06/11347 - fyrom - benefits of compliance with environmental...

Contract N° 07010406/2006/441662/MAR/E3

Task 2 - Benefits for the former Yugoslav Republic of Macedonia and other countries of SEE of compliance with the environmental acquis Final Report– Part II: Country-

The European Commission – DG Environment

06/11347/AL

October 2007

Patrick ten Brink (IEEP) Ljupco Avramovski (Enviro-L) Stijn Vermoote (Arcadis Ecolas) Samuela Bassi (IEEP) Karen Callebaut (Arcadis Ecolas) Arnoud Lust (Arcadis Ecolas) Alistair Hunt (Metroeconomica)

ARCADIS ECOLAS N.V. Roderveldlaan 3 2600 Berchem Belgium Tel: +32 3 328.62.86 Fax: +32 3 328.62.87 http://www.arcadisecolas.be

IEEP Quai au Foin, 55 1000 Brussels Belgium Tel: + 32 (0) 2 738 74 82 Fax: + 32 (0) 2 732 40 04 http://www.ieep.eu

http://www.arcadisecolas.be/http://www.ieep.eu/

ARCADIS ECOLAS / IEEP / Metroeconomica / Enviro-L Content 06/11347 - fYRoM - Benefits of Compliance with environmental acquis - final report

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CONTENT CONTENT.................................................................................................................................... I LIST OF ABBREVIATIONS .......................................................................................................III LIST OF TABLES .........................................................................................................................V LIST OF FIGURES ..................................................................................................................... IX LIST OF ANNEXES ....................................................................................................................XI EXECUTIVE SUMMARY ..........................................................................................................XIII EXECUTIVE SUMMARY – FORMER YUGOSLAV REPUBLIC OF MACEDONIA..........................XIII Benefit assessment air related directives.......................................................................................... xiii Benefit assessment water related directives ..................................................................................... xiv Benefit assessment solid waste related directives ..............................................................................xv Benefit assessment nature related directives .................................................................................... xvi Summary overview – former Yugoslav Republic of Macedonia ........................................................... xix 1 OBJECTIVES......................................................................................................................1 2 INTRODUCTION TO THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA......................3 2.1 The environment ............................................................................................................... 3 2.2 The economy .................................................................................................................... 4 3 BENEFITS ASSESSMENT OF AIR RELATED DIRECTIVES...................................................7 3.1 Current status of AIR QUALITY ........................................................................................... 7

3.1.1 National and Regional Level................................................................................................ 7 3.1.2 Air Quality Regulation ...................................................................................................... 12 3.1.3 Air Quality Monitoring ...................................................................................................... 13

3.2 QUANTITATIVE ASSESSMENT: AIR RELATED DIRECTIVES.................................................. 14 3.2.1 Introduction .................................................................................................................... 14 3.2.2 Methodology – The Impact Pathway Approach ................................................................... 15 3.2.3 Emission Reduction Scenarios ........................................................................................... 16 3.2.4 Extent of Benefits ............................................................................................................ 17

3.3 MONETARY VALUATION: REDUCED AIR POLLUTION .......................................................... 19 3.3.1 Benefits upon full compliance............................................................................................ 19 3.3.2 Trans-boundary benefits................................................................................................... 20 3.3.3 Conclusions..................................................................................................................... 20

4 BENEFITS ASSESSMENT OF WATER RELATED DIRECTIVES...........................................23 4.1 Current status of different water uses and threats .............................................................. 23

4.1.1 Drinking water................................................................................................................. 23 4.1.2 Recreational uses of water................................................................................................ 23 4.1.3 River ecosystems............................................................................................................. 24

4.2 Assessment using qualitative and quantitative data............................................................. 24 4.2.1 Introduction to the Method of Assessment ......................................................................... 24 4.2.2 Benefits from improved drinking water quality and supply ................................................... 25 4.2.3 Benefits to recreational users of water............................................................................... 31 4.2.4 Changes in River Ecosystems............................................................................................ 39

ARCADIS ECOLAS / IEEP / Metroeconomica / Enviro-L Content 06/11347 - fYRoM - Benefits of Compliance with environmental acquis - final report

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4.2.5 Future strategy on water management .............................................................................. 41 4.3 Monetary assessment....................................................................................................... 42

4.3.1 Benefits of Cleaner Drinking Water.................................................................................... 42 4.3.2 Bathing and other surface water quality – use values.......................................................... 44 4.3.3 Improved river ecosystem quality – non-use value.............................................................. 45

4.4 Aggregation of Benefits And Conclusions ........................................................................... 48 5 BENEFITS ASSESSMENT OF WASTE RELATED DIRECTIVES ...........................................55 5.1 Current status ................................................................................................................. 55

5.1.1 Waste generation and coverage ........................................................................................ 57 5.1.2 Recycling ........................................................................................................................ 58 5.1.3 Landfills .......................................................................................................................... 61 5.1.4 Packaging waste.............................................................................................................. 64 5.1.5 Incineration of waste ....................................................................................................... 66 5.1.6 Hazardous waste (HZW)................................................................................................... 67 5.1.7 Disposal of waste oil ........................................................................................................ 70 5.1.8 Batteries and accumulators............................................................................................... 70 5.1.9 Medical Hazardous waste ................................................................................................. 71 5.1.10 Disposal of PCB and PCT .................................................................................................. 72 5.1.11 Used Tires....................................................................................................................... 72 5.1.12 End of life vehicles........................................................................................................... 72 5.1.13 Construction and demolition waste .................................................................................... 72 5.1.14 Industrial contaminated sites ............................................................................................ 73

5.2 Assessment using qualitative and quantitative data............................................................. 74 5.2.1 Introduction .................................................................................................................... 74 5.2.2 National targets for the future years in the field of waste management ................................ 74 5.2.3 Landfill Directive .............................................................................................................. 76 5.2.4 Packaging Directive.......................................................................................................... 83

5.3 Summary and interpretation of results ............................................................................... 85 5.3.1 Summary results of the assessment .................................................................................. 85 5.3.2 Extent of the benefits....................................................................................................... 86 5.3.3 Summary of analysis approach.......................................................................................... 86

6 BENEFITS ASSESSMENT OF NATURE RELATED DIRECTIVES .........................................87 6.1.1 Current Status of Biodiversity and Ecosystems.................................................................... 87 6.1.2 Indicators used to assess the current state of nature protection and biodiversity................... 90 6.1.3 Threats to Biodiversity in the former Yugoslav Republic of Macedonia .................................. 95

6.2 Assessment using qualitative and quantitative data............................................................. 99 6.2.1 Environmental Benefits..................................................................................................... 99 6.2.2 Social Benefits ................................................................................................................100 6.2.3 Economic benefits...........................................................................................................101

6.3 CONCLUSIONS ...............................................................................................................105 7 LITERATURE .................................................................................................................107 8 ANNEXES.......................................................................................................................109

ARCADIS ECOLAS / IEEP / Metroeconomica / Enviro-L Abbreviations 06/11347 - fYRoM - Benefits of Compliance with environmental acquis - final report

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LIST OF ABBREVIATIONS BAT Best Available Techniques

CFCs Chlorofluorocarbons

CH4 Methane

CO carbon monoxide

DRF ‘dose-response’ function

ELV emission limit values

EPRTR European Pollutant Release and Transfer Register

HC hydrocarbons

HZW Hazardous Waste

IUCN International Union for the Conservation of Nature

MEPPP Ministry of the Environmental Protection and Physical Planning

NMVOVs non-Methane volatile organic compounds

MSW Municipal Solid Waste

NOx nitrogen oxides

NOx nitrogen oxides

PCB Polychlorinated biphenyls

PCT Polychlorinated terphenyls

PPP purchasing price parities

SO2 sulphur dioxide

VOCs volatile organic compounds

VPF Value of a Prevented Fatality

VSL Value of Statistical Life

WQO Water Quality Objective

WTP willingness to pay

PPP Purchasing power parity or parities.

