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Assessing costs and environmental damage of pollutants

Assessing costs and environmental damage of pollutants

Promoted by the Embassy of Uzbekistan in Brussels. The views belong to the sponsor.

The establishment of payments for environmental pollution and irrational use of natural resources is a model for the introduction of economic instruments and incentives in the use of natural resources.

Integration of environmental and economic policy, which is a requirement of the time, requires the effective functioning of economic mechanisms based on the introduction of environmental factors into the market system.

The mechanism of compensation payments functioning in Uzbekistan for emissions of pollutants into the atmosphere, for discharges of pollutants into open water bodies and for disposal of waste does not fully reflect the damage to the environment.

Against the background of a shortage of material resources, it is important to take special measures to combine the processes of market saturation and meet the demand of natural resource users, including for highly efficient air and water treatment equipment, environmentally friendly technologies, as well as highly sensitive means of monitoring the state of the environment.

The main elements of the economic mechanism of nature management are: 1) payment for nature management; 2) a system of economic incentives for environmental protection; 3) payment for environmental pollution; 4) improving pricing taking into account the environmental factor; 5) formation of funds for environmental protection; 6) environmental insurance, environmental audit, etc.

The classical model for the introduction of economic instruments and incentives in the use of natural resources is the establishment of payments for environmental pollution and irrational use of natural resources, according to the principle “polluter – pays”, “natural resource user – pays”.

The economic mechanism of environmental management existing in Uzbekistan can be attributed to the soft (sparing) type, which is aimed mainly at the formation of extra-budgetary resources of the organisation, mainly for financing individual environmental protection measures, as well as material incentives for employees of environmental departments.

A sustainable “green” economy is characterized by a tough type, in which administrative and market instruments are used to the full, contributing to an increase in production based on modern technologies.

The second approach to the economic regulation of environmental protection is essentially a market-based approach. The market approach to nature management is understood as the optimal regulation of management on the nature management market, on the right to consume or to pollute the environment.

Indeed, it is now impossible to imagine an economy without the integration of environmental and economic policies. Such integration requires, first of all, the proper functioning of economic mechanisms and, in particular, the correction of “market failures”, that is, the further effective integration of environmental factors into the market system.

The economic mechanism of environmental management should provide:

1) high priority of environmental protection and regulation of the use of natural resources;

2) expanded reproduction of the natural resource potential of individual regions and the republic as a whole;

3) further improvement of the formation of financial resources for the protection, restoration and reproduction of the environment and natural resource potential;

4) the economic interest of nature users in the rational use of natural resources and environmental protection.

The mechanism of compensation payments functioning in the country for emissions of pollutants into the atmosphere, for discharges of pollutants into open water bodies and for disposal of waste does not fully reflect the damage to the environment. So, for example, at the end of 2020, the total amount of compensation payments received for emissions (discharges) of pollutants into the environment and for waste disposal amounted to 68.3 billion UZS (Uzbekistan national currency).

At the same time, last year the total volume of emissions of pollutants from stationary and mobile sources amounted to more than 2.5 million tons, discharges of polluted wastewater into open water bodies amounted to about 110 million m3.

According to our preliminary calculations, the total amount of direct damage to the environment from air and water pollution alone amounted to about US $1.9 billion (or 20 trillion UZS) per year.

In addition, if we take into account the indirect damage caused as a result of a negative impact on the productive forces of society as a whole, including on a person (an increase in morbidity, disability, disability, additional social costs, etc.), then we can add in addition to this amount 30% of the estimated direct damage.

Combined, the annual economic damage to the environment and public health is about US $2.5 billion. Thus, the economic mechanism of environmental protection applied in our country of charged compensation payments for emissions (discharges) of pollutants and for waste disposal is incomparable in comparison with the damage to the environment. There are also no effective incentives aimed at reducing the negative impact on the environment, rational use of natural resources and the use of resource and energy saving technologies.

Therefore, at the stage of transition from regulated economic mechanisms in ecology to purely market ones, the problem of property liability of economic entities for damage caused by their activities to the environment should become urgent.

The regulatory and legal mechanism for compensation for damage should ensure the irreversibility of compensation and the economic interest of enterprises (organisations) in reducing risk and reducing harm to the environment, as well as stimulating the introduction of innovative environmentally friendly technologies without (little) waste technologies.

Considering the above, we have developed perfect methodological recommendations for determining the aggregate damage for environmental pollution in the Republic of Uzbekistan.

Boriy Alikhanov


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