Communication from the Commission - EU-Russia Environmental Co-operation
Date: 2001-12-17
Institutions: European Commission
Subjects: Russia, drinking water, energy distribution, energy resources, environmental cooperation, environmental protection, environmental standard, foreign investment, trading operation, water supply

COMMISSION OF THE EUROPEAN COMMUNITIES

Brussels, 17.12.2001
COM(2001) 772 final

COMMUNICATION FROM THE COMMISSION

EU-Russia Environmental Co-operation

   
CONTENTS

EXECUTIVE SUMMARY ................................................................................................................ 3

INTRODUCTION............................................................................................................................ 4

1. THE BENEFITS OF ENVIRONMENTAL ACTION FOR RUSSIA ........................................................ 5

2. THE ENVIRONMENTAL SITUATION IN RUSSIA........................................................................... 6

3. THE ECONOMIC CONTEXT ........................................................................................................ 7

4. EXISTING FRAMEWORKS FOR ENVIRONMENTAL CO-OPERATION ............................................ 8

5. STRENGTHENING THE DIALOGUE: KEY OBJECTIVES ............................................................. 10

5.1.

5.2.

Aims ... ………………………………………………………………………………10

Instruments................................................................................................................. 10

6. PROPOSED COMMON AGENDA................................................................................................ 10

7. PROPOSED ARRANGEMENTS FOR CONDUCTING DIALOGUE..................................................... 13

8. CONCLUSION AND NEXT STEPS ............................................................................................. 14

ANNEX : EU ENVIRONMENTAL AID TO RUSSIA ............................................................................ 15

2

EXECUTIVE SUMMARY

The 7th Russia-EU summit held on 17 May 2001 reaffirmed the commitment of both sides to
strengthening their long-term strategic partnership with the aim of fostering economic growth
and  prosperity,  social  development,  a  clean  environment  and  strengthened  security  and
stability in Europe, on the basis of shared values. It repeated their strong interest in deepening
co-operation  in  the  field  of  the  environment.  The  8th  summit  of  3  October  2001  confirmed
these objectives.

This Communication sets out the Commission's ideas and proposals in order to work towards
this  objective.  It  takes  into  account  the  existing  environmental  co-operation  under  the  EU-
Russia Partnership and Co-operation Agreement (PCA) which came into force in 1997 and in
other  political  frameworks.  It  argues  that  the  time  is  ripe  to  develop  a  closer  and  more  co-
ordinated  bilateral  dialogue  on  environmental  issues  through  the  PCA  with  a  common
strategic  agenda  and  reinforced  procedures.  It  builds  on  the  ideas  set  out  in  the
Communication on EU-Russia Environmental Co-operation submitted to the College in May
2001  (SEC(2001) 723).  In  particular  it  stresses  the  importance  of  linking  environmental,
economic and social objectives in constructing a common European economic space that will
be sustainable.

3

INTRODUCTION

The EU's Strategy for Sustainable Development, 'A Sustainable Europe for a Better World',
endorsed by the Gothenburg Council in June 2001, presents a long-term vision based on the
recognition that economic growth must support social progress and respect the environment,
that social policy underpins economic performance, and that environmental policy should be
cost-effective.  It  underlines  the  key  role  the  EU  has  in  bringing  about  sustainable
development  within  Europe  and  also  on  the  wider  global  stage.  The  strategy  identifies  key
threats  to  sustainable  development  including  global  warming,  risks  to  public  health,  loss  of
biodiversity  and  soil,  transport  congestion,  adjusting  to  an  ageing  population,  poverty  and
social exclusion. Many of these issues require action at the international level. The strategy
calls  on  the  developed  countries  to  join  the  EU  in  providing  leadership  to  meet  these
challenges. It stresses that EU policies - internal and external - must actively support the
efforts of other countries to achieve development that is more sustainable.

The  EU's  Sustainable  Development  Strategy  forms  part  of  the  preparations  for  the  World
Summit on Sustainable Development to be held in Johannesburg in 2002. In preparation for
the  World  Summit,  the  EU  has  invited  Russia  and  its  other  European  partners  to  intensify
dialogue and action on the following:

(cid:1)  Protecting the natural resource base of economic and social development

(cid:1)  Integrating environment and poverty eradication

(cid:1)  Making globalisation work for sustainable development

(cid:1)  Enhancing good governance and participation

In order to reach sustainability in Europe and globally, the EU's partnership with Russia is of
growing  importance  both  for  environmental  and  economic  reasons.  The  need  for
environmental  co-operation  will  increase  steadily  as  the  EU  enlarges  to  the  east  and  the
economic transformation of central and eastern Europe and Russia proceeds.

