environmental appraisal and environmental policy in the european union

Environmental and Resource Economics11(3–4): 489–501, 1998.© 1998Kluwer Academic Publishers. Printed in the Netherlands.

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Environmental Appraisal and Environmental Policy

in the European Union

DAVID W. PEARCEUniversity College London and CSERGE, University College London, Gower St, London, WC1E6BT, UK (email: [email protected])

Abstract. Revisions to the European Treaty of Union require some form of environmental appraisal– primarily risk assessment and cost-benefit analysis – of regulatory initiatives by the EuropeanCommission. A retrospective look at the emergence of environmental appraisal also shows that,while the Commission has made great advances in introducing cost-benefit or cost-effectivenessappraisals in recent years, past environmental decisions and overall environmental policy have notbeen informed by systematic appraisal techniques. Nor is it clear what role is now being played byrisk assessments. While it is impossible to gauge the extent to which systematic appraisal procedureswill save on regulatory and compliance expenditures, some indications are provided of the costs ofpast neglect of these procedures.

Key words: cost-benefit analysis, environmental policy, precautionary principle, risk assessment,sustainable development

JEL classification: C72, Q48

1. Introduction

It seems fair to say that most past environmental policy at the European Union(EU) level has not been informed by environmental appraisal procedures, whereappraisal is taken to mean a formal assessment of policy costs and effectivenessusing one of the established procedures of cost-benefit analysis, risk assessmentand multi-criteria assessment. That picture has changed in recent years and is nowaccelerating as procedures for assessing costs and benefits are introduced in lightof the changes to the Treaty of Union. This paper investigates the background tothe ‘change of heart’ in EU policy in the 1990s, and provides some indicators of theextent to which formal procedures can result in overall efficiency gains in decision-making. Unfortunately, no detailed quantitative assessment of the efficiency gainsis possible because past decisions have not been the subject ofex postevalua-tions using formal procedures. There is a challenge here for the European policyanalysis community, and a contrast with the USA where such policy evaluations arecommonplace. Nonetheless, some information exists and this suggests that policyinefficiency may have been substantial.

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The Treaty of Rome establishing the European Community made no referenceto the environment. Despite this, the Community introduced environmental legis-lation from the early 1970s and five ‘Environmental Action Plans’ (EAPs) havebeen implemented from 1973 to the present day. The 1992 Fifth EnvironmentalAction Plan,Towards Sustainabilitymade explicit reference to economic valuationand cost-benefit analysis:

Valuation, pricing and accounting mechanisms have a pivotal role to play inthe achievement of sustainable development. Economic valuations can helpeconomic agents to take environmental impacts into account,

while measures needed include the

. . . development of meaningful cost/benefit analysis methodologies and guide-lines in respect of policy measures and actions which impinge on the environ-ment and the natural resource stock. (European Commission 1992)

Article 130r(3) of the Treaty of European Union (the Maastricht Treaty) requiresaction to take into account several factors of which one is ‘the potential benefitsand costs of action or lack of action’. Clearly,someform of formal appraisal ismandated by this provision. The issue in question, then, is how the Commissionhas taken this requirement into account in formulating its own Directives. Untilrecently, it did so in only the most loose manner.

2. Past EU Policy and the Absence of Formal Appraisal

Up to about 1990 EU environmental policy was, by and large, effected with littleformal evaluation of policy taking place. Some examples of policy are brieflyprovided below.

2.1. THE PACKAGING AND PACKAGING WASTE DIRECTIVE

The EC Packaging and Packaging Waste Directive was finalised in December1994 (European Parliament and Council 1994). The Directive has a chequeredhistory. An earlier 1985 Directive (85/339/EEC) had already attempted to encour-age recycling and re-use of beverage containers, but the Commission found theimplementation of this Directive to be ‘disappointing’ with respect to the protectionof the environment and some of the measures adopted were regarded as being inrestraint of free trade. The early 1990s therefore saw further attempts to secure aneffective Directive, but this time extended to all packaging.

