Brussels, Theme D Workshops Wednesday 7 October 2009 Ex-post Evaluation 2000-2006: Is building environment infrastructure supporting growth in Europe?

Brussels, Theme D Workshops Wednesday 7 October 2009

Ex-post Evaluation 2000-2006: Is building environment infrastructure supporting growth

in Europe?

This document is designed as support to the oral presentation and is not intended to be used separately

Open Days 2009 – Global Challenges, European Responses

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Agenda of the workshop

Presentation of the findings and conclusions of the part of the ex post evaluation of the 2000-2006 Cohesion Policy devoted to environment and climate change

– Why to evaluate the role of environmental measures in the context of regional development (Objectives 1 and 2)?

– Environmental issues at stake as main drivers

– Environmental expenditures in the EU during the 2000-2006 period (including the ERDF support)

– Main contributions of the 2000-2006 Cohesion Policy to support EU regional development

– Challenge for the future

Discussions with the participants to the workshop

Why to evaluate the role of environmental measures in the context of regional development ? (1)

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Global picture of the ERDF support to the environment in the EU-25 over the 2000-2006 period: €25.5 bn, which is equivalent to 21% of the total ERDF budget for all the fields of intervention

Environnemental infrastructures €11.3bn

Planning and rehabilitation €11.5 bn

Energy infrastructures €1.7bn

Land protection €0.2bn

Env-friendly technologies €1.5 bn

Climate-friendly interventions

Why to evaluate the role of environmental measures in the context of regional development ? (2)

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Expected role in terms of regional development? Neither clear at the beginning of the period nor clear in the literature

– Priorities at the beginning of the period:

“The Structural Funds and the Cohesion Fund should, as a priority, assist compliance with the environmental standards established in the relevant Community Directives, in particular with regard to water and waste management”.

Environmental issues at stake were the main drivers for allocating ERDF resources to the environment

Public intervention are justified in the environmental field because

– Environmental quality on a broad sense is a public good

– Environmental infrastructures generate positive externalities on public health, environmental quality and economic growth potential

ERDF intervention in the environmental fields (except urban rehabilitation) were overall relevant compared to the needs and issues at stake

– Water supply: quality of drinking water and sustainable source of supply

– Wastewater treatment and collection: weak connection rate in Objective 1 regions and WWD requirements

– Waste: Decoupling growth and waste generation and improving waste management and treatment

– Climate change: not at the core of the political agenda but concerns about efficient and diversified energy sector

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Environmental expenditures in the EU during the 2000-2006 programming period (1)

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Total funds in environmental infrastructures (mainly solid waste, water supply, and wastewater) for the 2000-2006 period: € 211 bn

Source: Eurostat, computation by ADE 2009

Funding models: Gradual transition from subsidy schemes to financing user charges

ERDF : € 11.3 bn

32.3%

42.0%

58.2%2.0%

13.6%

3.2%

8.4%

0.0%19.3%

23.8%

0.8%

0.0%

5.3%

4.3%

6.9%

31.8%

16.3%

31.6%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%

100.0%

EU 10 EU 15 O1 Other EU 15

National Public Resources ERDF ISPA Cohesion Fund EBRD EIB Industry


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All the funds devoted to the environmental sector: by group of EU MS

Improving and maintaining the ecological …

Preservation of the environment inconnection …

Environment-friendly technologies, clean and …

Environment-friendly technologies, clean and …

Energy infrastructures (production, delivery)

Renewable sources of energy (solar power, wind …

Energy efficiency, cogeneration, energy control

Environmental infrastructure (including water)

Air

Noise

Urban and industrial waste (including hospital …

Drinking water (collection, storage, treatment …

Sewerage and purification

Planning and rehabilitation

Upgrading and Rehabilitation of industrial and …

Rehabilitation of urban areas

Protection, improvement and regeneration of …

Maintenance and restoration of the cultural …

- 1,000.0 2,000.0 3,000.0 4,000.0 5,000.0

Millions €

Objective 1

Objective 2

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ERDF support to the environmental sector: by field of intervention and Objective


EU-4EU-15EU-10EU-25

ERDF budget (€m)

Field of interventionsSource:ADE, 2009 based on information from DG Regional Policy

Total O2 EU-25

€0.42 bn

Total O1 EU-25

€1.88 bn

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ERDF support to climate-friendly interventions: by field of intervention and groups of MS


Main contributions of the 2000-2006 Cohesion Policy to support EU regional development (1)

