Although the ‘polluter pays’ principle (PPP) underpins EU environmental policy (Article 191(2) TFEU), it is too often the European taxpayer, not the polluter, who bears the cost of the pollution the latter causes, the European Court of Auditors denounces in a report published on 5 July.
The audit sought to establish whether the PPP was properly implemented in four areas of EU environmental policy: industrial pollution, waste, water, and soil.
The auditors also looked at whether the Commission and Member States had protected the EU budget from being used to support expenditure that was intended to be borne by polluters.
The answer is no, because the PPP is applied unevenly and to varying degrees.
The stakes are high, since for the period 2014-2020, the EU has allocated a budget of around €29 billion to cohesion policy and the LIFE programme for projects whose primary objective is to protect the environment.
The auditors analysed 42 projects totalling €180 million from the European Structural and Investment Funds (ESI) and the LIFE programme in eight regions in three Member States: Italy, Poland, and Portugal.
“In order for the EU to achieve the ambitions set out in the European Green Deal in a way that is both efficient and fair, polluters must pay for the environmental damage they cause. However, until now, the European taxpayer has all too often had to pick up the bill instead of the polluter”, according to the member of the Court responsible for the report, Viorel Ștefan. According to him, implementing the PPP would reduce pollution and costs for citizens and society.
The Industrial Emissions Directive regulates the most polluting, large installations, but most Member States still do not hold manufacturers responsible for the environmental damage they cause if their emissions remain below the legal limit values (residual emissions), the auditors note. These costs run into hundreds of billions of euros. Furthermore, the Directive does not apply to small industrial installations.
The PPP applies under the Waste Directive, but there is an investment gap at national level for the proper implementation of extended producer responsibility.
For many companies, the cost of water does not cover diffuse sources of pollution, particularly from agriculture. Households generally pay the most, even though they consume only 10% of the water.
In addition, of the 42 projects examined, 20 concerned costs (€62.1 million) due to ‘orphan pollution’ for which the PPP could not be applied, either because the pollution was old or because the polluter could not be identified.
The Court of Auditors recommends that the Commission: – assess the possibilities of further integrating the polluter pays principle into EU environmental legislation; – consider strengthening the application of the Environmental Liability Directive (2004/35/EC), in particular by making it compulsory for companies to have sufficient financial guarantees for the damage they may cause; – protect EU funds by ensuring that they are not used to finance projects that should be borne by the polluter.
In Mr Ștefan’s view, “if there were only one recommendation to make, it would be this: require financial security for operators. This would be a pragmatic way of applying the polluter pays principle”, he told the press.
In Portugal, which imposes this obligation, “the authorities are very positive”, he said.
He added, “Some problems, such as water pollution, have been known for decades. We hope that our recommendations and the EU’s Zero Pollution Action Plan will help tackle this problem where political will has been lacking in the past”.
See the report: https://bit.ly/2UsFmyj (Original version in French by Aminata Niang)