In its final form, the Directive may be summarised as follows. The objectivesare: to reduce the overall impact of packaging on the environment by reducingpackaging at source, to eliminate harmful materials in packaging waste, maximisethe recovery of packaging waste for re-use, recycling, composting and energyrecovery, and minimise the quantity going to final disposal (landfill); and to bringnational policies on packaging and packaging waste closer together to remove

ENVIRONMENTAL APPRAISAL AND POLICY IN THE EUROPEAN UNION 491

obstacles to trade and competition. The Directive covers all packaging in theEuropean Union – industrial, commercial, office, shop ‘or any other level’. Withinsix and half years of adoption of the Directive (five years from implementation innational law): 50–65% of packaging, by weight, must be recovered where recoveryincludes any activity which confers economic value on the waste (i.e. recycling,re-use, energy); and 25–45% of packaging by weight must be recycled, with aminimum of 15% of each material (paper, aluminium, steel, plastics) being recy-cled. These targets are relaxed for Greece, Ireland and Portugal who must attain atleast 25% recovery by the five year deadline, or achieve the five year targets for therest of the EU by 2005. ’Substantially increased’ targets will be set by the Councilin 2005.

The Directive is clear in indicating that re-use and recycling are ‘preferablein terms of environmental impact’ to other forms of recovery and to disposal.This hints at the so-called ‘waste hierarchy’ which has gained credence in policydiscussions on waste management. The waste hierarchy sets out a ranking of wastemanagement options. The ranking, from best to worst, is source reduction, re-use,recycling, composting, energy recovery, and landfill. Source reduction is describedas a ‘first priority’; reuse and recycling ‘should be considered preferable in terms ofenvironmental impact’; reuse is described as something that member States ‘mayencourage’; recycling is described as ‘an important part of recovery’ but energyrecovery is described only as ‘one effective means of packaging waste recovery’.Yet, despite clearly embracing the waste hierarchy, without quite saying so, thePreamble to the Directive states that ‘life cycle assessments should be completedas soon as possible to justify a clear hierarchy between reusable, recyclable andrecoverable packaging’. Life cycle assessment (LCA) is a technique for measuringthe environmental impacts of any product according to each stage of its ‘life cycle’,from the extraction of raw materials through to final disposal. The Preamble there-fore suggests that no LCA has yet been carried out that would justify the lowerranking given to energy recovery compared to recycling and re-use. Indeed, theonly study available to the Commission that would be relevant was not completeduntil 1996 (Coopers and Lybrand et al. 1997). That study suggested that sourceseparation was very probably the most preferred option and that recycling hasmajor net financial and environmental benefits for most, but not all, waste mate-rials. Thereafter the ’hierarchy’ depends critically on geographical conditions andthe nature of the electricity generating system, e.g. energy recovery from inciner-ation displaces low merit order electricity generation and hence secures benefitsfrom displaced pollution. But what those benefits are depends on what electricitysystem is in place.

There is little evidence that the European Commission sought any rigorousjustification for its belief in the waste hierarchy. A few studies were available thatcould have been of relevance. Thus, Schall (1992) had attempted a justification ofthe waste hierarchy for the USA. Using data from the New York City region, heargued that source reduction results in the following savings of around $100 per

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tonne of waste management costs avoided, plus around $170 per tonne of environ-mental impacts from the production of the products that eventually become waste.These are formidable cost savings and would clearly establish source reduction asthe most beneficial ‘waste management’ option. A UK study had also suggestedthat energy recovery is a highly desirable waste management option because of theelectricity displacement effect (CSERGE et al. 1993).