ARCADIS ECOLAS / IEEP / Metroeconomica / Enviro-L Tables 06/11347 - fYRoM - Benefits of Compliance with environmental acquis - final report

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LIST OF TABLES Table 2-1: Key economic indicators for former Yugoslav Republic of Macedonia .................................... 4

Table 3-1.Table of emissions for SOx, NOx, CO, TSP (2004) ................................................................ 7

Table 3-2. Emissions on year level in tones per year (2004) ............................................................... 7

Table 3-3. Emissions of air pollution from stationary sources in regions of RM (2004) ............................ 8

Table 3-4. Emissions of pollution substances from household with fire wood......................................... 9

Table 3-5. Fugitive emissions on NMVOC from petrol stations in regions............................................... 9

Table 3-6. Data from automatic monitoring stations in Skopje - ambient air quality ............................. 10

Table 3-7. Data from automatic monitoring stations of ambient air quality in Bitola ............................. 11

Table 3-8. Data from automatic monitoring stations for ambient air quality – Veles ............................. 11

Table 3-9: EU Air Quality Directives Amenable to Monetisation .......................................................... 14

Table 3-10: 2020 Emissions in the former Yugoslav Republic of Macedonia used for the current study. . 16

Table 3-11: Physical premature mortality impacts avoided in year 2020.............................................. 17

Table 3-12: Physical Morbidity Impacts in year 2020......................................................................... 19

Table 3-13: Benefits of Full Compliance (Million €)............................................................................ 20

Table 4-1: Future water supply norms in the former Yugoslav Republic of Macedonia (ERWRM) ........... 26

Table 4-2: Future water supply norms in the former Yugoslav Republic of Macedonia on a river basin scale (ERWRM) ....................................................................................................................... 27

Table 4-3: Water demand by tourists in the year 1996 on river basin basis ......................................... 28

Table 4-4: Total drinking water demands by tourists for the years 2010 and 2020 (ERWRM)................ 28

Table 4-5: Sanitary compliance of drinking water supply monitoring (sampling) for period 1997-2003 (Republic Health Institute) ....................................................................................................... 30

Table 4-6: Type and quantity of water intake and losses ................................................................... 31

Table 4-7 : Comparison between the former Yugoslav Republic of Macedonia bathing water standards and EU bathing water standards (76/160/EEC) – microbiological parameters................................ 32

Table 4-8: Overview of the waste water treatment infrastructure in the former Yugoslav Republic of Macedonia (Republic Institute for Health Protection) .................................................................. 36

Table 4-9: Calculated nutrient content of wastewater ....................................................................... 38

Table 4-10: Willingness to pay for cleaner drinking water.................................................................. 44


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Table 4-11: WTP for cleaner inland surface water............................................................................. 45

Table 4-12: Improvements to River Water Quality – Non-use Values .................................................. 47

Table 4-13: Aggregation of Annual Benefits from Full Compliance (million Euro per year) .................... 50

Table 4-14: Total benefits from full compliance with the water-related Directives ................................ 52

Table 5-1: Existing Waste Management Arrangements - Problem Analysis .......................................... 55

Table 5-2 – Waste management and collection ................................................................................ 57

Table 5-3: Total municipal waste generation and composition – year 2004 ......................................... 57

Table 5-4 – Waste recycling............................................................................................................ 59

Table 5-5: Overview of the recycled commodities in the former Yugoslav Republic of Macedonia – year 2004 ...................................................................................................................................... 60

Table 5-6 – Waste landfilled ........................................................................................................... 62

Table 5-7: Contribution of Methane (CH4) in CO2-eq emission in Waste Sector .................................... 62

Table 5-8: Identified non – compliant municipal landfills ................................................................... 63

Table 5-9: Number of municipal landfills per risk class ...................................................................... 64

Table 5-10– Packaging waste ......................................................................................................... 64

Table 5-11: Packaging waste expressed as percentage of total waste................................................. 65

Table 5-12: Main characteristics of Drisla hospital waste incinerator ................................................... 66

Table 5-13– Waste incineration....................................................................................................... 67

Table 5-14 – Hazardous waste........................................................................................................ 68

Table 5-15: Annual quantities of industrial hazardous waste and proposed disposal options (mining activities) – year 2004 ............................................................................................................. 69

Table 5-16: Annual quantities of industrial hazardous waste and proposed disposal options (mining activities excluded) – year 2004 ............................................................................................... 69

Table 5-17: Projection industrial hazardous waste generation............................................................ 70

Table 5-18 – Waste oils.................................................................................................................. 70

Table 5-19 – Batteries and accumulators ......................................................................................... 71

Table 5-20: General data on medical hazardous waste...................................................................... 72

Table 5-21: Industrial contaminated sites - ‘hotspots”....................................................................... 73

Table 5-22: Targets for recovery / recycling..................................................................................... 74

Table 5-23: Estimates of reductions in methane emissions per year by 2010 (in ktonnes) .................... 78


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Table 5-24 : Assumptions for the Municipal Waste Flow for the Period 2002–2020. ............................. 79

Table 5-25 : Assumptions for the Municipal Waste Flow for the Period 2002–2025, Strategy Scenario 2 – Increased Incineration............................................................................................................. 81

Table 5-26 : Recycling scenario for compliance with the Packaging Directive....................................... 84

Table 5-27: Estimated tonnes recycled and the changes in recycling levels per year (in tonnes and percentage) due to the Packaging Directive by 2020, ................................................................. 84

Table 6-1: IUCN Protected Areas: I-V Management Categories .......................................................... 91

Table 6-2: Flora - Number of endemic and threatened species among the higher plants ...................... 93

Table 6-3: Fauna - Diversity and endemism of species in different taxonomic groups........................... 93

Table 6-4: Potential environmental, socio-cultural and economic benefits ..........................................106

Table 8-1: Methane Emissions By Component, USEPA (1998) ...........................................................137

ARCADIS ECOLAS / IEEP / Metroeconomica / Enviro-L Figures 06/11347 - fYRoM - Benefits of Compliance with environmental acquis - final report

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LIST OF FIGURES Figure 2-1: Map of the former Yugoslav Republic of Macedonia ........................................................... 3

Figure 4-1: Bathing water quality of Ohrid Lake (Republic Health Institute)......................................... 33

Figure 4-2: Bathing water quality of Prespa Lake (Republic Health Institute)....................................... 34

Figure 4-3: Bathing water quality of Dojran lake (Republic Health Institute)........................................ 34

Figure 4-4: Quality of surface waters in the former Yugoslav Republic of Macedonia in the year 1996 ... 40

Figure 5-1: Composition of the total municipal (household and commercial) waste .............................. 58

Figure 5-2: Simplified diagram of Recycling Network in the former Yugoslav Republic of Macedonia..... 59

Figure 5-3: Packaging waste as percentage of the total waste ........................................................... 65

Figure 5-4: Annual generation of HW (Mining and Thermal Processes excluded) – year 2004 ............... 68

Figure 5-5: Strategy scenario 1 - Estimates of projected volumes of waste generated, collected, recycled, composted, incinerated and disposed for the period 2004-2020 assuming a zero municipal solid waste generation growth ......................................................................................................... 80

Figure 5-6: Strategy scenario 1 - Estimates of projected volumes of waste generated, collected, recycled, composted, incinerated and disposed for the period 2004-2020 assuming a high municipal solid waste generation growth ......................................................................................................... 80



Figure 6-1: Number of designated areas according to national categories ........................................... 90

Figure 6-2: Natural Protected areas in the the former Yugoslav Republic of Macedonia ........................ 92

Figure 6-3: Number of species, endemic and threatened vertebrate species in the former Yugoslav Republic of Macedonia (European Red List of Vertebrates).......................................................... 94

Figure 6-4: Percentage of certain types of erosion of the torrent flow area in the former Yugoslav Republic of Macedonia (Annual Report 2004 on Soil from the MoEPP - Macedonian Environmental Information Centre) ................................................................................................................ 97

Figure 6-5: Index of Utilized Agriculture Area by category of use, 2000-2004, 1999=100 (State Statistical Office, 2005) .......................................................................................................................... 98

Figure 6-6: Area under organic production......................................................................................102

Figure 6-7: Benefits of EU accession for the the former Yugoslav Republic of Macedonia - Protected areas: Increased coverage and increased quality .....................................................................106

ARCADIS ECOLAS / IEEP / Metroeconomica / Enviro-L Annexes 06/11347 - fYRoM - Benefits of Compliance with environmental acquis - final report

