmental Protection, a research body,  both of which have branches in major
 cities.  PIOS, in many ways the key division of MOSZNL because of its enforcement authority, is
 responsible for establishing pollution standards, implementing regulations, monitoring air and water
 quality, carrying out research on environmental quality, and initiation of anti-pollution efforts.
 Government Programs and Policy Formation

         Poland's Environmental Protection Strategy to the Year 2010 was adopted in 1985 as
 the administrative instrument to coordinate environmental quality efforts over the following  25
 years (MOSZN, 1988). The  Strategy acknowledged the unsatisfactory state of the environment in
 Poland, including the fact that in a number of regions of the country, especially those of high
 industrial activity or concentrated  urbanization, admissible pollution standards had been grossly
 exceeded.  Pollution of water,  soil, and air and shrinking total arable and forested land were
 recognized as the results of "irrational management" that had generated "evident economic
 losses."

         The Strategy gave first priority in air quality control policy to the abatement of pollution
 by S02 and NO, through the installation of pollution control equipment,  the adoption of coal-
 cleaning technologies, utilization of improved combustion processes, and flue-gas desulfurization.

         The goal of water pollution policy under the program was the restoration of water  quality
 levels according to standards of permissible pollutant concentrations.  The five  elements of  this
 policy were to accelerate construction of treatment facilities  for municipal and industrial
 wastewater, reduce the salinization of inland waters by mine drainage, reduce the pollution  of
 surface waters and the Baltic Sea by transportation systems, abate the pollution  of surface  water
 by agriculture, and reduce  transmission of water-borne  pollutants from abroad.
 Budgetary Activity in Environmental Protection
         While investments for environmental protection since the mid-1970s have grown steadily
.as a'share of total  investment, they have remained quite low as a percentage of national  income

   .".--'•           •••"..   46

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when compared to both international standards and government plans.  Investment outlays as a
share of GNP have hovered at an average level of 1.7% for Western developed countries for some
time.   Levels for Poland were quite low by comparison, from as little as 0.37% in the late 1970s
to no more than 0.73% as late as 1986, despite official plans over the entire period to attain an
average of 1.5%  per year for the 1980s (Poczobutt-Odlanicki, 1988).

       . Actual investment in environmental protection over the last two decades fell far behind
planned levels in both absolute  amounts and as a proportion of national income.  As Table 19
illustrates, at the  end of the 1980s, investment still reached only..8%  of GNP,  with water quality
taking the lion's share of resources (O.S.. 1989).

        Tables 20-22 summarize fiscal activity for three key  environmental funds:  the .
Environmental Protection,  Water Resources  Management, and Soil Protection Funds.  Charges for
the use of air and water operate fairly consistently, with amounts  received roughly matching
amounts assessed.  In the case of fines for the violation of permitted standards for emissions and
discharges, wide discrepancies exist between amounts assessed and amounts actually received;
overall, fines paid totalled less than 1.0% of fines levied  in 1988.
Monitoring and Enforcement

        Official statistics in the 1980s showed that local governments in Poland were responsible
for the largest share (i.e., 40%) of environmental protection investments, with other major
contributions from the metallurgical and heavy machinery industries (21.6%), the mining  and
energy industry (15.5%), and the chemical industry (12%).  Together, these five sectors
accounted for nearly 90% of all environmental investments,  the Ministry of Mining and  Energy
was the largest contributor to the Environmental Protection  Fund for "the economic use of the
environment," accounting for 30% of the total, followed by the Ministries of Metallurgy and
Heavy Industry,  Chemical and Light Industries, and Construction and Public  Works, with shares of
25%. 13%. and 17%.  respectively IQ.S.i.G.W.. 19881.

        The same four Ministries, along with the Ministry of Agriculture, were the principal
payers of fines for violations of pollution standards. Of fines paid, the Ministry of Chemical and
Light Industries held a 42% share, with the Ministries  of Agriculture, Construction and Public
Works, Mining and Power, and Metallurgy and Heavy Machinery at 16%, 9%, 4%, and 1%
shares, respectively. The ratio of total fines paid to total fines imposed was 30%, but the ratio
per ministry varied quite  widely, with the Ministry of Mining and Power,  which accounted for
39% of fines imposed, paying only 3% of the  nearly 4 billion zloties it was  assessed in 1987
(O.S.I.G.W.. 1988).
                                           47

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National Development Policy

        A fundamental part of Poland's national environmental policy is the system of 27
designated "areas of ecological hazard" which were described briefly  in a preceding section.  The
methodology that identified these 27 areas took into account air quality, water quality, condition
of soil resources, forest health, and general factors relevant to nature and landscape protection.
Research on these various elements  showed that certain parts of the  country were particularly
vulnerable to levels of environmental degradation that threatened both nature and human health.
Charting these zones showed for the first time the relationship between environmental
degradation and industrial concentration, and highlighted the predominance of "dirty technologies"
within industry.

        The environmental policies that resulted from these findings  include direct environmental
protection measures as  well as steps to facilitate technological improvements in industry, changes
in industrial structure, and adoption of'alternative patterns of development in affected  areas.  •
Installation of pollution control equipment,  recultivation of soils, and reforestation of degraded
forest lands must be accompanied by broad regional economic development planning that also
addresses the needs for environmental protection in these areas.

        At the  national level, the official designation of the 27 areas has played a role in the
formulation of long-term policies of development for the whole country.  For example,  the Polish
Seim (Senate) passed a resolution within the 1983*85 socioeconomic plan that banned
construction or expansion of .environmentally harmful industries in the five most degraded areas of
ecological disaster (Kassenberg, 1986).  The proposed development policy also separated Poland
into four distinct zones  in terms of future development:

  •     Zone I  is the belt of ecological hazard in southwestern  Poland that requires fundamental
        restoration of the natural environment.  In this area, environmental protection
        considerations must influence every economic decision.

  •     Zone II includes  the western portion of the Baltic coastline from Gdansk to Szczecin, and
        must be protected from further degradation.  In order to  reclaim its most degraded parts
        and maintain its  pristine areas/regional population and  economic pressures on the
        coastal  area must be reduced; in addition, special attention  must be paid to water  quality
        • improvement in the country as a whole in order to limit pollution of the water that flows
         into the Baltic  from the Vistula  and Oder rivers.

  •     Zone III includes west-central Poland, a region of distinct areas of environmental
        degradation that includes several  of the country's  largest cities,  requiring substantial
        attention to  environmental quality in regional investment and planning.

  •      Zone IV is actually two zones, the extreme southeast and across the  northern part of the
                                             48

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        country, with relatively good environmental conditions that will require preventive
        measures to be maintained.
Priorities for Environmental Protection                           .

         Since Poland's historic change of government in-1989, several major policy initiatives
have been introduced:                          *

  •      Considerable effort has been directed to reshaping environmental policy to fit the
         country's reorientation to market economics.
  •      Poland has indicated its intention to bring its environmental regulatory policies into
         agreement with European Community (EC) norms.
  •      A three-phase policy has been established to restore the  country's environmental quality.

         The three-phase environmental restoration policy will take place over a 30-year
timeframe.  Phase I addresses near-term, immediate threats to human health and nature in the
period from 1991 to 1996.  An example of action in this category is the cessation of food
production  in polluted Upper Silesia, with government compensation for both producers remove'd
from business and consumers who might have to pay more for food transported from other parts
of Poland.

         Phase II focuses on national  attainment of compliance with environmental standards by
the period 1998-2000.  Concurrent with this objective is the intention to bring Poland's
environmental regulatory policies into  agreement with European Community (EC) standards.

         The goal of Phase 111 is to chart a course of environmentally sustainable economic
development  in the longer term by the year 2020.  The level of investment necessary to achieve
this goal is estimated to be $260 billion.  Implicit in this phase is the reform of  policy instruments
to reflect the country's progressive reorientation to market economics.

         According to a document provided  by the Ministry of Environment, Natural Resources,
and Forestry  in March 1990, a series  of priority actions for environmental  protection has been
elaborated for principal polluting media. In the area of air quality control, these priorities are:

  •      desulfurization of 50 million tons of hard coal in the  years 1991-93, with a goal of
         reducing country-wide emissions of  S02 by  10%;
  •      desulfurization of flue gases  at power plants in Silesia, Jaworzno, Rybnik, Laziska,
         Pplaniec, Skawina, Turow, and Belchatow;
  •      replacement of individual coal-burning furnaces for home heating with  district  heating
         systems in Krakow, Katowice, Torun, Poznan, Wroclaw,  and Lodz;
  •      reduction of automotive emissions through the use of lead-free gasoline and
         asbestos-free  brakes; and
                                            49

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 •      utilization of coal gasification technologies for new power plants.

        Water quality control efforts are to be focused on'three issues:

 •      desalinization of coal mine wastewater at the Czeczot, Piast, Ziemowit, Budryk, and
        Debiensko mines in Silesia to remove two million tons of salt per year, thus reducing salt
        load of saline minewater pollution by over 20%;
 •      construction of 360 new and retrofitting 400 existing municipal sewage treatment
        plants; and
 •      development of production capability for the manufacture of equipment for wastewater
        aeration, sludge dewatering, and automatic  process controls.

        Industrial waste management programs call  for:

 •      construction of toxic waste incineration plants for the cities of Warsaw, Bydgoszcz, and
        Krakow;
 •      re-use of fly ash and slag from coal combustion and pyrite tailings generated by the
        desulfurization of hard coal;
 •      recovery and reuse of metals from metallurgical wastes in steel mills in Katowice and
        Krakow, copper refining in Legnica, and metal refining in Olkusz and Miasteczko Slaskie;
        and
 •      reuse of phosphogypsum derived from fertilizer production in Gdansk and Szczecin.

        Municipal solid waste management initiatives include:

 •      construction of regional waste  incineration facilities with waste heat recovery systems in
        Warsaw,  Krakow, Wroclaw, Lodz,  Poznan, and Gdansk;
 •      development of recycling and solid waste segregation programs in urban areas; and
 •    .  construction of composting facilities for urban solid waste and sewage sludge.

        Current priorities for nature protection fall into two main categories. Special protection is
required for the  Polish national parks that serve as biosphere reserves of international importance,
such as:

 •      the primeval forest ecosystem  in the Bialowieza forest in eastern Poland;
 •      the Babia Gora "atpine" mountains on the Czechoslovak border;
 •      the Baltic coastal dunes in the  Slowinski National  Park; and
 •      the Lukajno Lake wetlands.

In addition, several key areas are to be protected  against pressure from tourism and therefore
developed under strict controls:

 •      the Mazurian Lakes District in the northeast;
                                            50

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  .•      the Tatra, Karkonosze, and Bieszczady Mountains in the south; and
  *      the Pomorian Lakes District along the Baltic in the northwest.

         Table 23 summarizes the cost of achieving key objectives in environmental protection
 over the period 1991-1995, according to material made available by the Polish Ministry of
 Environment, Natural Resources, and Forestry (MOSZNL).
                 THE SOCIAL RESPONSE TO ENVIRONMENTAL DEGRADATION

         Poland's ecological movement was born as a social protest against the growing threats
 to the environment created by industry and sanctioned by the government. Intensified protest
 and increased popular concern for environmental issues was amplified in the aftermath of the
'Chernobyl nuclear accident in 1986, providing the environmental movement in Poland  with a
 rallying point for public protest.  The year after the accident brought numerous public
 demonstrations  against Poland's domestic nuclear  program, and as public awareness of other
 environmental problems continued to grow, so did Poland's environmental movement.   However,
 legal, effective public action on environmental problems in Poland grew out of the first Solidarity
 period in the early 1980s, and was already an established (albeit constrained) force by 1986.

         The 1980s witnessed the decline and ultimate elimination of monolithic decisionmaking
 in Poland's political system.  Nowhere were the symptoms of this decline and the concomitant
 rise of political pluralism more evident  than in the  environmental arena.  Poland's official
 environmental policy was transformed  by the emergence  of a range of public  interest groups that
 sprang  up to challenge the government and  officially sanctioned organizations on a variety of
 issues.  These nongovernmental organizations (NGOs) continue  their activities in post-communist
 Poland, albeit in a vastly different political climate  that permits open discussion on the full range
 of issues, leading to meaningful public involvement in a broad social agenda.  The groups that
 comprise  the contemporary ecological  movement in- Poland vary widely in degree of
 institutionalization, legal status,  and involvement in broader social issues.  Activities of some of
 these groups will be discussed in this section.
 Environmental Influences on Official Organizations

         The advent of the Solidarity trade union movement in the early 1980s prompted the .
 ruling Polish United Workers' Party {PZPR} to make a serious effort to improve the environment.
 In an effort to diffuse Solidarity's rising popularity, in  1981 the PZPR proposed that the Polish
 government should act  to halt increasing ecological deterioration,  place environmental protection
 on a par with agricultural production and housing in state budgets, and formulate a comprehensive
 national program of environmental protection and management. While only modest action was
 taken on these provisions, they brought official thinking to bear on environmental issues for the
 first time, a significant step that colored environmental policy for  the remainder of the decade
                                            51

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(Kabala, 1989):                        ....

        An example of the growing influence of environmental issues on public policy can be
seen in the role of the State Planning .Commission, the agency responsible for preparing and
coordinating the central  socioeconomic plans for the country-  The major contribution of the State
Planning Commission to environmental protection efforts in Poland was the geographic'
assessment-of the-state-of the environment;-published in 1985 by the'Polish Academy of
Sciences (Kassenberg and Rolewicz, 1985).  This project resulted in the designation of the 27
"areas of ecological hazard," an approach that became a fundamental tool in formulating
environmental and development policies  in post-communist Poland.

        The Polish Academy of Sciences (PAN) has also played an important role in providing the
scientific basis for environmental evaluations and in shaping environmental policy in Poland. As
the nation's foremost scientific  body, PAN tapped Poland's best expertise in diverse fields and, in
some cases, had direct access to  governmental  decisionmakers. A key example of PAN's role in
formulation of environmental policy was its 1987 report entitled Evaluation of the Effectiveness
of Measures in the Shaping and Protection of the Environment, which drew  on research on all
aspects of contemporary environmental research in Poland (Ocena,  1987).
Nongovernmental Organizations

        The first official national environmental organization in Poland, the League for the
Protection of Nature  (LOP), was founded in 1912, but continues to serve an important function
today. As the country's official nature protection organization, the LOP is funded by the
government and operated under the auspices of the Ministry of Environment and Natural
Resources; its activities are for the most part oriented toward education and nature preservation.
However,  during the  first Solidarity era, the LOP distinguished itself by the publication of a  major
report, The State of the Environment and the Threat to Human Health, which included estimations
of the social and economic losses resulting from environmental degradation .in Poland (LOP,
1981).

       "^Poland's first legal, non-governmentat environmental organization in Poland was the
Polish Ecological Club (PKE).  Founded in  1980, the PKE carried on with its ecological activism
after the supression of the Solidarity trade union movement in 1981.  By the late 1980s, the PKE
had established 17 branches across the country and gained over 3,000 active members. The PKE
pursued its objectives using methods similar to those of Western environmental groups,  i.e.,
collecting  petitions, holding meetings and lectures, sponsoring technical  reports, and making
persistent appeals to local and national authorities on issues of pressing environmental concern
(Fura, 1988).                                                      .

        The PKE program is based on the concept of ekorozwdi. or "ecodevelopment,"  an
environmentally-based  program of economic and social development for Poland.  It presents a

                                           '52

-------
stark contrast to the resource-exploitative industrial policies of the communist government. The
PKE used ekofpzwoi to address sectoral and local environmental issues such as the acute
industrial pollution of Upper Silesia and the Vistula River, as well as specific enviromental
problems cuased by.various branches of industry.  More recently, in  1990. .ekorozwoi became
known as "sustainable development" and has been institutionalized in the creation of a new, non-
governmental environmental research organization in Warsaw, the Institute for Sustainable
Development (Kassenberg, 1991).

         Another important contribution to promoting environmental awareness in Poland was the
founding in 1989 of the National  Foundation for Environmental Protection.  Based in Warsaw  and
operating 26 branch offices throughout Poland, the  Foundation is a technical  organization that
provides training, research, and technical assistance to industrial firms and local government
bodies in the areas of pollution prevention and control and nature protection. The Foundation has
links to voivodship administrations in several environmentally impacted regions, as well as to
several of the  country's technical universities (Metier, 1991; National Foundation, 1990).

         The Franciscan Movement for Ecology, founded in 1986, is an independent ecological
organization based in the Roman Catholic Church in Poland.  From its headquarters in  Gdansk,'the
Movement focuses its efforts on addressing the pollution of the Baltic Sea and Poland's Baltic
coastline, functioning largely in an educational capacity to increase public awareness of ecological
issues.

Political Parties

         With  regard to political participation  as a means of addressing ecological concerns, a
"green" movement, modelled closely after Greens of Western Europe, took shape in Poland at the
end of the 1980s, expanding on the activities of largely apolitical groups such as the PKE.  The
Polish Green Party was founded in 1988 as an officially registered, ecologically-oriented, political
organization.  The Green Party participates in elections for local, regional, and national offices on
a platform underscoring the primacy of ecology over economics, and calling for democratic
pluralism.

         Of particular relevance to the democratic transformation of Poland, the Solidarity
Commission on Environmental Protection and Natural Resources assembled representatives of
indpendent ecological groups, including the PKE, to take part in the ecological sub-group of the
government-opposition "roundtable talks" of 1989.  The environment group's contribution was
widely recognized for raising the prominence  of ecological issues during Poland's transition to
democracy.

         Finally, the Independent  Green  Movement Party brings together  representatives of
numerous environmental organizations such as the PKE, the  Silesian  Ecological Movement, and the
Polish Green Party, as welt as unaffiliated  individuals, and calls for a "new concept of ecological
authority." However, the Party does not take place in formal electoral politics.
                                            53

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                                                                        54

-------
                                         REGIONS OF FOREST AT RISK
                                         DUE TO AIR POLLUTION
                                         I~^O  sight hazard
                                         |/rTx1)  moderate hazard
                                         YJ?ZJ\  *>w» hazard
                                         AVERAGE ANNUAL CONCENTRATION
                                         OFSOj, 1985
                                         .M_        SO, . U mini'
                                         _ ^        to,-11 nl«f
                                          ^*  areas ef forest damaged by «if polhfion
Rgure 4. Air Pollution by Sulfur Dioxide.
  (Source:  Narodowy Program. 1988)
                     55.

-------
166 thous. tons
 78 thous. torn
162 thous. tons
144 thous. tons
 47 Ihous. tons
 21 thous. tons
 50 thous. tons
 66 Ihous. tons
                       PARTICULATE
                  BO    60     40
              Emissions
                    total
                                     20
                                                   Industry

                                                  fuel-energy
                                                 metallurgical
electromechanical
   chemical
    mineral
  pulp-paper
 pharmaceutical
    food
    other
                Emisji:
                            GASEOUS
                            40     60
                        Emissions
                                                                                I      I  CO
                                                                                              100%
                                                                                                2872 thous. tons
1117 thous. Ions

 171 thous. tons
 317 Ihous. ton*
 210 thous, tons
 114 thous. tons
 5$ Iheu*. tons
 131 thous. tons
 205 thous. ions
                                                       I  ether
                                                       '  gases
            Rgure 5.  Industrial Paniculate and Gaseous Emissions. According
                       to Branch of Industry, 1988.  (Source:  O.S. 1989)
                                                    56

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ACTUAL STATE OF WATER QUALITY. 1965

^^—•   water of class I
        water «l class II
***•**•   wale' of class III

^™""   water beyond classes
                                                INDUSTRIAL WASTEWATER AND MUNICIPAL
                                                SEWAGE REOUIRTNG TREATMENT DISCHARGED
                                                INTO SURFACE WATERS, 1985
O
•
(mated
untreated
RgureG. Water Quality Protection.  (Source: Narodowy Program. 1988)
                                       57

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Class of purity:
 1   1  class I
       class II
       class III
       beyond classes  -
         Rgure 7.  Water Quality in Polish Rivers 1987, According to Physical
               Chemical Criteria. (Source: Narodowv Program. 1988)
                                        58

-------
Claw of purity: .

I—• •  i *}»** II
     class It)

     beyond classes
             Rgure 8. Water Quality in Polish Rivers, 1987 According to
              biological Criteria.  (Source: Narodowy Program. 1988)
                                        59

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           Generated Annually

        J	t	
                                                                 Accumulated in Industrial Facilities
                 J	L
     Wastes:

         reused

   JMJB untreated
   I    1  stored In Industrial

         I faeiities {
  0       8        8
mint
L	L
                                              Industry:
                                               TOTAL
                                              fuel-energy
                                           electromechanical
      Rgure 9. Industrial Hazardous Waste According to Branch of Industry, 1988.
                                      (Source:  O.S. 1
                                                60

-------
  fmm^m
     ^C*.!VV>.;---/gi
             .
         Zn  "
EZJTI-tOOopmZn
     1-130 ppm Zn
   g>l30ppmZn
    £22311-
        li-3 Down AS
        31- 40 com As
(a)   Zinc content of pin« needles in ppm in dry matter
(b)  Arsenic content of pine needles in ppm in dry matter
 ^3 0.61-0.90 torn Cd
 onnni a9i-uoppmoj
     121-ZAOppmCd
    l> 240 pom Cd
 (c)  Cadmium content of pine needles in ppm in dry matter
              Vr

           il-ZOsom Pb     \y\
       E^21-XppmPb       "   '--
 (d)  Lead content of pine needles in ppm in dry matter
      Rgure 10.  Geographic Distribution of Heavy Metal Contamination in Poland.
                                (Source: MoIsM, 1990)
                                          61

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AREAS OF "ECOLOGICAL HAZARD" IN POLAND
1.
11.
III.
IV.
V.
VI.
XIII.
XIV.
XV.
XVI.
XVII.
XVIII,
AREAS
II.
IX.
xxm.
XXV.
XXVI.
Szczecin
Gdansk
Poznan
Bydgoszcz-Torun
Inowroclaw
Konin
Tomaszow
Pulawy
Chelm
Turoszow
Jelenia Gora
Walbrzych
OF "ECOLOGICAL
Gdansk
Legnica-Glogow
Rybnik
Upper Silesia
Krakow '
VII.
VIII.
IX.
X.
XI.
XII.
XIX.
XX.
XXI.
XXII.
XXIII.
XXIV.
CATASTROPHE"




Wloclawek
Plock
Legnica-Glogow
Wroclaw
Belchatow
Lodz
Czestochowa
Kielce
Tarnobrzeg
Opole
Rybnik
Myszkowo-Zawiercian





                                                              XXV.
                                                              XXVI.
                                                              XXVII.
Upper Silesia
Krakow
Tarnow
Source: Grodzinskl and Kaczmarek. 1986


                 Rgure 11. Areas of "Ecological Hazard" in Poland.
                                         62

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        rery savsre and sevam


|      I  moderate and slight


[   .   j  threatened zones


PROTECTION
    '|  I ming ol over 50% of soils


    ;;![!  recullivafon o) 1% ol soils
     Figure 12.  Areas of Degradation, Threat, and Protective Activity.
                  (Source:  Narodowy Program. 1988)
                                  63

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       COMMISSION ON
     MINERAL RESOURCES
       COMMISSION ON
      HYDROGEOLOCICAL
       DOCUMENTATION
       COMMISSION ON
   GEOLOGICAL ENGINEERING
       DOCUMENTATION
       COMMISSION ON
   EVALUATION OF GEOLOGICAL
    PROSPECTING PROJECTS
WORKER
COUNCIL

MAIN FLOOD
COMMITTEE
           MINISTER
        OF ENVIRONMENT
          PROTECTION,
       NATURAL RESOURCES
         AND FORESTRY
                                         COLLEGE
                                       OF MINISTRY
                                   NATIONAL COUNCIL FOR
                                   PROTECTION OF NATURE
                     NATIONAL COUNCIL
                      FOR PROTECTION
                      OF ENVIRONMENT
   UNDERSECRETARY OF STATE
   FIRST DEPUTY OF MINISTER
          NATIONAL
   CONSERVATOR OF NATURE
UNDERSECRETARY
   OF STATE
                           UNDERSECRETARY
                               OF STATE
1

2

3

4

5

6

7
CABINET
OF MINISTER

LEGAL
DEPARTMENT

ECONOMIC
DEPARTMENT

RESEARCH
AND PROGRAMMING
DEPARTMENT

FORESTRY
DEPARTMENT

NATURE PROTECTION
DEPARTMENT

AIR AND EARTH
SURFACE PROTECTION
DEPARTMENT
                                        FORESTRY
                                         COUNCIL
                                                                   GEOLOGICAL
                                                                    COUNCIL
                                                                 COMMISSION ON
                                                              ENVIRONMENTAL IMPACT
                                                                   EVALUATION
UNDERSECRETARY
   OF STATE
                UNDERSECRETARY
                   OF STATE
                                                               IL.
UNDERSECRETARY
   OF STATE
 CHIEF NATIONAL
   GEOLOGIST
                                                              CHIEF INSPECTOR OF
                                                            ENVIRONMENT PROTECTION

8

9

10

11

12

13
MAIN PATENT
REPRESENTATIVE

WATER MANAGEMENT
DEPARTMENT

GEOLOGY
DEPARTMENT

FOREIGN COOPERATION
DEPARTMENT

DEFENCE
DEPARTMENT

ENVIRONMENT
MANAGEMENT AND
IMPLEMENTATION UNIT

ADMINISTRATION
AND BUDGET OFFICE
Figure 13.  Organization Chart of the Ministry of Environmental Protection,
       Natural Resources, and Forestry. (Source: MOSZNL, 1990)
                                        64

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                                   TABLE 9
            POLISH EMISSIONS OF SO2, PRESENT AND PROJECTED
                                    1985
                             199S
    SOURCES




    Power plants



    Industrial energy and heat




    Manufacturing



    Domestic and agriculture



    Transportation



    TOTAL
1000 tons/yr.




   1,940




    880




    400




    980




    100




   4,300
 45.2




 20.4




  9.3




 22.8




  2.3




100.0
1000 tons/yr.





   2,450




   1,000




    450




   1,100   .




    10.




   5,100
 48.1




 19.6




  8.8




 21.5




  2.0




100.0
Source: Jagusiewicz 1988
                                        65 •

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                                   TABLE 10
            POLISH EMISSIONS OF NO,. PRESENT AND PROJECTED
                                    1985
                             1995
    SOURCES




    Power plants



    Industrial energy heat



    Manufacturing



    Domestic and agriculture



    Transportation



    TOTAL
1000tons/yr.




    400




    240




    400




    110




    350




   1,500
 26.7




 16.0




 26.7




  7.3




 23.3




100.0
1000 tons/yr.




    500




    300




    500




    150




    550




   2.000
 25.0




 15.0




 25.0




  7.5




 27.5




100.0
Source: Jagusiewicz 1988
                                      66

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                               TABLE 11
        EMISSIONS OF SO2 AND NOX ACCORDING TO SECTOR. 1988
                                 SO,
NO,
Total
Primary energy
Indust. energy •
Indust. processes
Comm./Res.
Transportation
1000T
4,180
2,020
720
380
950
110
^_
100
48
17
9
23
3
1000T
1,550
470 %
180
280
130
490
:•*.
100
30
12
18
8
32
Source: O.S. 1989
                                    67

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                                   TABLE 12

                  DEMAND FOR WATER IN POLAND. 1975-1988
                                    (in km3)

     Total demand
        of which:
        -manufacturing
        -agriculture
           and forestry
        -commercial and
           residential
1975


12.71

 8.98

 1.66

 2.07
1985


15-45

10.92

 1.61

 2.93
1988


14.81

10.12

 1.62

 3.07
Source: O.S. 1989
                                      68

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                                  TABLE 13

                 WATER PURITY IN POLISH RIVERS. 1967-87
          (% of total length of monitored rivers according to class of purity)
NB:  The total length of monitored rivers was 11,493 km in 1967, 17,764 km in 1977,16,238 km In
     1983, and 14,553 km in 1987.

Class 1
Class II
Class III
Beyond classes
1967
31
26
14
29
1977
10
30
27
33
1983
7
28
29
36
1987
5
27
26
42
Source: O.S. 1989
                                      69

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                                     TABLE 14

      MUNICIPAL AND INDUSTRIAL WASTEWATER REQUIRING TREATMENT
                                      (in hm3)
     Total

     Treated
     -physical-mechanical
     -biological
     -chemical

     Untreated
     -industrial discharge
     -municipal sewage
 1975

4,278.0

2,261.5
1,498.1
 484.7
 278.1

2,016.5
 665.0
1,351.5
 1988

4,466.6

2,802.7
1,531.3
1,026.7
 244.7

1,663.9
 492.9
1,212.2
100.0

 62.7
 34.3
 23.0
  5.4

 37.3
 11.1
 26.2
hm3 = cubic hecameter = one million cubic meters
Source: O.S. 1989
                                        70

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                               TABLE 15

   INDUSTRIAL WASTEWATER ACCORDING TO BRANCH OF INDUSTRY. 1988
                                (in hm3)
                     Total
hm3 = cubic hecameter = one million cubic meters
10,082
Fuel/Energy
Coal
Liquid/gas
Power gen.
Metallurgical
Ferrous
Non-terrous
Electromech.
Chemical
Mineral
Pulp and paper
Food processing
7,831
490
325
7,291
392
184
209
166
858
112
262
245
Source: O.S. 1989
                                 71

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                                   TABLE 16

              INDUSTRIAL WASTES GENERATED IN KEY REGIONS
                        OF ECOLOGICAL HAZARD, 1987
                                 (in million tons)
Poland total

Total in regions of
  ecological hazard

Upper Silesian
  Industrial Region

Rybnik Coal Region

Legnica-Glogow

Krakow

Szczecin
Generated

  180.3


  161.4
Stored

 81.7


 74.1
Treated

 98.1


 86.9
Accumulated

   1,455.7


   1,348.0
56.9
34.5
28.2
5.5
5.2
12.5
1.8
20.1
1.6
4.7
44.4
22.7
8.1
3.9
0.5
348.5
241.1.
302.9
74.5
56.2
Source: Monitor.... 1989
                                      72

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                                      TABLE 17
         CHARACTERISTICS OF THE 27 ZONES OF ECOLOGICAL HAZARD
Land area, km2
% of total

Population, mill.
% of total
27 areas

 35,220
  11.3

  12.9
  35.0
 Cflkl

13,783
  4.4

  6.2
 16.9
Cat. II


19,404
 6.25

 6.2
 16.9
Cat. Hi

2,033
  .65

  0.5
  1.2
Water consumption
in hm3/year

-industrial
 % of total

-municipal
 % of total

Sewage, in hm3/yr
% of total

Air pollutants

-particulates
 in 1000 tons  .
 % of total
 in tons/km2
 7,595.8
  69.5

 1,448.2
  57.0

 2,823.1
  61.9
 1,391.8
  76.0
  39.5
 in 1000 tons
 % of total
 in tons/km2

-of gases, SO2
 in 1000 tons
 % of total
 in tons/km2

Stored solid waste
 in 1000 tons
 % of total
 4,361.9
 '82.0
 123.8
 2,300.9
   82
  65.3
  91.0
Source: O.S.iG.W. 1987
                                         73

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                                    TABLE 18
         ENERGY EFFICIENCY IMPROVEMENT IN POLAND BY SCENARIO
                                (percent per year)
       Scenarios
1988-2000
2000-2010
2010-2020
2020-2030
Structural Change
  Energy quality
  Energy conservation
Efficiency Improvement
  Energy quality
  Energy conservation
   1.4
   0.8
   0.6
   2.1
   1.5
   0.6
   1.8
   1-2
   0.6
   3.8
   2.8
   1.0
   2.6
   0.5
   1.1
   2.5
   0.7
   1.8
   2.7
   0.5
   2.2
Source: Sitnicki et al, 1990
                                        74

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                               TABLE 19

         INVESTMENT IN ENVIRONMENTAL PROTECTION, 1976-1988
                         	{in-€tirrent-prices)
                          1976-80
1981-85
1985
1987
1990
bin. zl.
% of GNP
per capita
Water quality ,
bin. zl.
Air quality
bin. zl.
Waste mgmt.
bin. zl.
. 34.9
0.37
199
18.0
9.1
7.8
123.2
0.43
664
82.1
23.2
,17.9
49.1
0.56
1314
32.2
9.9
7.0
109.0
0.80
2894
64.9
22.1
22.0
189.5
0.80"
5006
120.5
33.4
5.6
Source: O.S. 1989
                                  75

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                                     TABLE 20
  ACTIVITY IN THE NATIONAL ENVIRONMENTAL PROTECTION FUND, 1985-1988
                                 -(in-miUionzlofies)        .              ......
                                       1985
Payments
for:
   air poll.
   stored waste
Fines
of which for:
   emissions of air poll.
   discharges of
   water pollutants
Assessed     Received
 16,260.8      15,873.1
                                     1988
  8,067.3
  3,990.1

  4,945.4

   492.7

  3,166.5
8,714.7
3,806.0

1,861.2

  344.7

1.201.5
              Assessed     Received
               70,304.6     62,386.0
39,071.2
21,738.3
55,218.7

   710.3
13,378.2
37,807.7
16,853.8
 5,498.9

   574.0
 4,681.5
Source: O.S. 1989
                                         76

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                                   TABLE 21
                ACTIVITY IN THE NATIONAL WATER RESOURCES
                        MANAGEMENT-FUND, 1985-1988
                                (in million zloties)
                                     1985
Payments

for:
   use of water

   discharges of
   water pollutants
Assessed    Received

 11,340.4      10,721.4
                                   1988
  3,213.9
  8,126.5
2,840.4
7,881.0
             Assessed    Received

              42,774.5     38,397.8
12,645.6
30,129.9
11,935.5
26,462.3
Source: O.S. 1989
                                      77

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                                    TABLE 22

                ACTIVITY IN THE NATIONAL AGRICULTURAL SOIL
                         PROTECTION FUND, 1985-1988
                                (in million zloties)
Payments for use of agricultural land for non-agricultural purposes:
Source: O.S. 1989
                                      1985
                              Assessed    Received
                                  1988
                          Assessed    Received
Annual fees


One-time fees
1,735.3
4,677.2
4,085.2
4,373.0
3,153.4
7,749.2
9,839.7      8,109.0
                                        78

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                                      TABLE 23

                  COST OF MEETING PRIORITY ENVIRONMENTAL
                       PROTECTION OBJECTIVES, 1991-1995
                                    (in million US$)
                                                      1991
                  1991.95
Water Quality and Supply

   Baltic Coast, reservoirs, lakes,
   municipal water intakes

   Municipal water supply systems

   River and reservoir infrastructure
 430

 195

  45
3,050

1,290

  260
Air Quality

   Flue gas desulfurization

   Coal cleaning*

   Particulate reduction

   Abatement of diffuse sources

   Monitoring


Management of Hazardous Materials

Remediation of abandoned industrial sites

Recultivation and reafforestation

Modification of agriculture in
heavily polluted areas


TOTAL
140
120
35
10
8
40
23
15
1,420
350
300
100
500
300
60
100
   15
1,076
  100
7,380
   50 million tons to be cleaned over 1991-93, with the effect of reducing sulfur dioxide and particulate emissions
   10% countrywide and gaining 1000 megawatts in additional power.
Source: MOSZNL, 1990
                                          79

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                               CHAPTERS:  HUNGARY
                 AN ASSESSMENT OF PROBLEMS AND PRIORITIES
       As late as 1988, national policies in Hungary were characteristic of a centrally planned
economy, giving budgetary priority to productive (i.e., industrial) branches at the expense of
services, and, in particular, environmental protection.  Although allocations for environmental
protection rose six.times from 1975 to the mid-1980s, these expenditures still  accounted for only
1% of GNP, and investment in environmental protection actually declined by 15% in 1981  and
21% in  1982 (Environmental Policy.  1989; Biro, 1988).

