Non-implementation of environmental law cost EU €55 billion in 2018

The costs to the EU of not implementing EU environmental laws in 2018 was around €55 billion (£47.4 billion), according to a new report.

The report, published on Friday 5 April by the European Commission’s Directorate General for the Environment, aims to provide an up-to-date estimate of the costs and foregone benefits for member states of not fully implementing EU environmental legislation, such as reduced biodiversity, increased risks from air and noise pollution and lost revenues from recyclable materials.

Non-implementation of environmental law cost EU €55 billion in 2018The EU maintains high environmental standards and has a sizeable body of environmental legislation that is implemented at national level by member states, such as the Waste Framework Directive of 2008 or the recent Circular Economy Package of 2018, which sets new ambitious recycling targets of 60 per cent by 2030 and 65 per cent by 2035. All member states are obligated to transpose EU directives into their national body of legislation.

The study, which benefited from work completed on the 2018 Environmental Implementation Review (EIR) reports – a tool launched by the Commission to improve implementation of EU environmental law – and was led by global consultancy COWI with environmental consultancy Eunomia Research & Consulting, evaluated the costs of EU member states not fully achieving environmental targets across seven policy areas: air, nature and biodiversity, water, waste, chemicals, industrial emissions and major accident hazards, and horizontal instruments.

The largest implementation gap cost estimate was attributed to air quality, with a central estimate of €24.6 billion (£21.2 billion) of costs in 2018, with nature and biodiversity and water following at €13.1 billion (£11.3 billion) and €9.3 billion (£8 billion) respectively. The central estimate of the cost of not fully implementing waste law was €4 billion (£3.5 billion). The size of the implementation gaps was calculated using the difference between estimates of the 2018 environmental status in each policy area and the respective environmental targets.

Commenting on the report, COWI's lead author and overall project leader, Peter Madsen, said: “An estimate of the costs to society of not fully achieving the environmental targets specified in the EU legislation is obviously connected with uncertainty. To encourage that the estimate is widely accepted among stakeholders, we have applied a transparent estimation method. We are thus positive to have provided a quality evidence base for policy making that also can be updated in the future.”

Eunomia’s lead author, Tanzir Chowdhury, added: “It is crucial to understand the effects failing to meet environmental targets has on the EU economy. This report clearly shows how important it is to ensure that member states are complying with environmental legislation: meeting the targets will result in stronger economies, better public health, and, of course, a diverse natural environment for our children to enjoy well into the future.”

Waste coming up short

In terms of waste specifically, EU waste policy is governed by several directives, six of which – the Waste Framework Directive, the Landfill Directive, the Packaging Directive and the directives on end-of-life vehicles, batteries and accumulators and waste electrical and electronic equipment (WEEE) – were subject to legislative amendments as part of the Circular Economy Package.

The revisions to the directives have seen a growth in ambition in targets contained in them, including targets for every member state to recycle 65 per cent of total municipal waste and limit landfilling to 10 per cent of all waste generated by 2035.

Waste was previously one of four policy fields identified in the 2017 EIR as the fields with the main challenges and pressing implementation gaps across member states, with several countries still well short of the EU’s 2020 recycling target of 50 per cent.

Regarding EU recycling targets, the UK currently has a four per cent implementation gap due to its recycling rate hovering around 46 per cent, and it is projected to miss the 50 per cent target unless action is taken. The UK also has an implementation gap of nine per cent against the future 2035 limit of 10 per cent of all waste generated sent to landfill. The UK also has projected implementation gaps of 5.3 per cent for both the 2030 packaging recycling targets (70 per cent) and the annual WEEE collection targets (65 per cent of electrical and electronic equipment (EEE) or 85 per cent of WEEE generated).

The total implementation costs for waste against current targets is €4 billion (£3.5 billion) across the whole of the EU, and this is projected to rise to €107 billion (£92.3 billion) if current practices continue. The potential material cost to the UK of missing its 2020 recycling target would be €177 million (£152.6 million), while against future waste targets the UK stands to see a material cost of €1.2 billion (£1 billion).

The costs accrued through implementation gaps are multiple and manifest in different ways. These costs can be quantified through the negative health and environment benefits or through unrealised market benefits, such as reduced costs of extraction of raw materials due to higher levels of secondary materials in circulation. Other costs can include market distortions due to uneven implementation across the EU and litigation costs for member states in the event of non-implementation.

You can read the full report, ‘The costs of not implementing EU environmental law’, on the European Commission website.

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