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LIST OF ANNEXES Annex 1: Regulation on classification of waters (The Official Gazette of the former Yugoslav Republic of

Macedonia of Macedonia No. 18-99) .......................................................................................111

Annex 2: Insights on ecosystems features ......................................................................................125

Annex 3: Insights on biological diversity .........................................................................................129

Annex 4: Institutional, legal and economic framework .....................................................................133

Annex 5 : Quantitative review of methane emissions .......................................................................137

ARCADIS ARCADIS Ecolas / IEEP / Metroeconomica / Enviro-L Executive Summary 06/11347 - fYRoM - Benefits of Compliance with environmental acquis - final report

EXECUTIVE SUMMARY

EXECUTIVE SUMMARY – FORMER YUGOSLAV REPUBLIC OF MACEDONIA

The country specific report for the former Yugoslav Republic of Macedonia provides an overview of the current status of the environment in the field of water, waste, air and nature and the results of the benefits assessments. A benefit assessment is carried out using quantitative data for Air, Water, Waste and Nature respectively – as in past benefits assessments. Next to this, a monetary analysis is carried out for parts of Air and Water. Nature and Waste are excluded from the monetary assessment since the main benefit values come from air and the benefits from water are also quite transparent and easy to communicate. The more general description of the benefits in qualitative terms is presented in the general report.

Our analysis is based on data collected in the period of March – June 2007 by national environmental experts. To this purpose, IEEP and ARCADIS Ecolas developed questionnaire templates for the national experts to fill out. The questionnaires provided us a picture of the current situation and, whether possible, past trends and future scenarios. The templates are presented in annex of the general report.

In this chapter, a summary is provided on the qualitative, quantitative and monetary (only water and air) benefit assessments. The main results are summarised on the last page of this executive summary. It is advised to consult the full report for background information on the methodology used and assumptions made as these reflect the context in which presented figures should be interpreted.

BENEFIT ASSESSMENT AIR RELATED DIRECTIVES

The study has assessed the extent of the benefits from lower emissions for the following pollutants: particulates, sulphur dioxide (SO2), nitrogen oxides (NOx), volatile organic compounds (VOC’s), and ammonia (NH3).

In summary, the key benefits identified are:

• It is estimated that 381 equivalent cases of chronic bronchitis could be avoided per year (domestic and external) through the full implementation of EU air related directives. Of these, 50 are domestic.

• Furthermore, the implementation of the air related environmental acquis should lead to approximately 237 fewer cases of premature death arising from lung cancer per year and other related respiratory diseases, 30 of which are domestic.

The key monetary benefits are:

• Full compliance should lead to an annual benefit value in a range of 22 to 38 million EUR (reflecting the metric for premature death used) for the former Yugoslav Republic of Macedonia, starting from 2020.

• Total annual benefits to all countries, including EU and third countries have been estimated to equal 285 million EUR in 2020 using the VSL metric. This is due to the fact that emissions reductions in Macedonia will lead to reductions in pollution exposure of the populations in neighbouring countries.


• The gaseous pollutants comprise almost 73% of the benefits whilst PM10 accounts for almost 27% of the total benefits.

• Avoided early mortality is the largest source of benefit; the value attributed to avoiding early mortality amount to over 64% of the total benefits valued.

The results presented are still likely to be under-estimates of the true benefits of compliance with these standards. The principal reason for this is that the benefits of reductions in some pollutants, notably CO, CO2 and CH4, are not valued since the impact-pathways are not yet defined for all end-points.

It should also be noted that uncertainty remains integral to the analysis – in other words the analysis does not try to hide the uncertainty in the estimates, on the contrary. Two examples of uncertainty include the monetary valuation of the receptor end-points, particularly premature deaths avoided.

Whilst the limitations must be acknowledged, the project team is confident that the results, if seen in the context of the uncertainties, do present very important conclusions on the scale of benefits that can accrue from the proper implementation of the Directives, from which broad policy conclusions can be drawn.

BENEFIT ASSESSMENT WATER RELATED DIRECTIVES

Benefits of improved drinking water will accrue (i) to households that have a new connection to water supply, and (ii) to households that already have water supply, but are guaranteed better quality water. 88.9% of the population is supplied with safe drinking water today. In absence of a more accurate estimate of the number of new connections, it was preferred to apply an experts’ estimate of 5% increase to calculate future connection percentages. Adding the 5% estimate of new connections to the current connection rate of 88.6% yields a total share of 93.6% which can be assumed to benefit from quality improvements of drinking water.

Although it is a well known fact that urban wastewater is one of the most dangerous pollutant sources of the surface water in the country, there is no data on the urban wastewater quality, due to lack of systematic monitoring. The Urban Waste Water Directive will have a positive effect on the quality of inland waters and, in some cases, groundwater. The total population of the former Yugoslav Republic of Macedonia was assumed to benefit from the bathing water quality improvement, through a reduction of the nitrates and phosphates load discharged.

The distribution of the present surface water quality was estimated to be 5% class I, 50% class II, 40% class III, 5% class IV and 0% class V, showing that the current water quality condition of most of the surface water is not satisfying the requirements of the secondary legislations (regulation or ordinance). As it was not possible to assess what will be the precise effect of the implementation of the various water directives (mainly Urban Waste Water Directive, the Nitrate Directive and the Dangerous Substances Directive) on river quality, it has been assumed that the full implementation of the various directives will lead to the effect that the real water quality in all watercourses will be such that the designated Water Quality Objective class I or II will be met. This seems a reasonable assumption, as the main cause of not meeting the WQO is the discharge of various substances by sewage and industrial discharges and these discharges will be dealt with by the directives.

The total benefits of clean drinking water are estimated to amount to around 58 million EUR/year upon full compliance.


An additional important benefit from the implementation of the water related environmental acquis is the benefit of access to quality bathing and surface waters. The total benefits of an improved surface water quality to the domestic population are estimated to amount to 8.5 million EUR/year upon full compliance – for the lower WTP value. For the high estimate, the benefits to the domestic population are estimated to be at around 22.3 million EUR/year upon full compliance.

Next to the recreational value of surface water, which has been covered above, many people have a WTP for improved river ecosystem quality even if they do not visit the respective river at all. The total non-use value of improving river ecosystem quality is estimated to amount to 0.21 million EUR/year upon full compliance.

The total discounted benefits to the domestic population of compliance with the water-related Directives has been estimated at around 546 million EUR (lower estimate) and 658 million EUR (upper estimate). This is equivalent to 270 EUR/person and 326 EUR/person.

BENEFIT ASSESSMENT SOLID WASTE RELATED DIRECTIVES

The EU Waste Directives will lead to major changes in handling, treatment and disposal of waste in the former Yugoslav Republic of Macedonia. The country has a wide range of ways in which it can choose to implement the set of waste directives. For example, it can choose to give priority to recycling or to incineration. This choice will affect the extent and value of the benefits arising from each Directive. It is therefore not always possible to identify exactly what will occur as a consequence of a specific Directive.

The main benefits from implementing the Waste Directives are:

• Better management and monitoring of waste streams through the Waste Framework Directive.

• Lower pollution to groundwater and surface water from leakage of unprotected landfills and, as a result, lower risks of contaminating drinking water.

• Reduced health and explosions risks as well as lower impact on global warming as methane emissions from landfills are captured and made to generate energy. Existing landfill sites will have to be upgraded and illegal dumping sites closed.

• Benefits to eco-systems and other environmental resources as emissions from waste activities into air, water and soil are reduced and the recovery of energy is increased through the Incineration Directive.

• Reduced health and environmental risks by improved treatment and disposal of hazardous waste such as hazardous solid waste, medical waste, PCB waste, used tyres and batteries etc.

• Increased efficiency in the use of material and reduced production of primary material as a result of higher levels of recycling. This is a result of the targets of the Packaging Directive, diversion targets from the Landfill Directive and targets of the WEEE Directive, ELV, Batteries, Waste Oils etc. directives.

• Lower costs for waste collection, treatment and disposal, as less waste will be produced.

EU waste directives will help avoid:

• Pollution into air, soil and water (methane, CO2, particulate, heavy metals from sewage sludge, PCBs/PCTs, waste oil) and ecological risks from waste treatment sites and hazardous waste.