Nor was there any apparent appreciation of the fact that recycling targets, ifachieved, could depress the market prices of recycled materials. The fact of pricefalls in face of increased recycling must have been apparent from the early expe-rience of the GermanDualessystem which had been introduced in 1991 with theadvent of theVerpackungsverordnung, the Packaging Ordinance. This Ordinanceestablished the right of consumers to return their packaging waste to the pointof purchase and from there to the producer of the product or the producer of thepackaging. The resulting chaos was avoided by making this a threat if the industrydid not itself institute a recycling system for the waste – the so-called Dual WasteManagement System which is enabled under the Ordinance. TheDualessystemand the Ordinance are of wider interest because of the role they played in influenc-ing the EC Directive, but by substantially increasing the supply of recycled materialin Germany, prices of materials fell, sometimes to such an extent that Germanyexported the waste to other countries at low or even zero cost. This ‘dumping’ ofwaste affected recycling industries in other countries. Since this was the subject ofofficial objections to the European Commission about the unfair trade aspects oftheDualessystem under Articles 30–36 and 85–86 of the Treaty, there must havebeen widespread understanding in Brussels of the effects of increasing supply bysetting recycling targets. Moreover, economically rational target setting would beextremely unlikely, except by accident, to come up with thesameminimum recy-cling target (15%) for each material since packaging materials have very differentenvironmental impacts.

2.2. THE HABITATS DIRECTIVE

Council Directive 92/43/EEC of 21 May 1992 relates to the conservation ofnatural habitats and of wild fauna and flora, the ‘Habitats Directive’. The aim isto conserve biological diversity in the Union against the background of continuingdecline in natural habitat. Since some habitats are under more serious threat thanothers, these are singled out for early attention. National conservation plans are tobe prepared within two years of the implementation of the Directive. By the year2000 a network of protected areas throughout the Community is to be establishedwith a legal requirement for Member States to protect these areas in compliancewith the Berne Convention on wildlife and natural habitats.

An explicit reference to burden sharing is made since it is recognised that suchhabitats are unevenly distributed across Member States and countries vary in theirfinancial capacity to invest in conservation. Arguments that the Polluter Pays Prin-


ciple make it the responsibility of countries to protect their own habitats regardlessof financial capacity are rejected since the PPP ‘can have only limited applicationin the special case of conservation’ (Preamble). Hence, burden sharing, wherebyricher states pay for the conservation of habitats in other countries, becomes anecessity, especially as the habitats are a ‘common responsibility’ of all MemberStates. Hence, ‘a contribution by means of Community co-financing should beprovided for within the limits of resources made available under the Community’sDecision’ (Preamble).

While the burden sharing arguments are themselves suspect (the PPP can inprinciple be applied to nature conservation), more relevant is a comment made bythe Economic and Social Committee in its general Opinion on the Directive, issuedin October 1990. The Committee notes, among other more general comments onthe lack of clarity in the Directive, that:

the lack of any estimates of the costs of implementation (which will have to beborne by the taxpayers, farmers and industrialists of the Member States) is aserious shortcoming. (Para 1.3)

and

. . . if it is to be effective it will require substantial funding. It would be appro-priate to find funds for many of the rural habitats from the funding of theCommon Agricultural Policy . . . and for the urban habitats from the Com-munity’s development funds. . . (Para 2.9) (Official Journal of the EuropeanCommunities, C31/1, Economic and Social Committee).

The central point arising from this case is the absence of costings for CommunityDirectives. The listing of habitats in the Community and species to be protectedconstitutes a form of risk assessment, but, as seen earlier, all risk assessmentsshould contain a cost reference. None was included in the Habitats Directive. Thereference to burden sharing makes this omission all the more pertinent since, ifapplied, it would imply that some Member States would bear not just the unspe-cified cost of protecting their own habitats and species, but also some share ofthe equally unspecified costs of protecting the habitats of other Member States. Itis possible that the Habitats Directive was being formulated at a time when thereference to benefits and costs in 130r(3) was itself being debated. It could thenbe argued that there should be no expectation that the benefit-cost principle shouldhave been applied. However, the discussion about the benefit-cost considerationwas extant in 1987, five years before the Habitats Directive was finalised.