The  EU  and  Russia  face  a  range  of  common  global,  regional  and  trans-boundary
environmental concerns such as:

(cid:1)  wasteful energy use and climate change;

(cid:1)  risks to human health from water and air pollution;

(cid:1)  depletion of natural resources and management of wastes, including radioactive waste;

(cid:1)  loss of natural systems and biodiversity;

(cid:1)  pollution of the Baltic, Barents, Caspian and Black Seas.

Moreover  the  EU  is  committed  to  assisting  Russia's  efforts  to  overcome  the  legacy  of
environmental problems that she faces and to conserve the immense areas of unspoilt nature
she enjoys.

4

1.

THE BENEFITS OF ENVIRONMENTAL ACTION FOR RUSSIA

Environmental progress is important in its own right, but equally action in the environmental
field  brings  significant  economic  and  social  benefits.  Effective  environmental  policies  and
standards

(cid:1)  help economic efficiency and raise productivity, for instance by applying cleaner and more

modern technology and management techniques.

(cid:1)  facilitate  access  of  exports  to  foreign  markets  and  enhance  the  climate  for  foreign

investment.

(cid:1)  yield economic benefits by reducing wasteful use of energy, water and raw materials.

(cid:1)  reduce  future  clean-up  costs  as  well  as  the  risk  of  accidents  and  environment-related
disease,  which  cause  human  distress,  disruption  of  the  reform  process  and  loss  of
productivity.

This can be seen for example in three areas of particular importance for Russia

(cid:1)  Energy: there are vast economic and environmental gains to be made from greater energy
efficiency, energy conservation, and more efficient production and distribution of energy,
including  reduction  of  pipeline  leakage.  Energy  efficiency  gains  almost  equivalent  to
Russia's natural gas production could be reached. This represents a huge amount of green
house  gas  emissions  that  can  be  reduced  with  a  view  to  mitigating  climate  change.  Soil
contamination as a result of oil leakage is also a major problem, as is risk of spillage from
sea-borne transport of oil. Wasteful energy distribution contributes to social costs such as
those caused by disruption of winter energy supplies.

(cid:1)  Water:  is  vital  for  life  and  the  health  of  people  and  eco-systems,  but  it  also  a  basic
requirement for successful economic development. Many branches of industry, agriculture,
tourism and fisheries depend on efficient and clean water supply. Inefficient cost-recovery
for  water  services  is  a  huge  burden  on  public  finance  and  fails  to  generate  the  resources
that are essential for efficient operation, maintenance and investment in infrastructure. By
avoiding pollution the need for expensive wastewater treatment is reduced.

(cid:1)  Trade  and  investment:  access  to  global  markets  means  producing  goods  and  services
which meet global standards - not least environmental standards - and being able to assure
consumers that those standards are being enforced. Russia's economic programme stresses
the importance  of  creating the conditions  to  attract  foreign  investment.  Investors  want  to
minimise  risks  and  uncertainties.  They  want  a  clear,  stable  and  efficiently  enforced
regulatory  framework  so  that  they  can  assess  with  confidence  what  their  environmental
responsibilities are.

5

2.

THE ENVIRONMENTAL SITUATION IN RUSSIA

It must be  stressed  that  in  many  respects  Russia  is  a  major  net  contributor  to  European  and
global  environmental  quality.  65%  of  Russia's  territory  has  not  been  affected  by  economic
activity and huge areas are virtually undisturbed by man. Russia contains 20% of global water
resources and 22% of global forests. The conservation of these immense environmental assets
is a key concern.

However,  Russia  also  has  immense  environmental  problems.  According  to  Russian  official
sources  the  environmental  situation  typical  of  densely  populated  urban  and  industrial  areas
(10-15% of the country's area) is 'alarming':

(cid:1)  municipal water supply is unreliable in many cities threatening water pollution, including
severe  contamination  with  heavy  metals.  One-third  of  all  water  pipes  and  17  percent  of
sewage  pipes  urgently  need  to  be  replaced.  Waste  is  exceeding  the  capacity  of  sewage
pipes by 60 percent.

(cid:1)  systems  of  industrial  and  domestic  waste  handling  are  inadequate  in  Moscow  and  other
cities. 1.8 billion tons of toxic waste has been accumulated and the annual increase is 108
million tons

(cid:1)  industrial and vehicle emissions are causing severe air pollution in many cities

The health situation of Russia is a matter of deep concern. Diseases and poisoning from heavy
metals and other toxic materials are a significant factor in the decline in life expectancy which
for  males  is  now  only  58  years.  On  current  trends,  the  population  would  decline  from  145
million today, to 135 million by 2015 and 100 million by 2050.