• Respiratory diseases and noise nuisance to local population, risks to health from contaminated water supplies, air and soil.

Extent of the benefits:


• The full implementation of the Landfill Directive will lead to a reduction of methane emissions (captured) of between 4 and 40 ktonnes annually by the year 2020.

• Associated with the increase in the levels of recycling/composting and incineration, implementation of the Landfill Directive will lead to a decrease in landfill disposal levels. Estimates for a decrease in landfill disposal levels (per year) by the year 2020 were calculated as the levels of disposal under the Landfill Directive, as a percentage of the non-implementation baseline. Under the recycling/composting scenario the disposal would be around 67% of non-implementation levels (i.e. a 33% decrease), and under the incineration scenario it would be around 52% of non-implementation levels (i.e 48% decrease).

• The quantitative assessment of the impacts of the Packaging Directive provide predicted changes in recycling levels across all materials. The estimates for the increases in recycling levels for the former Yugoslav Republc of Macedonia, per year, by 2020 are:

- for paper: +46,3 ktonnes; - for glass: +11,5 ktonnes; - for plastic (PET): +3,3 ktonnes; and - for metals: no change as the current recycling rate of 98% is already higher than the target

of the Packaging Direcitve

• For all the recyclables together, the increase will amount to around 61 ktonnes.

BENEFIT ASSESSMENT NATURE RELATED DIRECTIVES

Improving the nature-related legislation in the former Yugoslav Republic of Macedonia will primarily increase the size and quality of natural protected areas. The implementation of existing national targets can increase protected areas coverage from 7.3% (about 188,000 Ha) to 12% (300,000 Ha) – an increase of about 40%. In some cases the requirements for protected areas will need to be increased in order to meet Natura 2000 objectives. Furthermore, increased protection will be achieved by the development of EMERALD network Areas of Special Conservation Interest, in preparation of the future implementation of the Birds and Habitats Directives.

The implementation of the Habitat and Bird Directive can hence provide significant environmental benefits in term of more effective protection of endangered and endemic species (especially fish) and fragile ecosystems (like wetlands, relict lakes). The protection of migratory birds across borders is also expected to be improved. EU accession may also help mitigate some of the major threats to biodiversity in the former Yugoslav Republic of Macedonia, such as habitat loss and fragmentation due to urban/infrastructural projects, overuse of resources, water pollution (especially from waste water), overfishing and illegal hunting. Reduced pollution and increase nature protection in protected area is also expected to lease to enhanced water quality, including drinking water.

Key socio-cultural benefits will be increased amenity and recreation value and awareness raising (eg through the promotion of education and research). This can be particularly important given the low level of environmental awareness in the former Yugoslav Republic of Macedonia (often leading to resource overuse). This can also help preserve cultural identity. The adoption of EU processes – like stakeholder consultations in the context of EIA – can stimulate public participation in decision-making. In addition, reduced illegal hunting can also increase public safety in rural areas.

The economic benefits can be generated by increasing activities like tourism and ecotourism (which currently are not key economic resources), organic farming, sustainable forestry and harvesting of non-timber products (like medicinal herbs, oils, mushrooms etc). These activities can also lead to increased employment and volunteer work opportunities (eg in tourism, forest management,


sustainable agriculture etc). Increasing the number of programmes for nature protection and sustainable agriculture can also bring additional EU-funding (PES, LIFE + programme etc…)

ARCADIS ECOLAS / IEEP / Metroeconomica / Enviro-L Executive summary 06/11347 - fYRoM - Benefits of Compliance with environmental acquis - final report

SUMMARY OVERVIEW – FORMER YUGOSLAV REPUBLIC OF MACEDONIA

BENEFITS COMPLIANCE WITH ENVIRONMENTAL ACQUIS

Qualitative assessment Quantitative assessment Monetary assessment

AIR • Improved monitoring and registration system of atmospheric emissions and air

quality parameters

• General benefits to human health (mortality and morbidity), eco-systems (eutrophication, acidification and ozone damages), economy (impacts on agricultural crops (mainly ozone), absenteeism, triggers innovative approaches) and social aspects (e.g. damages to historic buildings, visibility issues in cities)

• 381 equivalent cases of chronic bronchitis avoided per year of which 50 domestic

• 237 fewer cases of premature death per year of which 30 domestic

• Annual benefit of 22-38 MEUR from 2020 onwards for the former Yugoslav Republic of Macedonia

• Annual total benefit of 285 MEUR in 2020 for all countries

WATER • Improved drinking water quality ;

• Improved inland surface water quality for bathing and recreational purposes ;

• Improved ecosystem quality of surface waters;

• 94% of population benefits from quality improvements of drinking water;

• All watercourses improved so that the designated Water Quality Objective Classes I or II will be met;

• All surface waters benefiting from improved ecosystem quality;

• Drinking waters: annual benefit of 58 MEUR at full compliance;

• Improved surface water (use value): annual benefit of 8.5 – 22.3 MEUR;

• Improved ecosystem quality of surface waters (non-use value): annual benefit of 0.21 MEUR/year;

• Total discounted benefits over 20 years of 546 – 658 MEUR/year.

SOLID WASTE

• Better management and monitoring of waste streams

• Reduced health risks linked to hazardous waste management, closure and remediation of old landfills and waste dumps

• Lower pollution of ground- and surface water linked to leakage of unprotected landfills

• Recovery of energy and better use of primary materials through energy recuperation, re-use and recycling activities

• Reduced impacts on climate change through capture of methane

• Reduced methane emissions : 4 to 40 ktonnes/year in 2020

• A decrease by 33% to 48% of volume of waste landfilled/year by 2020 under respectively the recycling & compositing scenario and the incineration scenario

• An increase to a volume of ca. 61 ktonnes of recyclables (paper, glass and plastic) per year in 2020

NATURE • Protection of endangered and endemic species (especially fish) and fragile

ecosystems (e.g. wetlands, relict lakes). • Increased protected areas coverage

from 7.3% to 12%

ARCADIS ECOLAS / IEEP / Metroeconomica / Enviro-L Objectives 06/11347 - fYRoM - Benefits of Compliance with environmental acquis - final report

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1 OBJECTIVES

The objective of this country-specific report is to carry out a benefits assessment for the former Yugoslav Republic of Macedonia, that follows the approach taken in the past Benefits of Compliance Studies for the EU13 and for Croatia.

In chapters 3 to 6 a benefits assessment is carried out using quantitative data for Air, Water, Waste and Nature respectively – as in past benefits assessments. Next to this, a monetary analysis is carried out for parts of Air and Water. Nature and Waste are excluded from the monetary assessment (as in the Croatia study) since the main benefit values come from air and the benefits from water are also quite transparent and easy to communicate.

ARCADIS ECOLAS / IEEP / Metroeconomica / Enviro-L Introduction 06/11347 - fYRoM - Benefits of Compliance with environmental acquis - final report

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2 INTRODUCTION TO THE FORMER YUGOSLAV REPUBLIC OF MACEDONIA

The former Yugoslav Republic of Macedonia is a landlocked country on the Balkan peninsula in south-eastern Europe. It is bordered by Serbia to the north, Albania to the west, Greece to the south, and Bulgaria to the east. The capital is Skopje. A map of the former Yugoslav Republic of Macedonia is given in Figure 2-1.

Figure 2-1: Map of the former Yugoslav Republic of Macedonia

2.1 THE ENVIRONMENT

The former Yugoslav Republic of Macedonia is a landlocked country that is geographically clearly defined by a central valley formed by the Vardar river and framed along its borders by mountain ranges.

The Republic's terrain is mostly rugged, located between the Šara and Osogovo, which frame the valley of the Vardar river. Three large lakes — Lake Ohrid, Lake Prespa and Dojran Lake — lie on the southern borders of the Republic, bisected by the frontiers with Albania and Greece. Ohrid is considered to be one of the oldest lakes and biotopes in the world. The region is seismically active and has been the site of destructive earthquakes in the past, most recently in 1963 when Skopje was heavily damaged by a major earthquake, killing over 1,000.

The former Yugoslav Republic of Macedonia also has scenic mountains. They belong to two different ranges: Dinarska and Rodopska. The Dinarska range is the oldest with subsequent erosion; the Rodopska range is younger offering rugged, alpine sceneries.