       Over the period from  1950, at the beginning of the post-war development program,
through 1986, significant sectoral shifts took place in the industrial mix of the  Hungarian    •  .
economy.  Food processing and  distribution dropped from almost 25%  of all industry to
approximately 17%; light manufacturing fell from approximately 20% to 13%.  Mining showed a
steady decline from  11% to 7% over the period, while metallurgical branches grew from 3.5% in
1950 to 8% in  1986,  with a post-war high of  13.6% in  1960.  Engineering branches showed an
increase of 25% overall, growing from approximately 20% to over 25%.  Growth in the chemical
industry was the most dramatic, rising from 3.5% in 1950 to  19% in 1986. These fundamental
shifts toward heavy  industry  over several decades led to prolonged environmental  pressures that
have resulted in severe levels of degradation, particularly in the industrialized areas of the country.
                A GEOGRAPHIC OVERVIEW OF ENVIRONMENTAL PROBLEMS
       In order to get a clear picture of the nature and extent of environmental degradation in
Hungary, the country can be divided into five regions characterized according to their industrial
base. Due to the heavy concentrations of industrial facilities in these areas,  they are considered
to be the most polluted and environmentally degraded in the country.  They are as follows:

  •    the Greater Budapest region, dominated by engineering, textile,  pharmaceutical, and food
       processing industries;
  •    the Borsod area in northeastern Hungary, counterpart to the Ruhr Valley of Germany and
       Poland's Upper Silesia, with an economy  heavily focused on steel and cement
       manufacturing.  This area also includes the Zagyva River Valley, with concentrations of
       brown coal  mining and the corollary industries of power generation and metallurgy.
  •    the Komarom-Gyor,  the site of brown  coal mining, power generation, aluminum
       processing, petroleum refining, and cement manufacturing;
  •    the mid-Trans-Danubian industrial zone, with concentrations of brown coal and bauxite
       mining, non-ferrous metallurgy, and chemical production; and
  •    the Pecs-Mecsek area in southern Trans-Danubia, with the only deposits of black coat and

                                           80

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       uranium, the extraction of which forms the core of its industrial activity.

       An overview of these industrial bases illustrates a wide range of environmental problems.
Within Budapest and a surrounding 50-km area, automobile exhaust and coal-fired home heating
systems are the principal causes of extreme concentrations of carbon monoxide (CO) and sulfur
dioxide (S02), as well as severe urban smog. In Tatabanya, aluminum smelting, coal-fired power
plants, mining, and coal-fueled home heating combine to produce acute S02< CO,  and fluoride
pollution.  In the heavily industrialized region around Dorog, a power plant, quarrying and coal
mining operations, pharmaceutical and chemical plants, coal-based home heating,  and a high-
capacity waste incineration facility generate high levels of SO2 and particulates, as well as air
toxics that have caused concern among residents.   At Pecs-Komlo, a series of power  plants and
industrial facilities  produce air pollution by S02, CO, and airborne lead in concentrations several
times allowable limits. Water pollution is so acute in the Pecs region that some 100 villages have
arranged for the distribution of pure water for children and pregnant women (Morava, 1990;
Varkonyi and Kiss,  1990; Vasarhelyi,  19901.
Air Pollution

       The effect on human and ecological health of such acute levels of environmental
degradation may  be inferred from data showing an increase  in the area and population affected by
unacceptable ambient air quality. These figures rose from 7.9% of total land area and 38.7% of
the population in  1978 to 11.2% and 44.3%, respectively, in 1986 (Orosz, 1990).

       For example, nearly four million people are regularly exposed to high concentrations of
carbon monoxide, including almost the entire population of Budapest (2,064,000) as well as
another 1.8 million people in urban settings elsewhere around the country (Varkonyi and Kiss,
1990).  Table 24 presents the size and population of regions of substandard air quality in
Hungary.  Fortunately, the major resort area of Lake Balaton lies outside the area affected by air
pollution; however, most principal forests are either within or near the polluted areas.

       With the exception  of the Pecs industrial region in the southwest, acute air pollution in
Hungary is concentrated in a belt running roughly southwest to northeast across the industrialized
northern half of the country (see Figures 14-17).  Although the most heavily polluted  area of the
country comprises only 11.2%  of its total territory, the population in these affected areas is
roughly 4.7 million, or 44% of the nation's total (Orosz, 1990).  In  terms of pollution  by sulfur
dioxide, nitrogen  oxides, and particulates, the  most affected areas are the Borsod County
industrial region in the northeast and the region around Budapest, which together account for.
approximately 4,800 km1 in area and just over three million people (the  affected  population in the
capital is approximately 2.5 million, while that of  Borsod is roughly  500,000).
                                             81

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       Air quality in Budapest in terms of concentrations of SO2, NO,, and CO, as well as fluoride
and cadmium content of particulate deposition is detailed in Table 25. S02 concentrations of
30-40 micrograms per cubic meter (m3) are typically found in Budapest and are generally
considered to be cause for concern.

       With regard to sectoral sources of air pollution, electricity generation accounts for 37% of
pollution by S02 and 21% by NO,, while  transportation accounts for 44% of all NO, pollution.
Industry and transportation generate 31% and 22% of S02 pollution, respectively.  Fossil fuel use
exclusive of electricity generation accounts for two-thirds of all particulates generated (State; *
1989; Varkonyi and Kiss,  1990).                                                        ;

       An environmentally stressful albeit unavoidable trend in Hungary has been the growth of
motor transport-in particular the private car-over the  last 30 years (see Table 26).  The impact of
this trend is well known in Budapest, where automobile exhaust has become one of two principal '
sources of air pollutants (along with coal  combustion)  responsible for the acute degradation  of the
city's air quality.  As  noted in Table 26, the number of buses in Hungary has increased nearly
ninefold in 30 years, while the number of trucks has risen almost 10 times.  More dramatically
still, the number of private cars has grown from a very modest 10,000 to  1.5 million, i.e., by a
factor of 150.

       Following a pattern prevalent in Eastern Europe as a whole, the technical  quality of
automobile engines is low, with the result that each vehicle generates 20-40% more pollution
than cars with higher quality engines.  Some 40% of  private cars run on a two-stroke engine
which, while relatively benign in terms of NOX emissions, emits 8-10 times the hydrocarbons, 3-4
times the formaldehyde, and 2-3 'times the benzopyrene emitted by the more efficient four-stroke
varieties.. The critical need to phase out  these engines in Hungary has been well recognized.
Water Resources and Water Quality         .                      .

         Water demand has increased dramatically in Hungary over the last several decades, from
an annual total of 3 billion m3 in 1970 to nearly 6 billion m3 in 1985.  Industry accounts for 73%
of .total  demand,  with agriculture and commercial/residential sectors accounting for 13% and 8%,
respectively.  In general terms, Hungary is adequately endowed with water resources;-however,
difficulties lie in providing water to certain water-short areas such as the Tisza River watershed,
where projections of demand may outstrip natural supply-in the future (Hock and Somlyody,  •
1990).

         Quality of surface waters has improved steadily in Hungary over the last decade.
Hungarian law specifies three categories of water quality:
                                             82

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         Class I:  Requiring little or no treatment for potability;
         ClassJI:  Requiring treatment for potability, but not harmful in ecological terms;
         Class III: Polluted beyond restoration by standard means; harmful to ecosystem.'

In addition, Class II is subdivided into categories according to the type of treatment required.

         Water quality in the country's principal river,  the  Danube, has improved modestly over
the last 30 years. The quality of water in the Danube when it enters Hungary falls into Class I
(requiring little or no treatment), but deteriorates  to Class II (potable after chemical treatment) as
a result of sewage discharged in Czechoslovakia  (Hock and Somlyody, 1990; Szilassy, 1990). It
remains in Class II for  most of its length in Hungary, despite significant discharges of  municipal
sewage from major urban areas, particularly Budapest.  However,  notable biological, mercury, and
lead contamination are responsible for a change of quality  in the vicinity of the capital. Coliform
and streptococcus counts in the river are five and ten  times higher, respectively, downstream
from Budapest than upstream, exceeding norms for swimming waters.  River water entering
Budapest falls into Classes II and III, while water leaving the city is completely in Class III (Hock
and Somlyody, 1990; State. 1990). The cause of this degradation is the inadequate treatment of
the city's wastewater; only 21% is treated biologically.  However,  this situation  is partially
alleviated by the  Danube's natural purification capacity, which results in water in some stretches
of the  river well past Budapest achieving Class I  quality before it leaves Hungary to enter
Yugoslavia.

         The Tisza River in eastern Hungary is under pollution stress as a result of municipal  and
industrial  discharges carried by its major tributaries, with its quality falling  from Class  I. to Class II
at the  confluence of the Szarnos and Kraszna Rivers, which carry pollutants originating in
Romania.  The Tisza is further degraded by water of the Sajo River which  is first contaminated in
Czechoslovakia.   Specifically,  the Tisza has fallen  in quality in terms of several pollutants:
dissolved oxygen, ammonium, nitrates, orthophosphates, and dissolved solids (Hock and
Somlyody, 1990). Official assessments have recognized that the purity of the Tisza is now
dependent on extensive investments in water quality improvement  throughout its basin.

         Quality of water in smaller rivers (e.g., Sajo, Zagyva,  Kraszna, Maros, Sed, and  Kapos) is
generally lower,  while that of the country's main lakes-Balaton, Velence, and Ferto--has been
made acceptable for swimming. In the case'of Lake Balaton, a substantial investment in  water
quality controls during the  1980s, combined  with land use controls in the lake's  drainage area,
have stabilized deterioration resulting from agricultural  runoff, inadequate sewage treatment, and
expanding recreational development.  In general, expenditures for water quality control totalling
over 20 billion forints during the period 1981-1985 have resulted in stabilizing and even improving
surface water quality in areas such as Budapest,  North-Transdanubia, and  Balaton (Szilassy,
1990).
                                             83

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        Groundwater quality in Hungary is not as good as surface water quality, since
underground water resources continue to be degraded.  It is estimated that 60%-75% of all
groundwater in Hungary is polluted by external contaminants such as sewage, agricultural
chemicals, animal wastes, and industrial discharges.  Perhaps the most acute and widespread
contamination is by nitrates from agricultural run off and untreated municipal wastewater.
Another prominent cause of groundwater contamination is the storage and disposal of solid and
hazardous waste in inadequate facilities that results in leakage into groundwater sources.
          *                                                                           i,
        Prior to use for drinking water,  approximately 45% of all groundwater requires treatment
to remove iron and  manganese, and 15% must be treated to remove methane. Arsenic
contamination  affected some 65 towns with  a total population of 450,000, until water supply
improvements in 1988 reduced contamination levels (Szilassy, 1990).

        Table 27 summarizes the current  state of  wastewater treatment in Hungary according to
sector.  Only one-third-of all industrial wastewater receives any treatment, with just over 10%
receiving biological or chemical treatment.  Two-thirds of municipal sewage is treated, but 44% .
only mechanically,  20% biologically, and 1.6% chemically (Hock  and Somlyody, 1990; KSH,
1986).

        Nearly 3 billion m3 of industrial wastewater are discharged into surface waters in
Hungary each year by 1,100  separate sources (Table 28).  By volume, most (86%) is thermal
pollution from power plants.  Over 200 million m3 of industrial wastewater is released annually
into municipal sewage systems (Table 29}. Food processing accounts for 30% of this,  with
engineering industries, light manufacturing, and chemicals production contributing 19%, 17%,  and
16%, respectively.
Soil Resources                                                  .,

         Arable soil is a key natural resource in Hungary, as agriculture plays an important role in
             •              '
the country's economy.  88% of Hungary's  9.3 million hectares (ha) is land potentially suitable for
agriculture, and nearly 75% is under cultivation.  Development and concomitant withdrawal of
marginal land from cultivation reduced the total area devoted to agricultural use by  1.2 million ha
from 1949 to 1981. At the same time, economic pressure to increase productivity stimulated
trends toward agricultural modernization, with  energy inputs per hectare increasing  30 times,
fertilizer use growing 100 times, and tractor utilization  increasing 12 times over roughly the same
period.

         The impact of these modern agricultural practices on soil quality in Hungary  is twofold.
First, the use of larger fields and fewer windbreaks has contributed to loss of soil from wind
erosion affecting some 1.4 million  ha (State. 1990).  In additjon, the intensive  use of artificial
                                             84

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fertilizers containing nitrogen and superphosphates has increased soil acidification rates; in fact,
the average pH value of Hungary's soil dropped one full point in 30 years. This trend has had
deleterious effects on plant development and on soil microorganisms.  It has been estimated that
remedying this situation will require an annual application  of approximately 1 million tons of lime.

         In spite of the foregoing, however, the most significant environmental impact of
agriculture  is the pollution of surface and groundwater by nitrate-bearing runoff, resulting  in the
eutrophication of lakes and contamination of drinking water supplies. The improper storage of
banned pesticides  (e.g., dieldrin, aldrin,  DOT, HCH) is another serious form of pollution problems
caused by agriculture (Biro, 1988).
Solid and Hazardous Wastes
                                                                                           t
         Each year, Hungary generates over  100 million tons of industrial waste and roughly 22
million m3 of municipal waste.  Since Hungary has no single body responsible for the regulation
and disposal of industrial wastes, the majority (95 million tons) of these wastes is incinerated or
placed in landfills by its producers or unregulated disposal operations.

         Approximately 5 million tons of industrial waste are classified as hazardous.  Of this
amount, 3 million tons of "red mud" (i.e., the residue from aluminum smelting) is stored untreated
in special disposal facilities; 600,000 tons is recycled; 400,000 is neutralized; and 340,000 tons
is stored in temporary holding facilities.  Some 600 of the country's 2,600 landfills are
unregulated and the ultimate fate of some 660,000 tons of hazardous waste  is not known
(Szenes, 1990; State. 1989). Of the 22  million tons of municipal solid waste generated, roughly
90% is disposed of by landfilling and incineration, while the remaining 10% is recycled.

         Until 1981, the collection, disposal, and treatment of hazardous wastes in Hungary was
entirely unregulated.  It is assumed that a large  proportion of the hazardous wastes generated up
to that time were either disposed of in municipal dumps, sewage systems, incinerators, or in
illegal dumps. This situation poses a serious problem for the country in terms of soil and
groundwater contamination and  potentially costly remediation work, although  investigation into
the precise scope of the problem is incomplete (Orosz,  1990).

         In a country the size of Hungary, with  limited  land that can be spared for waste disposal,
the shortage of acreage for landfilling has become a critical problem. The national program for
hazardous waste management in the 1980$ included the construction of two  high-capacity
incineration facilities, six special land storage sites, and a system of central transitional storage
facilities in each county.  In  1989,  a  permanent land storage facility began operation in Aszod,
and  one of the major incinerators started  operation in Dorog (State.  1989).  By 1991,  it is
expected that roughly one-third of the projected county centralized storage units will be in
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 operation.

         Along with environmental threats from existing enterprises, numerous abandoned
 industrial and waste disposal sites are scattered about the country; the dangerous levels of
 mercury contamination at the Borsodi Vegykombinat plant in Kazincbarcika is an example of this
 problem.  Although the Hungarian government banned the importation of hazardous wastes in
 1987, enforcement to date has been poor, and the issue of managing imported hazardous waste
'has arisen in connection with municipal garbage disposal sites near Mosonmagyarovar.

        , Another hazardous materials concern that has yet to be fully addressed is the
 accumulated waste at decommissioned Soviet military bases throughout Hungary, where fuels,
 lubricants, solvents, other toxics and unidentified materials permeated the soil from leaking tanks
 or open ponds and pits. In some of these facilities, soil has been found to be contaminated to a
 depth of two meters.
 Impacts on Human Health

         Determining the health consequences of pollution in Hungary is a complex task that must
 rely on indirect and circumstantial evidence in many cases, since it is often not possible to
 establish a direct causal link between environmental factors and the demographic characteristics
 of illness with available data. In general, the adverse effects of locally acute pollution often
 cannot be  traced between areas of origin and other affected  areas, as the discharge of effluent
 into flowing waters and the  "tall stack"  dispersal of air pollutants spread  pollution far beyond its
 point of origin.  As is the case in other parts of Eastern Europe, this difficulty is compounded by
 the  lack of satisfactory data. However, official statistics state that 44%  of Hungary's population
 lives in areas affected by pollution (Orosz, 1990).

         The Hungarian Ministry of Environment and Regional Planning (MERP) (formerly the
 Ministry of Environment and Water Management) has reported that data from areas most acutely
 affected by air pollution show increased rates of anemia, bone deficiencies, and cancer death as
 well as steady growth in rates of asthma and bronchial ailments in school-age  children.  In the
 most severely polluted areas of Budapest, the incidence of children's diseases is four times higher
 than the national average, while incidence of bronchial  disease among adults is three times the
 average (State,  1989).   Studies done in the industrial cities of  Dorog,  Ajka, and Papa show double
 the  incidence of upper respiratory disease in children living in these areas as compared to children
 living in areas .with clean air (Vukovich,  1990).  In  the vicinity  of the coal-fired power plant at
 Ajka, mortality rates due to bronchial asthma, bronchitis, and emphysema were found to be
 significantly higher than in areas not affected by power plant emissions (Biro, 1988).

         In acutely affected  areas,  information on local health effects  accumulated in recent years
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points to a serious problem. Over the period  1980-1984, 43 outbreaks of infectious disease
caused by contaminated drinking water resulted in 5,267 cases of illness (Biro, 1988).  At the
root of the severe health effects of water pollution in Hungary  is  the fact that only 18.6% of the
wastewater requiring treatment receives adequate treatment. -Specifically,  25.6% (or just over
1,000,000) dwelling units in the country are not served  by sewage systems.  The problem is
compounded by the fact that all of the sewage from the Buda  side of the capital  is discharged
into the Danube entirely without treatment.  Samples taken in the Budapest region show all  of the
water available in the northern part of the capital region  to be bacteriologically unacceptable. In
the southern part of the region, 50-60% of the water is  unacceptable.

         Some 740 of the country's 3,064 municipalities with  a cumulative population of 1.2
million people (11% of the  total) have water supplies chronically  contaminated by nitrate or
arsenic.  Tests of 103,000 samples of tapwater showed 44% to fall short of either bacteriological
or chemical levels of purity (Orosz, 1990).  High nitrate content of tapwater resulting from
contamination of groundwater by domestic  sewage and fertilizer runoff poses  a documented
threat to the population.  Between 1976 and  1985, 1,500 infants became ill and 22 died from
consumption of water with acutely high nitrate levels (Orosz, 1990). Beginning in 1987, bottled
water was made available for infants and pregnant women in 665 (i.e., 22%)  of the country's
municipalities.  Research done in 1981 indicated that tapwater supplies in some 70 localities
serving a population of 470,000 contained  unsafe levels of arsenic.

         In the counties of Borsod and Szabolcs-Szathmar, epidemiological information indicates a
link between high concentrations of nitrates in drinking water and stomach cancer. The National
Public Health Institute found high levels of arsenic in drinking water in Budapest (164 mg/kg) and
the industrial region of Borsod (1,080-2,800 mg/kg).

         A report prepared by the independent Action  Group Against Air Pollution in 1990
maintained that, as a result of pollution by carbon monoxide, nitrogen oxides,  hydrocarbons,
ozone, lead, and asbestos,  the number of respiratory and pathological illnesses has risen in
Hungary over the last 30 years.  Incidence  of asthma and chronic bronchitis rose nine and 2.4
times,  respectively, between 1978 and 1988, while the  incidence of malignant respiratory tumors
rose 2.8 times since 1960.
The Economic Costs of Environmental Degradation

         Vukovich (1990) asserts that damage to human health from environmental pollution in
Hungary costs the country 15 billion forints per year.  This figure may be compared with data
from research done in the mid-1980s that placed the cost of air pollution impacts on health at 3.6
billion forints per year. International epidemiological information and Hungarian data on
pollution-induced diseases were linked with economic  indicators for health care to generate an
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estimate of the effect on the overall well-being of the population. The findings indicated that one
disablement in 24 and.one death in 17 was the result of air pollution (Varkonyi and Bejczi,  1987).

         In economic terms, the loss was tallied at 3.6 billion forints,  approximately 14% of the
country's GNP and 13% of its health and social welfare expenditures.  Lost work hours, illness,
health  impairment, and  death represented a loss of 2.4 billion forints,  and sick leave, disability
retirement, and doctor and hospital care represented  a cost of 1.2 billion forints.  The direct loss
to the  population in terms of lost wages was calculated at 134 million forints per year, or an
average of three days' pay per wage earner.  The 1985-89 five-year plan included an allocation of
six billion forints for air pollution control in response to a problem that was projected to cost the
country 23.5 billion forints in illness,  new hospital rooms,  and premature death over the same'
period.
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                       ENERGY USE AND ENVIRONMENTAL QUALITY

        The single greatest factor affecting air quality in Hungary is energy policy.  Both the mix
of fuels in the overall energy supply and the way they are used greatly affect the total emission
load in the country.  While Hungary relies on coal to a considerably lesser extent than Poland, the
coal it does use is domestic brown coal  with relatively low caloric value and high pollution
potential.  Hungary has very little black coal or petroleum and only limited deposits of natural gas,
while nuclear power has run into obstacles  of cost, safety, and public concern. Presently, the
country has only one nuclear energy generating facility in operation, at Paks.

        Significant changes in the national fuel supply mix have taken place over the last two
decades.  From 1970 to 1986, the share of coal in the total energy supply fell by 40%, from
nearly two-thirds to just over one-third.  Natural gas use  increased from 20% of total  energy
supply in 1970 and 33.7% in  1986. Nuclear power entered the  energy picture in the 1980s to
provide  10% of total supply by 1986. In terms of electricity generation, brown coal and lignite
account for roughly 28% of the total,  and black coal  3%.  Petroleum and natural gas  account for
30%  and nuclear power 38%  of total  electricity generation {see Table 31).

        Energy demand is dominated by industry, although there has been some change in this
situation over the past 20 years.  Industry's share of national energy demand declined from
53.3% in  1970 to 45.6% in 1986.  Within  industry,  metallurgy and chemicals accounted for over
one-half of total demand.  Agriculture, forestry, and water management claimed 7.6% of demand
and the commercial/residential  sector increased its share  of total  demand from 20% to 28% (see
Table 32).

        Between  1970 and 1988, the Hungarian economy achieved reductions in energy
intensity {i.e., energy consumption per forint of economic output) of  1 %  per year on average,
reaching a rate  of 2.8% in the first half  of the 1970s, falling during the second half of the
decade, and resuming progress in the early  1980s.  Overall, Hungarian energy intensity fell  about
22%  from 1970 to 1988.  Over this period, total electricity demand  increased by 16%, with
growth of the construction, municipal, and services sectors accounting for most of the increase;
electricity  intensity in manufacturing and heavy industry  remained virtually unchanged (Jaszay,
1990).  This trend indicates a  movement away from energy-intensive sectors.  In overall structural
terms, the growth of non-industrial sectors  increased  their share of energy demand from 32% in
1980 to almost 40% in  1989.  Figures from the Hungarian Ministry of Industry indicate significant
reductions of industrial energy  intensity over the 1980s,  with  industry showing a decline of 52%
in energy consumption per forint of economic output  over the decade.

        In spite of these  encouraging statistics, however, Hungary's economy remains intensive
in both materials and energy as a result  of the centralized economic model followed since World
War II and resultant low productivity levels.  Hungary has the opportunity to further reduce energy
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intensity and generation of pollutants as it integrates itself into the world economy, producing
modern goods using modern processes. Hungary has the opportunity to considerably raise
personal income without risking further environmental degradation by changing the structure of its
economy.  This potential is demonstrated by the fact that the metallurgical, chemical, and
intermediary production branches account for 70% of Hungary's energy  consumption while
generating only 15% of its GDP.

         Indigenous sources of coal, oil, natural gas, and uranium ore provide roughly one-half of
.Hungary's energy needs. This energy bind is compounded by rising costs of delivering domestic
coal and uranium and dwindling oil and gas reserves. In this situation, a new mix of energy
supply and new suppliers must take precedence in energy planning. Currently the Soviet Union   .
remains the country's largest supplier of energy, but official policy calls for the diversification of
foreign sources of imported energy and fuel. .The presence of existing power and gas lines as
well as existing agreements and geographic proximity indicate that the Soviet Union will retain its
prominence in Hungary's foreign energy trade as increased supplies of natural gas become
available, despite the recent requirement that such exports must be purchased with  hard currency.
at world market prices.  By contrast, it is not anticipated that Hungary will be able to count on   -
increased exports of oil from  the  Soviet Union.                      .

         Development  of a major source of hydroelectric  power appears to have been precluded •'•
by the decision to stop work on the controversial 'Gabcikovo-Nagymaros dam project that was
slated to provide some 430 megawatts of power; this project will be discussed separately below.
The fate of the country's only nuclear  generating facility at Paks,  which was to have had an
added capacity of 2,000 megawatts by the year 2000, is uncertain (Jaszay, 1990).

         Scarcity of investment capital and the security and stability of supply act as major
constraints in Hungarian energy policy.  The official response has  been to focus efforts  on
reducing the energy intensity of the economy in order to lessen overall demand while reducing
growth in electric power demands and peak capacity requirements. Hungarian authorities have
come to recognize that reorientation to a market economy can bring about structural change and
allow increased output without increasing current energy demand.                     • -
 Trends in Energy Efficiency                                         •

         Despite increases in energy efficiency of 30% over the period 1971-87, Hungary's
 economy remains two or three times more energy intensive than developed market economies.  A
 key factor in this intensity is the high energy consumption patterns of the production technologies
 in use.

         The potential value of energy conservation can be seen from the fact that the average
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cost of energy efficiency efforts between 1985 and 1990 was just under 100 forints per gigajoule

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and spent fuel is transported there for final disposal.  According to the planned expansion, the
four units at the Paks facility were to have been supplemented by two more units of 1000
megawatts each using WWER-1000 technology to be built in the 1990s. This would have raised
the capacity of the Paks plant from  1760 to 3760 megawatts (Gyimesi, 1989). However, plans
to expand the nuclear power facility were halted due to public concern for safety and government
concern over rising costs.                                            .
                     THE BOS(GABCIKOVO)-NAGYMAROS DAM PROJECT
                                                            .                         <**•
         Hungary and Czechoslovakia had originally planned to erect dams on the. Danube River to
alter shallow channels and make possible waterway access from the Black Sea to the North Sea.
Later plans proposed a design for hydroelectric plants at the dams which would generate electrical
energy by a cheap and almost pollution-free process.

         However, secondary results of the proposed dam construction were speculated to cause
harmful effects to the environment.  Dams eliminate the normal water level drop of rivers and
thus slow their natural drift,  raising the danger of pollution backing up into reservoirs.  This effect
could also cause untreated urban and industrial sewage water to flow back and forth along the •
riverbank in the Gyor, reducing water quality.  Hungary placed a moratorium on further  .
construction at the site in 1989 due environmental concerns.

         In addition,  up river from the  dams, surface and subsurface water levels would rise,
potentially flooding productive land.  During peak hydroelectric energy production; the fait of the
impounded water is often  increased  by lowering of the riverbed below the dam.  The deepened
riverbed then lowers the level of underground water below the dam and thus changes the flow of
underground and stratum water.  These drastic changes in the watertables profoundly affect the
river basin ecosystem.  The conditions for flora and fauna are changed and whole species may
disappear from many areas.  Forests are damaged and agriculture becomes impossible.  A' 1985
study of the environmental effects of the dam project concluded that, while environmental
damage could  be corrected,  cost estimates were  not available for necessary corrective measures
such as water purification plants and improved systems of water level control (Perczel and Libik,
1989).

         In spite of the Hungarian decision, Czechoslovakia has completed construction of its  dam
at Gabcikovo (Bos) in Slovakia.  The controversy  has  attracted worldwide concern encouraging
further study to develop an environmentally sound solution to this transboundary problem.
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                  THE ADMINISTRATION OF ENVIRONMENTAL PROTECTION
Legislative Base
        The legislative base for environmental protection in Hungary was the Forestry Act of
1935, a statute which devoted a chapter to nature conservation.  Over the decade after its
adoption, this act was used to place certain forest areas of special national value (such as the
Debrecen Great Woods) under protection.  While the 1935  law derived from fairly modern
concepts of environmental  management, the expression "environmental protection" did  not appear
in  Hungarian law until 1971, in certain specified  regulations (Kilenyi, 19901.  However,  several
relevant statutes were passed in the 1960s:  the Act for the Protection of Agricultural Land
{1961), the Game  Protection Act (1961), and the Water Management Act (1964).

        In  1961,  a National Office for Nature Conservation was established with responsibility for
protecting species, habitats, and special landscapes.  Amendment of the statute on nature
protection in 1971 provided additional emphasis  on protective  measures,  including the
establishment of national parks. In 1973, Hungary's first national park, Hortobagy, was
established, and large tracts were placed under various types of protection.  The result was that,
between 1970 and 1980, total protected areas in Hungary  increased dramatically from  15,000 to
400,000 hectares.  By 1988, the total protected area increased to 550,000 hectares (Szilassy,
1989).

        The principal legislative basis for environmental protection in  Hungary is the 1976 Act on
the Protection of the Human Environment.  This  act stated  its  purposes as the protection and
planned use of the human environment and the identification, reduction, and prevention of
pollution.  According to the legislation, environmental protection was to be considered in  the
elaboration of the  national  economic plan and integrated into overall socio-economic development
policies, extending legal protection to water, air, 'fauna, flora, the  landscape, and the developed
environment.  Chapter 2 of the Act established responsibility for environmental protection under
criminal, civil, and administrative law, and contains provisions for the  levy of financial penalties for
pollution violations, promulgation of orders to cease offending  activities, and, in some cases,
grounds for criminal liability.  The Act established the National Office for  Environmental Protection
and Nature  Conservation, which began operation in 1977.

        On the basis of the  1976 Act, steps were taken to revise penalties for the pollution  of
surface waters and unpermitted discharges of sewage, and expand protection of natural areas.
Several other pertinent regulations came into effect in the last decade, including Cabinet  Decrees
on the control and neutralization of hazardous waste (1981), the prevention of noise and vibration
(1983), and air quality control (1986).
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        Water resources management is regulated in Hungary by a series of statutes and decrees
enacted since the end of World War II.' .A 1948 Cabinet Decree nationalized all water
management institutions, established the National Water Management Authority, and provided the
groundwork for the National Water Management Plan of 1955.  In 1964, the current Water  •
Management Act was passed.  Regulations stemming from the Act determined six categories of
water pollution control based on geography, natural conditions and patterns of water use. These
six categories were the Lake Balaton drainage basin, drinking water resources and recreational
areas, industrial concentrations, irrigation water resources, less important stretches of the Danube
and Tisza, and areas of minor water resource significance. Effluent discharge limits were set
according to these categories, with both standards and fines for pollution varying in stringency
according to the importance of the water resource  category in question (Szebenyi and Palmai,1
1989).

        The main function of water management bodies has  been the development of water •
supply systems, flood control, and irrigation management.*' Considerably less attention has been
paid to water quality control due to  the  emphasis on engineering and "production" issues
characteristic of centrally planned economies.              '   :

Government Agencies

        In 1987, the Ministry for Environment and Water Management was created through the
merger of the National Office of Environmental Protection and Nature Conservation and the
National Office for Water Management; as of mid-1990, its official name was changed to the
Ministry of Environmental and Regional Planning (MERP).  The MERP has full responsibility for
nature conservation, air and water pollution control, management of hazardous and radioactive
materials, protection against noise pollution, and land-use planning. Water supply, wastewater
treatment, flood control, and river management are now the responsibility of a separate  water
management body.  Within the fields of environmental protection and regional planning,  the  MERP
is charged to:

  •      implement investment and  regulatory  programs;
  •     ensure the incorporation of environmental considerations into  national socio-economic
         plans;
  •     coordinate the activities of other government bodies;
  •     facilitate scientific research in service of national policy objectives; and
  •      coordinate international activities related to environmental protection.

        The MERP implements its programs through 12 regional directorates responsible for
environmental protection.  The 1987 merger of the two offices with responsibility for
environmental protection and water  management caused some concern that the powerful water
arm, with a budget of hundreds of billions of forints and an established staff of some 70,000
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employees, would overwhelm the considerably weaker environmental division (Biro, 1988). To a
great extent, this turned out to be the case; by 1990 government plans to reorganize the  Ministry
called for separation of the two components (resulting in the name change cited previously) in
order to free the environmental regulatory function from the influence of the water supply and
management function (Papp,  1990).

         As of 1990, Hungary  was without a uniform national system of environmental
monitoring.  Partial information on certain topics has been available from various national   .  •
agencies. Examples of this type of data are the information on geological conditions compiled by
the Central Geological Office  and the State Geological Institute, the soil inventory data of  the
State Institute for Soil Research, and the survey of active and closed mines maintained by the
MERP.

         The MERP shares responsibility for monitoring stationary sources emissions with  the
Ministry  of Health and for mobile source emissions with the Ministry of  Public Transport.  The
official air pollution monitoring system tracks  concentrations of sulfur dioxide, nitrogen oxides,
and  particulates in 106  locations in the  country, operating 1,088 monitoring points (Rudnai, 1990;
State. 1989).  Budapest is served by a system of eight air monitoring stations measuring
pollutant concentrations  which  provides data for public health alerts.