The condition of land is unsatisfactory and critical in some regions due to soil erosion, decline
in  humus  content,  desertification  and  flooding,  salination  and  nitrification,  and  pollution  by
pesticides, heavy metals and radionuclides.1

The potential for energy savings is vast. The potential for energy-efficiency gains is estimated
at  400m  toe  (compared  with  annual  natural  gas  production  of  490  toe).  Oil  companies  in
Russia  spill  some  20  million  tonnes  of  oil  each  year  (5%  of  total  extraction).  The  entire
spillage of crude oil into Alaskan waters by the Exxon Valdez spillage in 1989 would be less
than a day's spillage in the Russian countryside.

Many of these problems have a trans-boundary or global dimension. Russia accounts for 7%
of world carbon dioxide emissions for 1% of GDP. The reduction of pollution in the Baltic,
Caspianand Black Seas requires joint-action by the  EU and Russia. Control of air pollution,
chemicals  and  hazardous  waste,  including  spent  nuclear  fuel  and  radioactive  waste,  also
require  close  co-operation  and  offer  important  mutual  benefits.  For  example  a  recent  study
estimated that  the benefits to  non-EU  countries (notably  Russia,  Belarus and  Ukraine)  from
actions by the candidate countries to meet the requirements of EU directives would be at least
EURO 9.5 billion a year2.

1

2

Country Profile of Russian Federation to the UN Commission on Sustainable Development, 1997.
ECOTEC et al "Benefits of Compliance with EU environmental acquis for the candidate countries".

6

                                                
3.

THE ECONOMIC CONTEXT

After  a  decade  of  virtually  uninterrupted  economic  decline,  Russia's  GDP  grew  by  3.5%  in
1999  and  by  over  8%  in  2000  and  industrial  output  increased  by  some  17%  in  the  same
period.  The  growth  rate  is  however  expected  to  decrease  from  2001  onwards,  with  most
scenarios forecasting GDP growth of between 5 and 6%. The economic decline has had  the
effect of  reducing pollution levels, but  these are expected to  increase  again  as  the  economy
expands.

Real disposable incomes increased in 2000 by 9%. Nevertheless, 35% of the population (50
million  people)  are  living  below  the  subsistence  level  of  EURO  50  a  month.  The  average
nominal monthly wage in mid 2001 was EURO 130. This limits the scope for cost-recovery
for environmental services.

The  State  budget,  although  balanced  in  2001  and  2002  (draft)  is  under  great  pressure
especially  from  foreign  debt  servicing  which  accounts  for  about  one  third  of  forecasted
budget  revenue  in  2001.  This  constrains  funding  for  environmental  policy,  institutions  and
enforcement. Sovereign guarantees for environmental loans have been unavailable for several
years.

The  rate  of  public  and  private  investment  is  critically  low.  Massive  technological  and
management modernisation  is  needed  -  not  least  in  the  environmental  field,  much  of  which
has  to  come  from  abroad.  However,  Foreign  Direct  Investment  in  Russia  is  very  low
compared with other emerging economies. FDI in Russia between 1991-99 amounted to about
EURO 23 billion (compare: 36 billion to Poland or 340 billion to China).

The EU is by far Russia's main trading partner and accounts for  about  one  third  of Russia's
imports and exports. This figure could go up to 50% after EU enlargement. Russia has a large
trade surplus with the EU. Russian energy supplies are particularly important for both sides.
53% of Russia's oil exports and 62% of natural gas exports go to the EU. This represents 16%
of  EU  oil  and  19%  of  EU  gas  consumption.  This  expanding  trading  relationship  offers
incentives for harmonising environmental standards.

In sum, the economic background to improving Russia's environmental performance remains
very  difficult.  Nevertheless,  provided  that  the  recent  improvement  in  general  macro-  and
micro-economic  conditions  (including  the  current  reform  of  natural  monopolies)  in  Russia
continues, there will be growing opportunities for environmental progress in such areas as:

(cid:1)  demonstration investments with IFIs/donors in water and other municipal services, energy
efficiency,  reductions  of  greenhouse  gas  emissions  through  implementation  of  the  Kyoto
Protocol.

(cid:1)  re-equipping  and  improved  environmental  management  especially  in  sectors  attractive  to

domestic and foreign investment and those operating in international markets

(cid:1)  economic instruments and improved cost-recovery

7

4.