The former Yugoslav Republic of Macedonia present a great diversity of fauna species, 6.5% of which are endemic. The most threatened group is fish.


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Most of the forest area is owned by the state, and often timber harvesting is managed rather inefficiently. In the pre-mountain (subalpine) regions the forest are almost destroyed, due to desiccation, fires, land drainage, mining and other anthropogenic activities like building construction, expansion of tourist settlements, road infrastructures and artificial lakes.

Grasslands ecosystems also occupy a large part of the former Yugoslav Republic of Macedonia, and are expanding in some areas due to forest degradation and abandonment of agriculture land. Grasslands are though under anthropogenic pressure from agriculture and mining activities.

Mountain ecosystems are under pressure due to overgrazing, the uncontrolled removal of plant species, and the construction of ski-lift and other infrastructures. The floral and faunal components though are not considered at risk.

Lake and watershed ecosystems are very rich in terms of biodiversity, but their state is alarming. Pollution from wastewater, industrial agricultural pollution, and a lowering of the water level in some lakes are among the highest pressures, threatening wetland ecosystems and their related biodiversity.

Although some national laws for nature conservation are in place (Law on Nature Protection - Official Gazette 67/2004), legislation is still incomplete. Nature in the former Yugoslav Republic of Macedonia is still under threat by lack of citizen’s awareness, outdated technology, unsustainable agriculture practices, illegal hunting, low institutional capacity, lack of strategic planning, and uncontrolled urbanisation and industrialisation.

2.2 THE ECONOMY

Agriculture and forests contribute to approximately 11.3% of the GDP. It is agriculture though – together with industry – the most important economic sector in the former Yugoslav Republic of Macedonia, while forestry is not a key economic resource. Agriculture is rather extensive and traditional, and at the moment do not represent a strong threat to local biodiversity. Nevertheless, economic development and market competition could lead the Macedonian agriculture to become more intensive. Tourism activities are not very developed, and contribute to only 1.6% of the GDP.

The key economic indicators for the former Yugoslav Republic of Macedonia are given in Table 2-1.

Table 2-1: Key economic indicators for the former Yugoslav Republic of Macedonia

Indicator Most recent year (ideally 2004) Population in your country and growth rate 2022547 (censuse 2002) 0.2% (2000-2005)

(state statistical office)

Population size per settlement (cities, major towns) in your country

Skopje - 506926 (census 2002) (state statistical office)

Population size by region (NUTS1 2 and NUTS 3 if possible)

The former Yugoslav Republic of Macedonia is divided in 8 statistical regions (Population and names of regions in table below) * The former Yugoslav Republic of Macedonia is divided in 84 municipalities plus 1 municipality Skopje. The information for population size can be find in statistic censuses from 2002 (state statistical office) www.stat.gov.mk

GDP (ideally 2004 money terms) 5.76 billions Curently US$ (2005) (world bank) 4.64 billions Euro (2005)

1 National unit of territorial space


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Indicator Most recent year (ideally 2004) GDP per capita 2119 US$ (2005) (state statistical office)

1706 Euro (2005)

GDP growth rate – past and projections 4.0% annual (world bank) 4.1% (2004) 4.0%(2005) 4.0(2006) State Statistical Office

Predicted 6.0% for 2007 and 2008 (current predictions are that 2007 GDP will be no more than 4.5%)

Number of households - 564237 (census 2002) (state statistical office) - Percentage of households that live in dwellings connected to the public water supply system: 88.6%

- Percentage of households that live in dwellings connected to the sewerage system: 62.9%

- Average number of household members

Number of dwellings 697529

Country surface area 25713 km²

Purchasing Power Parity 16.91 billion US$ (CIA Fact book) 12.51 billion Euro – according to current exchange rate us$/Euro

Share (%) of agriculture in the GDP (year 2003) 2

Crops app.:

Livestock app.:

9,8 %

7%

3%

Share (%) of agriculture, forestry and fishery in the GDP (year 2004) 3

11.3 %

Share (%) of forestry in the GDP (2003) 4 1%

2 Agricultural Report 2004, MAFWE: The value of the whole agri-food sector (including the wider agribusiness sector i.e. food and processing) is estimated to represent approximately 15% GDP.

3 Agricultural Report 2005, MAFWE

4 Agricultural Report 2004, MAFWE: According to the Strategy for Sustainable Development of Forestry in the former Yugoslav Republic of Macedonia (adopted in 2006) the share of forestry in the GDP is only 0,3-0,5 %, but if the multifunctional uses are valorised, the contribution will be higher.


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Indicator Most recent year (ideally 2004) Share (%) of tourism (hotels and restaurants) in the GDP 5 (year 2002):

(year 2003):

(year 2004):

1,7%

1.9%

1,6%

5 Statistical Yearbook 2006

ARCADIS ECOLAS / IEEP / Metroeconomica / Enviro-L Benefits assessment of air related directives 06/11347 - fYRoM - Benefits of Compliance with environmental acquis - final report

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3 BENEFITS ASSESSMENT OF AIR RELATED DIRECTIVES

3.1 CURRENT STATUS OF AIR QUALITY

3.1.1 National and Regional Level

The following tables document the quantity of principal air pollutants emitted from individual sectors within the former Yugoslav Republic of Macedonia.

Table 3-1.Table of emissions for SOx, NOx, CO, TSP (2004)

SNAP SOx t/y NOx CO TSP

1 Public power, cogeneration and district heating plants

91,863 13,100 385 4675

2 Commercial, institutional and residential combustion plants

1,062 1,502 41,443 1,533

3 Industrial combustion 6,450 2,744 552 1,209

4 Production processes 356 4,933 9,004 22,278

5 Extraction and distribution of fossil fuels 0 0 553 0

6 Solvent use 0 0 0 0

7 Road transport 775 9,200 40,927 0

8 Other mobile sources and machinery 251 2,069 2,025 225

9 Waste treatment and disposal 3.4 21 5.3 0.8

10 Agriculture 0 0 0

11 Nature 38,3 169 4,841 0

Total 100,799 33,737 99,735 29,921

Table 3-2. Emissions on year level in tones per year (2004)

SNAP NMVOCs NH3

1 Public power, cogeneration and district heating plants 1,690 0

2 Commercial, institutional and residential combustion plants 3,508 0

3 Industrial combustion 211 0,5

4 Production processes 1,108 0

5 Extraction and distribution of fossil fuels 425 0


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6 Solvent use 8,484 0

7 Road transport 8,824 0

8 Other mobile sources and machinery 969 0,28

9 Waste treatment and disposal 1.1 0

10 Agriculture 0 7,384

11 Nature 98,866 1,382

Total 124,087 8,824

Source: Data from MOEPP Report for year 2005

Under the framework of the CORINAIR programme in 2005, in the former Yugoslav Republic of Macedonia established an inventory for emissions of air substances in different sectors. Analyses of the period 2002-2005 showed a decrease of emissions in SO2, reflecting falls in the level of production activity. SO2 pollution is dominated by electricity production which relies on the use of poor quality lignite, with high percentages of sulphur. This, together with transport, is the main source of emissions of NOx. Data for NH3 are available for 2005 and the main source is agriculture.

Pollutant emissions on a geographical basis are presented in the following tables for 2004.