         Water quality monitoring is generally more advanced, as surface water monitoring
programs have been in place  for many decades. The State Hydrographic Service operates over
600 surface water monitoring stations that feed data into a computerized  analysis system.
Groundwater quality is not as well monitored, with data assembled from a  series of 300 sampling
points.  In addition, the public health services of the Ministry of Health monitor the bacteriological
and  chemical contamination of  water at 400 recreational and industrial sites.
Current initiatives

         In September 1990, the MERP launched a comprehensive Program of Environmental
Protection (see Appendix C).  The program identifies five priority areas for action:  air quality
improvement; treatment and safe disposal of hazardous wastes; protection of drinking water
supplies from contamination; conservation of threatened natural areas; and development of
regional sollutions to environmental problems. An illustrative list of proposals for cooperation with
the United States  within the framework of the program appears in Appendix D.

         The program analyzes the impacts  of changing the socioeconomic system in Hungary
and outlines the main points of the government's environmental philosophy, which calls for
significant changes in legislation and administrative structures.  Environmental concerns are to be
addressed separately from production interests.. The government intends to raise public
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awareness and assist local authorities in acquiring expertise on environmental issues.  With regard
to the use of nuclear energy and resultant radioactive waste, the government has stated that
nature  protection and public concern will be taken into consideration.  •

         The program also lists actions  to be taken in areas of major environmental concern,
including protection of the Danube.  In this regard, the government has rejected the continuation
of the dams and* proposes to develop Czechoslovak-Hungarian regional development projects, such
as establishing an international conservation park for the Danube region.
                                                                                      '-*
         For its part, the  Ministry of Industry and Trade has also outlined future tasks for
development of environmentally  sound industry in Hungary, including identification of the most
severe environmental impacts of industrial activity; analysis of financial opportunities and
constraints; and organization of  an official system of standards and a network for environmental
equipment (Hungarian Journal, 1990).
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                THE SOCIAL RESPONSE TO ENVIRONMENTAL DEGRADATION

Environmental Awareness                                  .-

        Changing  attitudes toward environmental protection  in Hungary in recent years have
demonstrated that  the public is generally wary of governmental decisions.  As a result, they are
demanding greater  access to information on environmental conditions as well as increased
participation in and influence on environmental decisionmaking. They generally agree with  the
idea of increased public spending on environmental programs, including more fines and/or taxes
for polluters; however, the majority continue to reject proposals that affect their personal
economic  status.                                                                     - •

        Paradoxically, declining living standards in Hungary sharpened public awareness on
environmental pollution as the  country's weakening economy  provided dwindling  resources for
                                                                                         »
environmental protection. As such, environmental awareness has increased considerably in recent
years.  Public opinion polls conducted in 1988 showed that almost no one in Hungary thought
environmental protection measures were adequate (Kulcsar, 1988;  Szocio-Reflex,  1990). The
great majority (79%) felt that society should ensure the maintenance of natural resources for the
benefit of  future generations.   Many (62%) said that they believed  that environmental protection
should take precedence over economic production.  An overwhelming majority would accept lower
living standards if health hazards could be reduced. About one-third (34%) said information on
environmental protection was insufficient, and many called for more forceful action to promote
environmental protection.

        The majority  of the population (54%) perceived  environmental problems in their own
neighborhood in 1988. The major environmental  disturbances from the following sources were
perceived: mobile sources (e.g., cars) and traffic (39%), industry (28%), air pollution (17%),
waste storage and  disposal  (15%), chemical use (12%), and water pollution, including drinking
water (10%). In 1990, 57%  responded that they perceived environmental problems as hazardous
for human health; this group represented 83% of the population of Budapest but only 41 % of the
population in rural  areas.

        It is  interesting to  note that, in spite of the generally high level of public environmental
awareness, a majority of the population (71%) questioned in the poll expressed no interest in
becoming  personally involved  in solving environmental problems, and less than one-third of those
questioned could cite any example of personal environmental  activity.  Thus, it is clear that
several narrow strata of society (mostly young, highly educated intellectuals and  college students)
have provided the foundation for broad-based activities of environmental groups in Hungary.
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Environmental Movements    /

        Although environmental concerns played a unique role in the historical changes that took
place in Hungary and throughout Eastern Europe in 1988-89, the social roots of environmentalism
remain limited.  The apparent strength of the Hungarian environmental movement in the late
1980s derived directly from its close relationship to the democratic opposition. Therefore, it is
important to recognize that the environmental nongovernmental organizations (NGOs)  and
movements that advanced the frontiers of political change in Hungary have had limited      "'''
opportunities to influence economic  processes since the changes took place; as such, their role in
Hungarian society is much less powerful than that of Western  NGOs which benefit from greater
organization,  experience, and professionalism. This lack of organized groups able to articulate
environmental concerns in the face of increasing pressures for economic growth has created a
serious gap in nascent policy making processes in Hungary.  Though groups like the Danube Circle
effectively polarized antigovernment sentiments under the old regime, these NGOs remain
somewhat disorganized, compete against  each other, and are apparently somewhat confused with
regard to their respective missions (Kildow et al., 1990).

        However, in spite of these  limitations, the Hungarian  environmental movement has a
solid foundation and is made  up of a variety  of different groups.  As mentioned above, the best
known environmental organization in Hungary has been the Puna Kor (Danube Circle). The
Danube Circle emerged in  the mid-1980s  as an intellectual movement against the Bos
(Gabcikovo)-Nagymaros Dam  project, and launched signature campaigns, demonstrations,
marches, and lobbied internationally to protest further work  on the project. As a result of this
increased public outcry,  work on the Hungarian segment at Nagymaros was suspended in 1989.

        The public debate over the Nagymaros dam project brought many disparate groups
together temporarily under the same banner; reform-minded  communists joined forces with
socialists, social democrats,  liberals, nationalists,  as well as  environmentalists.  However, the
victorious revolution of 1989 had a  paradoxical effect on the Danube movement.  In general, its
mass appeal and support base eroded significantly as people who had initially supported the
environmental assault on the  communist regime turned their attention to other pressing social
concerns. In addition, the leadership of the movement divided to pursue different activities,  such
as government service, education, consulting, as well as continued environmental  activism.

        Another important role in the Hungarian environmental movement has been played by the
various "green" groups that emerged from colleges and universities, particularly since the mid-
1980s.  The oldest and best known of these groups is the  Nature Conservation Group of Eotvos
University in  Budapest (ELTE). Established in 1983 by a group of young biologists, ELTE gained
wide publicity during its national campaign to protect Szarsomlyo Mountain in southern Hungary
from limestone mining.  ELTE has also been active in establishing a network with other East
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European green groups. In 1986, ELTE established the Greenwav newsletter (in English) to
publicize environmental hews of the network and of the region as a whole.

        The ongoing work of established conservation groups also contributes significantly to
Hungary's environmental movement. With about 15,000 members, the Hungarian Ornithological
Society was well placed to establish a National Conservation League in 1989.  Both groups
promote conservation values and educate young people in conservation ethics.  They also
encourage the establishment of more parks and wildlife reserves; they assist the government in
managing existing areas and surveying potential sites.

        Some environmental NGOs in Hungary operate with international support, such as the
Independent Ecological Center in Budapest and the Hungary-based Panos Institute, which assist
East European NGOs in networking and information sharing.  Many Western NGOs cooperate with
Hungarian NGOs on a wide variety of activities (e.g., leader training and exchange visits) and
sometimes  provide financial support for specific projects.

        The Hungarian environmental movement is currently undergoing differentiation of activity
within the broad spectrum of environmental issues.  Organizations of varying sizes and geographic
bases have emerged, focusing on single issues of specific concern such as urban air pollution,
groundwater contamination by agriculture, industrial hazardous wastes, landscape preservation, or
protection of the  Danube.  .These organizations vary in their choice of style of operation as well,
emphasizing research, education, lobbying, and other activities.

        Because of the increased prominence of environmental issues in Eastern Europe in the
1980s, environmental movements provided a  catalyst for broader political activity.  This was
particularly true in Hungary, where the environmental movement played a central role in affecting
political change as the Solidarity labor movement did in Poland.  However, after the dramatic
political events of 1989, environmentalism became only one of many areas of concern as Hungary
moved to renew civil society and recreate its  market-oriented economy.  Ironically, the very
success of the environmental movement in opening up flows of information and renewing civic life
resulted in the erosion of its broad social base as people began, in the new open democratic
environment, to expend their political energies in other areas.

        Nevertheless, environmental protection and related activism remain integral parts of the
complex process of change now underway in Hungary. The environmental movement faces
challenges as diverse as changing long-standing government policies of excessive confidentiality
and addressing the growing public pressure for a higher standard of living.  In this context, the'
experience  of Western democracies  is of value.  The openness guaranteed by political pluralism
works in favor of environmental protection, and a first step toward successfully linking
environmental quality with  economic growth can be taken through more efficient use of
resources.
                                             99

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EnvironmentalEducation

         Despite some shortcomings, the study of environmental issues in Hungary has begun to
develop through youth education.  Since the Hungarian educational system is controlled by the
state, basic environmental elements have been incorporated into the central curriculum, albeit with
varying degrees of success.  As a result,  some environmental education begins at an early age
and continues in some form from kindergarten to college level. In addition, several specialized,
experimental curricula focusing on environmental  issues have been developed and implemented.
Of course, the fate of these environmental education programs are inextricably linked to the
general status of the Hungarian educational system overall,  which is currently lacking the
necessary resources for adequate instructor salaries and other basic  needs. Therefore, innovative
measures have been unable to proceed rapidly, and progressive environmental education
experiments have had limited effects  to date on the system as a whole.

         The training of environmental experts at higher educational levels has gone on for many
years, although these courses (with only one exception) are given at the graduate or post-
graduate level. Technical,  agricultural, and forestry colleges provide training in environmental
engineering, scientific universities have ecology curricula,  and a college of public administration
has launched an environmental course for civil servants.

         Since the early 1980s, the environmental authorities have run a network of
Environmental Education Centers based at schools and cultural institutions willing to provide
teacher training services and teaching aids for other institutions.  National parks also have limited
facilities for outdoor educational activities.
                                             100

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101

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       Mpsonmagvarfivir

     Gy6r 
-------
Figure 15. Areas Affected by NO Pollution.
    (Source:  Varkonyi and Kiss, 1990)
                  103

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              Dorog

   TatabSnya £*^    Vf ^Budapest
Figure 16.  Areas Affected by Particulate Pollution.
       (Source: Varkonyi and Kiss, 1990)
                       104

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                                                           Over>' heavy polluted
                                                           urban areas
urban areas

heavy polluted urban
areas

heavy pollution, involving a
smaller number of people


moderate polluted
urban areas
Figure 17.  Urban areas of Poor Air Quality.
     (Source:  Varkonyi and Kiss, 1990)
                       105

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7000
6000-
5000-
4000 -
3000 -
2000-
Total


Industry


Domestic (municipalities)


Agriculture
 1000 -
     1970
   1975
1980
                                                   1984
        Figure 18. Water Use in Hungary, 1970-1984.
            (Source: Hock and Somiyody, 1990)
                           106

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       ]) Overall total demand
       2) Total demand (power industry)
       3) Total demand (other industries)
       4) Overall freshwater demand
       S) Freshwater demand (energy sector)
          Freshwater demand (other industries)
1965    1970   1975   1980    1985    1990    1995   2000
Figure 19.  Demand for Water in industry, 1965-2000.
        (Source: Hock and Somlyody, 1990)
                         107

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Figure 20. Quality of Surf ace Water.
(Source:  Hock and Somfyody, 1990)
              108

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6/0 (index of changes 1 980 • 1 00%)
118
116
114
112
no

108

106

104
102

1001


98

96
94


92

Qft
•
- '
•
•
_

•

•
i


( .-{


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\
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•


•






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f'


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,' Electric power
,' (inMkWh)












i
s
X
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Total energy
(inTJ)
*---t





•-,





jt
\
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t

         I960 1981 1982 1983 1984 1985 1986 1987 1988

                   Hungarian Industry. 1990
Figure 21. Trends in GNP and Energy Consumption in Industry.
             (Source:  Hungarian Industry. 1990)
                           109

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                        LEGEND:

                        •   SETTLEMENTS WITH MEASURING STATIONS FOR
                            SULFUR DIOXIDE, NITROGEN DIOXIDE. AND
                            SOOT AND SETTLED DUST.

                        A   SETTLEMENTS WITH AUTOMATIC CONTINUOUS
                            MONITORS.
Figure 22. Air Pollution Monitoring Network in Hungary.
               (Source:  Rudnai, 1990)
                        110

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                                   TABLE 24
                   REGIONS OF SUBSTANDARD AIR QUALITY
                                          km2
              1000 persons
         Greater Budapest



         Borsod Region



         North Trans-Danubia



         Middle Trans-Danubia



         Baranya Region



         Norgrad-Heves Region



         Other






         Total
1,946
2,225
1,369
1,283
1,304
1,165
1,136
2,527
512
277
310
271
221
613
10,446
4,731
Source: Varkonyi and Kiss, 1990
                                      111
                                                                                      -

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                                     TABLE 25
                            AIR QUALITY IN BUDAPEST
                                                          In 1986
                             In 1987
SO2, mrcrograms/m3

NOX, micrograms/m3

Particulates, tons/km2/year

Fluoride content .of particulates,
mg/m2/month

Cadmium content of particulates,
mg/m2/month

CO, micrograms/m3
40
34
96.9
5.0
30
33
92.4
7.7
35
27
77.6
. 6.9
3,450
3,530
                              0.0452
3,738
Source: Varkonyl and Kiss, 1990
                                        112

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                                 TABLE 26
                 GROWTH OF MOTOR TRANSPORT, 1955-1986
         Passenger Cars
Buses    Motorcycles
Trucks
Special Vehicles
1955
1960
1965
1970
1975
1980
1985
1986
10,092
31,268
99,395
238,563
568,259
1,013,412
1 ,435,937
1 ,538,877
3,029
4,933 -
6,570
9,534
12,452
22,238
24,854
25,920
26,127
70,331
157,870
269,228
298,071
266,746
233,739
239,073
20,649
44,511
75,339
142,681
139,593
128,258
182,959
196,566
1,658
2,183
3,832
6,181
8,747
12,257
15,569
15,837
Source: Varkonyi and Kiss, 1990
                                    113

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                                 TABLE 27




  WASTEWATER TREATMENT, ACCORDING TO METHOD OF TREATMENT. 1986
                       Mechanical
           Biological
            Chemical
           Total -
Industry



Municipal sewage



Other sectors






Total
22.0
44.3
0.8
4.6
20.5
0.3
5.9
1.6
0.0
32.5
66.4
1.1
67.1
25.4
7.5
100.0
Source: Hock and Somlyody, 1990
                                   114

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                                   TABLE 28




    INDUSTRIAL WASTEWATER DISCHARGED INTO SURFACE WATERS, 1984
         Mining and quarrying



         Electric power



         Metallurgy



         Building materials



         Chemicals



         Light industry



         Food processing



         Other industry





         Total
# of Sources







    81




    23




    13




    95




    50




   106




   540




    65






  1,168
Million m3







   82




 2,563




   59




    9




  110




   57




   38




    0






 2,972
Source: Vukovich, 1990
                                     115

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                                   TABLE 29

     INDUSTRIAL WASTEWATER DISCHARGED INTO PUBLIC SEWERS, 1984
                                 (in million m3)
                   Mining and quarrying

                   Electric power

                   Metallurgy

                   Engineering

                   Building materials

                   Chemicals

                   Light industry

                   Food processing

                   Other industry


                   Total
  4.6

 10.9

  6.4

 38.0

  6.0

 32.4

 35.3

 60.9

  7.9


202.4
Source: Vukovich, 1990
                                      116

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                                TABLE 30




    ENERGY SUPPLY, ACCORDING TO SOURCE OF ENERGY, 1950-1986, %
     Coal



     Oil



     PB Gas (extracted)



     Natural gas



     Gardine



     Nuclear Energy



     Hydropower



     Fuelwood



     Total
1970
62.7
13.0
0.6
20.3
0.9
-
0.2
2.3
100.0
1975
51.4
13.8
0.9
30.2
1.2
-
0.3
2.2
100.0
1980
46.0
13.2
1.7
33.7
3.0
-
0.2
2.2
100.0
1986
36.6
11.8
1.5
33.7
3.3
10.7
0.2
2.2
100.0
Source: Vukovrch, 1990
                                   117

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                                 TABLE 31
               SHARE OF FUELS IN ELECTRICfTY GENERATION
                                  1977
1987

Brown Coal
Lignite
Black Coal
Coal, Total
Oil for Heating
Natural Gas
Fossil Fuels Total
Hydropower
Nuclear Power
Total
GWh
5,600
4,100
1,266
10,926
5,200
6,000
22,126
144
-
22,270
_%_
25.1
18.5
5.5
49.1
23.4
26.9
99.4
0.6
-
100.0
GWh
4,678
3,294
958
8,930
3,500
5,170
17,600
. 169
10,985
28,754
_2L_
16.3
11.5
3.3
31.1
12;1
18.0
61.2
0.6
38.2
100.0
Note: 1 GWh (gigawatt-hour) = 1 million KWh (Kilowatt-hours)
Source: Varkonyi and Kiss, 1990
                                   118

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                                  TABLE 32

  ENERGY DEMAND, ACCORDING TO SECTOR OF THE ECONOMY, 1970-1986 %
     Industry

     of which:
        metallurgy
        building materials
        chemicals

     Construction

     Agriculture, forestry,
        and water management

     Transport and communication

     Comm./Res.

     Other

     Total
1970
53.3
16.1
6.3
11.8
5.5
9.7
20.8
8.0
100.0
1975
51.9
15.1
5.7
13.8
7.7
8.1
21.2
8.1
100.0
1980
50.5
13.3
5.4
15.0
7.8
7.1
23.8
8.0
100.0
1986
45.6
12.0
4.4
14.4
7.6
5.9
28.3
9.7
100.0
Source: Vukovich, 1990
                                    119

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                   CHAPTER 4:  INTERNATIONAL COOPERATION
               AVENUES OF INTERNATIONAL ENVIRONMENTAL COOPERATION

       The U.S. Government is only one actor among many in supporting environmental
protection in Eastern Europe.  In particular, the private sector initiatives undertaken by U.S.
commercial and non-governmental organizations and the efforts of other bodies outside the United
States have been very valuable.  U.S. Government activities need to be coordinated with the
programs and initiatives sponsored by other organizations and governments discussed earlier.

        The European Community (EC) programs for Poland, Hungary, Czechoslovakia and
Yugoslavia, and the Dutch and Swedish initiatives on air pollution monitoring, water quality
improvement, and environmental management in Poland are examples of bilateral governmental
activity among European states.  Specifically  regional efforts include the program of cooperation
on protection of the Baltic Sea and the Central European "Pentagonale" recently established by
Italy, Austria, Hungary, Czechoslovakia, and Yugoslavia.

       Multilateral initiatives include those of the  Organization for Economic Cooperation and
Development  (OECD), the Conference on Security and Cooperation in Europe (CSCE), the United
Nations Environment Programme (UNEP), the  World Health Organization (WHO), and the
International Energy Agency (1EA)".  The new Regional Environmental Center 'for Central and
Eastern Europe, located in Budapest, is an initiative that is supported by the United States,
Hungary, the  EC,  and a growing number of other governments. Several multilateral development
banks have made loans for environmental projects in the region, e.g.,  the World Bank, the Nordic
Development  Bank, and the European Investment  Bank.  The newly formed European Bank for
Reconstruction and Development (EBRD) will  be a possible source of funds for environmental
projects as well as a supporter of environmentally sound development.       .  '

       As these efforts develop, they will obviously be most' effective if they complement each
other to the greatest extent possible. This applies both to official and private initiatives emanating
from the United States and to efforts by other foreign governments and multilateral programs.

       The following discussion divides international assistance for environmental protection in
East-Central Europe into five categories:
  •
  *
direct financial assistance and technical services;
institution-building for governmental bodies;
enhancement of compliance capabilities in industry;
stimulation of business and industrial activity; and
strengthening non-governmental organizations.
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Direct Financial Assistance and Technical Services

       The countries of Eastern Europe will be forced to make considerable investments to
mitigate the effects of four decades of unfettered pollution.  Determining the most effective use
of limited indigenous resources for pollution control investment is a long-term policy issue.
International financial assistance in this area is crucial to stimulate action.  The goal is to use
limited resources in addressing acute sources of pollution to achieve the greatest total reduction in
emissions and discharges  per dollar/zloty/forint invested. The  investment in pollution  control
through state-of-the-art technology must be weighed against possible greater reductions through
appropriate (though not necessarily state-of-the-art) production technologies.

       For the purposes of pollution monitoring, control, abatement, or prevention, direct financial
or technical  assistance is the most straightforward type of cooperation, and generally involves.
making funds available for the purchase of equipment, hardware, and related technical services.
It may take the form of grants or loans on market or concessional terms, either under bilateral
arrangements or as part of programs of multilateral lending institutions. Several examples of this
type of effort are currently underway in Poland, including the World Bank's current environmental
management loan package, U.S. Government SEED activities providing air and water pollution  .
control in Krakow, and the EC's environment sector programs  for Poland, Hungary and
Czechoslovakia.  It is expected that the new European Bank for  Reconstruction and Development
(EBRD) will play a key role in this area; a share of EBRD's resources will  be focused on
environmental protection.

       Within the context of financial assistance, a role has been proposed for
debt-for-environment swaps.   To date,  two swaps have been negotiated  with Poland. The
German government has financed a swap that will yield $60 million, or half of the funds for the
FRG's environmental assistance agreement with Poland.  In addition, the  World Wildlife  Fund has
designed a swap that will provide $50,000 for water  pollution control on the Vistula River.
However, negotiating debt-for-environment swaps is difficult and a  key element in the Polish
case--a sufficient discount rate on the country's foreign debt-has been steadily decreasing as the
economy stabilizes.  If swaps of commercially held debt become unattractive, there is still the
possibility of using government-held debt to finance environmental improvements.

       The  U.S.  Government and its partners in the Paris Club should consider reducing portions
of the Eastern European debt  in exchange for agreements by debtor nations to undertake specific
investments in environmental protection.  The United  States has indicated to Poland a willingness
to consider official debt reduction that is undertaken in a multilateral framework.  However, it is
still too early to determine whether and how such reductions or  conversions might take place.
Given Hungary's  policy of servicing existing official and commercial debt, it is unlikely that debt-
                                             121

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for-nature swaps would take place there in the foreseeable future.
Institution-Building for Governmental Bodies

       The long-term success of environmental policies depends upon trained  personnel.
Management training involving not only national regulatory, scientific, and managerial personnel,
but also state, local, and regional environmental professionals should be a key component of'
international efforts. In this way, U.S. programs may aid the development of suitable national
environmental policies and regulatory frameworks, and also improve implementation at regional
and local levels.  Programs to enhance environmental management capabilities should incorporate
both enforcement practices and support of compliance efforts,

       In the U.S. and Western countries, environmental management options that shift away
from "command-and-control" approaches toward utilization of economic and financial mechanisms
for environmental protection are being used. However, economic mechanisms are management
tools used in the context of an established, effective regulatory framework, which is where
Eastern Europe must concentrate initially.

       The development of economic instruments for environmental protection falls within the
broader context of the region's transition from  centrally planned economies to market-oriented
systems, in which  environmental policy must reflect the relationship of environmental protection
to market economics.  Therefore,  along with legal and regulatory changes currently underway and
planned,  reform of energy and natural resource prices is crucial. Price reforms are needed to
value productive inputs at their real cost, thereby introducing an economic stimulus for their
efficient use.  Assistance to strengthen capabilities to manage  macroeconomic and sectoral policy
reform will also support environmental objectives.
Enhancement of Compliance Capabilities in Industry

       Encouraging the private sector to comply with--and, where appropriate, go beyond--
environmental requirements is a primary component of sound environmental management. A key
lesson to be drawn from U.S.  experience in recent years is that effective environmental
management requires not only a clear and fair governmental regulatory framework, but also
support for cooperative business and industry compliance efforts.  The U.S. has tried to
institutionalize financial incentives for pollution prevention in order to:

  •    shift the focus of technical effort from  "end-of-pipe" treatment back into production
       processes so that pollution can be prevented, reduced,  or managed before it  becomes a
       problem;
                                            122

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  •    contribute to the economic viability of firms; and
  •    constrain to some degree the confrontational and litigious nature of enforcement activities.

       Practical programs which incorporate  pollution reduction and prevention measures into
production processes and improve efficiency  of operations are equally important.  This type of
training and site-specific technical assistance may be provided through professional associations
and other not-for-profit organizations. The programs may include environmental audits,
peer-match exchanges, and training focused on needs of specific industrial branches. ~

       Examples of  bilateral cooperation in this area are the industrial environmental auditing and
training program to be carried out by the World Environment Center (WEC), the pollution
prevention training program being developed  by the Center for Hazardous  Materials Research and
the Peace Corps, and the industrial peer-match  program in preparation by  the EPA Office of
Cooperative Environmental Management.  In  a sector-specific activity, the newly formed Energy
Efficiency Centers  in Warsaw and  Prague fall into this category as they supply technical
assistance to industrial and power generation firms  in Poland  and Czechoslovakia.
Stimulation of Business and Industrial Activity

       Stimulation of business activity in environmental protection has two components.  First is.
the establishment of Polish and Hungarian firms that manufacture pollution control equipment or
provide environmental services.  This is a straightforward  issue in which East European countries
are quite interested,  as  it offers the opportunity to utilize their considerable technical expertise to
stimulate economic growth. The second component relates to encouraging environmentally sound
economic  investment by granting priority to projects that are environmentally benign relative to
other financially sound prospects.  A key role can be played in this area by providing U.S.
Government support for policies and programs that promote such overseas investment by U.S.
firms and  by encouraging environmentally sound lending policies for multilateral development
banks.
Strengthening Non-Governmental Organizations

       Developing a "public interest" sector of strong non-governmental organizations (NGOs) in
Eastern Europe is critical and is linked closely to the overall development of democratic
institutions, including the print and electronic media, and other public interest groups.  The free
flow of information within society and among sectors on key social issues enhances the
organizational and technical skills of indigenous environmental NGOs and should allow their
transition from reliance on confrontational policies developed  in response to the previous
totalitarian  regimes, to more affirmative,  constructive approaches that have proven effective in
                                             123

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democracies.
           CURRENT INTERNATIONAL INITIATIVES:  U.S. GOVERNMENT PROGRAMS

Support for East European Democracy (SEED) Act of 1989                               -

       The Support for East European Democracy  (SEED) Act of 1989 authorizes environmental
programs for Poland and Hungary, as part of actions to assist those countries in their transition to
democratic and free-market societies. The U.S. Environmental Protection Agency (EPA) was1
specifically authorized by the SEED Act to undertake educational, research, technical, and  ~
financial assistance to improve the severe pollution problems in Poland and Hungary. In Poland,
assistance is being provided by EPA to establish an air quality monitoring network in Krakow and
to improve both water quality and the availability of drinking'water in the Krakow metropolitan
area.  In addition, the SEED Act authorized EPA to establish the Regional Environmental Center for
Central and Eastern Europe in Budapest, Hungary, to promote environmental institution building in
the region.  '                                                                    .       •

       The SEED Act authorized the Department of Energy to develop a cooperative technology
program to retrofit a  coalrfired  utility plant in Krakow with clean coal technology, and to develop
Polish technology for using fossil fuels more cleanly.  Both EPA and DOE programs are funded  via
the Foreign Assistance Appropriation in  cooperation with the Agency for International
Development {AID). The SEED Act also authorized the U.S. Information  Agency to expand
educational exchange programs between American and Polish and Hungarian schools and
universities, cities, towns, and  other organizations in the area of environmental protection.

       Several other U.S. agencies manage programs that have significant environmental
components or impact.  These  include the Department of Commerce, the State Department's
Trade and Development  Program (TOP), the Overseas Private Investment Corporation {OPIQ, the
Export-Import Bank, the  Small Business Administration, the Peace Corps, and the Departments of
Labor, Health and Human Services, and Agriculture.

EPA Initiatives

       Bilateral Programs:  EPA has been involved in cooperative activities with Eastern Europe
for nearly two decades through its participation in intergovernmental science and technology
(S&T) agreements with Poland  and Yugoslavia that are administered by the Department of State.
In 1989, a new bilateral S&T agreement with a substantial environmental component was signed
with Hungary.  These agreements provide support for joint workshops, research, and exchange of
scientists and technical information in a variety of scientific fields.
                                           124

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       In addition, EPA concluded its own bilateral agreement in 1987 with the Polish Ministry of
Environment, Natural Resources, and Forestry (MOSZNL) that provides for joint research,
demonstration and monitoring projects, and bilateral workshops on topics such as environmental
policy and management, environmental health effects, and air pollution monitoring. The
EPA-MOSZNL agreement also has served to develop projects for implementation under the
U.S.-Polish S&T agreement and the President's  East European Environmental Initiative.

       Krakow SEED Initiatives: With assistance from the U.S. Army Corps of Engineers, EPA
delivered the first shipment of wastewater and drinking water treatment equipment to the city of
Krakow in December 1990.  Krakow water quality experts visited Washington and Cincinnati in
October, 1990, to participate in the annual conference of the Water Pollution Control Federation
and to consult with counterparts at treatment plants in the United States. With regard to the air
monitoring project, a team of EPA specialists visited Krakow in June 1990 to carry out detailed
discussions regarding equipment siting, training  needs, and Poland's current air monitoring
program.  Equipment specifications have been determined, and six air  monitoring stations will be
established in Krakow in the spring of 1991.

       Regional Environmental Center:  The Regional Environmental  Center for Central and
Eastern Europe opened in Budapest, Hungary on September 6, 1990.   Center activities will focus
on enhancing the capacity of Central and East European countries to address environmental issues
in four major areas:  data collection and dissemination, development of institutional capability and
outreach,  education, and clearinghouse functions.

 •     In the data collection  and dissemination  area, the Center provides access  to a wide variety
       of environmental information for use by  the public and professionals through a core
       collection of print materials and established data bases, on CD-ROM or on microcomputer.
       An important element is the development of partnerships with  existing information
       exchange organizations and networks.  In addition, the Center  may encourage creation of
       new data bases and assist in the development of local and regional monitoring capabilities.

 •     To develop institutional capability and  outreach, the Center promotes constructive public
       participation in environmental decision-making.  It also promotes intra- and
       intergovernmental and intersectoral communication  for policy planning, implementation,
       and enforcement of environmental laws, with a particular emphasis on areas such as
       waste minimization, energy conservation, and pollution prevention.

 •     The Center's educational function promotes public environmental awareness and literacy
       and facilitates the integration of environmental issues into course curricula. The Center
       also supports training  through  workshops and seminars, and assists  in the creation of
       environmental units within existing associations and organizations.
                                            125

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  •    In its clearinghouse mode, the Center seeks to match a variety of resources (e.g.,
       assistance programs, exchange programs, fellowships, and donated equipment} with
       appropriate recipients.  The partners may include local and national governments,
       international organizations, non-governmental groups, scientific institutes and laboratories,
       and monitoring stations.

       EPA-MOSZNL Environmental Management Project:  Under the auspices of their bilateral
1987 Agreement on Cooperation in  Environmental Protection,  EPA and MOSZNL have developed
an environmental management project funded by MOSZNL from the 1990 World Bank      :
Environment Management Project Loan (see section on World Bank,  below).
                            *                           .                             *
       Under this project, EPA and  MOSZNL specialists cooperate on various environmental
management areas including administration, management,  and policy (e.g., .establishing budget,
accounting, procurement procedures, information systems, and human resources for
environmental agencies); environmental planning (e.g., regional air or water plans,  integrated
environmental improvement workplans; matching resources with  risk); establishment of an
environmental management structure between the national,  regional, and local levels of
government; establishment of legal and regulatory systems including the role of subsidies in
environmental policies; and development of pollution prevention policies and programs.

       Energy Efficiency Centers:  EPA,  in cooperation with AID and the World Wildlife
Fund/Conservation Foundation (WWF/CF) has established energy efficiency centers in Poland and
Czechoslovakia.  The purpose of these centers is to develop the  indigenous technical expertise
and analytical capabilities needed to achieve  a rapid transition to more efficient and sustainable
energy development and use.

       Recovering Coal-bed Methane: EPA and  AID have completed a pre-feasibility study for
recovering methane (natural gas) from coal seams  in Poland and  utilizing the methane as an
alternative .energy source. Substantial quantities of methane, a significant "greenhouse gas"
factor in  global climate change, are  usually released into the atmosphere during coal mining.
Poland has the fourth largest emissions of coal-bed methane of any country in the world. While
some limited methane recovery is performed  in Poland, the technologies are generally antiquated,
inefficient, and more hazardous than the newer technologies addressed in the EPA/AID study.
Polish-American,and Hungarian-American Enterprise Funds

       The Enterprise Funds were proposed by President Bush to support the creation of a private
sector in Poland and Hungary as part of a comprehensive package of measures to help meet the
challenge of developing market-based economies.  Authorized under the  SEED Act of 1989, the
Enterprise Funds were established in May 1990 to encourage the development of private
                                           126

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businesses through investments and loans to small- and medium-sized enterprises.

       The Enterprise Funds are private organizations governed by independent Boards of
Directors. The charter for each Fund enables it to receive funds from the U.S. Government and to
manage them with full discretion within the framework of broad Congressional guidelines.

       Polish and Hungarian companies that apply to the Funds for support are evaluated on the
basis of their operating history and future plans, including sales and earnings,  organizational .j
structure, and strategy for growth within a particular industry.  In many cases, the Funds will help
Polish and Hungarian entrepreneurs meet these  requirements by  providing managerial and
technical expertise. In making its final investment decisions, each Fund considers internationally
recognized standards of worker and human rights, environmental factors,  U.S. economic and
employment effects,  and the project's commercial viability.  The Funds are committed to
conducting their activities in accordance with U.S., Polish,  and Hungarian law.
       CURRENT INTERNATIONAL INITIATIVES:  U.S. NON-GOVERNMENTAL PROGRAMS

       A growing number of U.S.  non-governmental organizations (NGOs) and foundations have
developed East European environmental programs.  While not a comprehensive listing, the
following section describes some of the major programs now in place.

Environmental Law Institute (EH)

       Efforts to reduce global pollution and to strengthen worldwide resource conservation
programs by providing environmental legal and technical assistance have been the major focus of
the Environmental Law Institute's international programs for over a decade.  ELI  offers technical
assistance on legislative drafting, policy implementation, and environmental enforcement.  Training
workshops, joint research  projects, information sharing, and specialized  consultations are offered
to government officials, academics, and representatives of citizen environmental  groups from
Central and Eastern Europe.