EXISTING FRAMEWORKS FOR ENVIRONMENTAL CO-OPERATION

The EU Common Strategy on Russia adopted by the EU Heads of State and Government at
the  Cologne  Council  (June  1999),  states  under  the  heading  ‘Common  Challenges  on  the
European Continent’ that the ‘environment is the common property of the people of Russia
and  the  European  Union…the  sustainable  use  of  natural  resources,  management  of  nuclear
waste and the fight against air and water pollution particularly across frontiers are priorities in
this area'.

The  environment  has  been  identified  as  a  priority  for  action  under  the  PCA.  Dialogue  is
conducted through the PCA Sub-committee on  Environment, Energy and Nuclear  Safety. A
Joint  Work  Programme  for  the  Russian  Federation  has  been  agreed  with  the  following
priorities:

(cid:1)  Harmonisation of environmental standards and legislation;

(cid:1)  Cross-border and regional initiatives (including Black Sea, Baltic Sea);

(cid:1)  Promoting environmental investments in Russia;

(cid:1)  Harmonisation of Environmental Impact Assessment procedures;

(cid:1)  Co-operation on environmental monitoring and reporting;

(cid:1)  Climate change – reduction of greenhouse gas emissions;

(cid:1)  Safety of nuclear installations and radioactive waste management;

(cid:1)  Cross-cutting  themes  such  as  raising  public  awareness,  integration  of  environment  into

other sectors, institutional capacity building.

It was agreed at the May 2001 EU-Russia Summit to establish a joint high-level group within
the framework of the PCA to elaborate the concept of a common European economic space.
Discussions  on  the  possible  areas  to  be  covered  by  this  initiative  are  in  progress.  A  first
meeting  of  the  High-level  Group,  co-chaired  by  Commissioner  Patten  and  Vice-Premier
Khristenko is planned for late 2001.

Environment and energy efficiency was one of the four themes analysed by experts during the
preparatory  phase  of  the  EU-Russia  Energy  Dialogue.  The  Dialogue  was  launched  at  the
EU-Russia  Summit  held  in  Paris  in  October  2000,  with  the  remit  of  working  towards  the
establishment of an EU-Russia Energy Partnership with the framework of the PCA. To enable
the initiative to be formalised swiftly, Russian President Putin nominated Vice-Prime Minister
Khristenko  as  Russia's  interlocutor  and  Commission  President  Prodi  designated  Mr
Lamoureux, Director General of Directorate General for Energy and Transport.

The Dialogue provides a framework within which all issues of common interest in the energy
sector can be jointly  examined and discussed. These include co-operation on energy saving,
rationalisation of production and transport infrastructures, European investment possibilities,
and relations between producer and consumer countries. The overall objective is to improve
energy  relations  while  ensuring  that  the  policies  of  opening  and  integrating  energy  markets
are  pursued.  In  this  exercise,  the  Commission  is  acting  mainly  as  a  facilitator  to  improve
investment  opportunities  in  Russia’s  energy  sector  in  order  to  upgrade  the  infrastructure,  to

8

promote  energy  efficient  and  environmentally-friendly  technologies  and  to  enhance  energy
conservation in Russia.

The  Communication 
the  Commission  on 
(SEC(2001) 712/5) was presented on 15 May 2001 on the progress achieved to date.

the  EU-Russia  Energy  Dialogue

to 

From  the  four  reports  submitted  by  the  experts  in  June  2001,  a  joint  Synthesis  Report  was
prepared by the two sole interlocutors and submitted to the EU-Russia Summit in Brussels in
October 2001. This report highlights a number of areas in which progress could be obtainable
over  the  short  term,  as  well  as  indicating  a  number  of  important  issues  will  require  further
exploratory contacts and technical examination before further progress can be made.

EU assistance for Russia is provided mainly through the Tacis programme. Environment is
not  currently  one  of  the  three  specified  priority  areas  in  the  Tacis  National  Programme  for
Russia. Nevertheless a number of projects with cross-cutting environmental benefits are being
supported (for  example co-financing of investments in municipal services particularly  waste
water treatment in St Petersburg is under consideration for the 2002-2003 national indicative
programme  for  Russia).  Environmental  projects  involving  Russia  are  also  being  supported
under  other  Tacis  programmes  notably  the  Regional  and  Cross-Border  Programmes.  (see
annex listing Tacis and other EU environmental assistance to Russia)

The Commission is also working with the EIB, the IFIs and donors to promote environmental
investments in Russia. In accordance with conclusions of the Stockholm European Council of
March  2001,  the  Community  will  provide  a  guarantee  for  the  European  Investment  Bank
(EIB) to allow it to make loans for  selected  environmental  projects  in  the Baltic Sea rim of
Russia, notably in the St Petersburg and Kaliningrad areas. The loans will be assessed by the
EIB on a case-by-case basis, must be of significant interest  to  the  EU,  will  be subject to an
indicative  ceiling  of  EUR  100  million,  and  Russia  must  honour  its  international  financial
obligations, including  those  to  the  Paris  Club.  The  EIB  will  co-operate  and  co-finance  with
other  IFIs  through  the  Northern  Dimension  Environmental  Partnership  (NDEP)  which
provides  a  framework  for  priority  setting,  involving  the  Commission,  bilateral  and
multilateral donors, the IFIs and Russia.