Table 3-3. Emissions of air pollution from stationary sources in regions of RM (2004)

Pollution substances [tonnes]

Regions SO2 CO NOx TSP

Pelagonian 74,047 987 12,333 4,041

Vardar 2,282 628 1.022 749

Northeast 138 91 51 13

Southwest 13,370 3,611 815 610

Skopje 6,441 1,134 3,262 524

Southeast 619 298 261 69

Polog 735 9,064 5,019 18,706

East 959 482 242 71

Total 98,590 16,294 23,006 24,783

Data MOEPP - Land registry of air emissions


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Table 3-4. Emissions of pollution substances from household with fire wood

Pollution substances [tonnes] Regions

SO2 CO NOx TSP

Pelagonian 3,844 12,344 126 357

Vardar 1,805 5,798 59 167

Northeast 3,477 11,168 114 323

Southwest 3,597 11,551 118 334

Skopje 8,593 27,597 281 797

Southeast 2,928 9,403 96 272

Polog 4,717 15,149 154 438

East 4,210 13,521 138 391

Total 33,171 106,531 1,086 3,079

Table 3-5. Fugitive emissions on NMVOC from petrol stations in regions

Regions Evaporable organic substance from oil derivates [tonnes]

from Petrol from Diesel

motor oil

Total

Pelagonian 46.0 45.0 23.4 114.4

Vardar 25.5 32.7 18.0 76.2

Northeast 46.8 68.1 52.2 167.1

Southwest 40.2 43.3 23.8 107.3

Skopje 153.1 138.0 30.9 322.0

Southeast 31.13 47.00 26.15 104.3

Polog 62.7 87.5 60.7 210.9

East 30.8 33.7 20.1 84.6

Total 436.2 495.4 255.3 1186.9


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Skopje

Evaluation of ambient air quality in Skopje is made by analysis of polluting substances and data from monitoring networks given by MoEPP, Hydro-meteorological Institute and Institute of Health-Skopje. In Table 3-6, data from results analysis taken from three autumatic monitoring stations for ambiental air quallity in Skopje (Karpos, Centar and Lisice) are given, in frame of MoEPP, as well from UHMR and Republic Health Protection Institute monitoring networks.

Table 3-6. Data from automatic monitoring stations in Skopje - ambient air quality

SKOPJE Year average

concentration Max Min Limit value

Number of days in year with average day concentration above Limit Value

Karpos 25 123 - 150 0

Centar 30 189 5 150 2

SO2 µ

g/m

3

Lisice 20 84 2 150 0

Karpos 52 116 15 85 5

Centar 52 106 25 85 14

NO

2 µ

g/m

3

Lisice 53 138 17 85 15

Karpos 1 5 0.4 1 276

Centar 2 6 0.3 1 270

CO

mg/

m3

Lisice 3 6 0.5 1 217

Karpos 34 103 3.7 110 0

Centar

O3

µg/

m3

Lisice 35 105 6 110 0

Karpos 92 366 11.9 120 47

Centar 104 420 1.1 120 61

MoE

PP

PM

10

µg/

m3

Lisice 114

7.2 120 91

Concentrations of CO are high at Karpos, Lisice and Centar. Warm periods in winter, increased frequency of traffic and meteorological conditions are the main reasons for the high levels of this pollutant. Bitola The ambient air quality in Bitola is monitored by two automatic monitoring stations operated by MOEPP (Bitola – 1, Bitola – 2) and one monitoring station operated by Hydro-meteorological institute. Data is shown in Table 3-7.


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Table 3-7. Data from automatic monitoring stations of ambient air quality in Bitola

Bitola Year average

concentration Мax Min

Limit Value

Number of days in year with average day concetration above Limit

Value

Bitola-1 25,47 78,39 7,059 150 0

SO2

�g/

m3

Bitola -2 12,40 30,03 5,159 150 0

Bitola -1 24,86 119,57 3,552 85 14

NO

2 µ

g/m

3

Bitola -2 34,12 115,00 8,025 85 3

Bitola -1 1,40 4,03 0,256 1 169

CO

mg/

m3

Bitola -2 1,22 5,98 0,304 1 158

Bitola -1 75,45 163,22 22,165 110 32

O3

µg/

m3

Bitola -2 78,06 145,31 21,95 110 60

Bitola -1 65,63 253,92 10,828 150 27

MO

EPP

PM

10

µ

g/m

3

Bitola -2 71,07 530,29 4,313 150 22

Source MOEPP- 2005 Veles Veles, as an industrial city, is one of the most polluted cities in the former Yugoslav Republic of Macedonia. In Table 3-8, information from two automatic monitoring stations in the frames of MOEPP (Veles-1, Veles-2), three monitoring stations operated by Hydro-metrological institute and two monitoring station in the frames of Institute of Health – Vales, are presented.

Table 3-8. Data from automatic monitoring stations for ambient air quality – Veles

Veles Year average

concentrations Мах Min

Limit Value

Number of days in year with average

day concentration above Limit

Value

Veles-1 29,76 111,86 10,082 150 0

SO2 µ

g/m

3

Veles-2 29,05 125,47 8,673 150 0

MO

EPP

NO

2

µg/ m

3 Veles-1 13,07 43,21 2,743 85 0


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Veles-2 31,57 126,06 10,119 85 4

Veles-1 1,09 2,15 0,325 1 172 C

O m

g/m

3

Veles-2 1,28 4,42 0,307 1 208

Veles-1 66,16 122,23 8,797 110 15

O3

µg/

m3

Veles-2 75,42 147,89 19,083 110 60

Veles-1 54,83 210,75 5,194 120 10

PM

10

µ

g/m

3

Veles-2 80,43 260,97 10,207 120 56

Note: Maximal, minimal value and number of days with daily average concentrations over Limit Value are taken from tables with basic data where we can find daily average of polluting substances

3.1.2 Air Quality Regulation

A new Law for ambient air quality was established in September 2004 in the former Yugoslav Republic of Macedonia and in June 2005, Regulation for Limit values on polluting substances in air came into being. This is the first legal act in moving towards harmonisation with EU directives. Resulting activities are likely to include:

• Definition of National max. emission values for some ambient pollutant substances consistent with

the EU Framework Directive (2001/81/ЕU). This is still in preparation process, but it is planned to come in force not later than 2008.

• National plan for implementation of emission reduction of POPs which has been adopted in accordance with project office of POPs, but needs corrections, modifications and amendments.

• Implementing CORINAIR methodology for an inventory of air pollution so as to inform UNECE and CLRTAP (convention for trans-boundary transfer of air pollution)

The activities for implementing the system for integrated air pollution prevention and control are currently ongoing in accordance with the EU Directive 96/61/ЕC and the Statute and Ordinance for their implementation have been prepared. In the Statute and ordinance, licenses for companies are defined. There are specified terms for the control of air pollution and the limits of their emissions. It is hoped that implementing this system will achieve better results in terms of pollution emissions reduction.


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3.1.3 Air Quality Monitoring

In the former Yugoslav Republic of Macedonia, air quality monitoring is undertaken with static monitoring stations and with hand-taking samples from defined sites. Measurement of ambient air quality in the former Yugoslav Republic of Macedonia is made by:

• Republic Institute of Health – Skopje: monitoring SO2 and smoke concentatons in 7 places in the town

• Republic Institute for Health – Veles: monitoring SO2 and black smoke in 3 places in the town • Hydro-meteorological Institute: monitoring SO2 and smoke in 9 places in Skopje and 10 in other

towns in the former Yugoslav Republic of Macedonia: Berovo, Bitola, Tetovo, Gevgelija, Kumanovo, Ohrid, Prilep, Stip, Veles and v.Lazaropole.

In addition, the Ministry of environment and physical planning (MOEPP) has 13 static automatic monitoring stations for air quality, one mobile monitoring station and one station for traffic pollution monitoring. In Skopje there are 4 static monitoring stations for air quality in: Karpos, Centre, Lisice and Gazi Baba and one station for traffic pollution monitoring in the area of (Rectors office) head office of a university St. ”Kiril and Methods”. Two stations exist in Bitola and Veles, whilst Kicevo, Kocani, Kumanovo, Tetovo and the village of Lazaropole each have one monitoring station, a mobile station is currently placed in Kavadarci. These stations measure:

• SO2 mg/m3 • CO mg/m3 • NOx mg/m3 • O3 mg/m3 • particulates (PM10) mg/m3

These monitoring stations also measure the following meteorological parameters:

• wind speed (m/s) • wind direction (º) • temperature (ºC) • Humidity (%) • pressure (hPa) • global radiation (W/m2)


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3.2 QUANTITATIVE ASSESSMENT: AIR RELATED DIRECTIVES

3.2.1 Introduction

Table 3-9 below lists the individual EU Directives for which we have attempted to quantify, in physical and monetary terms, the environmental benefits that would result from the former Yugoslav Republic of Macedonia adopting these Directives. The table indicates the pollutants that are considered in each Directive. Those indicators marked in bold show which pollutants we have been able to include in our adopted methodology.