       Specifically, ELI's Environmental Program for Central and Eastern Europe is preparing a
series of training workshops in Hungary for the  purpose of improving pollution control regulations
and developing effective environmental enforcement policies.  The first workshop on ground water
protection in Hungary is scheduled for March 1991, and will address Hungary's  groundwater
quality problems resulting  from industrial  waste, agricultural runoff, and untreated sewage
contamination.   Workshop topics will also explore options for monitoring, standard setting, and
enforcement, possible uses of economic incentives,  the role of the judiciary, and public
participation in environmental planning and policy development.
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     .  With support from AID, ELI has also established a law-drafting assistance project to assist
East European countries to redesign environmental laws and policies.  Recent efforts under the
project identified standard-setting and enforcement of air pollution control measures, hazardous
waste management options, pollution-control strategies, the role of citizen suits, and
environmental impact assessments as major areas of concern in Poland and Czechoslovakia.  ELI's
future efforts in Poland and Czechoslovakia will focus on preparation of regulations based  on the
enactment of laws. The law-drafting assistance project will also be extended to Hungary in  1991.

World Wildlife Fund/Conservation Foundation (WWF/CF)

       World Wildlife Fund/Conservation Foundation's Central and East European Environmental
Program was launched  in 1988.  Major program goals include empowering the public,
strengthening environmental management capabilities of public institutions and state enterprises,
promoting appropriate technology transfer and environmentally sound investment in the region,
and building domestic U.S. understanding of and support for Central and Eastern Europe
environmental concerns.

       WWF/CF manages a Central and Eastern Europe Environmental  Affairs Network which has
grown to about 300 members since its inception in December 1988.  Members include individuals
from government agencies, environmental groups, foundations, academia, corporations, and  other
organizations.  Periodic meetings of the network have featured presentations by U.S., East and
West European environmental specialists. A network newsletter describes activities of members,
highlights new publications,  and is distributed in Central and Eastern Europe.

       In July 1989, WWF/CF signed a memorandum of understanding with  the Polish Ecological
Club. Activities under the agreement have taken many forms,  including exchanges,  preparation of
papers for professional  conferences, participation in joint policy research and development of grant
proposals.          .

       WWF/CF is expanding its Environmental Advisory Service,  now operating in Latin America,
to include Central and Eastern Europe.  The service assists government agencies  and NGOs by
responding to questions concerning environmental science, technology, and policy.  WWF/CF is
also expanding its established programs in NGO training and in environmental dispute resolution to
include Central and Eastern Europe.  In cooperation with the United States Information Agency
(USIA) and other exchange organizations, WWF/CF provides assistance and information to visitors
from Central and  Eastern Europe. WWF has received funds from U.S.  AID for its initial NGO
training workshop and for assessing the feasibility of expanding its Environmental Advisory
Service to the region.          .                                                    .

       Also of relevance to Eastern Europe,  WWF's Multilateral Development Bank Program has
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recently completed a detailed study entitled "The European Bank for Reconstruction and
Development:  An Environmental Opportunity," which includes recommendations for structure of
bank policies.
German Marshall Fund of the United States (GMF1

       The German Marshall Fund's "Initiative for Central and Eastern Europe" funds "
environmental, economic, and political development activities in Czechoslovakia, Hungary, Poland,
and the former German Democratic Republic. GMF supports short-term fellowships, conferences
and workshops, travel grants, and  projects that support organizational development. Activities
include support for the new Polish  Institute for Sustainable Development in Warsaw, and an
organizational development fund for small grants to NGOs in Poland.

       GMF  is also supporting a pilot project with  the National Safety Council's Environmental
Health Center, a non-profit organization specializing in environmental journalism, to host a
delegation of 9 environmental reporters from Czechoslovakia, the former German Democratic
Republic, Hungary, and Poland for  an eight-week work/study tour from January to March  1991.
The group will meet with a variety of policy makers,  citizen activists, and academics for briefings
and discussions in Washington, and will tour chemical manufacturing facilities, treatment plants,
water projects, and other sources of environmental news in three regions of the United States.
U.S. Committee on Poland's Environment (U.S. COPE!

       U.S. COPE is a recently formed non-profit organization that is working to develop scientific
and technical strategies to address Poland's environmental problems. U.S. COPE initiatives
include the creation of a registry of environmental experts and a Technical Assistance, Program.
The goal of the registry program is to provide contacts for Polish scientists, environmental
managers,  and industry representatives who are available for scientific consultation.  To facilitate
the exchange of scientific information and technical experts between Poland and the United
States, U.S. COPE has developed a grants program to bring Polish specialists to the  United States
for short-term internships and to fund membership in professional associations.
World Environment Center (WEC)

       The World Environment Center (WEC), a non-profit organization that draws on U.S.
corporate expertise to promote sustainable environmental management  practices throughout the
world, is extending its technical assistance program to Poland, Hungary, and Czechoslovakia.
With support from U.S.  AID, WEC's first projects  in the  region will focus on chemical, aluminum,
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tanning, and pharmaceutical industries, and will include environmental/energy audits and
management assessments.            •       .   .
Citizens Democracy Corps (CDC)                                 .

       The Citizens Democracy Corps is a Presidential initiative to support the voluntary efforts of
U.S. citizens to help strengthen-the emerging democratic institutions'and market economies, of
Central and Eastern Europe.  The CDC uses the skills of U.S. citizens to provide technical -t•«•
assistance to the region in diverse areas, including the environment.                      «

       The CDC Clearinghouse serves as a focal  point for Americans who are able to provide
technical assistance and/or donate supplies'and talent. It responds to priority requests from the
region which  can best be met by the U.S.  private sector.  The Clearinghouse helps CDC advise  ".
corporate and other non-governmental organizations as to where they might concentrate their
efforts, matching them with  partners in the recipient countries.

       CDC will establish partnerships with private enterprises, non-governmental organizations
and educational institutions in the United States that are  active in Central and Eastern Europe, as
well  as maintain contact with U.S. Government agencies and organizations that provide bilateral
and multilateral assistance.     .   .                •
 CURRENT INTERNATIONAL INITIATIVES: MULTILATERAL AND OTHER BILATERAL PROGRAMS

       Most European countries have established bilateral environmental programs with one or
more East European countries.  While some are largely formal government-to-government
protocols, several enjoy very active and productive programs of technical and information
exchange, consultation, and investment for environmental projects.  The Netherlands, Sweden,
and Germany currently have some of the most vigorous programs.

       European and other bilateral environmental programs in Eastern Europe are coordinated via
the "Group of 24" (G-24), the body of 24  industrialized nations (OECD member countries) that
was formed in the wake of the  1989 Economic Summit to coordinate all types of Western
assistance for the region.  The environment working group of the G-24 is chaired by the
Environment Directorate (DG-XI) of the Commission of the  European Community (EC).  The EC is
also carrying out its own ambitious program of environmental technical assistance in Poland,
Hungary  and other countries of  the region.

       In 1990, the governments of Czechoslovakia, Hungary, Yugoslavia,  Austria, and Italy
formed the "Pentagonale" to develop guidelines for  political and economic cooperation in various
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sectors among the member countries. For example, a joint waste management project allows
transboundary shipment of waste between member countries as part of a three-year program of
economic cooperation.  The Pentagonale is also mapping transboundary national parks to help
preserve  the environment. Other projects include a cooperative effort to monitor specific aspects
of the environment and the development of environmental data bases.  Nuclear safety and
radiation  protection programs are also being considered  by the Pentagonale for mutual notification
agreements in the event of nuclear accidents.  The next Pentagonale summit (Dubrovnik,
Yugoslavia, in mid-1991) may consider admitting new member countries.  Currently, other
countries may participate in the working groups. Poland has already joined the environmental
group as an observer.                       . ,                  •                   -

       Several multilateral organizations have also undertaken environmental initiatives for Eastern
Europe.  These include the Organization for Economic Cooperation and Development (OECD), the
Conference on Security and Cooperation in Europe (CSCE), and many of the United Nations
agencies, e.g.,  ECE, WHO, ILO, UNEP, UNDP, and UNIDO.  For example, based on a U.S. industry
and government initiative, UNEP's Awareness and Preparedness for Emergencies at the Local
Level (APELL) program will conduct training in Eastern Europe on emergency planning.

       In a recent effort to coordinate programs, the US-supported Regional Environmental Center
in Budapest sponsored a conference in November  1990 on how activities sponsored by the U.S.
Government and International Energy Agency (IEA) in the field of energy could best complement
each other.  Key areas discussed included measures to  assure direct participation of energy
interests  from Central and East  European countries, define priority issues and problems in
accordance with energy technology programs in Eastern Europe, and identify follow-up activities
and potential implementation  mechanisms for suggested courses of action.   The 1EA will produce
a thematic review on energy technologies for efficient end-use and fuel switching.

       While it is  unlikely that all assistance programs will ever be fully coordinated, it is clearly
desirable that they complement each other to the greatest extent possible.  To this end, the
United States participates fully in the G-24 mechanism, and works directly with other donor
counties  and organizations when feasible.  However, the most effective coordination will be
achieved when the recipient countries in the region recognize the need for internal management of
foreign assistance and develop the capability to,use available resources well by assuming
responsibility for coordination of their programs.
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                   INITIATIVES OF MULTILATERAL DEVELOPMENT BANKS

The European Bank for Reconstruction  and Development (EBRD)   .             .'

       The European Bank for Reconstruction and Development (EBRD) was organized to assist
Central and East European countries that have adopted multiparty democracies and market
economies. The EBRD, which expects to begin lending by March 31, 1991, may provide loans
that help improve the environment.  EBRD's environmental objectives recognize that East
European countries must begin to correct four decades.of.severe environmental abuse, neglect,
and contamination as part of their economic redevelopment.  The charter members of the EBRD
have dedicated  $12 billion in initial appropriations for loans to the region.    .

       EBRD's  Articles of Agreement make clear that it  is primarily an investment bank, designed
to develop and  support the private sector.  It may also function as a development bank, as
infrastructure loans will be necessary for private sector development and will promote the
transition to a market-based economy.  Therefore, the EBRD would not usually make loans that
would restore polluted lands or pay for environmental training programs.  However, the bank can
help to develop private sector businesses providing environmental goods and services.

       To effectively address Eastern Europe's  environmental problems, the Bank will aim  to
achieve a balance between economic development and environmental protection.  Provisions for
environmental protection development, therefore,  were incorporated directly into EBRD's Articles
of Agreement.                                        •
                                                            ""           *      '
       The EBRD will work with organizations such as the European Investment Bank,
International Monetary Fund, World Bank, commercial lenders, and governments in providing
financial support for European economies in transition.  Various organizations such as the Center
for International Environmental Law, The World Wildlife Fund-US, and Friends of the Earth  have
cooperated in drafting model environmental programs for the EBRD.  Recommended provisions
include environmental  protection and restoration as a primary objective, effective monitoring-
procedures, public access to information,  and environmental  assessments for all bank-funded
projects.                         •
The World Bank           -       ;

       The .World Bank's $18 million Environmental Management Project with Poland is designed
to provide immediate investments for environmental improvements in the short term while laying
the foundation for a longer-term sustainable investment and policy program.  The project is
designed to provide a framework for addressing the highest priority environmental concerns in
Poland as it moves toward a decentralized system of environmental management.  The project
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 aims to establish the institutional, regulatory, and informational basis for immediate corrective
 actions and longer-term investments supported through bilateral and multilateral assistance.  It
 also aims to reduce health risks, decrease economic costs from environmental degradation, and
 improve environmental quality.

        Investments and institutional measures  under the project focus on the most polluted areas
 of Poland.  They are designed to serve as models for industrial, air, and water management that
 could be replicated throughout the country as financial resources become available. The primary
 components of the World Bank project are described below.

        The Management and Policy segment uses an international team of experts to advise on -,
 implementing an improved budgeting/work program procedure and a management information
, system; a country-wide environmental monitoring strategy; economic incentives for
 environmentally sound investment decisions and efficient natural  resource use; input to the
 legislative drafting process; and an economic analysis of investment proposals for local and
 foreign financing.

        The Environmental Health segment seeks to  improve the quality of monitoring and data
 gathering on food and soil contamination through inter-laboratory tests and unified analytical
 methods to establish a priority list of hazardous chemicals and technologies in Poland; establish
 more reliable linkages between environmental factors and the  health of affected population
 groups;  identify the most hazardous areas  in Poland; ascertain which pollution sources contribute
 most to population exposure; and train epidemiologists to deal with the major health problems
 arising from exposure to environmental contamination.

        The Municipal Solid'and Hazardous Waste segment will establish a policy for municipal
 solid and hazardous waste management, taking into account spatial planning and health effects.
 Several  institutions will coordinate least-cost investment and policy strategies for  waste
 management by the end of 1992.                                           •      •

        Industrial Efficiency and Environment Reviews introduce a program for conducting reviews
 to assist economically viable industrial enterprises in the Katowice,  Krakow, and Legnica areas to
 identify  least-cost modes of compliance with environmental standards.  The reviews, using teams
 of foreign and local experts, would provide a technical basis for improvements in management,
 process supervision,  and direct domestic and external financing for high priority environmental
 improvements in industrial enterprises.  Foreign and  local training opportunities in industrial
 pollution management and control would be provided to personnel "from national and local
 environmental authorities,  industrial enterprises, and consulting organizations.

        The Air Quality Management component will help develop a comprehensive air pollution
 management and abatement strategy for the highly polluted Katowice-Krakow region. Support
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would be provided to establish a real-time ambient air monitoring system for Katowice; provide
mobile air quality monitoring equipment for evaluation of emission sources; provide computer
equipment and software to strengthen analytical capabilities in dispersion modeling,  regional air
management and investment decisions; prepare health risk assessments; develop least-cost
strategies; as well as carry out extensive training. USG-sponsofed projects in Krakow are being
coordinated  with this component of the World  Bank  project.

       The Water Resources Management component will serve as a model for integrated river
basin management in Poland by supporting the development of an improved water resources
planning and management system for the upper Vistula River basin.  It will strengthen the Water
Management Council representing the 11 administrative districts (vyoiewodstwos) in the upper
Vistula river basin; help develop a phased least-cost  investment program; and provide equipment
for hydrometeorological observations to control the risks of flooding; monitoring and warning
stations to improve both the national monitoring network and management of the main water
treatment plants in the basin; field investigations to control major industrial and municipal  •
effluents; groundwater investigations; leakage detection and metering of losses of fresh water
from the  water distribution net; upgrading two environmental laboratories to serve the area for
analysis of water, air, waste, and contaminated soil  samples; and establish a geographic
information system (GIS) to improve overall environmental management in the  region.
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                     CHAPTER 5:  POLICY RECOMMENDATIONS
                  UNDERLYING PRINCIPLES FOB U.S. GOVERNMENT POLICY

       Recent events in Eastern Europe offer the United States an unprecedented opportunity to
assist the new governments in the region to  link ecological, economic, and social objectives.
Properly designed cooperative programs can assist the political transition to democracy and
economic reorientation, while advancing measures for environmental protection.  By the same
token, environmental objectives should be considered carefully in other U.S. Government
assistance efforts in Eastern Europe, such as investment programs, measures directed toward
legislative reform, and programs in the energy sector.

       The following principles incorporate this perspective and should guide U.S. policy in   •
assisting environmental protection efforts  in Eastern Europe over the next five years:

  •    Support fundamental economic reform and restructuring of sectoral policy, particularly for
       industry and energy;
  *    Emphasize development of decentralized, integrated environmental management systems;
  *    Support credible enforcement of environmental laws;  .
  •    Place particular emphasis on pollution prevention;
  •    Enhance public participation and access to information;
  *    Develop alternative forms of financing environmental investments;
  •    Increase the level of private ownership; and
  •    Stress regional approaches to common environmental problems.

       To be effective, these principles must be shaped by the range  of cultural, historical,
environmental, political and economic factors pertinent to a country's society.  No single Western
formula for improved environmental management could or should be adopted whole cloth by  East
European  countries, as differing circumstances and local participation development will necessarily
produce unique systems for each country.
Fundamental Economic Reform and Restructuring

       Many of the critical environmental problems facing the countries, of Eastern Europe result
from the social and economic system put in place under communist rule after World War  II.
Ideological, political, and structural characteristics of the communist system distorted the
fundamental organization of the economy and largely ignored environmental quality.
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       Marxist ideology denies or sharply restricts property rights, demands state ownership of
productive assets, and values natural resources according to the "labor theory of value."
Consequently, there has been an inadequate legal basis for claiming damages, and industrial, coal
and energy ministries have served political masters who insisted on artificially low natural resource
prices, resulting in their inefficient and often wasteful use.

       In fact, communist central planners allocated massive inputs of resources and labor to
create new or expanded industries they thought would  provide economic growth.  Their focus on
attainment of plan targets and the institution of managerial financial incentives directed'at this
goal resulted in the expansion of capacity throughout their economies with little regard for
demand signals, actual costs of production, quality control, or environmental impact.  "
                                                                                  •f.V
       As a  result, centrally planned economies developed a sectoral bias toward easily quantified -'
and heavily rewarded manufacturing industries at  the expense of the service sector and, within
industry, with an emphasis on environmentally stressful extractive and production enterprises
(e.g., steel making, coal mining, and copper smelting) and associated energy production. This
pattern of economic development hot only consumed energy and natural resources inefficiently,
but also constrained development of other economically profitable and more environmentally
benign branches of the  economy.

       Central administration of pricing policy together with  soft budget policies that place no
value on scarce natural resources contributed to the very high,  by international comparison,
energy, material, resources and water intensity  of GDP.  Below  cost pricing of natural resources
and of services provided by public utilities,  and  extensive recourse to subsidies created an
economic bias against investments in pollution abatement, adequate maintenance  of existing
plants, and higher levels of recycling.  Pollution charges, both fees and fines, are well below
abatement costs and in practice, when accompanied by the soft budget policies, had no impact
on polluters behavior.

       Given this historical  context, substantial economic reform in Eastern Europe is necessary
to provide  the best opportunity for effective environmental protection.  Such reform implies
eliminating subsidies for inputs to industry, energy and  other sectors, establishing property  rights,
privatizing  economic activity, instituting real (i.e.,  cost-based) pricing for natural resources and
energy, developing procedures to  manage the failure and liquidation of  inefficient firms, and
encouraging investment in non-heavy industry sectors of. the economy.

       Price  reform is a crucial element to improving environmental -conditions. Without price
reform, market forces do not reflect the economic value of natural resources and their ecological
functions.  A crucial activity of the governments in the region will be to move to market prices as
quickly as  possible and  to acheive more realistic prices  for resources such as water, energy, and
raw materials.  Elimination of subsidies for industry, energy,  water, and agricultural commodities is
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a necessary first step of price reform.

       Some of the most significant near-term environmental benefits are likely to be gained
through the careful identification and dismantling of obsolete and economically unsound industrial
plants and replacing them with less polluting private enterprise.  In other words, a key principle
for sound environmental management during this transitional phase should be an industrial policy
that takes into account environmental effects.                                        -;

       Clearly, policies established to enhance commerce will  have great near-term influence on
environmental quality,  as will efforts focused on environmental standard-setting and enforcement.
Three areas deserve particular attention. More efficient and less polluting energy technologies
must  be utilized, and energy conservation and demand management should become a major
governmental priority across all economic sectors.  Second, use of agricultural chemicals banned
in Western countries, excessive or inappropriate  use of pesticides and fertilizers, and other
destructive agricultural practices must be changed.  Third,  auto, truck, and bus emissions,
particularly from leaded fuels, are directly correlated with serious human health effects in urban
areas  and must be addressed.  Therefore, transportation policy-ranging from commitment to mass
transportation systems to fuel taxing-will have major implications for environmental quality.

       Introducing privatization and market discipline in Eastern Europe has clarified the need to
create "social  safety nets"--programs of unemployment compensation and other income support,  "
worker retraining, and  entrepreneurship  assistance-to bridge the personal and social costs of
economic  transition. The actual costs of environmental improvements may only represent a small
percentage of the costs of economic reform.  The effect of the costs should be identified so that,
if worker dislocation occurs from implementation of environmental policies, national social safety
net programs can be applied.

Integrated and Decentralized Environmental Management Systems

       Effective environmental protection institutions and policies require decentralized, integrated
environmental management systems.  Policy and the phasing-in of regulatory standards should be
based on cross-media scientific and economic analyses.  Media-specific approaches to
management are inefficient both from the environmental perspective, because pollution is
transferred rather than mitigated and residuals are unaddressed; and, from the standpoint of
efficiency,  because resources are misaltocated to low-priority problems.

      'The integrated, or cross-media alternative uses risk information about pollution threats to
human health  and ecosystems as the basis for establishing priorities for environmental programs.
(This  implies, of course, establishment of a strong monitoring and risk information system.)  Risk
priorities should then be combined with knowledge  about the technical and economic feasibility  of
control of these pollution threats to determine an effective, practical  plan for regulatory action.
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       Decentralized environmental management is most efficient both for protecting the
environment and for enhancing cost-effectiveness.  When environmental policy, standards, and
enforcement must be established at the national level, decisions are general  and do not reflect
specific local conditions or needs.  By decentralizing decision making authority. East European
countries can tailor  environmental action to the specific needs of a geographic area.  This helps
ensure that the specific, unique environmental threats to an area will be addressed and, at the
same time, discourages imposition of general and costly controls on tow-priority sources of
pollution.  However, decentralized management should be developed in the context of. mandatory
national minimum standards.                                               ^

       Decentralized environmental management should include methods for providing information
on environmental hazards and a variety of procedures for public participation in decision making to
encourage a sense of public ownership and a willingness to comply with the implications of
responsible environmental decision making.

       From an economic point of view, environmental protection is most efficient  when its costs
are internalized through normal market pricing of goods. Ideally, environmental policy should
provide ways to cost out pollution control and clean-up associated with product development,
then establish mechanisms and incentives to ensure that those costs are included in the market
price of the  goods.  While this should be  done whenever possible, it often involves, unfortunately,
very complicated  and lengthy analysis.

       A practical near-term  approach should rely on a balance between "command-and-control"
methods and development and use of market mechanisms.  "Command-and-control" involves  •
creation of a system of standards, permits, and legal enforcement, with civil fines and criminal
penalties for non-compliance. Ideally, a system of pollution fees for obvious, demonstrated
pollution threats should be added as soon as possible.  However, it may be  difficult to gauge,
even in this  limited  application, the precise fee or charge which will provide incentives  to develop
substitute practices or  products without leading to unacceptable market consequences.
Credible Enforcement of Environmental Laws

       The credible enforcement of environmental laws is the bedrock of every successful
environmental management system.  Developing a strong enforcement system is particularly
critical for East European countries, where the past 45 years have demonstrated widespread
disregard  for environmental laws and sporadic or ineffective implementation.  The following ideas
on establishing an enforcement system assume that environmental policy will be based on a
combination of "command-and-control" regulations and law which take additional advantage of
market mechanisms to encourage environmental protection.
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       A credible enforcement system must begin with an approach to law-making and regulation
that recognizes that compliance must be practically achievable. It would be undesirable for
Poland to totally adopt West European or U.S. standards and enforcement practices, since these  .
standards cannot possibly be achieved under Poland's current economic system.  Public respect
for environmental protection as a whole will be undermined as a result. The alternative is for
Poland (and other countries in the region) to develop its own laws and regulations, and phase
standards to achieve target levels on a predictable timetable.

       Effective enforcement requires a means of monitoring compliance.  Inspectors must be
capable of determining emissions from regulated sources.  East European countries should also
establish procedures for resolving disputes between enforcement  inspectors and the regulated
parties.  This is important in a free market economy where private enterprises have huge
incentives for delaying or avoiding costly compliance and attempting to shift the burden of clean
up to society at large. Risk factors and financial  constraints should determine priorities for
monitoring investments.

       Finally, it will  be impractical from the point of view of administrative resources to structure
a compliance monitoring and enforcement system that addresses all pollution sources immediately.
Criteria should be developed for establishing enforcement priorities,  i.e., the importance of setting
legal precedent or potential harm  to human health and the environment.
Emphasis on Pollution Prevention

       Many of the environmental problems facing Poland, Hungary, and the rest of Eastern
Europe may be addressed more effectively by preventing rather than controlling pollution at end-
of-pipe.  By encouraging the use of processes, practices, or products that reduce or eliminate the
generation of pollutants and wastes and protect natural resources, the countries of Eastern  Europe
can move more decisively toward the goal of improving environmental  quality in the region.

       Pollution prevention includes source reduction through redesign of manufacturing
processes, subsitution of non-toxic production materials for toxic ones and, to the extent  possible,
the environmentally sound  reuse and recycling of wastes that cannot be eliminated completely.
Such measures not only reduce risks to human health and the environment, but also conserve
resources by reducing demand for raw materials.

       Thus, in addition to the primary.goal of reducing pollution generation, successful pollution
prevention also results in improved efficiency of processes and practices, including a reduction  in
pollution from the extraction or manufacture of input materials.  In particular, important
environmental gains many  be achieved by applying pollution prevention measures to reduce toxic
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emissions from industrial sources (particularly those which are prone to cross-media transfer) as
well as to municipal and agricultural sources contributing to air pollution or non-point source •
runoff to surface waters.

       East European countries should consider the environmental and economic benefits realized
through the integrated use of technical and non-technical approaches for pollution prevention.,
assessing the potential gains offered by improvements in process efficiencies.  The jatter often
requires changing attitudes and procedures at all levels of the firm, from shop floor to plant
management. The direct, traditional approach of end-of-pipe pollution control may be the only way
to reduce polluting  emissions or discharges from many existing sources. However, costly outlays
for conventional pollution control might be minimized  by process changes that reduce the quantity
of pollutants requiring end-of-pipe treatment, resulting in lower costs overall. Investments in
pollution prevention are particularly valuable for new enterprises or major upgrades of existing
plants.  Decision makers should evaluate carefully the trade-offs between investments for end-of-
pipe treatment and pollution  prevention, particularly as financial resources for this type  of
investment are limited.

       En order  to stimulate  both the public and private sectors to adopt voluntary pollution
prevention measures, information on the toxicity of environmental pollutants and feasibility of
pollution prevention technologies must be collected and disseminated.   In the long term, Eastern
Europe's environmental protection goals will be best served by a comprehensive pollution
prevention strategy that identifies roles for federal and local governments,  industry,  agriculture,
community organizations, and the general public.
Develop Alternative Forms of Financing of Environmental investments

       Poland and Hungary will increasingly rely on market based instruments to implement
newenvironmenta! policy.  Emphasis will be placed on adopting the polluter and user pays
principle, internalizing the environmental costs in product pricing, and public financing for
environmental services.  This will require  introducing a new system of economic instruments and
financing mechanisms.  These economic instruments include effective  pollution charges, user
charges, fines, taxation,  subsidies, and environmental funds. Transfer of authority from central to
local administrative units will be critical for setting appropriate resource charges, such as for
water, to meet fully  operating and maintenance  costs.

       Pollution charges are applied to change the behavior of polluters  and to generate revenues
for environmental protection.  The rate structure of these charges and efficiency of collection
determine how effectively  they can help to acheive the goals of environmental policy.  In both
Poland and Hungary, air  and water pollution charges have been too low  to cover operation and
maintenance  costs of pollution control equipment, let alone investments.  These low rates have no
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effect on the level and structure of output and provide no incentives to obtain environmentally
sound technologies.

       User charges aim at increasing user efficiency of resources.  Like pollution charges, user
charges have been below cost recovery for operation, maintenance and investments for drinking
water. Water intake fees are too low, while  geographic variations in water quality and the costs
of treatment have not been reflected  in price.  This has resulted in an excessive level of water .
demand and increasing losses of water throughout distribution systems.  Similar problems exist
for the energy sector.  When the centrally financed environmental funds are phased  out, these
user fees will need to be increased to finance local services. Financial instruments such as  .
municipal bonds, commercial loans, and the private provision of services such as water supply,,
energy, and waste disposal will need  to be expanded.                              .

       Currently, fines for non-compliance with environmental permits are paid by offenders from
their profits and from the public sector budget.  Proceeds from fines have  been used as a general .
source of revenue for environmental management  and investments, although they are rarely
earmarked to mitigate the specific environmental pollution problems for which the fines are
assessed.   Local fines are often redistributed to other communities for political reasons for the
few  projects that can be financed  from an inadequate pool. Fines have been set at  levels below
the cost of investment in pollution control and therefore  have had no affect in changing behavior.
Fines must be raised, to realistic  levels to  influence investment strategies.  .

       Fiscal policy, including broad-based taxes,  can be introduced to improve the  efficient use .
of resources.  A surtax on hydrocarbon fuels and  differential taxing for leaded fuels, a tax on  the
production of hazardous  materials, and a  surtax on power utilities could be developed to generate
short-term  revenues for environmental investments and affect long-term consumption patterns.
Investment tax credits and royalties or rents  for land can also be used to  capture  the social costs
of resource extraction and pay for reclamation.  The legal and institutional framework for the
issuance of development bonds, particularly at the local and municipal level, will be  crucial to
finance environmentally sound investments.

       Subsidies have.significantly negatively distorted prices and environmental quality.  The
elimination of subsidies (for industry,  energy, water, agriculture  inputs) that have  negative
environmental effects should be a top priority.   Further policy analysis may be needed to identify
the cross-sectoral linkages that may be negatively affecting environmental quality. Other
economic  instruments such as grants, tax holidays, preferential tax regimes, and interest rate
subsidies should be expanded so that when economic restructuring and market signals start to
take effect, environmental improvements  can be further realized.  It is absolutely critical for
Poland and Hungary to learn from the lessons of Western countries that direct subsidies for water
treatment,  waste disposal, and air pollution clean  up have too often resulted in costly  and
inefficient "end-of-pipe" responses.   These type of subsidies can also lead to choice of
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technologies and solutions that promote design of capital intensive projects with excessive reserve
capacity for pollution treatment.

        In the near-term, the use of environmental funds may be necessary to finance some of the
egregious damage  of the past  and to set priorities for clean up.  It is essential that these funds be
made available for investments at the local level and preferably with a matching fund element.
The use of such funds should  be coupled with tax and legal reform to permit locat authorities to
levy and retain taxes, defer taxes, raise financing through bond issues, and stimulate private
sector investments in environmental improvements.
Increase the Level of Private Ownership                                       •        *r-

       The emphasis on economic instruments to alter behavior is premised on rapid movement
to private ownership and deregulation of state control of. the economy.  Privatization will limit the
need for public financing and permit producers to chose the most efficient and economic means
to meet environmental standards.  In conjunction with privatization, governments and companies
should consider developing an Environmental Code of Conduct for all large investments that spell
out the responsibilities of all parties, including clarification  of any liability for past environmental
neglect.

       Private  ownership will  be a key to promoting incentives in a market economy.  Current
disincentives exist from state ownership of production facilities and the  profits realized from that
ownership.  Plant managers have no incentive to make investments in mcdernization and
efficiency,  since they will not realize the profits from these investments.  State ownership also
complicates access to capital markets and new technologies under licence or through joint venture
arrangements.  Lack of access to finances will further cut  off opportunities for growth and long-
term investments. . Private  ownership and the legal right to sell enterprises will be powerful
incentives to investments in modernization that will lead to environmental improvements.
Enhancing Public Participation and Access to Information

       Successful environmental management requires strong public support to assure adequate
protection.  Such support may be gained through utilization of academic expertise, media events
which increase the quality, volume and flow of pertinent information through society, and
programs to enhance the capacity of non-governmental environmental interest groups to organize,
raise and analyze issues, inform  the public, and influence policy making processes.

       Environmental protection has succeeded best where social concern about ecological and
human health  risks has translated into public action on key issues and brought about political
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action.  Nowhere has this been demonstrated more vividly than in Eastern Europe, where, in the
words of one Hungarian activist, "environmental protection was the training ground for
democracy."  During the 1980s, the growth of political participation by an environmentally aware
public led directly to the development  of a broader political awareness and a movement  toward
democracy.  Building the organizational and technical skills of indigenous environmental
nongovernmental organizations (NGOs) can assist  them in the transition from confrontational
tactics used against the former regimes toward a  more affirmative, constructive style that is more
effective in a democratic context.

       Strong public participation in environmental decision making is particularly necessary in .
Eastern Europe because of the delicacy of the tradeoffs between  environmental values and other
social benefits.  Formalizing procedures for public  access to information and a public role in
decision making processes could be enhanced by:

  •    procedures for public access to information concerning government actions;
  •    an environmental impact assessment process that permits public input prior to
       development decisions;
  •    procedures for public review and comment prior to the promulgation of significant
       regulations and policies; and          '                     .
  •    regular publication of information on  pollution levels  and methods by which communities
       can reduce risk from hazardous substances.            '

       By strengthening the capabilities of nascent NGOs in the  region to cultivate and  further
expand public awareness, the  United States and other donors providing environmental assistance
to Eastern Europe can make a  real contribution toward the goal of supporting the growth of
democratic institutions in the region.  Targeted assistance and training to  develop an
environmentally aware  and technically proficient non-governmental community would be a
uniquely American contribution to the  overall political development of Eastern Europe. A major
benefit would be to enhance the ability of non-governmental groups to engage  in policy
formulation through analysis and research.
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                                PRIORITIES FOR U.S. POLICY

       The immediacy and magnitude of environmental deterioration in Eastern Europe require
attention on several fronts.   There  is pressure to mitigate acute, existing pollution in the near
term, while there are equally urgent tasks of assisting countries to develop needed environmental
institutional capabilities and to restructure their national economies away from resource-intensive,
inefficient, and polluting behavior to reduce  pollution in the longer term,. A balance must be
struck between measures to alleviate pollution impacts and actions to preserve remaining areas of
high environmental quality.

      . Guided by the principles for sound environmental  management outlined in the previous
section, the U.S. Government should assist  East European governments to:

  •    develop macroeconomic and sectoral policies that incorporate environmental as well as
       economic objectives;
  •    improve energy efficiency;
  •    encourage institution building, policy development, and public participation to enhance
       environmental protection;
  •    reduce or prevent air, water and soil pollution, particularly in  "hot spots" to reduce threats
       to human health, ecosytems and economic sustainability;
  •    emphasize pollution prevention, particularly in investments for new industrial facilities;
  •    expand protection of pristine natural areas; and
  •    stimulate  private  investments for environmental improvements.

