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Methodology of Cost Estimation of EU Environmental Directives in Ukraine

Volodymyr Mishchenko
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Volodymyr Mishchenko: Public Institution "Institute of Environmental Economics and Sustainable Development of the National Academy of Sciences of Ukraine", Kyiv

Economics of Nature and the Environment, 2014, 6-9

Abstract: It is proven the urgency of cost estimation of the ecological directives implementation in Ukraine in the context of the EU Association Agreement signing. Such assessments are the precondition of financial analysis of financing requirements and their sources. In is investigated the methodological tools of calculating the cost indicators which is to ensure getting of relevant and credible assessments. It is examined the composition and classes of costs, the main methods of assessment calculation and the peculiarities of their application. The European experience in the above-mentioned sector is generalized. Due to signing of EU-Ukraine Association Agreement, the question of cost estimation of the European directives' implementation is relevant. One of the main aims is commitment to ecological standards. The financial resources to implement the EU standards are expected to be of considerable amount. EU-Ukraine Association Agreement project in its part concerning nature protection legislation comprises 26 directives and 3 regulations which are to be implemented. The terms of implementation start from 2-3 up to 5-6 years (in some directives regulation – up to 8-10 years) on the entry into force of the Agreement. The cost indicators are the integral part of the implementation plans, on the basis of which it is necessary to analyse the investment requirements' financial resource capacity. The cost estimation of the European Union Regulations is to be based on using of certain standardized tools. Such information may be relevant and credible only being obtained by pre-determined methodology. Having no appropriate basis we will stumble upon controversial and disparate estimations, which can later be used with speculative purposes. It is grounded the application of methodological approaches based on macroeconomic comparison with other countries' experience; using unit labour cost; development of local (territorial) models, specially made software and some others. The implementation of the EU Regulations and Directives to the national nature protection is a complicated multistage process. Respectively, is includes a number of expenditures, beginning with administrative costs on the different levels of management, and finishing with capital and operating costs within the production sphere. The process starts from legal analysis on legislation conformity and transposition – transferring of legal regulation to Ukrainian legislation. Hereafter, it passes to the stage of work planning and management, providing of coordination among central and regional bodies of executive power, professional informational and financial support, realization of audit functions on all stages, and, finally, monitoring. The crucial role in forming the investment implementation is up to balancing of financing sources. Primarily, they are to be estimated capacities of the state and local budgets. Secondly, they are enterprises' assets, grants, loans, international funds benefit and other incomings. Based on the experience of the Central and East European countries having implemented the EU Regulations, this process received benefits from different EU funds, including structural ones. As far as it concerns Ukraine, such assistance is not expressly provided (except for technical one), but is within the bounds of possibility.

Date: 2014
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