Russia  is  also  a  key  partner  for  the  EU  in  multilateral  environmental  agreements  and
the  common
international  forums  and 
environmental challenges they face. These include:

initiatives  concerned  with  responding 

to 

(cid:1)  UN Framework Convention on Climate Change and the Kyoto Protocol

(cid:1)  Convention on Biological Diversity

(cid:1)  'Environment for Europe' process and UNECE European regional conventions

(cid:1)  Northern Dimension, including the NDEP

(cid:1)  Multi-lateral Nuclear Environment Programme for Russia (MNEPR)

(cid:1)  Regional  Seas  -  Baltic  (Helsinki  Convention)  Black  Sea  (Bucharest  Convention)  and
Atlantic  (OSPAR  Convention),  and  Regional  Fisheries  Organisations  in  the  Baltic  and
North-East Atlantic

9

5.

STRENGTHENING THE DIALOGUE: KEY OBJECTIVES

5.1.

Aims

There  is  considerable  scope  to  improve  the  environmental  dialogue  with  Russia.  Although
many valuable initiatives are taking place on specific aspects this has not led to a substantive,
strategic dialogue. Existing structures offer sufficient opportunity to develop such a dialogue,
but  there  is  a  clear  need  for  greater  political  commitment  to  realise  the  full  potential.  It  is
essential to bring into the dialogue the key actors on both sides as responsibilities impacting
on  the  environment  are  dispersed  widely  within  the  Russian  government  and  the  European
Commission.

The  overriding  aim  is  therefore  to  achieve  a  more  fluent  and  comprehensive  EU-Russia
dialogue  on  environmental  and  sustainable  development  issues.  This  should  focus  on  a
Common  Agenda  of  areas  where  environmental  action  can  be  most  beneficial  to  Russia's
wider economic reform and vice versa.

5.2.

Instruments

The existing structures should evolve to facilitate the enhanced dialogue. They should be:

(cid:1)  Located within the PCA structure

(cid:1)  Permanent - continuing between annual or bi-annual meetings of PCA sub-committee

(cid:1)  Flexible and responsive - to enable substantive discussion on the full range of  matters of

current mutual concern

(cid:1)  Co-ordinated - involving all the relevant ministries and agencies on the Russian side, and
all  the  relevant  Directorate-Generals  on  the  Commission  side,  as  required  in  order  to
ensure the integration of environment into other policy sectors. Because of the focus on the
interface with economic  issues it will be essential that  the Russian  ministries responsible
for economic reform are fully involved.

(cid:1)  Resourced - with sufficient human and financial resources on both sides to ensure efficient

operation

6.

PROPOSED COMMON AGENDA

The  agreed  Joint  Work  Programme  under  the  PCA  remains  valid  and  its  implementation
should  continue  through  the  enhanced  dialogue.  However  it  was  developed  between  DG
Environment  and  the  former  State  Committee  on  Environmental  Protection  in  1999;  since
then there have been important organisational and policy developments both in Russia and the
EU.  A  broader  strategic  agenda  should  therefore  be  agreed  that  takes  account  of  these
changes.

A key starting point is Russia's objectives of environmental policy and resource management
as  set  out  in  the  Medium-Term  Economic  Development  Programme  for  the  Russian
Federation (2002-2004):

10

(cid:1)  Preserving stability and maintaining a sustainable equilibrium in regional and country-wide

ecosystems as a part of the global ecological balance

(cid:1)  Creating favourable ecological conditions as a factor in improving human habitat

(cid:1)  Establishing an environmentally friendly economy to minimise the negative impact on the

environment and ensure that resources and energy are used efficiently

(cid:1)  Maintaining the overall sustainability of the biosphere

Priorities for action in the medium-term include

(cid:1)  resource and energy saving technologies, processes and products

(cid:1)  economic  instruments,  environmental  standards,  improved  environmental  control  and

inspection, environmental assessments

(cid:1)  Construction and renovation of water treatment plants, reduction of atmospheric emissions

(cid:1)  Application  of  the  'polluter  pays  principle'  -  including  internalisation  of  environmental

costs through pollution charges

(cid:1)  New  financial  mechanisms  to  encourage  investment  and  budgetary  aspects;  improving

environmental policy to attract foreign investment

(cid:1)  Structural change in the 'dirtiest' sectors of industry

(cid:1)  Active role in international processes

These objectives and priorities will guide Russia's Sustainable Development Strategy which is
currently under preparation.