Table 3-9: EU Air Quality Directives Amenable to Monetisation

SO2

NO

x

Particulates

VOC’s

CO2

CO

Heavy m

etals

Dioxins

Furans

Halogens

Ozone

CH4

Air Quality - Relevant Directives

Large Combustion Plants x x x

IPPC Directive x x x x x x x

Emissions from Mobile Sources

x x x x x x

Air Quality Framework + Daughter Directives for SO2, NOx and Particulates

x x x

VOC Emissions: Storage & Transport of Petrol

x

VOC-Solvents Directive x

Tropospheric Ozone Pollution x

As agreed with the European Commission, we have adopted an analytical approach that allows us to estimate the aggregate benefits of the former Yugoslav Republic of Macedonia implementing these Directives by "bundling" the Directives together in the first instance. The benefits of implementing individual Directives are therefore not identified directly - though an indication of the relative importance of the different directives is given below. One reason for this bundling is that benefits from different directives cannot be separated. For instance, a SO2 reduction due to the IPPC directive leads to reduction in SO2 concentration and so helps towards fulfilling the limits in the first daughter directive. Another, more practical, reason centres on data availability and resources available to the project team. The former Yugoslav Republic of Macedonia project partners found that little research was publicly available on the quantification of the effects of implementing individual EU Directives in the former Yugoslav Republic of Macedonia. Nevertheless, when discussing the results of our analysis we put forward some suggestions for the relative importance of individual Directives in accounting for total impacts.


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The four categories of pollution impacts that we quantify are:

• Premature deaths avoided (mortality). • Illness avoided (morbidity) – e.g. bronchitis6, asthma. • Crop damage avoided. • Material damage avoided.

One reason why our estimates of environmental benefits are likely to be under-estimates of the true benefits of compliance with EU Directives is that we are not presently able to quantify the benefits associated with the following impacts avoided:

• Impacts on ecosystems. • Change in biodiversity. • Potential effects of chronic exposure to ozone. • Impacts on cultural heritage and monuments. • Material soiling. • Direct and indirect economic effects of change in forest productivity, and fishery performance.

Nevertheless, we would suggest that those impacts that we can quantify are likely to represent a significant - and majority - share of the total impacts in welfare (monetary) terms.

3.2.2 Methodology – The Impact Pathway Approach

Within the current project, the “impact pathway approach”, developed within the ExternE project series ‘External Costs of Energy,’ has been used to quantify the benefits from emission reductions (European Commission 1995, European Commission 1999, European Commission 2000b).

Impact pathway assessment is a bottom-up-approach in which environmental benefits and costs are estimated by following - as far as possible - the ‘impact pathway’ from source emissions through air quality changes to physical impacts, before being expressed in monetary benefits and costs. The ECOSENSE model, an integrated software tool for environmental impact pathway assessment developed within the ExternE projects, has been used to make the benefit estimations. ECOSENSE uses harmonised air quality and impact assessment models together with a database containing the relevant input data for the whole of Europe.

Within ExternE, the ECOSENSE model was originally used to estimate external costs from individual power plants. The ‘multi-source’ version that was used in the current project is a modified version, which supports the usage of more complex emission scenarios. In Annex of the General Part, the models and data used for the benefit estimations in the current project are described in more detail.

6 Benefits include the benefit to the individual of not incurring the illness, and also benefits of reduce hospitalisation days and reduced activity days.


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3.2.3 Emission Reduction Scenarios

The calculation of the emissions reductions as a consequence of the full implementation of the air-pollution related acquis are outlined for the principal pollutants.

RATIONALE

In this study we have established a baseline for emissions for gaseous pollutants derived from the baseline scenarios identified in the development of the Gothenburg Protocol (UN ECE 1999), reported by EMEP7 (Mylona 19998). The policy scenario is derived from analysis undertaken by IIASA in the current modelling being undertaken in the revision of the National Emissions Ceilings in the EU25. The emission scenarios for the SEE countries we are concerned with – Serbia, Bosnia & Herzegovina, Kosovo, the former Yugoslav Republic of Macedonia, Montenegro and Albania – are therefore judged to be compatible with those for countries within the EU25 with socio-economic commonalities. The resulting pollution reductions are therefore best viewed as a reasonable approximation to the scale of reductions that would be brought about by adoption of the EU environmental acquis. It is important to note that the scale of reductions is comparable to those assumed in previous equivalent analyses for DG Environment9.

METHOD

The case and reference scenario are outlined below.

CASE SCENARIOS:

Main: Emission ceilings are adopted in the policy scenario as emissions at a country level. Data derived by IIASA are directly reported by the individual country. The emission reductions for the former Yugoslav Republic of Macedonia are presented in Table 3-10.

Reference scenario: Emission projections that do not include compliance with the emission ceilings are derived from earlier projections reported by EMEP (Mylona 1999). These emission projections are used as non-compliance estimates for the reference scenarios.

Table 3-10: 2020 Emissions in the former Yugoslav Republic of Macedonia used for the current study.

Emissions for the Policy Scenario Compliance with Emission Ceilings

Emissions for the Baseline Scenario without Emission Ceilings

NH3 NMVOC NO2 SO2 PM NH3 NMVOC NO2 SO2 PM

[kt] [kt] [kt] [kt] [kt] [kt] [kt] [kt] [kt] [kt]

12 22 28 57 12 15 36 43 72 23

7 EMEP is the Co-operative Programme for Monitoring and Evaluation of the Long-range Transmission of Air pollutants in Europe 8 EMEP/MSC-W Note 1/99, July 1999. "EMEP EMISSION DATA. Status Report 1999". By Sophia Mylona 9 Implementation and Enforcement Capacities in Croatia - Benefits for Croatia of compliance with the environmental acquis – Final Report. European Commission, DG Environment (2005); The Benefits of Compliance with the Environmental Acquis for the Candidate Countries. European Commission, DG Environment (2001)


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3.2.4 Extent of Benefits

The mortality impacts of the pollution emission reductions assumed above for the former Yugoslav Republic of Macedonia are shown in Table 3-11 below for 2020 – the year in which it is assumed compliance with EU Directives is achieved. The benefits of these reductions in EU25 countries and others – due to reduction of trans-boundary transport of pollution from the former Yugoslav Republic of Macedonia - are also given. Details of the Ecosense model from where these results are taken are given in Annex 1 of this report. Note that exposure – response functions are taken from the peer-reviewed literature, surveyed in 2007.

Morbidity impacts are of a disparate nature and so cannot be expressed as a common unit. However, for illustration, the morbidity impacts are presented - in Table 3-12 - as equivalent number of cases of chronic bronchitis avoided.

Units for materials and crop damages are not as readily meaningful and we cannot present these here. However, in the case of materials, the impact being quantified is the premature ageing of various building materials exposed to SO2 deposition from acidification. Thus, in our context, the whole exposed material surface area to SO2 will age at a slower rate than if the Directives were not to be implemented.

Crop damage is measured primarily by the change in yield that results from the change in pollutant concentrations in the air. Thus, with knowledge of the geographical distribution of crop plantations within a country, the acreage of a given crop affected by a change in pollutant concentration can be estimated and the percentage yield change can be derived.

Table 3-11: Physical premature mortality impacts avoided in year 2020

Total NH3 NOX SO2 PM

Metric YOLL Deaths YOLL Deaths YOLL Deaths YOLL Deaths YOLL Deaths

former Yugoslav Republic of Macedonia

274 30 36 4 49 5 37 4 152 17

Outside former Yugoslav Republic of Macedonia

1.859 207 89 10 444 49 770 86 596 66

Total 2.133 237 125 14 493 55 807 90 748 83

Table 3-11 shows the number of premature deaths avoided from emission reductions in the former Yugoslav Republic of Macedonia. The results show that a total of 237 premature deaths per annum are avoided when the emission reductions are implemented. The numbers are for the premature deaths that would be avoided in 2020 - the first year in which full implementation of the EU Directives is assumed in the former Yugoslav Republic of Macedonia. Note that the reduction in deaths caused by the reduction of emissions is separated into those occurring within the former Yugoslav Republic of Macedonia and those occurring outside the former Yugoslav Republic of Macedonia as a result of trans-boundary effects. It is interesting to note that the trans-boundary impacts comprise roughly three-quarters of the total impacts for the former Yugoslav Republic of Macedonia’s emissions.