Main contribution: improved wastewater treatment and collection in lagging MS

Main results: extension and modernisation of wastewater treatment and collection network enlarging the coverage of population having access to such services (=> contributing to compliance with EU directives )

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Indicator Unit Objective 1 Objective 2 Total

Projects in water supply Number 165,597 134 165,731

Projects in wastewater Number 5,421 790 6,211

Additional population served by water supply projects Inhabitants 13,593,695 508,134 14,101,829

Additional population served by wastewater projects Inhabitants 14,929,582 5,517,455 20,447,037

Problems related to wastewater treatment and collection:– Oversized investment in some areas?– Final connection not ensured – Financial viability

Impact on quality of water (rivers, aquifers, coastal waters) not established


Other contributions to the environment

Water supply: – more oriented to solve the problem of sustainable supply but complex issue with results being

not clear at this stage

Solid waste: focus on treatment modalities and not on waste generation. Financial contribution was low but interesting results :

– the strengthening of the waste sorting and recycling capacities– closure/rehabilitation of landfills

Climate change: no significant impact in terms of the reduction of GHG emissions but interesting specific results:

– heating systems more energy-efficient– energy savings in entreprises– increased renewable energy

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Sectoral approaches followed as required at the beginning of the period (mainly compliance with WWD and various waste directives)

No clear understanding of interactions between environmental challenges and the growth process

Intended role of environmental measures in territorial development not very explicit

Objectives broadly laid down and logic of intervention difficult to highlight

Weak integration of environmental measures with other parts of the OPs. Some good cases but mainly for small interventions

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Weak integration of environmental measures into territorial development strategies


As a demand side effect, by increasing investment, internal demand and domestic product (but may be mitigated by crowding out effects)

As a supply side effect, by increasing the production capacity of the environmental sectors (mainly related to water and waste collection and treatment as well as in the renewable energy sector)

As an external input into production functions that can enhance the attractiveness of the region for direct investment and for qualified workers

By contributing to a better quality of factors of production (mainly natural resources) for specific sectors such as tourism, agriculture, etc.

By supporting a technological push that may increase innovation capacity within the region

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How environmental infrastructures could support regional economic growth ?


Overall: limited contribution to regional economic development Positive effects affecting mainly local areas without spillover effects on the regional economy Environmental sectors:

• improvement of labour productivity in the water sector • more direct effect on recycling activities (growing sector in terms of employment)• Missed opportunity in terms of developing a green economy (even if interesting

experiences) Some expected impact on tourism and agriculture Not a decisive factor for improving regional competitiveness : mainly rehabilitation measures

that have an impact on local sites attractiveness Has permitted macroeconomic adjustment: the ERDF has provided resources to local

authorities while budget constraint obliged central government to limit investment

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Assessment is based on 10 regional case studies

(combining Objectives 1 and 2 regions – rural/urban)

What have been the main results in terms of contribution to regional economic growth ?


15NB: « + » = small effect, « ++ » = medium effect and « +++ » = significant effect

Contribution of the ERDF environmental measures to economic development


Environmental sector

Tourism Agriculture Competitiveness of firms

Attractiveness for investments

Innovation

South Finland ++ +(still expected)

++ (in Lahti) ++

Lazio +(still expected)

+

Midi Pyrénées + +

Poland Podkarpackie

+ ++ (around Rzeszow)

+

Eastern Slovakia + + +

Latvia + + (internal) + (local sites)

UK-WWV + ++ + (local sites) ++

Portugal Norte + + + + (local sites) +

Greece- Central Macedonia

+(still expected)

+ (local sites)

Spain - Valenciana + ++(coastal zone)

+

Significant contribution in terms of standards of living Impact on spatial cohesion and location of population and economic activities Main tradeoffs:

– More populated areas/ less populated

– Potential centres of growth/areas under risk of marginalisation

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Other effects on territorial development


Challenge for the future

Environmental stakes are growing

To address them will require significant amount of resources that should not be managed separately from public intervention dedicated to support economic growth

Trade-offs between short-term /long-term objectives: (1) more productive investment today means more wealth tomorrow, but also potentially more pollution; (2) investment in cleaner technologies today means less pollution tomorrow but also potentially less wealth.

How can the ERDF contribute to – to make environmental investments more productive ?– to make other investment less polluting ?

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How to better integrate environmental investment into regional development strategies ?

Documents

Brussels, Theme D Workshops Wednesday 7 October 2009 Ex-post Evaluation 2000-2006: Is building environment infrastructure supporting growth in Europe?