The common strategic agenda should also reflect the priorities and the objectives of the EU as
identified in the EU's strategy: A Sustainable Development for a Better World, in particular:

(cid:1)  Limit climate change and increase the use of clean energy

(cid:1)  Address threats to public health

(cid:1)  Manage natural resources more responsibly

(cid:1)  Improve the transport system and land-use management

(cid:1)  Combating poverty and social exclusion

(cid:1)  Dealing with the economic and social implications of an ageing society

The EU's 6th Environmental Action Programme 'Environment 2010: Our Future, Our Choice'
identifies four priority issues climate change, nature and biodiversity, environment and health,
and natural resources and water, as well as five key policy approaches which are valid in this
context:

11

(cid:1)  Ensure the implementation of existing environmental legislation;

(cid:1)  Integrate environmental concerns into all relevant policy areas;

(cid:1)  Work closely with business and consumers to identify solutions;

(cid:1)  Ensure better and more accessible information on the environment for citizens;

(cid:1)  Develop a more environmentally conscious attitude towards land use.

On the basis of the priorities of both sides, it is proposed that the enhanced dialogue should
therefore focus on the following areas:

Efficient  use  of  energy  and  combating  climate  change:  more  efficient  generation,
distribution and use of energy resources are the key to reducing greenhouse gas emissions and
also bring major economic benefits. The Russian Federation underlined at the closing session
of the Seventh Conference of the Parties to the UNFCCC (COP-7, Marrakech in November
2001)  that  the  results  obtained  there  have  opened  the  path  for  the  ratification  of  the  Kyoto
Protocol  by  all  countries,  including  Russia.  The  EU  and  Russia  have  a  common  interest  in
implementation  of  the  UN  Framework  Convention  on  Climate  Change  (UNFCCC)  and  the
Kyoto  Protocol.  .  Further  co-operation  on  climate  change  under  the  Partnership  and  Co-
operation Agreement should maximise the synergies with the EU/Russia Dialogue on Energy
the  outcome  of  which  aims  at  attracting  investments  in  the  energy  sector  in  Russia  and
improved  energy  efficiency.  In  this  respect,  the  EU/Russia  Energy  Dialogue  should  also
facilitate the development of Joint Implementation projects in Russia. The enhanced dialogue
should  include  consideration  of  concrete  joint  action  to  implement  UNFCCC  and  Kyoto
commitments,  including  capacity  building  activities  on  monitoring  greenhouse  gases  and
reporting. This should facilitate the early ratification of the Kyoto Protocol by Russia and the
EU  and  allow  the  EU  and  Russia  to  participate  in  the  Kyoto  mechanisms,  in  particular
emissions trading and Joint Implementation. For this purpose the EU's existing financial tools
and technical assistance methods should be reinforced in co-operation with the IFIs.

Improving public health: much can be done through environmental action to reduce health-
risks which particularly affect vulnerable groups including children and the poor. A pressing
priority is the condition of the water supply system which is critical in many parts of Russia.
Action  is  essential  to  improve  the  management  and  maintenance  of  the  system,  reform  its
financing and reduce risks to public health. The dialogue should build on existing initiatives
(eg the Almaty Conference of Environmental and Economic Ministers in 2000) and projects
(St  Petersburg  Waste  Water  Treatment)  but  should  also  develop  a  new  common  agenda,
particularly in the field of air quality.

Improving  resource  efficiency:  Trade,  Investment,  Industrial  Re-equipment  and  waste
management: this is another key area where economic and environmental interests coincide.
Co-operation  should  focus  on  promoting  the  internalisation  of  environmental  costs  through
reduction  of  subsidies,  improving  cost  recovery,  and  increasing  the  use  of  economic
instruments as well as promoting the application of the Polluter Pays Principle. This will yield
benefits through more efficient use of infrastructure, energy and raw materials, by generating
revenue for improved services and investment, and by allowing more efficient and effective
enforcement of environmental policies.

12

Co-operation  should  also  focus  on  issues  related  to  replacement  of  obsolete  industrial
technologies and processes and improved environmental management  in enterprises.  This is
particularly  important  in  the  area  of  management  of  hazardous  wastes.  Russia  faces  a  huge
task in coming years to modernise infrastructure and equipment throughout its economy. This
will produce major environmental as well as economic benefits as old polluting technologies
are replaced.  Low-cost improvements in  environmental  management in enterprises  will also
improve economic performance.