       Examples of cooperative activities include: workshops, training, consultations,  studies,
and short- and long-term technical assistance.  Effective cooperation based on intense interaction
between U.S. and East European  specialists will enable the latter to  be instrumental in the
formation and implementation of  environmental protection programs. Annual and multiyear
workptans should be developed in consultation with  host governments  for each country and,
when appropriate, for regional or  other multilateral activities.
Macroeconomic and Sectoral Policies

       Dramatic and immediate environmental improvements are likely to result from shifts in
fundamental economic policy.  A market economy will introduce measures to improve economic
performance that could also have beneficial environmental effects.  These include introduction of
realistic prices for resources, elimination or reduction of subsidies, privatization and
competitiveness.   Economic policy also needs to address such issues as funding for major public
sector projects (e.g., new municipal  sewage treatment facilities), especially during the transitional
period.
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       Enterprises that have long functioned inefficiently, and therefore are major pollution  .
sources, will be forced by market pressures to improve quality and reduce costs of their products.
Some will close down if they are not economically viable under the new conditions, others will
attract substantial investments to upgrade facilities.  The net result should be a healthier industrial
base, in both economic and environmental terms.

       New policies for the industrial, energy, agriculture, transportation, and housing sectors all
offer broad opportunities to introduce measures that will  improve environmental quality in  cost
effective ways.  For example, investments  in energy efficiency and conservation would reduce
both air pollution and production costs,  and free up resources that could be directed to new
investments, perhaps in pollution control technology.                            .          ""

       U.S. programs to assist in economic restructuring and development of private enterprise
will play an  important role in furthering environmental objectives. Such programs also provide a
unique opportunity to promote U.S. commercial interests in the region by encouraging private
sector involvement in appropriate assistance activities. In addition, these' environmental programs
can contribute to economic  and  sectoral policy development by sponsoring studies,  consultations
and training in key areas.  Effective coordination with major lenders (e.g., the World Bank, the
European Bank for Reconstruction and Development  [EBRD])  and donor countries will increase  •
both the economic and environmental benefits of U.S. assistance programs.
Energy Efficiency Improvements

       The impact of energy supply and use on environmental quality in Eastern Europe is
extensive and acute, and has been  discussed in some detail in the chapters of this report  dealing
with Poland and Hungary.  Many international organizations and donor governments have
recognized opportunities for improved environmental quality and economic performance through
energy conservation.  Their initial efforts are therefore focused on supporting the implementation
of energy efficiency improvements in power generation and industry.

       U.S. programs on energy efficiency in the region  reflect the critical  link between economic
restructuring and environmental protection.  Pricing of energy to reflect actual.costs is integral to
policies of fundamental  economic reform. From the perspective of energy conservation, implicit in
such policies is reliance on the power of market forces to stimulate the efficient use of energy in
all sectors of the economy.                       •

       Therefore, Poland and Hungary should emphasize development of least-cost national
energy supply strategies.  Such strategies must address construction of new and retrofitting of
existing energy supply facilities as well as options for importing  energy, especially electricity.
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Cost and availability of imported fuel is obviously a key factor in light of fluctuating world market
prices.

       National energy supply strategies must be developed by the East European countries.
themselves, with careful attention to demand management that evaluates energy needs in terms
of fuel supply, power generation, power transmission, environmental  costs and end use. Each
point from fuel production to end use must be examined.  This integrated approach should
examine the benefits from changes in fuel mix and quality, process improvements, modifications
in operation and management of facilities, and use of end  output.                       \

       The U.S. Government and other international parties  (e.g., the European Community and
the International Energy Agency) involved in energy programs for the region must coordinate their
respective assistance  efforts in light of the impacts on oil  supply from the Persian Gulf War and
the current Soviet  policy requiring hard currency at world  market prices for fuel.  Past practices of
relying on heavily subsidized domestic energy and cheap Soviet fuel imports that were paid in soft
currencies leave Eastern Europe particularly vulnerable to power scarcities and great economic
hardship from rising prices of imported fuels.
Policy and Institutional Development                                                  .

       Regulatory policy provides the nexus for a series of environmental and economic issues,
including pollution abatement and prevention, regional attainment of standards, regulatory
compliance by firms, and environmental assessment of new investments. The past inadequacy
and ineffectiveness of environmental policy has prompted the new governments of Eastern Europe
to design rigorous environmental standards.  In some cases, the eagerness to redress the
environmental failings of the past has resulted in the promulgation  of standards so stringent as to
be virtually unenforceable  without acute economic and social  disruption, a development that has
caused deep  concern on the part of both existing firms and prospective new investors.

       The governments of the region clearly intend to adopt environmental standards equivalent
to'those of the European Community (EC). Current environmental  and  economic conditions in
Eastern Europe will make this very difficult.  New environmental standards must be fair,  clear and
take into account the difficulties of  achieving compliance.  It may be more appropriate for
governments to differentiate standards for existing and proposed facilities.  In such an approach,
standards for new facilities may be  as  stringent as the best available control technology  will
allow, while standards for existing facilities would be as high  as practicable under the  prevailing
economic and social conditions.

       Given the widespread interest in this issue  (governmental, quasi-governmental, national,
international, public, and private), a structured dialogue among officials of the countries of Eastern
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Europe, the EC, and the OECD to.lay out a strategy for setting clear and consistent standards
would be useful.  The Regional Environment Center in Budapest has indicated a strong interest in
promoting the development of environmental legislative frameworks in Eastern Europe, and could
possibly serve as a point of coordination for such an effort.                                •

       Lasting improvements  in environmental quality in Eastern Europe depend on indigenous
administrative and technical skills to implement sound environmental management policies.
Assistance should be provided for strengthening environmental agencies at the national, state or
county, and local levels.  The  corps of highly capable East European environmental professionals
currently in place should be augmented through  training programs.

        U.S. domestic environmental programs have developed the expertise to provide technical
assistance, training, and  information in the areas of policy and management,  legislation and
enforcement, compliance and  monitoring, risk assessment, comparative risk analysis,  pollution
prevention, public participation, and technology transfer.  Development of scientific risk
assessment and comparative  risk analysis skills is a particularly important tool for managers in
identifying  and ranking priorities, tailoring regulatory and other responses to risks, informing
resource allocation decisions, evaluating risk reduction opportunities, and providing the public with
accurate information on key environmental issues.
Pollution Abatement and Prevention

       One of the highest priorities in U.S. environmental assistance to Eastern Europe should be
to address the existing contamination of air, soil and water in environmental "hot spots," where
acute conditions present a high risk for human and ecological health. Specific criteria for
identifying and selecting priority sites or regions for remedial action need to be developed in
collaboration with  East European officials and  other donors, as appropriate.  Measures to address
priority sites will be  included in country-specific workplans.  In addition, U.S.  programs should
retain adequate flexibility to be able to respond to a limited number of unanticipated, urgent  •
requests for site-specific assistance.

       Pollution from existing industrial sources may be reduced and prevented or minimized in
the future by encouraging inclusion of pollution prevention approaches in investments for plant
upgrades and new facilities.  A major component of programs for both pollution prevention and
mitigation should be the transfer of information on existing (non-proprietary) environmental
technologies and technical information.

       Pollution abatement and prevention will be enhanced through first steps in economic
restructuring and identification of low cost/no cost means to reduce pollution from industry.
Improvements in good housekeeping measures, inventories of existing pollution levels, introduction
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of process changes and monitoring equipment, training of key personnel in industrial audits, and
exposure to Western approaches to environmental management in plants are likely to go a long
way to reorienting behavior in industry. The key to this approach will be to focus on immediate
changes that improve profitability and simultaneously decrease pollution levels.

       For example, a high-priority, site-specific program could be developed for regional air
quality planning and mitigation in Upper Silesia in Poland.  This would target an area with high
population density and critical pollution levels, and would build on ongoing U.S. air pollution
monitoring and energy programs in Krakow, World Bank-sponsored air quality management  and
industrial efficiency programs in the Krakow-Katowice area, and EC and Dutch air pollution -
monitoring initiatives in Poland.  The program would provide integrated environmental and energy
policy recommendations for investment decisions by Poland and other governments.    *

       Other examples of projects include protection of relatively pristine  natural areas, e.g., the
Mazurian Lakes district in Poland,  site-specific hazardous waste assessment and remediation in
either Poland or Hungary, measures to improve  drinking water quality in Borsod county and other
locations in Hungary,  and efforts to reduce paniculate emissions from small stationary sources in
historic cities throughout Eastern  Europe.

Environmental Protection in Krakow

       The ancient Polish capital  of Krakow provides a microcosm of problems of  environmental
deterioration in southern Poland and heavily polluted urban areas  elsewhere in the  region.  The
city lies in one of the most polluted regions in the country.  Krakow is  situated  on the Vistula
River, which is contaminated  by mining and industrial effluent, and is also surrounded by
numerous industrial facilities that generate large quantities of solid and hazardous waste. As is
the case for Poland as a whole, power plants and metallurgical and chemical industries are
responsible for much of the pollutant load.   In addition, Krakow is subject to acute local air
pollution from thousands of coal-burning domestic furnaces and district heating units.  Public
health statistics indicate the severe impact  on human health of chronic pollution; crumbling
facades and monuments show the toll taken by  pollution on cultural and historic monuments.

       Current U.S. Government  initiatives in Krakow focus on the region's major pollution
problems and provide an important basis for future action.  The EPA-sponsored air quality
monitoring system for the city authorized under  the Support for East European Democracy (SEED!
Act of 1989, combined with  technical training and cooperation on regional air quality
management, transfers both technology and know-how to local authorities.  Similarly, the
Department of Energy project to upgrade the Skawina power plant in Krakow is an important
contribution to efforts  to reduce the city's environmental burden from the energy  sector.

       The  need  to reduce paniculate  emissions from domestic heating units and small factories
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is central to plans to improve air quality in the historic section of Krakow.  Programs of foreign
assistance to convert central Krakow's individual heating units to a district system using natural
gas, cleaner burning boilers or pre-treated coal provide a direct approach to the issue.  Technical
assistance to industrial facilities  and power plants in the Krakow and Katowice regions to improve
energy efficiency and environmental performance promise to reduce upwind sources of air
pollution.  World Bank lending and AID-sponsored programs in support of industrial efficiency in
the two regions are therefore quite valuable.
Expanded Protection of Pristine Natural Areas

       Despite the urgency of mitigating the severe pollution in Eastern Europe, assistance donors
should not neglect efforts in nature conservation.  While pollution places all countries of the
region under stress, they are far from completely degraded.  For example, a substantial segment
of Poland is ecologically sound enough  to warrant the designation "The Green Lungs of Poland"
because  of its high level of  air quality and large areas of healthy forest and wetlands.
International cooperation is  necessary to assure the protection and development of this and similar
areas in the region.

       While restoration of  environmentally degraded sites is generally a costly undertaking,
protection of relatively pristine areas can make very effective use  of limited financial resources.
Support for conservation should be a strong candidate for U.S.  cooperation with the World Bank-
managed Global Environmental Facility. The demise of communism in the region has opened a
window of opportunity for the conservation of nature and the preservation of pristine areas;
action should be taken before unwise development decisions foreclose this option.

       The first of these opportunities  exists as a result of the  removal of the "Iron Curtain" from
extensive stretches of land that previously had been used as high-security  border zones.  As this
land was shielded from development for over four decades,  it now provides an opportunity to
preserve substantial areas in their natural state.

       A second opportunity derives from  the  process of privatizing land ownership in the Eastern
Europe.  For a short period  of time, while significant portions of land remain under government
ownership, as privatization and land use laws are being developed, and before market-driven
increases in land prices are  seen, the opportunity exists for governments to set aside substantial
tracts for preservation.  Funds from foreign donors could be used to establish long-term
endowments for the direct purchase of land from the state and  private owners,  or to support the
preservation of key natural areas in private  hands through the use of easements.  Such efforts
could readily build on the  region's experience in developing "landscape parks."
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                                        CONCLUSION

        The United States is uniquely positioned to influence environmental quality and economic
 reform in Eastern Europe.  U.S. environmental specialists-from government, private sector, the
 NGO community, and academia-enjoy great credibility and excellent working relationships with
, their counterparts in the region.

        While it is clear that no single country or combination of donors will be able to contribute
 the billions of dollars required to restore environmental quality in Poland and Hungary, the U.S.
 can share its technical expertise and undertake intensive efforts to help the countries of the region
 develop their own strengths for better environmental management. U.S. programs can  also
 stimulate direct investment in clean technologies and an environmentally benign goods and  ."
 services industry in Eastern Europe.  Finally, U.S.  programs can contribute significantly to
 improved environmental  quality in the region while supporting the  transition to a market economy
 and democracy if they are coordinated effectively with the governments.of the region, multilateral
 development banks, international organizations, and other donor countries.



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                         APPENDIX A
                                            August 28, 1990
                Environmental  and  Energy  Strategy
                 for Central and Eastern Europe
                          INTRODUCTION

    The countries of Central and Eastern Europe (CEE) face
major challenges in addressing the region's severe
environmental degradation.  .This strategy paper outlines a
framework for U.S. assistance in meeting these challenges and
sets priorities for program implementaton in FY90, FY91, and
beyond.

    The primary goal of U.S. environmental assistance programs
in Eastern Europe is to strengthen the region's indigenous
capacity for:                                 ',
                                              >
    short-term mitigation of critical environmental problems;
    and

    medium- and longer-term pollution prevention and
    remediation through institution building and economic
    restructuring.

    Within this context, U.S. environmental and energy
assistance seeks to bring about concrete improvements in
environmental conditions in Eastern Europe while supporting the
overall political and economic reform processes necessary to
improve the quality of life in the region.  In addition, such
assistance should seek to maximize the rapid introduction of
cost-effective energy conservation technologies into CEE to
bring about environmental improvements while lowering the cost
and capital requirements for fossil fuel consumption.

    In order to provide lasting benefit from such assistance,
it is important to strike a balance between technical and
policy solutions, between regional and bilateral activities
(including existing science and technology agreements), and
among nongovernmental organizations.  At the same time, the
U.S. assistance program recognizes the complex
interrelationships among environmental protection, energy
production, use and conservation, public health, agricultural
practices, economic growth, and political reform in the region.

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                               -2-
                      CONCEPTUAL FRAMEWORK
 Program Goals  .

    The goal of U.S. environmental and energy assistance in
 Eastern Europe is to contribute to the improvement of
 environmental conditions in the region by providing technical
 assistance and training, including demonstration of U.S.
 environmental and energy technologies.  The program takes a -
 dual-track approach:  to assist with near-term mitigation of*
 critical environmental problems and to strengthen the region's
 indigenous capacity to address these and related energy
 management problems in the longer term.                      '

    Because environmental contamination is pervasive in Eastern
 Europe, it is crucial to initiate efforts that will provide
 immediate environmental and health benefits.  It is equally
 crucial to begin longer-term efforts to eliminate existing
 constraints to future economic growth and to correct the root
 causes of environmental degradation so that pollution levels
 can be reduced.

    Specifically, U.S. assistance should focus on creating
 indigenous capabilities to:

    reduce ambient pollution concentrations in key regions;

    restructure the economic and political framework to ensure
    that future economic growth is energy efficient and
    environmentally sound;

    incorporate environmental and conservation values in
    government and industry decisions;

    mobilize private initiatives for environmental and energy
    efficiency improvements;  and

    develop the skills and institutional structure needed to
    ensure sound environmental and energy management.

Program Criteria

    U.S.  environmental programs in Eastern Europe are guided by
several criteria to set priorities for and ensure maximum
benefits  from U.S.  assistance.  Although these criteria are
intended  to be used flexibly and in selected combinations,  U.S.
efforts in Eastern Europe should:

    Be consistent with the  objectives and priorities of the
    overall U.S.  economic assistance strategy for Eastern
    Europe.

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     Be  identified as a priority by the host government or
     expert community as well as by the U.S. government.

     Contribute to strengthened capabilities of indigenous
     institutions in local, regional, and national governments,
     as  well as in the private sector.

     Complement and not duplicate other U.S. or international
     efforts; assistance should be coordinated through both
     bilateral and multilateral mechanisms (e.g., the Regional
     Environmental Center in Budapest; G-24 process; the
     International Energy Agency; Development Assistance
     Committee; World Bank; and, when established, the European
     Bank for Reconstruction and Development).

     Focus on issues with significant implications for
     sustainable agriculture, energy production and use and
     economic growth.         .

     Mobilize additional financial and technical resources from.
     the private sector or other donors.       -;

     Promote appropriate environmental and energy solutions with
     proven technical,  economic, and commercial application, as
     well as investments that transfer U.S. technologies and
     promote commercial development in the region.
                       PROGRAM DESCRIPTION

    The goals of U.S. environmental and energy assistance
efforts will be achieved through support of mutually
reinforcing activities targeting three key groups:  government,
the private sector, and nongovernmental organizations (NGO's).
Specifically, U.S. assistance activities in Eastern Europe will
seek to:

1.  Improve CEE government capacity and efficiency in providing
    environmental and energy services.  The governments of the
    region have requested varying degrees of assistance to
    improve their domestic capability to clean up existing
    pollution; increase the efficiency of resource and energy
    use and pricing; develop environmentally sound agricultural
    practices; develop and enforce environmental regulations
    and standards; monitor environmental conditions; and reform
    environmental and economic policies and planning.
       ,. -. *
2.  Support private sector activities which lead to
    environmental investments and improved environmental
    conditions.  Economic restructuring and increased
    privatization and modernization will provide opportunities

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                               -4-
    to use market and policy tools to improve environmental
    management.  Improved environmental conditions can be
    achieved through reform of economic policies, promotion of
    efficient resource and energy use, and development of
    commercial technologies and services.

    U.S. assistance in this area should promote environmentally
    and commercially sound private sector investment, draw on
    U.S. private sector expertise, and provide information to
    U.S. companies regarding commercial opportunities in >
    Eastern Europe in environmental and energy-related fields.
    Emphasis is given to projects that could be financed by the
    Trade and Development Program (TDP),  Overseas Private*
    Investment Corporation (OPIC)/ and the Export-Import Bank,
    and by multilateral sources such as the World Bank and the
    European Bank for Reconstruction and Development.  The
    Department of Commerce, Department of Energy; Environmental
    Protection Agency/  and the Agency for International
    Development should seek appropriate opportunities to
    promote the export of U.S. goods and services.

3.  Provide limited and select support to environmental NGO's
    to promote increased government accountability on
    environmental and.energy issues and to increase public
    participation in environmental and energy decisions.  The
    primary vehicle for supporting NGO's  in the region should
    be through private sector mechanisms  such as the Citizens
   •Democracy Corps.

Priority Program Areas

    U.S. environmental  and energy assistance should focus on
the following areas which are listed in the order of priority.
Programs and projects initiated in FY-90  that were authorized
in SEED I will be continued,  subject to the availability of
funds and consistency with host country priorities.

1.  Strategic planning  and priority setting, including
    technical assistance and local,  national and regional
    environmental assessments.

2.  Technical assistance and training to  facilitate
    environmentally based legal and economic policy reforms.
    Emphasis will be  placed on development of effective and
    enforceable environmental policies and standards as well as
    on overall reform of economic policies to reduce or prevent
    environmental degradation.   In particular, priority should
    be given to development of policies and practices that
    increase indigenous capability to perform environmental
    impact assessments,  promote pollution prevention measures
    in industry and agriculture,  and address transboundary

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                               -5-
5.
    environmental problems.  Activities in this and other areas
    may be implemented in part through the Regional
    Environmental Center in Budapest.

    Promote energy efficiency on a national as well as regional.
    basis.  Working with the IEA, IBRD and the G-24, the United
    States should initiate regional as well as bilateral energy
    efficiency and conservation programs designed to reduce
    pollution, conserve energy, and transmit it more     •   .  ,
    efficiently.  This program should focus, jntec alia on
   . power generation and industrial, transportation and
    residential uses of energy.  The Central and East European,
    countries should be encouraged to develop regional policies
    to deal with energy issues.         '          .   "

    Technical assistance and training that focus on reduction
    of air and water pollution and on improved management of
    hazardous and conventional splid waste in key regions and
    industrial sectors.  Criteria will include activities that
    leverage additional resources, address environmental health
    issues, utilize environmentally sound agricultural
    practices, and lead to direct investments vin remediation .
    and modernization.

    Technical assistance and training to reduce pollution
    associated with energy production and consumption.
    Assistance should include a combination of projects,
   • including energy assessments, clean coal technologies, and
    promoting the development of alternative energy sources.

    Technical assistance and training to encourage .application
    of financial tools that lead to environmental
    improvements.  Some examples are commercialization of
    environmental technologies, privatization or restructuring
    of businesses, and improved government financial management
    and resource utilization.
    Provide limited and select support to nongovernmental and
    government organizations.

    Assistance to promote U.S. commercial interests in the
    region.
7.


8.


9. • Direct funding of remediation and demonstration projects.

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                               -6-
-Hear—Term Activities      .'

    Within these priority areas, U.S. assistance efforts will.
 focus on specific locations where a substantial population and
 important natural resources are under severe environmental
 threat, and will attempt to reduce pollution within a limited
 time frame.  For example, the following programs launched in
 FY90 emphasize near-term activities but are also consistent
 with longer-term objectives:                .

    Completion of country-specific and regional environmental
    surveys, and initiation of technical assistance to develop
    environmental strategies for selected countries.
    Establishment of a regional program, coordinated through
    the Regional Environmental Center in Budapest, which
    includes support for constituent organizations throughout
    Eastern'Europe.
                                           < •
    Introduction of U.S.. technologies in the retrofitting and
    upgrading/repowering of existing power plants in the region.

    Encouragement of private sector initiatives in industrial
    environmental management, energy efficiency and pollution
    prevention.

    Initiation of institution-building activities, (i.e.,
    workshops on environmental policy and its implementation,
    training for governmental and NGO environmental personnel,
    cooperation to develop relevant research and analytical
    capabilities, and economic policy incentives for
    environmentally sound development).

Long-Term Activities                                         •

    Looking ahead, U.S. assistance efforts in Central and
Eastern Europe will support activities that may be initiated in
the near term but will involve a longer  period to achieve
results.  Such activities should:

    Help to address the environmental devastation in major
    industrial regions of Central  and Eastern Europe.  Portions
    of southwestern Poland, northwestern Czechoslovakia, and
    the southeastern GDR constitute one  of the worst ecological
    disaster areas in the industrialized world.  Other areas of
    persistent or severe environmental impact affecting
    significant populations or resource  bases also warrant
    long-term assistance.   These include severa^ industrial
    centers in Slovakia,  major river basins (e.g., the Danube,

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                               -7-
     the Tisza  in Hungary  and Yugoslavia, the Elbe in
     Czechoslovakia  and  the GDR,  and the Sava in Yugoslavia),
     key industrial/population centers  (e.g., Krakow, Prague,
     Bratislava, Katowice, Miskolc, Pecs, and approximately 15
     cities  in  Yugoslavia), as well as  the Adriatic coast of
     Yugoslavia.                                              '

     Support efforts to  prevent significant deterioration in
     what few areas of environmental quality remain in Central '•""
     and Eastern Europe.  Activities of this sort could fortify
     local economies by  stimulating increased revenues from
     expanded foreign tourism.  Growth  in this sector is
     inevitable, and requires proactive, integrated planning;
     Bilateral  and multilateral efforts in the Mazurian Lakes
     region of  Poland are already planned and could provide an
     excellent  model for future activities of this kind.

     Support efforts to  improve, the efficiency of energy
     production, transportation and consumption, and to develop
     comprehensive energy conservation programs in the energy
     consuming  sectors (power generation, industrial,
     transportation, and residential).  These efforts will also
     promote private sector involvement in the development of
     energy conservation technologies in the region:

     Contribute to the reduction of transboundary pollution
     between neighboring countries in Central and Eastern
   'Europe.   Almost every pair of adjacent countries in Eastern
     Europe has some transboundary environmental issue of major
     concern.  Without coordinated regional solutions, the
     efforts of individual countries to mitigate their
     environmental problems will be, at best, only partially
     successful.

    The Regional Environmental Center for Central and Eastern
Europe, which is scheduled to open in Budapest in September
1990, will be well positioned to assist in all of these tasks.
It can help identify the principal sources of pollution in the
Polish-Czechoslovak-East German disaster areas, and can
facilitate the gathering and integration of health effects data
as an early step in setting priorities for the region.   It can
commission inventories of areas still largely untouched by
pollution and provide guidance to governments,  developers, and
local communities looking to expand tourism in ways that are
environmentally sound.   Finally,  it can serve as a neutral
forum, and perhaps even as an informal mediator, for the
discussion of troublesome transboundary pollution problems in
the  region.

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                               -8-
                           CONCLUSION

    The severe degree of environmental degradation in Central
and Eastern Europe requires that U.S. environmental and energy
assistance efforts in the region focus on both near-term
mitigation of critical environmental problems and long-term
remediation and prevention through institution building and
economic and legal reform.  While air and water pollution
levels in certain industrial areas demand immediate attention,
the region's current environmental crisis cannot be overcome
without strengthening and, in most cases, restructuring the
indigenous economic and legal framework.

    The U.S. environmental and energy program in Central and
Eastern Europe seeks to strike a balance among various modes of
assistance to ensure that both near-term and long-term goals
are met.  These activities will involve representatives from
government, the private sector, and nongovernmental
organizations in order to achieve maximum benefit through
improved intersectoral communication and coordination.  U.S.
assistance will also address a mixture of technical and policy
issues through both bilateral and multilateral, arrangements.
Finally, U.S.  efforts will reflect the complex
interrelationships among environmental protection, energy and
resource issues,  public health, economic growth, and political
reform in the region.
                                                                       .

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              APPENDIX B             . .  "

 MINISTRY OF ENVIRONMENTAL PROTECTION, NATURAL RESOURCES
                 AND FORESTRY
NATIONAL ENVIRONMENTAL POLICY
             WARSAW, NOVEMBER 1990

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                                     CONTENTS

  I.  REASONS FOR THE NEW NATIONAL ENVIRONMENTAL POLICY FOR POLAND  ...   3
 II.  SUSTAINABLE  DEVELOPMENT AS  A  FOUNDATION  OF THE NATIONAL  ENVIRON-
    MENTAL POLICY	   4
    The basic principles of sustainable development policy	   4
    Main policies for particular spheres of economy	   5
    Rationalization  for energy management	   5
    Change in the structure of industry	   6
    Reducing the pollution related to transport	'.	   6
    Rationalization of water resources  use and management	   6
    Rationalization of mining and use of mineral resources	   6
    Use, protection and landscaping of living natural resources	   7
HI.  ORGANIZATION OF ENVIRONMENTAL PROTECTION - THE SYSTEM OF AUTHORITY AND
    RESPONSIBILITY	   9
    Government  administration	   9
    Territorial self-government administration   	10
    Responsibility of economic 'entities	10
    Responsibility of citizens, role of the public	10
IV.  PRIORITIES  IN  ENVIRONMENTAL PROTECTION	12
    Near-term priorities   	12
    Medium-term priorities	13
    Long-term priorities	14
V.  ENVIRONMENTAL  POLICY TOOLS	15
    Legal  and administrative  tools	15
    Economic instruments	  16'
    Inspection and monitoring systems	17
    Research	'	17
Vf.  INTERNATIONAL COOPERATION	19
    Poland's participation in resolving of regional and global environmental problems  ....  19
    Frontier areas and relations with neighbours	20
   The scope and utilization of foreign assistance oriented to environmental projects  ....  20

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    I. REASONS FOR THE NEW NATIONAL ENVIRONMENTAL POLICY FOR POLAND
   1. Poland, a country confronted with ecolo-
gical  disaster,  faces  the  very  difficult task  of
reshaping its environmental policy during a time
of radical change in the national economic sy-
stem. This policy refers to the content of the
agreement of the Round Table Talks on environ-
ment and to the changes in political and econo-
mic life of the country. This new policy departs
from what was once a narrow understanding  of
environmental  protection,  to a broader goal  of
sustainable development, i.e. the attainment  of
a balance between social, economic, technical
and environmental conditions in the process  of
development. This kind of understanding for the
idea of sustainable development should be bene-
ficial to addressing society's social and economic
needs.
   2. The interrelationship between the state of
the environment  and  the  health status of the
population ensures public support for sustainable
development. A 'much lower  life  expectancy,
excessive morbidity,  development of environ-
mental diseases  and  reduced physical  and in-
tellectual fitness of the population, as compared
to developed countries, has prompted a heigh-
tened awareness of the issues. It can be assumed
that every individual  wishes to live a long and
healthy life, and to be  convinced that the next
generation will grow under healthy living  con-
ditions. The awareness of these interrelationships
stimulates voluntary  action of society for the
defense and improvement of the natural environ-
ment and  thus  overall living  conditions. Full
access to information on the state of environment
and the  state  of health • is needed  to  ensure
expansion of this process. Similarly, the increased
knowledge of the influence of  pollution on hu-
man  health enhances awareness  of environ-
mental problems, and demonstrates the ways to
reverse negative  impacts due to development.
   3. At the same time, there is common ground
between a sustainable  development policy and
the economic interest of the country. Closing the
existing technical gaps between harvesting, pro-
cessing and consuming natural resources, lead-
ing to waste, high costs and  low quality  of
production can lead to economic benefits. The
opportunity to gain such benefits is growing,
particularly  at a  time of privatization  of the
economy. Thus environmental protection, in  its
broadest sense,  will be  an  ally to a modern.
effective and prudent economy.
   4.  The policy of sustainable development can -
prove to be highly beneficial in the context  of
international cooperation. Poland, being a rather
small  country.on a global scale, is nevertheless
one of the main contributors to-global degrada-
tion of the natural environment (e.g. emission of
C02, S02, NOX, and pollution of the Baltic Sea).
At the same time our country, because of  its
geographical position, plays a  key role in the
Pan:European system of natural  interrelations-
hips.'Interest in the solution to  global issues is
growing steadily, particularly in highly developed
countries. Poland, because  of  its catastrophic.
environmental situation,  has an  opportunity to
attract external financial.resources devoted to the
reduction of global threats, since they  can  be
more  effective in  Poland than in the developed
countries. This will also enable easier access to
foreign aid for environmental projects,.for econo-
mic restructuring  that will benefit the environ-
ment  and for the protection of valuable natural
resource  complexes.  Activities,  undertaken  to
support sustainable development,  will promote
credits, transfer of technology, and reduction of
debts.

   5.  Acceptance of these reasons as a basis for
the ontroduction of sustainable development to
society and to economic circles  will allow  an
effective implementation of the national environ-
mental policy. Launching the potential for hu-
mans to take action, re-orienting business to reap
higher profits through thrifty and  more efficient
use of resources, and the demonstration of a uni-
fied concept of sustainable development as a tar-
get for foreign aid, provide a great chance to cross
a milestone in broadly understood environmental
protection policies.

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                  II. SUSTAINABLE DEVELOPMENT AS A FOUNDATION
                      OF THE NATIONAL ENVIRONMENTAL POLICY
   6. The policy of sustainable  development
means on the one hand a manner of consumption
and production which, in a sustainable manner,
preserves the qualities and resources of the en-
vironment, and on the other hand, active protec-
tion of natural habitats. Both these approaches
towards  a sustainable development policy are
appropriate in Poland.  While an area covering
11% o Poland is considered to be severely en-
vironmentally threatened, approximately 27% of
Polish land remains in a natural or very close to
natural state. This situation calls for a differen-
tiated regional, decentralized approach to en-
vironmental protection in  our country.
   7. The policy of sustainable development will
be implemented through the  enforcement of
environmental requirements in every public and
economic activity throughout the country, as well
at through an approriate policy towards neigh-
bouring states. The  consciousness of each citi-
zen's sense of individual responsibility regarding
environmental protection in all aspects of life: at
home, work  or play, must be raised. Under the
changing conditions of the economic and poli-
tical  system it is necessary to incorporate the
principles of sustainable  development  into the
newly developed legal and economic framework
as well as into the new management system. The
process of economic reconstruction, now under-
way, shall, in addition to social and economic
goals, take into  account environmental  goals.
   An effective policy of sustainable develop-
ment should embrace all sectors of the economy.

   The  basic principles of sustainable
           development policy
   8. Excessive pollution  is, at present, the main
threat to the natural environment. The strategy for
prevention of this threat shall be based on the
principle of control at the source. This means
that the choice of preventive measures and me-
thods of remediation of damages,  should  be
according to the following hierarchy:
   (1) avoidance of pollution generation, i.e.
activities aimed at the reconstruction of manufac-
turing and consumption practices to reduce the
burden of pollutants;
   (2) recycling, i.e. recirculation of materials
and resources; recuperation of energy, water, and
raw materials from sewage and waste; utilization
of wastes to reduce emissions into the environ-
ment; and
   (3) neutralization of pollution, i.e. cleaning of
wastewater, detoxication of combustion gases,
and neutralization and dumping of solid wastes.
   9. One  of the basic  principles of the new
environmental policy shall be the principle of*
law-abtdigness. This,  under our conditions,
means the necessity of reconstruction of the legal
system and the system of enforcement in suctv«
a way that each regulation will be strictly abided,
and that  no opportunities will exist for circum-
vention of the law for reasons of "circumstances
outside, one's control", "public interest" or "im-
possibility".
   10. The principle of common good, shall
be implemented through the  establishment of
institutional and legal conditions to be enacted
by citizens,  social groups and non-governmental
organizations.  Action towards environmental
protection will  be  promoted through environ-
mental education programmes designed  to  in-
duce  a  greater  ecological  consciousness  and
sensitivity of individuals and the  public,  and
a new ethic of behaviour towards the environ-
ment.
   11. In connection with the transition  of the
Polish economy to the market system, environ-
mental policy will be, to the maximum.extent,
subject   the  economization  principle.This
means that the greatest possible advantage will
be taken of market mechanisms, with the
necessary maintenance through state interven-
tion. During the initial period,  market mecha-
nisms should fully rule the production of environ-
mental protection equipment.  Gradually these
instruments will be introduced into other spheres
of environmental policy, for instance, the system
of charges for the use of the environment.
   12. The implementation of the economiza-
tion  principle shall take the form of strict im-
plementation of the "polluter pays" principle.
This means placing full responsibility, including
material liability, for the effects of pollution and
other damages  to  the  environment,  upon the
originator, i.e. subjects utilizing the environmental
resources.
   13. In the reconstruction  of environmental
law and the system of economic instruments, the
principle of regionalization shall be observed
which means:

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   (1) extension (or introduction) of rights of
the territorial (local) self-government and regional
governmental  administration to determine re-
gional charges,  standards  and other environ-
mental requirements towards commercial enter-
prises,
   (2) regionalization of countrywide mecha-
nisms and policy of environmental protection in
relation to three  kinds of areas:
— areas  of endangered environment,  that is
   industrialized .and urbanized areas;
— areas  of  great natural value (with the pre-
   dominance of recreational functions, forests
   and "environmentally friendly" agriculture);
— intermediate  areas  (with predominance of ,
   intensive agriculture and modestly developed
   industrymainty processing industry); and     \
   (3) connection  (coordination) of  regional
policy with  the  European regional ecosystems
(e.g. the  Baltic Sea, and border ecosystems of
neighbouring countries).
   14. Poland's  substantial role in the pollution
of the European environment, as well as the
transboundary influx of pollutants into the Polish
territory,  calls for the need to implement the
principle of .common solution by the entire
international community to address European as
well  as global problems of environmental de-
vastation. A need also exists for the strengthening
of links between regional European policy with
the regional ecosystems (e.g. the Baltic Sea, and
border ecosystems between neighbouring coun-
tries).
   15. Regarding the vast work still outstanding
and the  large investments  required  to  reduce*
degradation  and  to  revive the environment, the
adoption  of .the principle of staging of long
term plans with the selection of priorities for each
particular stage needs to be implemented.