The morbidity benefits for the emission reduction are expressed in terms of the equivalent number of cases of chronic bronchitis avoided in the country in 2020 - the first year of full compliance with the EU Directives assumed. The equivalence between cases of chronic bronchitis and other health conditions is reached simply by dividing the total monetary value of morbidity benefits by the value of one case of


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chronic bronchitis avoided to give the number of cases of chronic bronchitis-equivalents. The total number of cases per year is approximately 381.


19

Table 3-12: Physical Morbidity Impacts in year 2020

Morbidity impact (equivalent number of chronic bronchitis cases avoided each year

Cases

former Yugoslav Republic of Macedonia 50

Outside former Yugoslav Republic of Macedonia 331

Total 381

3.3 MONETARY VALUATION: REDUCED AIR POLLUTION

3.3.1 Benefits upon full compliance

The monetary estimates of the benefits resulting from the air pollution emission reductions assumed above in the former Yugoslav Republic of Macedonia are presented in summary form in Table 3-13. All values presented are in million Euros (2005 prices), and relate to the year 2020 - the first year of assumed full implementation. A description and analysis of these results is given in this section. The values here look at the benefits to the former Yugoslav Republic of Macedonia. Additional benefits accrue to the EU, and to third countries, as a result of reducing emissions in the former Yugoslav Republic of Macedonia, and the relationship between domestic action and foreign benefit is presented in Section 3.3.2.

Box 1 : Premature Mortality: Values of Prevented Mortality: Range of Values

Modelling of air quality benefits in monetary terms has historically been challenged by the use of appropriate metrics in monetising premature death impacts. Whilst there is a case for the numbers of deaths to be used on the basis that the Value of a Statistical Life (VSL) has – until recently - been the only metric for which there is empirical evidence, recent studies have tended to use the Value of Life Year (VOLY) measure as more empirical evidence has become available. The reason for the choice of using VOLYs is that for these deaths brought forward (with higher air pollution) or postponed (with lower air pollution) it is misleading to use the full Value of a Statistical Life for monetary valuation, because it attributes the full VSL to what is understood to be only a small portion of a full life expectancy. Put differently, there are many reasons why life is shortened. Air pollution in the days immediately preceding death is but one of them. It is widely understood though not fully established that higher air pollution in the days before death is a contributory factor to earlier death only in people who already have serious cardio-respiratory disease; and it seems reasonable and even necessary to attribute the deaths in greater part to that underlying disease and, perhaps, to the risk factors (smoking, occupation, diet, poverty…) that caused it.

To reflect these issues, recently (e.g. in the CAFE Programme) DG Environment has tended to use both the VSL and VOLY metrics. VOLYs have been calculated through ‘conversion’ of attributable deaths from time series studies to equivalent changes in life years. However, research as part of the NEEDS project has derived directly elicited VOLYs across a range of eight European countries. As a consequence the air quality modelling has made use of these new values. Consistent with the DG Environment approach in the CAFE analysis we use both VSL and VOLY metrics; we use values of €1 million and €40,000 for these, respectively.

The mortality avoided impacts comprise the only impact category that can be easily aggregated from the results. It should also be stressed that mortality avoided impacts typically comprise the majority of the total benefits in valuations undertaken by following the described methodology, and so are by far the most significant.


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See the annex (part 1 - general part) for further discussion of the results of the NEEDS VOLY-related research, as well as the valuation of benefits of avoided illness.

To be consistent with previous analyses of benefits of compliance with the environmental acquis in the following paragraphs we highlight results using the VSL metric for monetising reduced risks of premature death from air pollution. Equivalent results using the VOLY metric can be identified from Table 3-13.

Table 3-13 shows that the total benefits to the former Yugoslav Republic of Macedonia are equal to 38 million Euro each year following full implementation of the EU Directives in former Yugoslav Republic of Macedonia. When considering the period up to 2030, with full implementation by 2020 and including the benefits accruing in the period 2010-202 preceding full implementation, the total benefits for the former Yugoslav Republic of Macedonia amount to 327 million Euros.

Table 3-13: Benefits of Full Compliance (Million €)

Annual Benefits once full imp. Achieved

Total Benefits 2010-2020 before full imp.

Total Benefits 2020-2030 after full imp.

Total benefits over period until 2030

VSL=€1M VOLY =€0.04m




former Yugoslav Republic of Macedonia

38 22 139 80 188 109 327 189

Outside former Yugoslav Republic of Macedonia

247 140 903 512 1.220 692 2.123 1.204

Total 285 162 1.042 592 1.408 801 2.450 1.393

* Assuming full implementation in 2020 and linear implementation 2010-2020. The analysis used a 4% discount rate.

3.3.2 Trans-boundary benefits

Table 3-13 above presented the benefits that accrue to the former Yugoslav Republic of Macedonia as a result of its own emission reductions and the benefits outside the former Yugoslav Republic of Macedonia, which compares with the total benefits that accrue to the former Yugoslav Republic of Macedonia. One key point of this analysis is that there are very significant trans-boundary benefits from reduction in air emissions to levels resulting from EU Directive implementation. Total annual foreign benefits from domestic action (i.e. excluding domestic benefits from domestic action) amount to €247 million once implementation is completed.

KEY POLLUTANTS AND KEY BENEFITS

The benefits discussed above are most attributable to the reduced number of premature deaths caused as a result of air pollution. Mortality reduced benefits account for 64% of the total benefits. Morbidity reduced benefits account for 32% whilst reduced damage to materials and to crops account for 4% and 0.0001% respectively.

In terms of pollutants, the gaseous pollutants (SO2, NOx, NH3 and NMVOC) and PM10 can be attributed 73% and 27% respectively.

3.3.3 Conclusions

The study has assessed the extent of the benefits from lower emissions for the following pollutants: particulates, sulphur dioxide (SO2), nitrogen oxides (NOx), volatile organic compounds (VOC’s), and ammonia (NH3).


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In summary, the key benefits identified are:

• It is estimated that 381 equivalent cases of chronic bronchitis could be avoided per year (domestic and external) through the full implementation of EU air related directives. Of these, 50 are domestic.

• Furthermore, the implementation of the air related environmental acquis should lead to approximately 237 fewer cases of premature death arising from lung cancer per year and other related respiratory diseases, 30 of which are domestic.

The key monetary benefits are:

• Full compliance should lead to an annual benefit value in a range of 22 to 38 million EUR (reflecting the metric for premature death used) for the former Yugoslav Republic of Macedonia, starting from 2020.

• Total annual benefits to all countries, including EU and third countries have been estimated to equal 285 million EUR in 2020 using the VSL metric. This is due to the fact that emissions reductions in the former Yugoslav Republic of Macedonia will lead to reductions in pollution exposure of the populations in neighbouring countries.

• The gaseous pollutants comprise almost 73% of the benefits whilst PM10 accounts for almost 27% of the total benefits.

• Avoided early mortality is the largest source of benefit; the value attributed to avoiding early mortality amount to over 64% of the total benefits valued.

The results presented are still likely to be under-estimates of the true benefits of compliance with these standards. The principal reason for this is that the benefits of reductions in some pollutants, notably CO, CO2 and CH4, are not valued since the impact-pathways are not yet defined for all end-points.

It should also be noted that uncertainty remains integral to the analysis – in other words the analysis does not try to hide the uncertainty in the estimates, on the contrary. Two examples of uncertainty include the monetary valuation of the receptor end-points, particularly premature deaths avoided.

Whilst the limitations must be acknowledged, the project team is confident that the results, if seen in the context of the uncertainties, do present very important conclusions on the scale of benefits that can accrue from the proper implementation of the Directives, from which broad policy conclusions can be drawn.

ARCADIS ECOLAS / IEEP / Metroeconomica / Enviro-L Benefits assessment of water related directives 06/11347 - fYRoM - Benefits of Compliance with environmental acquis - final report

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4 BENEFITS ASSESSMENT OF WATER RELATED DIRECTIVES

4.1 CURRENT STATUS OF DIFFERENT WATER USES AND THREATS

4.1.1 Drinking water

The percentage of connections to public water supply systems in the municipalities-urban areas is much higher then the average, it varies from 82% (Berovo, Kumanovo) to 100% Skopje-Centre municipality. The total number of inhabitants connected to public water supply systems equals 1 200 000.

Regarding the r

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