One very important issue in this context is that of the management of spent fuel, from nuclear
power  stations  and  nuclear-powered  submarines,  and  radioactive  waste.  The  environmental
threat posed to the Arctic Seas by the legacy of wastes in North-West Russia have been well
documented, but there are other areas where equally serious problems exists, such as around
the fuel reprocessing complex at Mayak and the installations at Krasnoyarsk and Tomsk.

The dialogue should also pay attention to the role of improved and harmonised environmental
standards and their enforcement in creating more favourable conditions for trade and foreign
investment.  These  discussions  should  be  linked  to  the  developing  co-operation  under  the
Common European Economic Space.

Other  issues:  the  enhanced  dialogue  should  also  highlight  several  other  important  areas  of
co-operation:

(cid:1)  Environmental  monitoring:  Russia  is  leading  a  joint-initiative  with  the  European
Environmental  Agency to strengthen environmental  monitoring  and  reporting  at  the  pan-
European level. In addition, it was recently agreed that the EC/ESA European initiative on
"Global  Monitoring  for  Environmental  and  Security"  (GMES)  will  be  subject  of  an  in-
depth  analysis  of  existing  opportunities  for  cooperation  between  the  Russian  Federation,
the European Union and European Space Agency

(cid:1)  Public awareness and environmental information

(cid:1)  International  co-operation  and  implementation  of  multi-lateral  environmental
agreements: this should include the respective roles of the Russian Federal and Regional
authorities and an early conclusion of the Multilateral Nuclear Environmental Programme
for Russia (MNEPR).

(cid:1)  Northern Dimension, Danube/Black and Caspian Seas co-operation

(cid:1)  Sustainable use of natural resources of common interest

7.

PROPOSED ARRANGEMENTS FOR CONDUCTING DIALOGUE

The  PCA  sub-committee  should  continue  to  be  held  at  least  once  a  year  as  the  supervising
forum for the enhanced dialogue. It should be chaired at minister or vice-minister level on the
Russian side and Director-General or Deputy Director-General on the EU side.

Following  a  proposal  from  the  Russian  side  it  is  suggested  that  an  informal  working  group
should be established to meet on a regular basis (2 or 3 times a year) to continue the dialogue
between  meetings  of  the  sub-committee.  The  agreed  procedures  of  the  PCA  sub-committee
should apply to the work of this group. Specialist expert meetings may be held on a temporary
or  longer-term  basis  to  deal  with  particular  issues:  eg  climate  change  or  the  Northern

13

Dimension. The working group should be co-chaired by DG Environment and the Ministry of
Economic Development and Trade.

It  is  essential  that  there  is  co-ordinated  input  from  all  the  relevant  ministries/agencies  and
DGs at meetings. In particular better linkage should be made to the other policy  areas dealt
with in the Sub-committee (Energy and Nuclear Safety). On the Russian side, the Ministry for
Economic Development and Trade, the Ministry for Natural Resources, Roshydromet, and the
Ministry  for  Energy  should  be  closely  involved.  On  the  EU  side,  key  contributors  would
include DG Environment, DG External Relations (including the EC Delegation in Moscow),
DG Energy and Transport, DG Research, DG Regional Policy and EuropeAid.

Appropriate resources as well as representation at senior managerial level should be provided
by the respective sides to ensure efficient operation.

One  of  the  first  tasks  of  the  informal  working  group  could  be  to  up-date  the  Joint  Work
Programme  for  the  Russian  federation  agreed  by  the  PCA  sub-committee  on  Environment,
Energy and Nuclear Safety.

In addition  to reinforcing  the EU-Russia  bilateral dialogue consideration should be  given to
new approaches in order to strengthen multilateral environmental co-operation.

The Russian Regional Environment Centre which is supported by the European Commission
and  the  Russian  government  with  the  participation  also  of  other  stakeholders  (NGOs,
academic, business) can play an important and positive role in this context.

8.

CONCLUSION AND NEXT STEPS

An  enhanced  dialogue  on  environmental  and  sustainable  development  issues  is  an  essential
component  in  the  long-term  strategic  partnership,  based  on  common  values  which  was
reaffirmed by the 7th Russia-EU summit in May 2001.

It  is  proposed  that  the  ideas  and  suggestions  in  this  Communication  should  be  developed
further  with  Russian  counterparts  with  a  view  to  establishing  the  common  agenda  and
procedures as soon as possible.