   Main policies for particular spheres
              of the economy

   16. The achievement of significant results in
environmental protection requires reconstruction
of those spheres  of the economy which present
the main source of threat to the environment (i.e.
energy production,   industrial 'processes,, and
transportation); as well  as  a wider implemen-
tation of sustainable  development in such sectors
of the economy (mining,  agriculture, forestry,
etc.),  which are directly linked with the use of
natural resources, i.e. water, minerals, soil, etc.
The necessary steps to be taken with regard to
particular economic activities are presented in the
paragraphs to follow.

  Rationalization of energy management
   17. The power industry in our country, be-
cause of its devastating impact on the earth (i.e.
emission of dangerous gaseous pollutants, ac-
cumulation of solid wastes and salinization of
waters), represents a key  problem  to  the im-
plementation of sustainable development. The
expected structural changes of industry toward
low energy consumption methodologies of pro-
duction are in accordance with the basic principle
of sustainable development in the energy sector.
   The Government shall strive to decrease the
burden of this sector by the implementation of the
following measures:
— effective use and conservation of-energy in ail,
   sectors of the national economy through full
   utilization of market  mechanisms,  taxation"
   policy, and administrative regulations;.
- improvement of coal quality through  deep
   enrichment, removal of pyrite, and  as  well;-
   production of smokeless fuel;.
— modernization of  combustion techniques in
   coal-fueled  power plants and a switch to
   environmentally safe firing systems,  such as:
   fluidized bed boilers, low  emission  burners,
   and application of emission reducing additives
   to fuels;                      .  •'
— gradual change in the  current  structure of
   prime energy carriers towards carriers less
   dangerous to the environment; an'd
— installation of dust and gas reduction equip-
   ment and proper use of that equipment.
   18. Conditions shall be created for the use of
non-conventional sources of energy (geothermal,
small scale and large-scale hydropower as well as
facilities utilizing the energy  of sun, wind and
biogas).
   19. There are prerequisites for the assump-
tion, that  for economic, ecological and  social
reasons, nuclear energy is not an alternative for
producing  energy  in  our  country  in the near
future. When  considering  the. use of nuclear
energy in the distant future,  special  attention
must be given to the issue of nuclear safety. This
refers specifically to the siting, intrinsic safety,
disposal of medium- and low-radioactive waste.
processing of spent nuclear fuel, and disposal of
equipment and structures  after termination of
use.  The analysis  of  radiation safety  must be
related to groups of people threatened by the
operation of the nuclear power plant as well as to

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future generations endangered by the effects of
wastes and residues left behind after the plant has
been shut down.  The weight of safety in the
overall risk  assessent must be  such that  con-
sideration be given only to those technical solu-
tions meeting the highest available quality stan-
dards.
    Change in the structure of industry
    20. The  present re-structuring of industrial
production i.e. the reduction of the complexes of
fuel industry and steel industry which has been in
operation for decades, shall be the guiding  prin-
ciple in  the aim  to improve and protect the
environment. The  changes taking place in the
economic system, formed  by market  require-
ments, must respect  restrictions provided by
environmental law.
    21. It has to be expected that the reconstruc-
tion and  modernization of industry will  in effect
lead to:
—  reduction of  energy, material and water de-
    mand  by production  processes,  which will
    slow down the use of natural resources and.in
    most cases emission of pollutants;
—  broader  implementation of cjeaner  techno-
    logies (producing no or low waste) and the
    recirculation of water, utilization of waste, and
    hermetic closure of production  processes,
    which will reduce the amount of pollution
    rendered to the environment:
—  creation  of  an industry  that  will  produce
    equipment for environmental protection; and
-  installation and proper management of equip-
    ment for the reduction of pollution  by special-
    ly trained services in industry.
    22. Parallel  to activities  aimed at environ-
mental protection, with  regard  to  production
processes, the quality requirements for manufac-
tured materials, as  well as final products, will be
raised gradually.

Reducing the pollution related to transport
    23. Environmental goals in the development
of transport shall be achieved primarily through
improvement of public transport systems and
promotion of "clean" transportation systems with
regard to pollution and noise emission. This refers
to both the means of transport and reloading
devices.
   24. The development of motor transport will
depend on the possibilities for  production and
importation  of vehicles, mechanisms, and ma-
chines with .fuel engines characterized by low
emission  of pollutants, supply of  fuels meeting
international standards, reconstruction or elimina-
tion of engines requiring leaded petrol, and as
well  commencement with the manufacture of
lead-free petrol and motorcar catalyzers.

  Rationalization of water resources use
             and management
   25. A more efficient use of water by industry,
agriculture, and households shall  be enforced
mainly through economic means. Thus, the price
of water for all users will reflect the economic
rarity of water resources on a  regional  basis.
Similarly, the  charges for wastewater disposal-
will be equivalent to the cost of construction and
operation of water  protection facilities and any
changes in production technologies.
   2(1 The government policy for the manage-
ment of water resources will be based on:
- decentralization  of management by the im-
   plementation of a river basin management
   system;
— reduction   in  allowable  concentrations  of
   pollutants deposited into surface waters, and
   the ground, as  well as the introduction  of
   progressively growing charges for disposal in
   order to significantly improve the quality of
   surface- and deep ground waters;
— strenghtening  of economic  instruments  in
   order to enforce efficient use of water and the
   minimization of losses of water in the pipe
   network, and  recirculation of water  in in-
   dustrial processes and energy production;
— continuous increase in the amount of water
   stored in retention reservoirs and delimitation
   of protected drainage areas to secure a high
   quality of the water retained;
— restriction of deep groundwater use for in-
   dustrial purposes to only food processing and
   manufacturing of Pharmaceuticals in order to
   protect the water supplies of  households;
— improvement in  protection of the public and
   national wealth against flood disasters; and
— utilization of rivers for energy production and
   transport where it can be justified as environ-
   mentally safe and economically sound.

         Rationalization of mining
       and use of mineral resources
   27. The protection of mineral resources will
concentrate on abandonment of mining when
a substitute of a given  raw material becomes
available and on the reduction of materials used
to manufacture a single product. Parallel to the
implementation of reforms to the general econo-

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mic system the following action shall be taken:
—  creation  of a comprehensive  geologic and
    mining law which will  guarantee a sparing
    and rational management of non-renewable
    mineral resources, in particular, through in-
    troduction of economic factors corresponding
    with the value of the main mineral and secon-
    dary minerals of the same bed, and by em-
    bracing geologic exploration and exploitation
    by market mechanisms;  and
—  creation,of economic conditions for the mo-
    dernization  of processing  facilities and  in-
    troduction of new technologies for the en-
    richment and purification of mined minerals.
    28.  In the surroundings of mining and pro-
cessing enterprises, action will be taken to reduce
the intensity and range of environmental abuses.
One of the means by which to increase effective
use of minerals will be a system of concessions
required for the access to beds and deep ground
waters,  including thermal and currative sources.
    29.  Geologic exploration for  minerals and
deep waters  will be continued simulatenousiy
with improvement and development of research
and cartographic methods.
    In exploration and documentation activities,
the full assessment of mineral beds shall dominate.
Thus ecological parameters  will be introduced as
principles for exploration,  documentation and
stock taking of mineral beds.  The criteria regarding
the degree of rarity of a mineral shall be  included
into the bed classification system, as well as the
elaboration of particular principles for the manage-
ment of particular kinds  of beds. Special regula-
tions  shall be  issued to enforce the  duty of
determining   all  the  resources of all  minerals
present in the deposit.

Use, protection and landscaping of  living
             natural resources
    30. The  goverment  shall  support  the im-
plementation of the concept of  an  integrated
system of protected areas through the establish-
ment of new national parks and natural reserves
as well as landscape parks and areas of protected
landscape. The basic role of these areas will be to
preserve the natural environmental and landscape
qualities which have great scientific and cognitive
values, ensure the ecological protection of areas
under special protection, and  as well, protect
densely populated urbanized areas with  heavy
economic activity by retention of areas oriented
towards "green" methods of husbandry and in
  creation of conditions for outdoor  recreation
  associated with areas of intact nature.
     31.  Structural improvement of protected areas
  is  necessary,  among others,  by distinguishing
  between national and local landscape parks.
     32.  It will be necessary to increase the acreage
  covered by the ecological system of protected
  areas up to 30% of the country's territory, out of
  which the area of national parks should reach 1%
  and the natural reserves 0.4-0.5%. As.airesult. all
  the eecosystems and biotopes, representing na-
  tural communities typical  of  Poland's-./ange of
  geologic formations still remaining untouched or •
  only slightly affected, should be embraced by full
  or  partial slightly protection.
'     33.  The main goal of the government policy is
i  to  retain  forests  as the  main component  of
*  ecological balance of the biosphere and to retain
  all  other living natural resources specific to the
  environment of our country. The basic assump-
  tion of sustainable development is the integration
  of  rational management  of  natural  resources
  while protecting them against the negative im- *
  pacts of economic activities.
     34.  The prospective goal of actions taken> by
  the government administration, the self-govern-
  ments, and the public should be the attainment of
  a situation which would secure:
  —  permanent functioning  of ecological systems
     through preservation of valuable natural and
     cultural complexes, arid the full array of  plant
     and animal  species, as well as their  gene
     pools;
  —  preservation of useful  values of natural re-
     sources, intensification of their  productivity
     and biological and chemical purity; and
  —  setting up of  adequate  natural  areas  on
     a countrywide, regional, municipal, and local
     district scale for proper mental and physical
     development of humans, and effective protec-
     tion of public health  and recreation based
     around natural resources.
     35. Forest  resources  constitute a   basic
  treasure. Their preservation and longevity present
  an important factor in a balanced ecosystem and
  a source of renewable raw materials. Forests fulfill
  a variety of functions for purposes of sustaining
  the environment, as well  meeting a variety of
  social and economic  needs.  Their preservation
  should be a goal of everyone engaged in econo-
  mic and public activities.
     36. The following activities shall have  the
  greatest weight in forest management:
  -  augmentation of biological resistance of  fo-

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rests and their ability to self-regulate forest
ecosystems;
neutralization  of processes  leading to the
death of forests, particularly mountain and
other stands located in threatened areas  of
environment;
preservation of the gene pool of wild plant
and animal species;
increased  forest  area,  including watershed
areas, to prevent run off thus increasing the
biological productivity  of the area;
formation of  natural,  multifunctional  forest
communities,  enrichment  of the  biological
structure  of communities close to natural
areas,  and the creation of  substitue com-
munities in degraded areas; and
making better use of forest's natural ability to
respond to improved management practices.
37. The government shall promote the con-
servation of agricultural land and improvement in
quality of food  crops. The basic  directions  of
acitivity should aim at:
— reduction and elimination of negative impacts
   of farming on the natural environment;
- protection of soil, but first of all the elimina-
   tion  of degradation processes and the neu-
   tralization of chemical pollutants of soils;
— reduction of land area appropriated for build-
   ing purposes and minimization of deformation
   of biologically active soil surfaces, particularly
   with regard to highly productive arable land;
— counterating processes leading to the lower-
   ing of ground-water tables and negative im-
   pacts caused by drainage systems;
- Encouragement of ecologic/bio-dynamic farm-
   ing  systems and  production  of  "healthy"
   food; and
— reclamation of land degraded by industrial
   activities.

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        III. ORGANIZATION OF ENVIRONMENTAL PROTECTION - THE SYSTEM
                          OF AUTHORITY AND RESPONSIBILITY
   38. The State, as an organizer of economic
and public life, is in the end, accountable to the
citizens for the overall state of the environment
and the use of natural resources.
   39. The duty to protect the environment rests
on each individual and  croporate entity. The
public has the right to come out in defense and
organize itself for the protection of the environ-.
ment. The government and self-government ad-
ministration, which constitute the system of en-
vironmental authorities, are responsible for provid-
ing conditions to implement complete and publicly
acceptable environmental management systems.

        Government administration
   40. The main duties  of  the central  state
authorities are:
— to secure proper health  conditions for the
   population;
- to provide conditions for trie thriving of nature
   in prosperity;
- to  create  an   institutional  environmental
   management system  that ensures effective
   and efficient implementation of  protection
   measures;
— to create a coherent legal system of environ-
   mental protection;
— to introduce  a  system of economic instru-
   ments and mechanisms for financing environ-
   mental protection;
— to-maintain an  administrative supervision  of
   the quality  of  the environment, including*
   objects of protected nature;
- to provide conditions for the creation of  an
   effective and economically efficient environ-
   mental monitoring system;
— to initiate and coordinate practical activities
   aimed to protect the environment which will
   be carried out by territorial government ad-
   ministrations  and  state  commercial • enter-
   prises;
- to stimulate environmental related research
   and environmental education for teachers and
   children, as well as upgrade courses for pro-
   fessionals;
— to create conditions and  inspire activities to
   raise public awareness and sensitivity to the
   environment; and
— to carry out international policy in the sphere
   of environmental protection.
   41. As economy shifts  towards a market
system, the activities in environmental protection
should be reckoned among branches which require
state intervention, thus, which cannot be subjected
to the market mechanisms alone. The government is
responsible for the elaboration  of  mechanisms
and the scope of such intervention.  It is the duty
of the  government to establish  technical  stan-
dards preventing wasteful utilizatiohVof geogra-
phic space, raw materials and  energy, and  to
promote technical designs and structural"changes-.
which will reduce the negative impacts on natural
resources  affected by  industry  and economic
development.
   42.  The  main  task  of the  territorial
government administration is to:
   (a)  monitor and  predict the environmental
situation,
   (b) regionalize the national  environmental
policy,   .                             '
   (c)  issue  administrative decisions  as  pres-
cribed  for the governmental administration and
deriving from the environmental law,
   (d) 'supervision and inspection of commercial
enterprises,
   (e)  coordination .of  all  kind  of  environ-
ment-protecting activities on  their respective
territories.
   43. The  territorial  structure  of  government
administration will be developed in three forms:
   (a)  regional (above the voyevodship) struc-
ture taking care of particular areas of environ-
mental protection;  .
   (b) presently operating voyvevodship struc-
tures with a wide scope of competence in the
execution of environmental laws  (issuance  of
administrative decisions foreseen by the law);
   (c)  district (within  the voyevodship) struc-
tures aimed at direct cooperation with territorial
self-government.
   44. The regional structures of government
administration .will  be established, with great
caution, when the voyevodship  boundaries pre-
sent a barrier to resolving environmental pro-
blems.
   At  present, these conditions are flufilled  for
the following areas:
— water  management based on  a river basin
   self-financing arrangement (such structures
   are in the course of establishment);
— state environmental monitoring (independent

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    of structures which may be arranged at voye-
    vodship level);
 -  forest management, in accordance with natu-
    ral forest regionalization); and
 —  nature protection
    45. The  competence of  the  voyevodship
 government administration  will  be  adjusted
 through:
    (a) transfer of partial control to the regional
 authorities (water administration, environmental
 monitoring);
    (b) transfer  of part  of  competence  to the
 territorial self-government (e.g. applying penalties,
 administering decisions to commercial enterprises
 of  local scope,  and disposing  of part of target
 funds etc.);
    (c) extension  of a  regional government's
 rights to pursue regional environment protection
 policies (determination of standards stricter than
 those of the rest of the country, raising fees and
 penalty charges, deciding on the transfer of rights
 to use the environment etc.).
 Territorial  self-government  administration
    46. The regional  structures of the govern-
 ment's administration of environmental protec-
 tion  shall  present authorities  with control  of
 detailed activities of voyewodship authorities and
 directly support  the  activities  of  territorial
 self-governments.
    47. Strengthening of territorial self-govern-
 ment as the territorial  cell of environmental
 authority shall be implemented as follows:
 -  strengthening of the commune's position in
    the process of investment siting  procedures
    not only in relation to local investments, but
    also in relation to projects of voyevodship and
    cduntry-wide importance and providing full
    rights to participate in the impact assesment
    practice;
 -  introduction  of procedures that would allow
    the commune to take the role as initiator or
    party in  cases where authority usually  rests
    with the voyevodship or the central authority
    (e.g. designation of natural monuments, re-
    serves, communal parks and other protected
    structures located entirely or partially within
    a commune's  boundary  and tightening  of
    standards as well as raising fees and penalties
    above the level adopted for the whole country
    or voyevodship);
 -  participation in disposal of a portion of target
    funds originating from remittances paid  by
    enterprises exerting influence on the environ-
    ment within the commune's area.
— participation in the procedure related to licens-
   ing (i.e.  issuance of permits to pollute the
   environment).

Responsibility of economic entities using
       the environment for effects
             of their activities
   48. Holding   users  of  the   environment
responsible for the resultant impact due to their
activities is the basic principle for the environ-
mental legislation presently under review. This
principle will  also  be the basis  for practical
enforcement of these laws and for the policy of
government and self-government administration
in environment and self-government administra-
tionfin environmental protection. Responsibility
shatf be understood as a moral standard for the
evaluation of the behaviour of citizens' and eco-
nomic entities; as well as a legal standard with
respect to material, civic and penal law.
   The above mentioned responsibility will con-
cern every user of the environment, independent
of the organization of the economic life, and  in
particular:
- every citizen and every household;
— every entity in  charge of organized living
   arrangements,  (e.g. housing  cooperatives,
   communal enterprises, communes, and vo-
   luntary or compulsory societies of communes);
   and
- every producer or provider of a service,
   49. The legal respomsibility shall be defined
in particular to the:
— obligation  to remove the effects of, or' ter-
   minate activities, harmful to the environment;
— compensation for the proved damages caused
   to individuals or corporate bodies;
— bearing of  payments provided for by environ-
   mental law and appropriate to the reclamation
   of the degraded environment;
— discharge of payment of imposed penalties for
   offences and misdemeanour affecting the en-
   vironment.

   Duties of  citizens, role of the public
   50. The  duties of citizens with  respect to
environemental protection are of a dual nature:
— personal responsibility for their own activities
   affecting the  environment combined  with
   household  management economic activity
   on own account recreational use of environ-
   ment etc.; and
— personal participation  in  costs of environ-
   mental protection,  since  eventually all the
10

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   expenditures incurred by the state or economic
   entities are debited tothe citizen in the form of
   taxes or prices of commodities acquired.
   51. The interest of local community leaders to
cooperate in the framework of councils, informal
groups, schools, and educational establishments
is of fundamental importance.
   Support for informal environmental organiza-
tions and their contacts with similar organizations
in  other countries is an important  element of
efficiency in environmental policy. This efficiency.
however is based on a democratic selection of"
goals and verification of paths to their attainment.

   52. The environmental  goals  are accepted
within the framework of religious doctrine. The
influential power of church institutions should
be, to a higher extent, included in the develop-
ment of social  behaviour  that  supports  the
pro-ecological policy of the state.
                                                                                            11

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                    IV. PRIORITIES IN ENVIRONMENTAL PROTECTION
    53. Given the long term negligence of en-
 vironmental  protection that has taken place,  as
 well as the limited availability of resources to  be
 allocated by the State and the public to address
 the situation, there is a need to prioritize environ-
 mental protection goals, draft a schedule for their
 attainment and identify  financial  sources  with
 which to execute particular tasks.
    The  priorites for environmental protection
 have been presented below within three different
 time frames:
 —  near-term priorities — implementation should
    be commenced  immediately with the attain-
    ment of results envisaged within 3 — 4 years.
    Within this group outstanding tasks, the
    execution of which  cannot be postponed
    because of their effects on human  health  or
    life, are considered;
 —  medium-term priorities — embracing syste-
    matic action aimed to protect water, air, land
    and nature to counter the unfavourable trends
    of emission of pollutants into the environment
    causing the continued degradation  of the
    environment, to  reverse those tendencies and
    to  substantially limit  the pressure on the
    environment.  The  implementation  of  me-
    dium-term goals should  enable Poland  to
    move closer to European environmental stan-
    dards and  allow  it to join  the EEC.  It  is
    envisaged that  medium-term goals  should
    gradually be raised during the implementation
    of the short-term priorities programme (within
    3—4 years) and completed within approximately
   ,10 years (by the year 2000); and
 — 'long-term priorities — the full introduction  of
    sustainable development principles into the
    entire economy  and the attainment of such
    a state of environment which,  according  to
    our present citeria, could be considered desir-
    able, securing safe  public existence and sta-
    bilization  of a thriving natural environment.
    The long-term  goals, as it  is  understood,
    require a period of 25—30 years to be achieved
    (at least until 2020).
    54. Regarding the implementation of environ-
 mental protection priorities, the activities of state
 institutions, local governments, economic enter-
 prises, non-governmental organizations and other
 organizations as well as individual citizens should
 be concentrated. Those  activities will be  sup-
 ported  financially and organizationally  by the
 State.
   The environmental priorities formulated below
do not include all actions that will be required. It
should  be understood that  there  might and
should be further countrywide, regional, local,
enterprise-oriented,  or  even individual environ-
mental goals, formulated  and implemented  as
called for by the law or emerging from needs felt
by the public and expressed by social and political
organizations including environmental NGOs.

           Near-term priorities
   55. The  following  near-term  priorities are
being adopted:
 ; (1) abandonment or change of manufacturing
profiles or implementation of protection measures
under extraordinary  circumstances (i.e.  break-
-down) in industrial plants emitting dangerous
substances into the air, disposing of toxic sub-
stances  into waste waters or storing dangerous
substances threatening to  human health or life.
This refers to the 80 industrial plants included in
the countrywide list as well as 500 other enter-
prises which will be indicated by the voyevodship
lists under preparation. They  should be subject
to intensive supervision by the environmental
authorities and the  public;
   (2) implementation of the coal  quality im-
provement programme (pyrite removal from sul-
phur — containing coal and rise in calorific value
of pulverised energetic coal) and the adaption of
coal used for domestic purposes to the world
standards as well  as the utilization of simple
reserves (for instance  the improvement of the
efficiency of technical supervision, organization
and management aimed at the reduction of par-
ticulate  and S02 emissions into the  air). This
activity will initiate the implementation of en-
vironmental and economic programmes aimed at
the improvement in energetic efficiency and in
more efficient use of resources;
   (3) noticable reduction in dust and gaseous
emissions, particularly  in  Upper Silesia  and as
well in  other regions  where environment and
public health is threatened (this refers especially
to the reduction of low and dispersed emissions);
   (4) reduction of  deficits in  quality drinking
water supplies  for urban areas, mainly through
the construction of sewage treatment plants sited
along tributaries of Vistula, Oder, and Pomeranian
Rivers, with simultaneous  modernization of wa-
terworks systems and the  increase in the water
retention capacity as well as  through  improved
12

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. water management (including realization of wa-
 ter bills);
    (5) radical reduction of the solid waste burden
 through  the implementation  of  an adequate
 management system of industrial and municipal
 solid wastes and disposal of toxic wastes;
    (6} gradual diminution of food crop produc-
 tion on soils affected by toxic substances, first of
 all in the Upper Silesian region (combined with
 the change in the profile in agriculture in those
 areas);
    (7) initiation of the reduction .of environ-
 mental effects caused by means of communica-
 tion and transport;
    (8) improvement of ecological security on
 state borders through the extension  of  frontier
 monitoring systems (air, water, solid waste);
    The above list of priority tasks for the next
 period has to be supplemented with additional
 two which have a different character:
    (9) intensive afforestation programme, par-
 ticularly of watershed areas and land unsuitable
 for agricultural use;
    (10) education of the public with particular
 emphasis on the development of responsibilities
 for the state of environment and respect for the
 nature.
    The impact of the latter activities will be visible
 only  after many years. Nevertheless any post-
 ponement  in their  commencement  would  be
 inappropriate. They belong to that kind of invest-
 ments which cost of implementation is manyfold
 lower than the cost of repair of damages, which
 otherwise could be prevented.

           Medium-term priorities
  .  56. With regard to air quality protection, the
 following  priorities have been identified:
 -  reduction of S02 emissions into the air by 30%
    as compared to levels of 1980 (i.e. from 4.2
    million tons/yr at present, down to 2.9 million
    tons in the year 2000);
 -  reduction of N0xemissions into the air by 10%
    (i.e. from 1.5 million tons/yr at present down
    to 1.3-1.4 million tons  in the year 2000);
 —  reduction of dust emissions into the air by
    about 50% (i.e. an increase in the elimination
    of particulates from stackgases  emitted by
    industrial and power generating  plants from
    92% at present to 96% in the year 2000);
 -  reduction  of  emissions  of volatile  organic
    substances,  hydrocarbons  including, (ben-
    zo-a-pyrene),  heavy  metals  and  other  air
    pollutants;
- taking up actions adequate to those en-
   deavoured by the international community to
   counteract global climate change (i.e. reduc-
   tion  in  emissions of C02 and  other gases
   causing greenhouse effects, and protection of
   the ozone layer).
   57. Within the scope of protection and rational
use of  water  resources  the  priorities are  the
following:
— reduction of pollution loads disposed of by
   industry and municipalities into the rivers by
   50% through the decrease in the amount .of
   untreated industrial and  municipal  sewage
   from 0.5 billion and 1.2 billion m3 at present to
   0.1 billion and 0.6 billion m3 by the year 2000
   respectively, as well as increasing the rate of
   highly effective wastewater treatment systems
   (biological  and chemical) in the overall se-
   wage treatment from the present 48% to 70%
   in  the year 2000;
- improvement of sanitary  conditions in rural
   areas by supplementing village pipeline water
   supply systems with adequate sanitation solu-
   tions;
— alleviation of water shortages in urban areas
   and  provision of water supplies for drinking
   and production purposes in the villages;
— reduction of negative impacts resulting in
   saline water disposed of into the Upper Vistula
   and Oder Rivers; and
— utilization of deep groundwaters (termination
   of industrial use of these resources except for
   food and pharmaceutical  industries);
   58.  For the remaining issues  regarding en-
vironmental protection the  following priorities
have  been  identified:
— proper processing  or safe storage of all ha-
   zardous wastes;
- reducing all massive industrial wastes requir-
   ing storage/dumping by 20% and increasing
   the rate of their utilization;
- creating a system of preselection and recycl-
   ing of municipal wastes and introducing tech-;
   niques of composting, incineration,  and bio-
   gas production;
- recuitivating  degraded land to be put  back
   into natural use;
- implementing noise control  so that no more
   than  25% of the total population would be
   temporarily exposed to noise exceeding the
   set standards; and
- creating a system of early identification of non
   ionizing radiation and counteracting the threats
   of ionizing  radiation  to  the environment  as
                                                                                            13

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   welt as catastrophic emissions of chemical
   substances.
            Long-term priorities
   59. The following priorities have been outlined
to meet  a long-term strategy for environment
protection:
 — introduction of environmentally friendly, mo-
   dernized manufacturing techniques throughout
   all production processes with  support being
   given to the implementation of clean tech-
   nologies rather than to the construction of
   expensive "end of pipe" cleaning equipment;
— restoration of environmental damages and the
   creation of a system preventing their repeated
   occurrence (i.e. in response to market distor-
   tions);
- restructuring of the economic system to work
   in tune with environmental  protection such
   that economic gains are linked with the state
   of the environment;
— consolidation of environmental, cultural, and
   ethical values, as well as attitudes that provide
   for the draw of benefits from dispersed actions
   useful to the environment;
— consolidation of the philosophy of sustained
   development as a durable base for economic
   and social policy of the State, local municipal
   self-governing bodies, enterprises, and institu-
   tions, as well as individual citizens.
   The results of the implementation of the above
listed activities and meaures will largely depend
on the prioritization made today. The adoption of
a comprehensive environmental programme for
the economic and social development of Poland
is at  stake.
   60. The implementation of the. long-term
strategy  of  environmental  protection  requires
inputs assesed at the level of 2500 trillion  zloty
(i,e.  260 billion  US dollars).  This figure also
cdntains the cost of the desired change in the
structure of the economy  and the switch  to
environmentally-safe technologies. The environ-
mental protection programme is thus envisaged
in the long term as an integral part of the strategy
for the development of the economic system.
14

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                          V. ENVIRONMENTAL POLICY TOOLS
   61. Effective implementation of the national
environmental policy must be supported by tools
that will enhance the implementation of environ-
mental  protection  priorities;  and equipment
designed to monitor emissions and enable effective
control of their spatial and temporary distribution.
The legal and administrative regulations, econo-
mic instruments, inspection and monitoring sy-
stems, as well as research, should be regarded as
such toots.

      Legal and administrative tools
   62. The  ultimate solution to  environmental
degradation in Poland is the complete codifica-
tion of environmental protection regulations. Ho-
wever, such innovative solutions on a global
scale must be considered for development in the
future. At present, a  complex amendment  of
existing acts is  necessary. It is considered  most
appropriate to draft one comprehensive act con-
taining general principles and common standards
for all forms of environmental protection; and
divisional  acts,  such as the Water Law, regula-
tions concerning forests, the Hunting Law, the
Mining  Law, the Ecologic Law or the Building
Law.           .
   63. The  basic goals for the changes  being
introduced,  complying  with stipulations of en-
vironmental .groups, will be the following:
- a full coherence with other elements of the
   Polish  legal system;
— accordance  with international obligations
   adopted by Poland;
— assurance of feasibility of duties imposed and
   practicability of rights granted; and
- clarity  and  expticitness of the  language
   adopted.
   64. The main principles of the proposed legal
solutions should in particular be:
— the principle of universality of environ-
   mental protection, expressed by  the unified
   imposition of  duties towards all subjects,
   including administrative organs and any other
   organizational units and physical persons. In
•   effect, however, a greater degree of specifica-
   tion for concrete duties  required by commer-
   cial subjects should.be elaborated;
- the  principle  of  sustainable  develop-
.   ment, demonstrated in particular  by the
   unequivocal statement  that the duty of en-
   vironmental  protection cannot  be  treated as
   one which remains  in conflict with the in-
   terests of the economy, but which constitutes
   an element of proper economic management,
   while any activity violating that duty is ab-
   solutely illegal;
- the principle of including the environ-
   mental protection requirements in plann-
•   ing activities, combined  particularly with
   the augmented role of physical planning in the
   proper management of natural resources;
- principle of cost efficiency meant as the
   attempt to implement environmentaKgoals at
   the lowest cost possible to the public under
   efficient application of market mechanisms;
- principle of  non - exceedance of the
   legally or administratively established scale of
   intrusion into the environment even, when the
   potential users are prepared to take the burden
   of financial compensation {e.g. in the from of  '
   monetary fine) for the abuse;
- principle of  the perpetrator's  respon-
   sibility for  the infraction or menace to-the
   environment incorporated  into a diversified
   and  specified  system of sanctions of civil,
   administrative, penal  and labour legislation;
- principle   of active  participation  of
   citizens and  public organizations, exp-
   ressed by various forms of public inspection of
   environmental protection, the universal right
   to advance claims aimed at abandonment or .
   limitation of acts against the environment, and
   the universal right of access to  information
   about the state of environment and the means
   of its protection;
- principle of regionalization of environ-
   mental protection  provided by the transfer
   of the majority of ruling rights to the local
   administrative  entities organs and by leaving
   only the general, state rights, to the central
   authority;
— principle of local self-government par-
   ticipation in securing environmental protec-
   tion, understood as a gradual process in the
   growing role of self-government entities due
   to their strengthened position and elevation of
   expertise.
   65. The principles of the new environmental
laws, indicated above, will be included into legal
acts presently under preparation. This refers in
particular to the following laws:
- the  Natural Environmental Protection Law,
   which will regulate problems embraced by the
   presently valid Acts of Protection and Shap-
                                                                                         15

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    ing the Environment and the Act of Protection
    of Nature;
 —  the Water Law, repealing the present act of the
    same name, taking  into account in particular
    the changes in the water management system,
    changes in ownership, and the development
    of local self-governments;
 —  the  Forestry  and Forest  Management Law,
    replacing regulations presently contained in
    various legal acts, primarily stressing the en-
    vironmental functions of forests;
 -  the  Geological and Mining Law,  replacing
    outdated legal acts and introducing particular
    changes aimed at the assurance of environ-
    mental protection requirements in exploration
    and exploitation of mineral and fossil resources;
 —  the Hunting Law, adapting the  regulations on
    game  management, game  protection,  and
    hunting to the present requirements for protec-
    tion of forest flora and fauna;
 —  the State Inspectorate of Environmental Pro-
    tection Act, being  a new law aimed  at the
    transformation of this institution into a strong,
    centralized organ having broad rights of an
    "environmental police".
    66,  Later on, extension of regulations concern -
ing extraordinary menace to  the environment
through their adaptation to the legislation con-
cerned  with other  threats to human life  and
health, to nature and the national economy, is
envisaged. It should be a separate, complex legal
act. A similar, complex  legal act is also  necessary
with reference to all the issues of waste manage-
ment.
           Economic instruments
    67.  All the environmental fees and the emission
 permit markets together with  the supplemental
 subsidies (granted in the form of direct grants, tax
 exemptions or preferential  credits etc.), tools
 which do not strain on the state budget (i.e. tax
 diversification, deposits on dangerous substances)
 and finally the penalties for the abuses of per-
 missible standards of  use of environmental re-
 sources, belong to the group of economic in-
 struments. Based on the experience of the most
 developed market economy countries, the eco-
 nomic instruments  shall supplement  legal and
 administrative tools.
    68. The economic  instruments will serve to
 minimize  public costs  of environmental protec-
tion through an effective differentiation of protec-
tion requirements; hence subjects  (i.e.  polluters),
bearing the lowest costs of environmental protec-
tion should be  faced  with  the most stringent
standards. In practice, this principle will be im-
plemented through the issuance of permits for the
use of environmental resources and emission of
pollutants.  Those  permits should  be-tradable.
Thus a possessor of a permit should be able to sell
that permit to another subject, in accordance with
the authority in charge. A second goal of  eco-
nomic instruments should to be collection of
funds to be used for environmental protection.
The fees, as well as other instruments, will provide
motivation for environmental protection.
   69. During the process of addressing environ-
mental problems that have built up over the years,
the "polluter pays" principle will be applied with
some limitations. The role of ecologic charges in
tHis case will essentially mean the collection of
funds, which  in turn  will be used selectively,,
depending on the urgency of particular tasks, to
co-finance  environmental protection  projects.
For this purpose the rates of charges and penalties
will be raised by  150%  and  the procedure of
collection will be modified in such a way which
would secure  receipts at the level of-5.5 billion
zloty in 1991.
   70. Decentralization of assessment,  execu-
tion,  and utilization of  environmental  fees is
envisaged. The imposition of an environmental
levy on fuels (a measure implemented or planned
for implementation in some OECO countries) as
a source of income to  the National Fund of
Environmental Protection and Water  Manage-
ment is being proposed. These funds are needed
to co-finance  national projects  or  local under-
takings which cannot be financed through regional
budgets alone. Alternative sources of the National
Fund's income can be:
   (a) participation in a turnover  tax (in the
future, the value-added tax) imposed oh com-
modities or activities particularly harmful to the
environment,
   (b) subsidies from the state budget.
   71. The bulk of environmental charges will
result from the principle of self-financing dif-
ferent branches of environmental protection, like
water protection, air protection, waste utilization,
etc. The possibility of supporting  appropriate
actions by the central and local budgets during
the coming years to compensate for environmental
arrears will be made available.
   72. An exploitation charge for the  access to
mineral deposits will be imposed. This will differ
depending on the geologic position and mining
conditions of the ledge. This charge will be taken
over by the state treasury, being the owner of the
16

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 country's mineral resources. After the establish-
 ment of a competitive exploration and mining
 market, the rote of the exploitation charge will be
 replaced by a license fee determined at auctions.
 During the transitional period,  exploration and
 documentation costs will be borne by the state
 budget,
   73, A forest tax will be imposed'on the users
 of forests. This tax will depend, among others, on
 the quality of the ecosystem, and shall replace the
 present profit  taxes of the State  Forests enter-
 prises. Subsidies, to support activities concerned
 with removal of massive damages and reforesta-
 tion needed by the country for environmental and
 economic reasons shall be. provided.
   74. Subsidizing   environmental  protection
 costs with  public  funds  (e.g.  budget,  target
 funds) should be maintained. These subsidies
 will be used for the creation of minimum municipal
 infrastructure.  Subsidies for the environmental
 protection programmes in the industrial sector (at
 a limited scope) will be part of the governmental
 programme  for the  change in the economy's
 structure,
   75. The principles of subsidy provision will be
changed from the present tax  relaxations and
preferential credits to assure maximum efficiency
of those resources from the point of view of the
environmental policy of the state. It is envisaged
that selected banks (e.g. the presently organized
 Environmental  Protection   Bank  Ltd.)  will be
allowed to provide preferential credits, thanks to
the separation  within the state budget of special
 means, to cover differences in interest  rates.
   76. Economic intruments will be  initiated
 which do not  require state budget intervention
 and are aimed at the creation  of financial  in-
 centives for environmentally friendly changes in
 the economy and public attitudes. In particular,
 this will, among others, concern the bail money to
 be duly paid by those turning over commodities,
 substances, or packages particularly dangerous
 to the environment. This  kind  of procedure is
 planned to be imposed on the turnover of car
 batteries, dry batteries, engine oil, selected che-
 micals, and packing materials used for pesticides.
 Differentiated taxes and custom duties leading to
 higher taxation of commodities potentially more
 harmful to the environment will be developeH
   77. The present penalty system for the infring-
 ment on the environment will be maintained only
 with reference to single abuses caused by break-
 downs. Consistent  abusers will be dealt with
 based on other sanctions established by law.
    Inspection and monitoring systems
    78. The establishment of a uniform and ef-
 ficient system for the inspection of compliance to
 the environmental law, equipped with legal in-
 struments enabling effective enforcment of duties
 towards the environment by their users, will be an
 immediate goal. The  basic instruments in the
 hands of the environmental inspection authorities
 will be:
 — the right to order'  a  halt to a negligent act
    toward the environment within a given period;
 — the right to discontinue activities abusive to
    environmental protection requirements;
 - the duty to prevent the operation or start up of
,    a new erected facility which does not comply
    with requirements  of environmental protec-
;   tiori.
    79. The operation of the State Inspectorate of
 the Environmental Protection system (PIOS) will
 be adapted to the organizational and functional
 structure  of the government administration. It is
 envisaged, that PIOS will be simultaneously.the
 source of information on the state of the environ-
 ment and status of its users. The information will
 be gathered  by the  state monitoring  system
 operating under PIOS  and made available to the
 state and local administrative entities as well as to
 public organizations and citizens.
    80. The development of the state monitoring
 system embracing all  elements of the environ-
 ment, uniformly equipped and applying  unified
 methods of measurement, will be continued. This
 system should be linked to the world monitoring
 network  and apply measuring methodologies
 used within that network.