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ANNEX : EU ENVIRONMENTAL AID TO RUSSIA

Tacis National Programme – Russian Federation

2000

(cid:1)  Harmonisation of Environmental Standards (€2m)

1999

(cid:1)  Environmental Monitoring Systems in Russia (€2.5m)

(cid:1)  Support to Waste Management in Russia (€2.4m)

(cid:1)  Restructuring of former Chemical Weapons Production Facilities (€3m)

1998

(cid:1)  Support to Ministry of Emergencies on Industrial Accident Prevention (€3m)

(cid:1)  Advice to Ministry of Natural Resources on Water Management (€2.5m)

(cid:1)  Chemical Weapons II (€3.9m)

1997

(cid:1)  Volga  Basin  Environmental  Management  Training  –  support  to  World  Bank  programme

(€2.9m)

(cid:1)  Improvement in Forest Fire Response system (€1.95m)

(cid:1)  Chemical Weapons I (€3.9m)

1996

(cid:1)  Institutional support for State Committee on Environmental Protection (€2m)

1995

(cid:1)  Lake Baikal - Ecological information and public awareness (€0.5m)

15

Tacis Russia Energy/environment projects

(cid:1)  Oil Industry Environmental Code of Practice (ended Sep 2000)

(cid:1)  Regulation of Energy Resource Development and Environmental Protection in the Timan-

Pechora Region (current)

Special Action Baltic Region 2000

(cid:1)  Kaliningrad - Waste Management (€2m)

(cid:1)  Lake Chudsoe - Environmental management (€2m)

Tacis Cross-Border Programme

2000

(cid:1)  Sortavala Sewage Treatment Plant Rehabilitation (€4.5m)

1998

(cid:1)  Kaliningrad water quality management (€2.4m)

(cid:1)  Environmental quality management, Patsojoki river (€1.4m)

1997

(cid:1)  Protected area management, Karelia (€3.5m)

(cid:1)  Tuloma River Salmon Restoration (€1m)

1996

Water supply and waste water management, Karelia (€1.5m)

16

Tacis Regional (NIS-wide)

2000

(cid:1)  Black Sea - technical assistance (€3m)

(cid:1)  Environmental Monitoring initiative (€1.5m)

(cid:1)  Environmental information, education and public awareness (€3m)

1999

(cid:1)  Implementation of Environmental Policies and NEAPs – focus on water (€3m)

(cid:1)  Joint River Management – capacity-building, transboundary water basins (€4m)

1998

(cid:1)  Joint Environmental Programme – project preparation with World Bank (€5m)

(cid:1)  New RECs – Phase 3 – includes REC-Russia (€3.1m)

Since  1994  Tacis  has  contributed  EURO19.5  million  for  environmental  research  and
development projects through the International Science and Technology Center

Tacis Small Projects Programme

2000

(cid:1)  Municipal  Investment  Support  Programme:  institutional  and  project  preparation  for  IFI

projects on water/sewerage, district heating, waste management (€4.5m)

(cid:1)  Policy  Advice  Programme:  short-term  policy  and  legal  advice  to  high  level  decision-

making bodies, including PCA implementation and environment policy (€6.2m)

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Tacis Bistro

1999

(cid:1)  Tver River - economic instrument (€97,000)

(cid:1)  Astrakhan - research on sturgeon breeding (€75,000)

(cid:1)  Chuvashia - hazardous chemical recycling (€98,000)

(cid:1)  Moscow region - reduction/prevention of oil pollution (€99,000)

(cid:1)  State Environmental Examination Service - training (€97,000)

(cid:1)  Moscow region - environmental improvement at ex-military sites (€96,000)

(cid:1)  North Caucasus - environmental improvement at health resort (€95,000)

Tacis Nuclear Safety Programme for Russia

Tacis also provides support for the improvement of the safety of nuclear power plants and of
other  civil  nuclear  installations  located  in  the  Russian  Federation,  including  fuel  cycle  and
waste management facilities through this programme.

DG Environment has supported a number of radioactive waste studies in North-west Russia
and around Mayak, Krasnoyarsk and Tomsk).

Life Third Countries Programme (St Petersburg, Kaliningrad)

1999

(cid:1)  Biodiversity Action Programme (€220,000)

(cid:1)  Helcom Effluent Limits (€141,000)

(cid:1)  Conservation of wild fauna and habitats, Leningrad (€173,000)

(cid:1)  Eco-auditing St Petersburg (€220,000)

1998

Survey and observation system for forests (€210,000)

Leachate pollution Baltic Sea, St Petersburg (€201,000)

18