   Environmental education and research
    81. Dissemination  of environmental  educa-
 tion ought to be an essential part of the environ-
 mental policy. It should be regarded as a pre-
 requisite of, and as well as a result of, progress in
 that policy.
    82. Increasing an individual's knowledge of
 the natural  environment and the threat to that
 functioning caused by the activities of individuals,
 social groups and economic entities will be the
 goal of environmental education. The concept of
 pollution  prevention should have a prominent
 place in this education.
    83. An essential goal of environmental educa-
 tion should be inspiring the emotional desire to
 act for the  cause of environmental  protection.
 Environmental education should become rooted
 in  the process  of  upbringing. A positive and
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responsible attitude toward nature should become
a permanent element of values constituting human
morality.
   84. A. programme of environmental educa-
tion, addressed to a broad spectrum of the public
and utilising a variety of techniques and in-
struments of influence, will be developed. Along
with formal schooling, the ideals inciting humans'
sensitivity and the sense of responsibility should
be extended. Initiatives of informal organizations
aimed at extension of a positive, emotional relation-
ship to nature will be supported.
   85. Research projects  aimed at the imple-
mentation of sustainable development will be
supported. They  should identify present and
future threats to the environment and human life
and propose solutions together with their means
of implementation.
   86. General support should be rendered to
research aimed at determining mechanisms that
govern the function of nature and its sensitivity to
degraded areas. This refers also to the investiga-
tion  of the restoration of ecological  balance,
recultivation, and protection of nature, with par-
ticular emphasis on forests.
   87. Examination of the spatial pattern of na-
ture, including regional protection activities, will
also  be supported.
   88. The state will economically influence re-
search in the field of technique and technology, in
particular, strengthening research  important to
environmental protection.
   89. Polish  researches should participate  in
international research programs devoted to en-
viro^mental protection (global  change, arctic
research programs, etc.).
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                           VI. INTERNATIONAL COOPERATION
           Poland's participation
        in the resolving of regional
    and global environmental problems
    90. Effectively  tackling environmental  pro-
blems in  Poland is impossible without broad
international  cooperation. This is due  to the
global character of many environmental issues
and transboundary pollution, international  legal
obligations already adopted by Poland, and also
the benefits provided by international coopera-
tion,  primarily concerning exchange of  know-
- how and technology.
    91.'Environmental, issues are contained in
about 150 international  conventions and  pro-
tocols, Poland being party to approximately  40 of
them, as well as in numerous bilateral agreements.
Poland's   present  international legal commit-
ments, which .affect the speed  and scope  of
domestic environmental protection activities, are
the following:
   (a) commitment to the protection  of the Bat-
tic Sea waters, including the obligation to reduce
50% of the organic waste discharged into the sea,
resulting  from .the  Poland's signing of the  Hel-
sinki Convention agreement of 1974;
   (b) obligation  to reduce, emissions of  air
pollutants udertaken within the Convention  on
Long-range Transboundary Air Pollution (Gene-
va, 1979) and the protocols of this Convention;
   (c) commitment to  rational waste manage-
ment  and to  the introduction of low-waste or
non-waste technologies,  as accorded  by the
Declaration  of UN ECE  Countries  signed  by
Poland in 1979;
    (d) obligation towards nuclear safety, result-
ing from the Convention on Assistance in Case of
Nuclear Accident  or  Nuclear Threat (Vienna,
1986) ratified by Poland  in 1988; and
    (e) commitment to nature conservation, as
per: World Nature Conservation Charter adopted
by the UN General Assembly in 1982, of which
Poland is a party; Convention on  Wetlands of
International Significance, particularly as habitat
for water fowl (Ramsar, 1971); Convention  on
World Cultural  and Natural  Heritage  (Paris,
1972); and the Convention on International Tra-
de  in  Endangered  Animal and  Plant  Species
(Washington, 1973)..
    92. In the coming years, the scope  of Poland's
legal  international obligations will be  broadened
in connection with the ongoing ratification pro-
cedures  and work on  new conventions and
protocols as well as in accordance with.noted
tendencies in developments of international en-
vironmental law. This will refer, among others, to:
   (a) not taking up production of. limiting the
importation of, and use of substitutes harmful to
the ozone layer, according to the Vienna Conven-
tion and the Montreal Protocol;
   (b) necessity  of  reducing the emission of
sulphur dioxide into the air         >;'
by over 30% and also the necessity of-reducing
emissions of further substances (volatile organic
substances, heavy metals);           *•
   (c) introduction of limits in the international
trade  of  substances, equipment, and products
harmful to the environment (eg. waste, toxic and
dangerous  materials, contaminated food, noisy
and air polluting motor vehicles, etc.) including
commitments and duties determined by the Basel
Convention on waste products trade and  the
Vienna Convention on ozone  layer protection;
   (d) introduction of regional bans and limita-
tions  on  various activities and use of products
(e.g. waste disposal in the sea, and movement of
motorcars fueled with ethyl gasoline);
   (e) conduct of environmental impact asses-
ments regarding transboudary pollution;
   (f) introduction of material liability for damages
(including emergency) caused by transboundary
pollution of air, surface water and sea water, as well
as, soil pollution; and damages caused by nuclear
accidents.
   There is therefore a need for prior preparation
to meet new international legal obligations, and
also to influence the formulation of such obligations
to the benefit of our country.
   Poland  will continue to  participate in  the
activities of international organizations and also
in the execution of international conventions and
agreements. This brings a range of benefits that
will:
   (a) allow specification and  unification of
standards for the  utilization of the environment
and its resources;
   (b) ecourage the mutual exchange of infor-
mation on the dangers of accidental contamina-
tion of the environment, including methods to
limit this contamination, as well as procedures of
joint clean  up if contamination occurs;
   (c) actively protect animal and plant species
and their habitats threatened by extinction;
   (d) facilitate the transfer of techniques and
technologies friendly to the  environment, and
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provide easier  access  to  modern  methods  of
measurement and measuring equipment;
    (e) provide for  claims to compensation  in
cases of accidental pollution (to be developed in
the future, when adequate legal regulations pre-
sently under elaboration, will be adopted) In case
of nuclear accidents, this is even more important
because  Poland, not owning or operating any
nuclear power plants,  is  still exposed to the
consequences of nuclear disasters that  occur
beyond its border;
    (f) provide an opportunity for improved eco-
nomic conditions for the betterment of the state
of the environment.

        Frontier areas and relations
             with neighbours
   93. The geographic position of Poland leads
to transboundary water and air pollution. Polluted
waters from Germany, Czechoslovakia, and the
USSR are reaching our territory by the Neisse,
Oder and Bug Rivers respectively, while Poland is
a source of Baltic contamination, namely by the
waters of the Vistula and Oder  Rivers. North-
-western, western, and south-western winds are
transporting gaseous pollutants and particulates
from Germany and Czechoslovakia,  but also from
further West-European countries to Poland, and
Scandinavia. Poland is extremely interested in the
commencement of activities to develop a regional
strategy for environmental protection.
    94. The state of the environment of external
areas close  to  our  frontiers in Czechoslovakia,
Germany, and the USSR poses a danger to Poland
and therefore,  the  activities  of  our diplomatic
services and environmental authorities should be
intensified in order to secure Poland's interests.
    95. The existing bilateral and trilateral agree-
ments with USSR, Czechoslovakia and Germany
do not regulate matters  of responsibility for
damages caused by transboundary pollution of
accidental character. For  practical reasons re-
negotiation of the valid agreements should  not be
undertaken for the  reason of including clauses
referring to repair of damages, but talks should be
sought with the view of preparing new special
bilateral agreements which  would parti-
cularly regulate problems of responsibility
for damages.
   96. The existing bilateral and trilateral agree-
ments with the USSR, Czechoslovakia and Ger-
many do not assure environmental security for
Poland either in terms of their form and content
nor their implementation pattern. They all should
be renegotiated in two stages:
— first: during the period of preparation of a num-
   ber of new European and global conventions
   regulating environmental protection, the mat-
   ter  of temporary programs for the improve-
   ment  of the  implementation of the signed
   agreements should be focused on. In addition,
   the legislative initiative on  problems of re-
   sponsibility for damages should be taken up;
- second: (approximately after 1992) a general
   revision of the agreements already signed
   should be undertaken in order to adjust them
   to the new European environmental conven-
   tions which will be introduced during 1990
   'and 1992.
   J"hose  renegotiations should also take  into
account the unification  of Germany, with the
newly formed Germany thus becoming becoming
party of the new agreements.
   97. A more active role of local communities
on both sides of the borders should be a  sig-
nificant element  to the improvement of the en-
vironment in those areas. The state administration
at the central and regional level, as well as the
local self-government, should provide assistance
to public environmental organizations. This asi-
stance should consist of providing access, to all
forms of information on the state of the environ-
ment and sources of pollution,  and facilitate the
exchange of ideas between domestic and foreign
experts.

         The scope and utilization
      of foreign assistance oriented
        to environmental projects
   98..The time gap between the degree of
advancement of undertakings to improve the
environment in Poland and in Western countries
provides  an opportunity to develop profitable
cooperation and to obtain financial support. From
the point of view of  those countries which are
affected by pollutants from Poland, the reduction
of emission  at  the source proves  to  be more
effective than to mitigate the effects caused by
those pollutants. This kind of  cooperation-can
also  be stimulated by opportunities to share
economized raw materials and, in the future, the
access to a large market for clean technologies
and environmental  protection installations.
   99. The external aid for the protection of the
environment should, first of all, be used to reduce
extreme threats to human health and nature. The
initiation of processes which would ultimately
20

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multiply our own efforts in solving prioroty pro-
blems should be a principle built into our general
State policy.
   100. The social and political changes, as well
as the  change of economic  strategy in  Poland,
including a wider openness to highly developed
countries, are facilitating opportunities to acquire
economic assistance for environmental  protec-
tion  in  Poland. The channels of such assistance
are through the following:
   (a) World Bank assistance in  the  form  of
credit (presently 18 million US dollars)  and the
anticipated assistance of other international finance
organizations (Nordic Investement Bank,  Euro-
pean Reconstruction and Development  Bank,
etc.). Credits in this form  are  simultaneously
combined  with organizational,  scientific, and
technical assistance;
   (b) assistance provided by the declaration of
the G-24 Countries announced in Brussels (so far
at the level of 25 million US dollars) for environ-
mental protection as a grant coordinated by the
EC Commission; and
   (c)  international aid from particular countries
(e.g. USA, Sweden,  Finland, the Netherlands,
and  others)  provided  in  connection with the
declaration mentioned under (b), and also based
on earlier or separate agreements.

   101. The  main  task  for  the  governmental
bodies participating in the utilization of foreign
aid from highly developed countries is the esta-
blishment of' an organizational framework  to
manage the expenditure and  efficient utilization
of the funds. The targeted uses for this kind  of
assistance are the following:
   (a) transfer ot environmental protection te-
chnologies not applied within the country, as yet
(e.g. desulphurization and denitrification of com-
bustion gases, utilization of toxic waste, desaliniza-
tion of water, etc.) including the construction of
pilot installations:
   (b) promotion of domestic production ot en-
vironmental protection equipment, among others,
through joint undertakings (joint venture); and
   (c) organizational assistance, ^improvement
of management,  and  training of qualified staff,
including assistance in the establishment of con-
sulting enterprises.               ...
   The regional distribution of projects, executed
with the  participation  of foreign assistance,  is as
follows:
   (a) Upper Silesia,  the region of Rybnik,  Cra-
cow, the Copper  Mining and Smelting region of
Legnica —Glogow arid the Baltic Sea shore  belt;
   (b) areas of prominent natural value; and
   (c) other areas environmentally  threatened.
   102.  The rate of  foreign assistance i'n  the
overall cost of environmental protection invest-
ments in Poland will not be large in financial
terms, particularly in comparison to what Poland
needs for restoring its environment. It is expected
that  it will not exceed  several tenths of  one
percent.  Therefore,  the  methods  and forms of
utilization of assistance should be  an example
and model for solutions to be implemented by our
own means. The assessment of the  feasibility of
multiplication and distribution of acquired tech-
nologies, equipment and instruments, as well as
know-how and experience, are to be regarded as
the basic criteria for the selection  of projects for
implementation.
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                .APPENDIX C
Ministry for Environment and Regional Policy
       Republic of Hungary
DRAFT OF PROPOSALS AND PROJECTS FOR
      FUTURE COOPERATION IN THE
        ENVIRONMENTAL SECTOR
             Budapest 1991 January

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                 CONTENTS
Draft of proposals and projects for the environmental
                 cooperation
       State of the environment in Hungary
       (based on the Government Program)

                   — 23 —
             Program for environmental actions (Government Program
                         launched in September 1990}

                                  — 31 —

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Draft of proposals and projects for the
      environmental cooperation

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                 I. PROGRAM FOR  THE CONTROL OF THE AIR POLLUTION
 .1. Comprehensive improvement of the air quality in the heavily polluted
   regions.

   Proposed field of cooperation:                                 ~"

      Elaboration of proposals for the, complex solution of the problems
      in the most  endangered settlements, regions and firms {e.g.  in
      the  regions of VSrpalota. Tata-Tatabanya. Pdcs-Komld).
1.2. Reduction of the emissions of sulfur dioxide, nitrogen oxide and other
   pollutants from power plants, chemical- and other basic industrial plants.

   Proposed field of cooperation:

      Emission reduction in power plants (e.g. Gagarin plant).

      Fluidized  Bed  Combustion  installations at Ajka and  Dorog
      plants.

      Reduction of  the dust-emission  at  the cement works Vac,
      Labatlan, Be'lapa'tfalva.

      Reduction of the dust- and CO  emission in  the metaliurgic
      industries (iron and aluminum) harmonized with the transition to
      the   new  technologies   in   Dunaujvaros,  6zd,   Miskolc.
      Budapest-Csepel.

      Introduction of new  technologies  in order to reduce the toxic,
      organic and inorganic emissions in the organic chemical industry,
      at the crude oil refinery, and at the incinerator.

      Separation of the carcinogenic substances.
1.3. Abatement of the air pollution caused by  road transport.

   Proposed field of cooperation:

      Introduction of the catalytic converters technology in transport.

      Establishment  of a Kat.Lab..

      Financing and testing of catalyzers for two-stroke  engines.

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      Manufacturing leadless and  reduced lead-containing fuel, and
      dtesel oil without sulfur.

      Improving and manufacturing diesel soot-filters. Improving and
      propagation  the  use of  lead-filter  silencers  (mufflers)  with
      ceramic pad.

      Establishment of effective car-testing system.

      Development of an efficiernot ad-network and  of measures for
      effective traffic-system, including .the efficient  road-network,
      public  transport etc.
 .4. Promotion of alternative energy uses.

   Proposed field of cooperation:

      Exchange of experiences, introduction and testing of technologies
      for geo- thermal, solar, wind  energy and mini-hydros.
1.5.  Development of  air-quality  monitoring systems  according to  the
   international standards

   Proposed field of cooperation:

      Development of a monitoring system for the general control of
      the state of environment.                       .

      Establishment  of   smog-forecast  monitoring-systems  in  the
      heavily-polluted areas.

      Monitoring the consequences  of unexpected  events, and   the
      reduction of damages.
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2. PROGRAM FOR THE REDUCTION OF THE HARMFUL  EFFECTS  OF
   WASTES, FOR PREVENTION AND RECYCLING
   2.1; Introduction of low waste technologies, and of technologies for the
       reuse of wastes.                  .

       Proposed field of cooperation:                                 :

         Information about low waste 'technologies.

         Licences and know-how of such technologies.

         Projects  and reference plants for introducing the processes.
   2.2. Further steps in the program for the safe neutralization and utilization
       of hazardous wastes.  Prevention   and recycling of toxic wastes.

       Proposed field of cooperation:

         Project  a new  dumping site and of a  new incinerator plant.
         Neutralization and reuse of the red mud at the alumina factories
         Ajka, Mosonmagyardvar and Alma*sfiizit6.

         Neutralization of the wastes from hospitals in 100 country towns.

         Reuse of  the galvanic  sludge at more than 50 plants.

         Neutralization  of   the   wastes   and   sewage   with  high
         chrome-content from leather factories.

         Development of sets for mobile waste-treatment  for  physical,
         chemical processes for  the neutralization of fluid wastes, for the
         drainage of the sludges, for the reduction of the harmful material
         content  of the fluid wastes.

         Combustion furnaces with low capacity (adopting the combination
         of pyrolyzing and burning) for hospitals, for sanitary institutions
         and for small and medium size  enterprises.

         Processing on site and utilization  of  wastes and  deposit  of
         building materials.
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2.3.  Elimination of the major large scale pollutions and contaminations.

   Proposed field of cooperation:

      Cleaning up the soil in the military territories, the lead pollution
      in  Budapest-Nagyte*te"ny  and the  mercury  pollution  of the
      Chemical  Works Borsodi Vegyi  Kombina't.


2.4.  Promotion of communal waste management.

   Proposed field of cooperation:      •

      Introduction  of  selective  collection  of  household   wastes,
      including  small  chemical  waste  (paints,  chemical  batteries.
      medicines, sources of  light). Promotion of their  recycling and
      neutralization.  Communal waste  composting and use for soil
      improvement.
2.5. Promotion of the reuse and neutralization of the packaging materials
   and devices.

   Proposed field  of cooperation:

      Increasing the recycling capacity for waste papers in the paper
      mills Dunaujvaros. La*batian.

      Development of efficient standardized and harmless packaging
      practices in various industries (prevention of PVC use and non
      separable composites).
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                  3. PROTECTION AGAINST NOISE AND VIBRATION
Proposed field of cooperation:

   Improving  instruments,  systems  for  monitoring  noise  and
   vibration.

   Elaboration of methods  for monitoring  and classification of
   sources of noise and vibration Qualifying the products, materials
   and constructions for the  protection against noise and vibration.
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   Investigation of the impact of electric fields  of high frequency
   to  health, and  possibilities  for protection.
                  4. PROGRAM FOR SOIL CONSERVATION
                      4.1. Creation of the  Space-Informatic System for  Soil Conservation and
                         Environmental Geochemistry together with its data supplying network.

                         Proposed field of cooperation:

                            Creation of the network database in order to realize the space-
                            time continuous data storage.

                            Establishment of an expert system dealing with the drinking water
                            bases  of great importance, the regions of catchment  areas and
                            the  elementary units of hydrogeological conservation in arable
                            lands with the functions  to support the exploration, collecting.
                            evaluating and recommending and  regulative work in the field
                            of public health,  including global and regional analysis  as well.

                            Establishment  of a subsystem for the ministry on the basis of
                            the information provided by the expert system and by the network
                            database with the function to supply computer-aided alternative
                            basis for decision-makers.
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   4.2. Introduction of new, self-calibrating and self-adaptive plant cultivation
       technologies in order to support optimal or selective interrupted use of
       chemicals in agroecosystems with minimal environmental risks.

      Proposed field of cooperation:

         In  the  self-calibrating way of simultaneous  controlling and
         optimizing,  the substance flows in  connection with  non-point
         sources of pollution according  to the demands of space-time
         continuity.

         By the help of the double-defence of both point-pollution sources
         and  probable sinks, creating  a pollutant  trapping  drainage-
         network around critical   objects  at  low  cost  and  creating
         measurement  possibilities at collector  points of network.

         Minimizing  soil erosion,  run-off by utilisation of a complex,
         energy- saving soil  cultivation method, which works  along the
         geomorphological  trajectories of the area in question.

         Developing  techniques for chemical-free  plant  protection by
         mechanical  and-or other solutions.   ,         .
5. PROGRAM FOR THE CONTROL OF THE QUALITY OF WATERS
    5.1. Concentrating the efforts on protection of the drinking water bases.
       Reduction  of the gap  in  the public utility services. Increasing  the
       capacity of the sewage systems and of the wastewater treatment.

       Proposed field of cooperation:

          Increasing the capacity of the sewage farm South Pest enjoying
          priority  in case of the Expo  1995.

          Construction, resp.  raising the capacity of sewage treatment
          plants, e.g. at the sewage farm in Gy6r, Sopron, P6cs, Debrecen.
          Szeged,  Baja.

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                     5.2. Assuring drinking water in each settlement with special regard to waters
                        with  high nitrate  and arsenic contents.
                        Proposed field of cooperation:
                           Technologies for the treatment of contaminated waters.
                           Assuring the drinking water  supply  in  the  endangered smai!
                           villages in  the  county  Borsod.                               ;
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5.3.  Reduction of damages in the thermal karst systems in Transdanuhia.
   Proposed field of cooperation:
      Methods for protecting and monitoring the changes in the karst
      system.
      Reconstruction of thermal bathes, spas (e.g. modernization of the
      thermal bath Rudas. Szechenyi, Kira"ly, Lukacs in Budapest).
      Projects for building spa-hotels,  hydrotherapeutic  establish-
      ments.
5.4. Introduction of water saving technologies, and acceptance of.methods
    to  reuse and neutralize  sewage sludge.
   Proposed field of cooperation:
      New methods for  environment-friendly technologies. Applying
      technologies to use and neutralize sewage-sfam.
      Technology for  the water systems in paper-mills in order  to
      improve  the water quality.
      Change the bleaching technology in the cellulose manufacturing
      to substitute the chlorine with oxygen.
      Water recycling at the aluminum furnace in  Tatabanya.
                     5.5. Transboundary projects for the water quality control of the.main rivers.
                        Proposed field of cooperation:
                           Preparation  of  action plans for  the Duna and Tisza.

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6.  PROGRAM FOR  THE  PROTECTION  OF  THREATENED  NATURAL
   VALUES
    6.1. General issues of nature conservation and landscape protection

       Proposed field of cooperation:

          Studying the organization of the legal and economic regulatory
          systems, and management methods in countries with advanced
          culture of  nature conservation and landscape protection.

          Studying the tasks of the operation, the maintenance and the
          development on protected lands.


    6.2.  Protection of the habitats of plants and animals

       Proposed field of cooperation:

          Assessment and  preservation of the stock of rare,  protected
          species of plants and  animals.

          Improvement and reconstruction of habitats.

          Studying  methods of  artificial propagation,  reintrodution, the
          transfer and transplantation.
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    6.3. Landscape protection

       Proposed field of cooperation:

          Methods for appraisal, evaluation and utilization  of  protected
          landscapes  in landscape architecture and planning.

          Requirements,  guidelines and  legal regulations for landscape
         . protection.

       •   Monitoring and control of protected landscapes.       •
    6.4. Meeting the requirements of international conventions.

       Proposed field of cooperation:

          Harmonizing   the   tasks,  and  realization  of  international
          conventions for  nature conservation  (UNESCO, MAB and the
          Conventions of Ramsar. Bonn, Washington, Bern  and  Paris)

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6.5.'Sustaining, resp. restoring the ecological capacity of the land.  (E.g.
    rehabilitation of the abandoned Danube barrage construction  site)

   Proposed field of  cooperation:

      Technical assistance for the governments priority to come to an-
      agreement with Czechoslovakia and Austria on the Danube dams
      project.  Preparation of an environmental impact assessment of.
     ' the Nagymaros barrage.      •                                $

      Elaboration of a complex environmental program of the  Duna
      -branch  below Budapest, the Soroksari Duna.
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6.6. Introduction of new methods for farming, forestry, fishery and hunting
    on protected lands.

   Proposed field of cooperation:

      Introduction of nature-friendly and  cost  effective methods  of
      agriculture,  silviculture,  reed-cutting,  wildlife-  and   water
      management on protected lands.

      Possibilities for the solution of conflicts of interests   between
      agriculture, silviculture, reed-cutting, wildlife management and
      nature conservation, economic regulatory systems to solve the
      conflicts.

      Tourism on protected lands.

6.7.  Research on nature conservation

   Proposed field of cooperation:

      Elaboration of joint programs for the  protection of natural values
      •with  international significance.

      Joint research in the  experiments of  reintroduction of different
      species,  and of natural and artificial propagation. Exchange  or'
      experiences concerning  their conditions and  results.

      Studying the scientific research in biosphere reserves, formation
      of  further  areas  for   the  representative  ecologic  sampling
      networks.

      Exchange of experiences concerning research on  the tolerance
      of the protected areas.

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         Studying  the experiences  relating  to  farming  capacity of
         landscapes,   methods  for  assessment  and  evaluation,  and
         possibilities.of computerized monitoring.

         Studying  the methods .for sustaining  the original  type  and
         character  of  landscapes.  Implementation of rehabilitation.
   6.8.  Monitoring nature conservation

      Proposed field of cooperation:

         Joining the mutual information service of the World Conservation
         Monitoring Center.

         Studying  the  monitoring systems  for  nature  conservation.
         coordination.of systematic and constant observation. Checking
         the internationally acceptable parameters, data for consistent
         registration and interpretation.
   6.9. Education, training  and public relations in nature conservation -

       Proposed field of cooperation:

         Exchange  of  experiences  in  the  field  of  teaching  nature
         conservation, different forms  and methods of  instruction and
         training.

         Studying  the  possibilities,  forms and  methods  of publishing
         information.

         Exchange of publications, or launching reviews in forms of joint
         edition  about nature  conservation.
7.  PROGRAM FOR REGIONAL DEVELOPMENT


    7.1. Handling the crisis in the  depressed regions promoting the structural
       changes of the economy, and supporting of small businesses.

       Proposed field of cooperation:

          Methods, means and experiences on  crisis management.

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^•^••WIPBBBB
                             Projects for the necessary measures, action plans.

                             Rehabilitation of depressed coal-mining and metallurgy regions.
                             Development of advanced industrial regions affected by the crisis
                             of  the Rubel exports.
                       7.2.  Elaboration   of  regional  development  plans  for  regions  with
                          environmental and social problems to regulate privatisation, employment
                          and  the environmental issues.

                          Proposed  field of cooperation:

                             Translation of environmental concerns into regional planning.

                             Planning methods  for regions in need of comprehensive changes.



                       7.3. Establishment of  the  Geographic Information System (GIS)

                          Proposed  field of cooperation:

                             System development of data related  to different spatial units.
                             Connecting existing elements of the  computerized  information
                             system  from   the   land  register  through   the  statistical
                             dataprocessing to' the remote sensing.

                             Access to the international networks of the GIS.
                    8.  PROGRAM  FOR THE  IMPROVEMENT  OF THE  ENVIRONMENTAL
                       MANAGEMENT
                       8.1. Harmonizing the environmental and economic interests in the spirit of
                           the  sustainable  development.  Promotion  of  the   introduction  of
                           environmentally appropriate technologies set in the process of the
                           structural changes.

                          Proposed field of cooperation:

                             Exchange of experiences on pricing policies and other financial
                             and economic instruments for directing a sustainable economic
                             development during the economic reconstruction process.

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      Harmonizing the technological regulations and  classifications
      partly for preventing the transfer of polluting technologies, partly
      for testing and certifying environment-friendly products.
8.2.  Improvement of regulatory means and methods for the environment
   according to the international  practice and in compliance with  the
   international convents.

   Proposed field of cooperation:

      Exchange of  experiences concerning  the different regulatory
      systems, harmonizing the limits, studying  the  environmental
      preferences, allowances in the system of taxation,  and the results
      with the special economic implements  for the environment.

      Harmonizing  the means and methods  of control between  the
      different countries, considering the equality of the international
      competition and the free trade of products and  services.

      Revision of the sanitary norms with special regard to the European
      Standards.
8.3. Strengthening the environmental management capacity. Promotion of
    professional skill and efficiency of experts  at  the central and local
    authorities  and non governmental organizations.   .

    Proposed field of cooperation:        ;

      Elaborate proposals for the task of the  local governments to
      handle environmental problems and nature conservation.

      Studying the institutions involved in measuring and surveying the
      experiences of the system of independent laboratories.

      Environmental training programs for staff  at Ministry  and
      regional offices.
8.4. Enforcement of the regulatory system  especially the environmental
    impact analysis  and the  environmental auditing.

    Proposed field  of cooperation:

      Studying the regulatory system for the control of air pollution,
      water and soil, experiences about the operation of the legal,
      technical  and economic framework.

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      Studying the models and methods of the prevention of disasters,
      chemical accidents.

      Exchange of  experiences  in the regulation of the toxic waste-
      treatment.

      Methods for the classification of environment-friendly products.

      Studying the experiences of the environmental impact assessment
      in countries using this method,cooperation in the methodological
      research, exchange of documents for such assessments.

      Training for  staff.
8.5. Development and usage of information systems.

   Proposed fields  of cooperation:

      Definition of the main components of a complex Environmental
      informational  system.

      Cooperation to work out information  systems  of environmental
      protection, such as air-,water and soil pollution control, wastes,
      hazardous substances, noise and vibrations, radioactive materials
      and pollution accidents, further such related to the technologies
      aimed at eliminating or moderating the detrimental impacts to
      •the environment, nature conservation  and  landscape protection.
      regional  development  and  zoning,  dynamical  models  and
      simulation, decision  support systems.

      Cooperation   to  work  out  data  processing  standards  for
      environmental  protection use  (i.g.  Wastes  codes, Soil-,  Air
      Quality-, Emission and Water standards, GIS systems etc.).

      Cooperation to use CASE(Computer Aided Software Engineering)
      tools  for  planing and working put environmental  information
      systems   (analyze,   design,  automatic  documentation,  code
      generation and maintainance etc.).

      Definition of  the interfaces to access environmental protection
      databases, and.exchange environmental data.

      Governmental policy, laws, bills,  rights, experience, reality and
      plans of collecting,  processing and using environmental data.

      Assistance for the formation of  the  environmental  monitoring
      system, assistance for procuring  the  necessary equipments.

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      Establishment of service laboratories for analytical measurement
      on an  international level of quality.
8.6.  Research and development.

   Proposed field of cooperation:

      Promotion of the  exchange of the international environmental
      bibliography,  access to international  databases.

      Proposal for  the control of technologies to be introduced in
      Hungary, according to the environmental aspects. Elaboration of
      a  control  system  for  the  environmental  impact  of  new
      technologies.

      Studying the  methods appraising and calculating the damages
      resulted  by pollution.  .

      Research on  the acidification of the  environment, with special
      regard on  the damages in forests, their rehabilitation.

      Studying the parameters for the complex  {air, water, soil) quali-
      ty of settlements and  regions.

      Substitution,  or reduction of freon-kind materials in the plastic
      industry, by the foaming process {at polyurethane and polystyrene
      foams).

      Cooperation in researching the technical-scientifical  conditions
      of the complex and  environment-friendly utilization of thermal
      waters (feeding back thermal water, fixing the quantity for
      constant exploitation by the preservation  of the stratum energy,
      environment-friendly removal of used waters).

      Intensive, anaerob treatment of industrial waste-waters with high
      content of organic materials with special regard to the biological
     . removal  of the toxic components.

      Complex biological  methods  for the  utilization  of organic
      micro-pollutants.   Identification  of    unknown   pollutants,
      preparation of measures for their reduction, examination of the
      special endangered regions.

      Improving methods  of. neutralization for wastes contaminated
      with chlorinated carbohydrates, with PCB and toxic heavy metals.

      Neutralization of  end gases containing  fluoride, chlorine and
      hydrochloric acid.                               *  •

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 Research'  on   technologies   for  the  active  protection   and
 rehabilitation of  water-resources  (washing,  the polluted  parts.
 isolating them).

 Introduction, of   remote-sensing  methods  substituting   and
 completing the traditional monitoring networks.

 Monitoring  and  control  of  the  reguiarition  of  diffusion  of
 pollutions in underground waters. Investigation of processes in
 the environment of the point-like and non-point diffuse sources
-of pollution.

 Establishing the. conditions of the modern qualification of waters
 based on  hydro-biologic  methods, application of bioindicators.

 Improving technologies for local cleaning up soils contaminated
 with  hazardous  wastes  (extraction,  washing  process,  airing,
 high-frequence heating, biological treatment).

 Regeneration  of  damaged   forests.Technologies  for  carefu!
 cultivation, use and exploitation of woods (nature-close methods
 of forestry, definition of the optimal age for  woodfelling  and
 cutting, technologies for thinning out, and  utilization of logs).

 Maintenance of gene-banks  (flora and fauna),  quantitative  and
 qualitative improvements.

 Biological methods in agriculture: biological protection against
 diseases  and   pests,  tying  the   atmospherical    nitrogen,
 detoxification the toxic materials in soils.

 Investigation of pollutions in closed spaces (interior of buildings!
 for radon. CO, NOx,  noises, etc), assessment  of the .effect of
 constructions and their equipments on the health, possibilities for
 the reduction of  the harmful effects.
                       8.7. Education and training. Strengthening the environmental concern of the
                          population.

                          Proposed field of cooperation:

                             Elaboration of a program for education and instruction in the
                             spirit of the protection of environment and health started in the
                             kindergarten up to the university applied to the Hungarian condi-
                             tions:

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Elaboration of a new strategy for information and propaganda,
for the public relation to promote the realization of the govern-
mental decisions for Hungarian  application.

Establishment of a Central and Eastern European model-site and
training center.

Promotion of the education and the qualification of the staff at
local governments responsible for environmental management as
well as  of NGO active  members.

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State of the environment in Hungary
(based on the Government Program)

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PROTECTION OF THE NATURAL AND OF THE MANMADE ENVIRONMENT

       The state of the environment in Hungary has been deteriorating for
       a  long  time.  Our natural resources, manmade environment, our
       national treasures are going to ruin, with  no hope of replacement.
       The mortality  rate  that  is  particularly high  in  a  worldwide
       comparison, the reduction of the average life-span, the deteriorating
       state of health of the population can, to a large extent, be attributed
       to pollution.               •

       The party-state withheld information on the state of the environment
       from the public, just like on any other matter that could have jolted •
       the public mood out of its state of pseudo-satisfaction. Those who
       exposed the problems  were  penalized. Consequently, no  public
       environment consciousness could  evaluate.
Natural resources, the state of the environment
    Land: The greater part of the known coal and mineral wealth of  the
       country lie in the range of the central mountains; the hydrocarbon
       reserves are  located in  the  Great Plains and  in the Southern
       Transdanubian area,  while  minerals  used  in  construction can be
       found virtually all over the  country. Although the size of the area
       withdrawn for the purposes  of mining is decreasing, the size of  the
       areas  directly  or  indirectly  adversely  effected  by  mining  is
       increasing. Bailing by the  coal and  bauxite  mines have a major
       'impact  on the  equilibrium of the water  systems, including  the
       thermal waters and other springs effected. Open-cut mining causes
       severe problems (waste rock piles, slag dumps, waste disposal sites,
       etc.)  and  land recultivation can be estimated at a  mere 10 to  12
      . thousand  hectars annually.

       Some 3.7 million hectars of land  are damaged by water and wind
       erosion. Soil quality  deterioration is also significant owing to  the
       wrong agricultural techniques applied and to the sowing system that
       is not entirely suitable to the condition of the soil. The acidification
       of the soils accelerated in the course of the past fifteen - twenty
       years due to improper fertilizer use, the acidic precipitation of  the
       atmosphere and the various acidic industrial wastes and by-products
       as well as to the  decrease in liming  that reduced acidification.
       Improperly planned and implemented irrigation projects lead to the
       accumulation of salts, to alkalinity. Stubble burning, the irregular

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    handling and misuse of manure led to the deterioration of significant
    natural resources.
Water: The deterioration of the quality of the country's surface waters
    with respect to the chemical characteristics is continuing, although
    at a slower rate in the past  few years.

    The quality of the waters  of the Danube is good at the border at
    Rajka; it deteriorates  due  to the  impact of the Czechoslovakian
    sewage waters coming from the VSg-Danube, but, with the regular
    methods of treatment  it can  still be used as drinking water. This
    state obtains all along the Danube until the estuary of the Si<5; after
    that water quality again improves owing to self-purification. Of the
    small water courses  in the main catchment  area of the river, it is
    primarily the tributaries of  the Danube that are polluted. In addition
    to bacteriological pollution, Budapest also causes mercury and lead
    pollution. The river Tisza arrives in good quality at the border, but
    the polluted waters of the Szamos, the Kraszna and the Sajd coming
    from abroad as weli as from domestic metallurgical and chemical
    plants  and  the untreated communal sewage  deteriorate its  quality.
    The  increasing frequency of extraordinary pollution  in the Koros
    rivers cause severe problems.

    The quality of the water of the Lake Balaton has improved somewhat,
    it is suitable for bathing. From a bacteriological point of view, the
    open  waters of the Balaton  are clean, worse  values have been
    measured only in the  Bay of Keszthely.

    In the central Transdanubian area, the level of the karst waters has
    sunk significantly mainly owing to bailing.  At the  present rate of
    utilization of the layer waters, water levels are decreasing, especially
    in the area of the Great Plains, while ground water levels are rising
    in the  internal  parts of a number of villages and towns, primarily
    due to the lack of  public  utilities.

    About one  half of the surface water reserves can be reckoned with
    as drinking water reserves, of which about one  quarter is of good
    quality. Three-quarters  of the reserves  can be used only after
    treatment.  The first phase  of the program aimed at purifying and
    replacing arsenic waters in  the Great plains was completed last year.
    The ground waters (depth range of 0 to 20 meters) cannot  be used
    to supply drinking  waters  in the downtown areas. About  65% of
    the drinking water reserves do not have sufficient natural protection
    against surface pollutants. In over 1000 water works, the nitrate
    amount approaches the limit value.

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Air: In  more than 11% of the area of the country, air quality is  iess
    than satisfactory. 44.3% of the population of the country live here:
    even the most conservative estimates put the damage attributable
    to air pollution to above HUF 15 billion a year. According  to the
    findings of a Hungarian study, asthma and bronchitis diseases have
    been steadily increasing in children of 7 to 17 between  1975  and
    1984.  In polluted towns  and the  heavily polluted-, districts of
    Budapest pathological alterations characteristic .of children  occur
    four times more frequently than the average. The occurrence of adult •
    chronic bronchitis is three times that of the average. Owing  to the
    heavy air pollution, 12 Hungarian towns deserved the title "the  Filthy
    Twelve".

    Analyzing  the developments  of  the  last  few years, the following
    conclusions can be drawn: sulfur dioxide emission is on the decrease
    owing to changes in the forms of energy used and to the stagnation
    of production; nitrogen oxide and carbon monoxide emission is rising
    due to the  increasing number of cars most of which are obsolete
    and  badly  maintained;   lead  pollution  has,  in  general,  been
    decreasing  since  1985 as the lead content of petrol was reduced,
    but  the magnitude of lead pollution is different from area to area;
    settling dust pollution is  fluctuating, the decrease measurable in
    places  and at  times .is not lasting.

    Hungary joined  the  European and global  programs aimed at -the
    protection of the atmosphere. We undertook to reduce sulfur dioxide
    emission by 30% by  1993 relative  to  the  1980 level (at present,
    the  reduction is  at about 25%). Having signed the  protocol on the
    restriction  of  nitrogen  oxide  emission, Hungary  undertook to
    maintain the 1987 level until December  31 1994.  We also joined
    the  Vienna Convention on the protection of the stratospheric  ozone
    layer: this means restriction on the domestic consumption of freons
    and halogens.
Biosphere: The number of non-domesticated animal and plant species
    growing wild, the richness of the species of the natural  :;  habitats
    is still relatively high in Hungary..So far. there is evidence of the
    extinction of 40 plant and 53 animal species; 1130 species (2.5$
    of the species in Hungary) are endangered. Natural forests,  reeds.
    marshes, fields and meadows are driven back to smaller and smaller
    areas.  18% of the area of the country is under forests. The area
    of the forests  is continuously increasing, but their  composition
    according to purpose and tree species is not what should be desirable
    from  an environmental point of view. The stock of live trees has
    doubled, growth has tripled and timbering has quadrupled, in the

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    course of the past four decades. Clear-felling is practiced in large
    areas,  the  natural renewal  of the  forests fails  to take place,
    monocultures of tree species alien to the region are spreading. The
    state  of health of the forests' has  noticeable deteriorated. The
    problems are aggravated by the excessive increase of game and  by
    the inefficient  operation of  the forestries.
Nature conservation; nature conservation in Hungary protects the
    of the country's area {600 thousand nectars) that is least effected
    by the detrimental  effects and is  the richest in natural resources.
    There are 183 protected  areas of national significance. Of these,
    4 are national parks, 44 landscape conservation areas and 135 nature
    conservation areas.  All caves, 415  plant and 619 animal species are
    under protection. The number of protected areas of local significance
    approaches  900,
Landscape: The Hungarian landscape is diversely structured, is of high
    aesthetic value and still  carries many traditional elements. In the
    past the  main purpose was to increase production and  to exploit
    natural resources  to the  utmost, while  aspects of environmental
    protection or of aesthetics were neglected. Thus most of the new.
    edifices  of  large-scale  production are unassuming in  looks and
    design and frequently their location was also objectionable.  Many
    of the forest strips protecting the fields  and along the rivers were
    destroyed. In many places, the structure of the landscape was formed
    without due attention being paid to the natural conditions; here the
    gravest problems are caused by the established agglomerate areas
    that fully destroyed the earlier landscape-nature  relations of the
    towns.
The environment  of the  towns  and  villages:  The  quality of  the
    environment of towns and villages is determined by the quality, of
    a number of environmental elements (state of the  soil, water,  air,
    of the treatment of the wastes generated, etc.) together with  the
    degree of economic development and the structure of infrastructure
    of the town/village. The present tendencies determine the quality
    of the environment  also in a long run.

    The air of the towns in the areas most severely hit  by industrial
    air pollutants -  in the valley of the Sajd, the Tata Basin and  the
    industrial estates of the Central Transdanubian region  - is  badly
    polluted.  Traffic plays  a decisive role in the development of  the
    quality of air in the towns. In  general, air quality along the  heavy

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       traffic roads of the towns and in certain in villages in the vicinity
       of the highways  is low. The quantity of communal  solid wastes
       treated within the municipal network is also increasing. Presently.
       there are  2600 waste disposal sites in the country. Most of them
       (965?) do.not meet the regulations of environmental protection and
       of public health.

       The buildings of the  downtown areas of our towns and  cities are
       in a badly deteriorated condition. Renewal, where already  begun
       effected  the historical town quarters primarily (Sopron, Koszeg.
       Gyor, Pdcs, Eger, Budapest). Hungary has 9576 protected historical
       monuments..60% of which are in a technically acceptable condition,
       30% can be renewed,  10% are in danger. Public gardens and parks
       make up about 10% of the town areas, but the plants are withering.
       Traffic noise burdens some 52 to 55 % of the population in some
       form. The noise of industrial establishments is concentrated to the
       area of the industrial  estates. Improvement in the structure  of the
       network of towns and villages can be expected only if they  obtain
       true political, economic and  social  independence and  will manage
       their own  affairs. This  will  involve  significant  resources  in
       development, in the solution of communal tasks and will certainly
       result in a more  lasting (environment-friendly)  town  structure.
The  problem of the barrage on Danube

       The plan of the Barrage on the Danube is a symbol of the insensitive
       and absolute measures of a wanton executive power. Mastering the
       given situation is also of symbolic value. The solution of the open
       international questions and the reconstruction that will also explore
       new possibilities will be carried out with a double approach. Starting
       out from the external circle, Hungary wishes to find an exemplary
       solution to heal the wounds caused by an investment project that
       was mistakenly started-and to strengthen the symbolic bridging role
       of the Danube within the framework of the new Danube agreement
       to  be  based  on  cooperation  with  the  environment  protection
       institutions of the  European Community and the United  Nations.
       Starting out from the internal circle, we wish  to achieve that the
       tasks of  reconstruction arising  from  avoiding the  ecological
       emergency provide an opportunity for a novel,  ecologically driven
       development of the Danube landscape that will also  make use of
       sport and holiday making possibilities.through cooperation with the
       new local  governments  and environment  protection movements,
       embracing their initiatives, naturally, on a scientific basis. Following
       through   preparations,    we    wish    to    re-negociate   the
       Czechoslovakian-Hungarian  international  treaty. We  shall  do

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everything in our power to prevent the contradictions generated in
the course of the investment project from taking on the nature of
a conflict  of interest  between nations.  The same applies to  the
solution of trie country's obligations according to its contracts. The
objective is to win as much international moral and financial support
for an exemplary healing of the Danube landscape as possible. This
could promote the ultimate objective of not letting the issue of the
barrage burden our bilateral relations but of freeing new forces for
cooperation.

Instead of the forced utilization of the Danube for winning energy,
the Government of Hungary intends to place the establishment of
an.Austrian-Hungarian-Czechoslovakian national park to link  the
regions and particularly the utilization of the healthy drinking water
reserve into the foreground. The international navigability of  the
Danube is to be ensured by the minimum of intervention  that will
not  involve risks similar  to those of the  barrage project.  The
Government follows a new, global  way of thinking and objectives
that reflect an ecological approach; it wishes to work together with
the Czech and  Slovakian Republic to rectify our error  with  an
ecological approach: there should be no banking-up at Dunakiliti
either; in  the area between  Vienna-Bratislava (Pozsony) and Gyor
a joint  Austrian-Hungarian-Czechoslovakian national park should
be established by the time of EXPO'95; the Hungarian Government
attributes primary importance to the protection of the  subsurface
waters  of the  Szigetkoz and  the  Csalldkoz and  of  their  shore
filtration draw-off possibilities for  the purposes of future regional
drinking  water  supply;  it  aims  at  the  human  and  integrated
development, of the area along  the  Danube between  Rajka and
Budapest   paying  particular  attention  to  the  local  interests
represented by the local governments, such as the supply of drinking
water,  tourism,  mitigation  of environmental  damage,  etc.;  at
reconstructing the Bend of the Danube with particular emphasis on
the natural, historical and cultural values as well as the requirements
of tourism, holiday making  and waterborne traffic; at  saving  the
characteristic gallery forests and to their re-afforastation, wherever
possible; and - as in general - it aims at eliminating the' separating
role of the borders, at assisting the natural contacts of the people
living on  the two sides of the river  by means of foreign policy and
regional development.  .              :        .

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Program for environmental actions
     (Government Program
  launched in September 1990)

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TASKS. THE MODE OF SOLUTION
   The  built  environment:  By re-regulating  construction,  the  values;'
       generating and value safeguarding aspect of construction is to be^
       strengthened  (renewal, protection  of  historical monuments}. The-
       government regards the protection  of the country's national values-'5
       (natural resources, historical monuments, folk artistic, cultural and
       historical heritage) as its task. To this end, the government intends
       to  set  up a  national  institutional  system for the protection  of
       historical monuments suitable  for both  dealing  with, the tasks
       involved and  for property management.  At the same time a new
       low will be drafted on the protection  of historical monuments. In
       addition,  to the state subsidy serving the protection  of  historical
       monuments, preparations are under way for the establishment of
       a separate state fund relying on Courts of the protection of Historical
       Monuments,  on private  and institutional foundations and  on the
       revenues  generated by the  utilization of these monuments. The
       implementation of the program will take  the ecological loadabiiity
       of  the  holiday resorts also into  consideration.

       Within the drafting of the new construction law, it is intended that
       the emphasis  be shifted from the individual building to the entire
       built environment,  from the unidirectional  regulation  to social
       consensus; the government intend to achieve that construction serve
       the public interest, that it be  implemented in a coordinated manner,
       that it be organically fitted into the environment. Physical planning
       can serve the protection of  the  natural environment and  the
       development of the built environment only if it is under strong.social
       and professional control. To mitigate the excesses of the transition,
       the  role  of  physical  planning,  landscape  protection  and  the
       construction authority will have  to be strengthened to protect the
       public  areas,  land and  the structure of the towns.

       In the work of the government, the construction authority supports
       the well considered  planned development of the towns and villages
       wishing to strengthen the role of planning in cooperation with the
       local governments;  it  will take  stock  of the  values  of  the built
       environment   to be  protected,  determine the values of historical
       monuments, protect and take care of them; review the elements of
       technical regulation on the  basis  of  the social requirements set
       against edifices; it will develop a  nationwide system of construction
       administration called  to provide  professional assistance. to  the
       environment development activities of local governments, economic

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Noise, vibration: The government shall assess the situation and elaborate
    an action program.


Radiation: Radioactivity has been more or less regularly measured since
     1950  in  Hungary.  There  is a  special  control program  in  the
 *   environment of the users of nuclear energy, with particular emphasis
    on the 30 km zone around  the nuclear power station at Paks. The
    Tshernobil  catastrophe  of 1986 caused slight increase  in  the
    radiation  load of the country.


The institutional system of environment protection: The institutional
    system of  environment protection  was influenced by  sectorial
    interests. The deficiencies of inter-departmental cooperation and the
    division of the instruments of environment protection have  lead to
    severe disturbances in the  operation of  environmental protection.


 Economic incentives for the protection  of the environment: the weak,
     penalty-oriented regulations do not encourage the protection of the
     environment nor are they sufficient for  the replenishment of the
                                                                                    ft
                                                                                    *
    organizations  and citizens and  to  represent the institutionalized
    values or  society.                            "
Wastes: In Hungary, the quantity of waste generated is relatively high
    in an international comparison, while the rate of waste utilization
    is low. The introduction of low waste technologies is still in its initial
    stage. This,  in Hungary, only about the half of the generated  100
    million tons of waste is utilized, making up about 35E of the total
    quantity of materials used. The results of the programs elaborated
    for the utilization  of wastes and secondary  raw  materials have
    gradually diminished as incentives were withdrawn. At present, the
    economic  and  legal instruments whereby enterprises  could  be
    encouraged to utilize secondary row materials have virtually ceased
    to exist. The government intends to halt this process. At the same
    time the program aimed at reducing hazardous waste generation and
    improving their neutralization will be reviewed and  continued; it
    was  within  the  framework of  this program that the final waste
    disposal site at Aszo\l and the  incinerator plant at Dorog were
    commissioned in 1989. Some 16.5 million cubic meters of waste
    generated in the towns and villages are collected and neutralized,
    mainly by disposal.  Owing to the saturation of the disposal sites,
    this  solution involves  increasing problems.
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r
.*
 *
 n
    financial funds of environment protection operations. The principle.
    according to which one should pay for using nature and the revenues
    thus collected should  be put towards the creation  of a healthy
    environment and the safeguarding of the values thereof, has not been
    implemented. The position of environment protection is  reflected
    by the fact that expenditures  to this end  do not reach 15? of the'£"-
    GDP, which is lagging far behind the practice of advanced European^
    countries.                                                     *•
The impact of the change of system: Despite the inherited difficulties
    a historic  opportunity has now opened for environment protection.
    Inter alia, it was the various "green" actions that gave the decisive
    impetus to  the democratic  transformation process. The  public
    demand for a healthy and humane environment has awakened. The
    measures of the government and the citizens' activities can guarantee
    that the deterioration of the state of the environment will be halted
    and that it  will be improved. The state of the environment in Hungary
    requires that principles be reviewed and  practices in the protection
    and use of  the environment be  developed. The most important
    principle  is" that it  is the economy that should be developed and
    'operated in  harmony with the environment. The revitalization  of
    the Hungarian  economy  will   only  be  possible  through   an
    environment   friendly   restructuring   of  the   economy,   the
    establishment of a  market economy and the strengthening of the
    owner's approach. Environment protection and nature conservation
    are fundamental national  interests.

    The. government  does not accept  the single-mined  technocratic
    approach,  the underestimation of  dangers, the assertion  of  the
    interests of  small  groups and thereby putting the health  or  the
    natural/social environment of others at risk and consequently the
    further deterioration of the existential bases of the economy. In line
    with its environmental  philosophy  and  strategy, the government
    intends  to introduce radical changes in the legislation pertaining
    to environment protection and nature conservation their institutional
    system and its mechanism of operation. Yet it is also obvious that
    the problems of environment protection can be solved only if the
    attitude and value system of the Hungarian society  changes  and  its
    sensitivity to problems  of the environment further increases.

    The government's objective is to lay down the right to a healthy
    and clean  environment as a fundamental individual and communal
    right, in general, the so called "third generation" human rights more
    precisely than what is presently set forth in the Constitution; it will
    also request an interpretation of the present formulation from the

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                                                                                   m
    Constitutional Court. The new law on environment protection and
    nature conservation will contain the conditions and possibilities of
    using natural resources, the ways and means of preventing activities
    constituting a threat to the environment as well as causing actual
    damage, in this way, also  laying down the general requirement for
    environmental impact  studies. The legal system in force  will be
    reviewed and protection laws (particularly a law for the protection
    of animals) will be submitted. The  objective  is to reconcile  the
    interests of the economy and of the environment and to let the costs
    of using the environment  appear, in proportion to the extent of
    utilization, at the users. The centralized-revenues are meant to cover
    the costs of the state and of the environmental authority; lending,
    tax and customs  policies are  to encourage the development and
    spreading of environment-friendly technologies and products as well
    as the establishment of non-profit organizations that will produce
    environment-friendly energy (small wind, hydro- and solar power
    stations) and low energy equipment (lighting fittings, machinery,
    etc.) and sell these.

    Another objective is  to  cooperate  with  the  institutes   for
    environmental protection of the European Community,  to  explore
    further opportunities for cooperation and to improve existing ones.
    The Government will review the recently concluded'international
    agreements. Matters of the environment will  be separated from
    direct  production interests,  a  perceptible  deceleration  of  the
    •deterioration of the environment will be achieved, primarily in  the
    severely polluted areas. The government also intends to raise social
    awareness  in matters  of the environment.  It will assist the local
    Government in setting up their specialized apparatus with expertise
    in environmental matters. In reviewing the use of nuclear energy
    and the disposal of radioactive wastes, the natural conditions and
    laudability of the natural environment as well as the interests and
    views of society and of the community concerned will be taken into
    consideration.
Action programme: To  safeguard  man and  the biosphere, to protect
    the elements of the environment and to mitigate the impact of
    pollutants, the following priorities will be enforced: improvement
    of the purity of air; treatment  and risk-free recycling or disposal
    of hazardous waste; protection of drinking  water reserves  from
    further pollution; placing endangered natural resources under urgent
    protection; active participation in the regional and global protection
    of the Carpathian  basin.
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    The Government will promote the implementation of the objectives
    of environment protection through customs, tax and price policies.
    The concrete modes thereof will be laid down in the current Budget.
    Thus  next year,  the customs  tariffs on products related to the
    implementation of the objectives of environment protection wilL.be
    cut to a greater extent than the  general tariff  cut expected. The
    accurate and' detailed  magnitude  of  the  tariff cuts and   their
    distribution will be published in connection with the detailed 19,91
    Budget.                             -                •  -
Protection of  air purity: The  further reduction of the emission of
    industrial and communal pollutants requires significant financial
    expenditure.  The source thereof is to be created by Government
    measures, preferences and from fees for using  the environmental
    and from penalty revenues.

    To reduce air pollution in the case of existing power stations, the
    Government will have the mode of operation of these power stations
    modified  and  will  enforce  the  requirements of  environment
    protection also in the case  of  reconstructions.

    As of next year the annual mandatory environment protection control
    of cars will be introduced to control the emission of flue-gases; the
    modernization and replacement of the obsolete car park will be
    encouraged by  a customs tariff and  taxation system that will be
    selective according to environmental considerations.

    Fitting existing  cars with devices reducing air pollution will also
    be encouraged. In the course of  the next three years, the importation
    of four-stroke  engines  to  replace  two-stroke  engines  will be
    promoted by way  of customs  policy.  With  the reasonability
    corresponding to the age of the cars, the Government will, having
    effected  the necessary technical and economic preparations,  order
    that  cars be  subsequently equipped with catalytic converters.

    The  application of pollution reducing devices and inventions will
    be encouraged;  cars equipped with  such devices will  be  given
    preferential treatment in the case of traffic restrictions for reasons
    of environment protection. The sale of fuels causing unnecessary
    pollution  will  be stopped.  By  changing fuel  price ratios,  the
    consumption of fuels causing less pollution (lead-free petrol) will
    be encouraged. Banning obviously polluting vehicles from traffic
    will  also be made  possible,  although  with  a period of  grace;
    unnecessary  car  use will be  reduced  through expedient traffic
    re-organization and  the  development of infrastructure.

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    To  meet  the  obligations  undertaken  by joining  international
    agreements, halo-hydrocarbons will have to be reduced; therefore
    the Government will order the termination of the  production of
    freon-filled sprays and support the spreading of sprays operating
    with mechanic atomization or alternative  driving gases with the
    preferences  granted  to  environment-friendly  products;  it  will
    support the introduction of technical measures whereby the quantity
    of freons escaping refrigerators can be reduced to a minimum; it
    will  introduce restrictions in  the  case  of  technologies using
    halo-hydrocarbons and support their replacement; it will review the
    technical regulation  of air quality protection  and adjust it to the
    European  norms (standards, principles, etc): it will set-up an air
    quality  monitoring system that will be  in line with international
    standards  and linked to other  national and international systems.
    The'technical and legal conditions for calling smog alarm in the
    severely polluted areas  of the country will be put  in place.
Mitigation of the detrimental effects of wastes: The introduction of
    low-waste technologies came to a standstill owing to the backlogs
    in industrial restructuring, investment and reconstruction projects.
    For that reason, the Government initiates a program for the reduction
    of waste generation and the encouragement of waste utilization and
    neutralization.  A general  legal regulation  covering all kinds of
    wastes will be implemented and a concrete system of incentives will
    be  introduced  aimed  at reducing  the quantity and  degree of
    hazardousness  of  wastes generated;  at  sparing  non-renewable
    resources;  at  promoting  recycling and  waste  utilization; at
    influencing consumer  behavior.

    The  Government  will  continue   the   program  for  the  safe
    neutralization of hazardous wastes, under which a hazardous waste
    disposal  site  and  pretreatment plant  will  be  built  in the
    Transdanubian area, the second hazardous waste incinerator will be
    built  in North  Hungary and the second  waste utilization plant of
    Budapest  will also be commissioned.

    By the end of  1991, recommendations will be issued for the  local
    governments on the selective collection, recycling and safe disposal
    of  communal  wastes; the selective  collection, utilization and
    neutralization  of  hazardous materials  in  household waste  {dye
    residues, chemical sources of electricity, medicament residues) and
    the recycling and neutralization and packaging materials will be
    begun.
*
*

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€
*
                           The Government takes particular care of the elimination of the
                           large-scale pollution caused by hazardous wastes and materials, such
                           as  the  soil pollution of military areas, the lead pollution  around
                           Te"tenyi Street in Budapest or the mercury pollution of the Borsod
                           Chemical  Works.
                       In relation to protection against noise and vibration: the noise level-
                           qualification of products will be  introduced; the noise load on the
                           population due to road and  air traffic will be mitigated by traffic
                           restrictions as  needed and with  technical solutions; requirements as
                           to protection against noise will be enforced in physical planning.
                       Protection  against  radioactive  radiation  :  the  appropriate  legal
                           regulations will be reviewed and comprehensive legislation will be
                           introduced. Care will be taken of the safe long term disposal of
                           the radioactive wastes generated by the Paks Nuclear Plant bearing
                           in mind the experiences of tifalu as well  as the issues  related to
                           the disposal of the remnants of the power plant upon its closing.
                           The radiation control of products will also be introduced. The survey
                           of  the  base  level of  natural radiation  and  radioactive material
                           concentration of the country will be completed. The presently de-
                           concentrated radiation monitoring  system will  be fitted into the
                           National Environment  Protection Monitoring  System.
                       Protection of  the waters:  Within  the  scope of  its authority,  the
                           Government intends to take measures to halt the deterioration of
                           water quality  of  the Danube, the Tisza and other surface  waters
                           of  the  country.  Continuing  the  comprehensive water  quality
                           regulatory  interventions  initiated earlier, the water quality of the
                           Balaton will  be  improved.  The  conception for protecting  water
                           quality will be  reviewed. To  mitigate  the damage  done  to  the
                           Transdanubian karst  and  thermal  karst  systems,  karst   water
                           "utilization" will be restricted and bailing where it is of a detrimental
                           magnitude  will be gradually phased out. To prevent  the widening
                           of the gap between water supply and sewage drainage systems, state
                           funds will be concentrated  on  expanding drainage and  sewage
                           treatment  capacities.  Efforts   aimed   at  changing  activities
                           jeopardizing  the  water .bases of  the  operational water  works will
                           be continued. The instruments of active financial policy (preferential
                           taxation, cheap loans, fees and contributions for using water, etc.)
                           will also be used to protect the waters.

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Nature conservation: In accordance with the spirit of the new low of
    nature conservation, further damage to the nature conservation areas
    making up 1% of the total area of the country and to their natural
    resources will  be  prevented. Valuable  natural  areas  meriting
    protection will be placed under nature  conservation protection. In
    1990 a national park will be established together with Austria' in
    the area of the Fertd (Neusidler) Lake.  National parks will  also be
    established in the northern Balaton region and elsewhere  (Orsdg,
    County Be'ke's, etc.). The parts rich in natural 'resources of the areas
    which were freed from previous military or border guards' use will
    be placed under protection  and  transferred to the ownership of
    environment   protection  organizations  (National . Park  of. the
  .  Kiskunsig  and  HortobSgy, Bakony area,  etc.). To safeguard the
    potential of the  landscapes and to restore it as needed, in 1991 the
    legal  regulations   serving  the safeguarding  of  the -ecological,
    economic and aesthetic  potential of natural landscapes  not under
    protection will be introduced and enforced. Emphasis will be placed
    on  the  reconstruction   of  damaged   protected natural  areas,
    landscapes, habitats {swamps, meadows, open  pits,  forests, etc.).
    Ownership of the areas under protection will be transferred to the
    nature conservation areas, with particular stress on  the  highly
    protected areas  as  well  as those  under the effect of international
    agreements.  The monitoring and information  system for  nature
    conservation  and forestry will also be set up. Nature conservation
    supervision  for  mineral exploitation will also be introduced. In
    protected areas, modes of economic activities in harmony with nature
    will be propagated  and  the general system of regulations of nature
    friendly management will be established (particularly in the areas
    of meadow,  forest  and  reeds management).

    The financial and organizational conditions of nature and landscape
    conservation will  be  improved, its scope of authority will be
    extended. The tasks arising from the international obligations of
    nature conservation will be met {trade in wild game, protection of
    the resting places  of migrating animals, biosphere reserves, etc.).

    A modern  law on the protection of animals that  will also  rely on
    the experience of the application of similar European laws will be
    submitted to Parliament.                      •   • \

    Special attention will be paid to the maintenance of the stock of
    plant and animal species in danger or on the brink of extinction,
    to the protection of their localities and to the protection  of the
    country's geological values.
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   Contingencies:  Finally,  the  discovery of  severe  cases  of hidden
       environment pollution that accumulated over a long period of time
     -  and  suddenly occurring cases of  severe  pollution (e.g.  spilling
       hazardous materials) will have to be reckoned with. The Government
       will  take care of the organizational and  technical conditions of
     •'* dealing with environmental emergencies.
Main tasks at the Danube barrage

       Preparation of the long term flood control and river control  plans
       of the part of the Danube above Budapest (in agreement with the
       Czech and Sloyakian Republic) and starting their implementation.
      : Termination of the filling of the temporary river bed and work pit
       at Nagymaros and completion of the reconstruction: with ensuring
       a navigable waterway of realistically reduced technical parameters,
       with the formation of near natural embarkments suitable for water
       sports as well as the draw-off of embankment filtrated drinking
       water.

       The infrastructural  investment  projects  (formerly linked to the
       barrage  project)  modified according  to the new criteria of town
       development, nature conservation, environment protection and water
       management are gradually being completed. According to our plans.
       the implementation  of  the first phase of  the international  nature
       conservation park will  be begun with.the termination of rough
       , technical .forestry and. agricultural  (soil erosion, use of chemicals)
      . .interventions and with the elimination of industrial pollution in the
       most severely  effected  areas.

       The first stage of the complex regional development conception and
       plan  to  be carried  out together  with the Czech and  Slovakian
       Republic contains  the  development  of  links of communication
       between  twin-towns  (Szalka-Letkes,  Pdrkany-Esztergom,  etc.),
       coordinated sewage treatment, environment protection and technical
       measures for the mitigation of industrial and nuclear pollution and
       for the reduction of risks.

       An ecological emergency can be avoided  only if the filling of the
       reservoir at Dunakiliti-Kortve'lyes will  not begin!

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