2.3. THE DRINKING WATER DIRECTIVE

Directive 80/778 – the Drinking Water Directive – fixes maximum concentrationsof undesirable substances in drinking water. Amendments to the Directive are stillbeing considered. Various representations have been made concerning the amend-ments with respect to the need for an appraisal of the costs and benefits of the

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standards in the Directive. By the end of 1993 no Member State fully compliedwith the Directive due to difficulties in reaching standards on nitrates, pesticides,coliforms and heavy metals. Widespread opinion suggested that some of the stan-dards – e.g. for nitrates and pesticides – were unnecessarily restrictive (UK RoyalCommission on Environmental Pollution 1992). The EC limit for individual pesti-cides (0.1µg/l) and for total pesticides (0.5µg/l), for example, does not correspondto WHO standards which are generally less stringent, are health-related, and arespecific to particular pesticides.

The costs of complying with an amended Directive are thought to be consid-erable. In the United Kingdom, for example, the lead concentration limit can onlybe met by replacing lead pipes to water supplies in houses at a cost of billions ofUK pounds. The benefits to human health are likely to be small since lead in waterrepresents only a fraction of total lead intake by humans, but there could be otherbenefits from accelerated pipe replacements such as reduced leakage and increasedpressure and flow.

There is no evidence that the Commission undertook a systematic cost-benefitappraisal of the standards in the original Directive, but the origins of the Direc-tive pre-date the benefit-cost requirement of 1987. However, some of the technicalstudies for the amendments are seeking to appraise benefits in qualitative terms andcosts in money terms. This is a sign that 130r(3) is being taken more seriously. Aninteresting UK study, not emanating from Commission sponsorship, suggests thatpeople place high value on clean drinking water, with 98% of respondents citing‘safe to drink’ as the most important feature of water standards, together with asurprising 88% citing treating sewage to EC standards. Average willingness to payto improve the taste of drinking water was UK£ 29 per annum in areas with lowwater charges and UK£ 49 in high charge areas (Bolt 1993). Aggregated across20 million households these figures amount to a minimum of UK£ 580 millionp.a, suggesting that a benefit-cost study might support the Commission’s stance onimproving quality since the total cost of meeting the Directive standards in the UKhas been put at some UK£ 180 million p.a. (UK Government 1990).

2.4. THE BATHING WATERS DIRECTIVE

The Bathing Waters Directive dates from 1976 and hence predates the benefit-costrequirement in the Single European Act and Maastricht Treaty. This Directive hasbeen controversial and attracted very low levels of compliance until the mid 1980swhen the Commission pursued Article 169 on infringements of Community law.By the end of 1993 some 25 judgements on infringements had been given by theEuropean Court of Justice. It is known that the original 1976 Directive was draftedwithout the benefit of any form of risk assessment. Recent epidemiological workdoes suggest, however, that the EC standards may be consistent with modern riskassessments. Correlations between enteroviruses and total coliform counts havebeen found in waters exceeding the EC limits.


Nonetheless, even if the standards do coincide with modern ‘no effect’ thresh-olds, the Commission did not itself adopt any risk assessment procedure inevaluating progress under the ‘old’ directive, nor, more significantly, did it userisk assessment procedures in the proposed 1994 amendment to the Directive(6177/94). Yet the 1994 amendments should have been in compliance with therevised Article 130 of the Treaty. The aim of the 1994 proposals was to simplify andmodernise the Directive. The Commission appears to have been aware of the poten-tial criticism that no cost-benefit assessment had been undertaken, arguing thatthe revised Directive would ‘on balance’ reduce the financial burden on Memberstates since compliance would cost less, clean bathing waters would have financialbenefits in the form of tourism, and would give rise to public health benefits. But noform of quantitative assessment of these impacts was available. In its ExplanatoryMemorandum, the Commission stated that:

The assessment in financial terms of the improvement in the quality of theenvironment and public health is difficult to quantify. There is no reliable basisupon which an objective calculation to measure the value and security of abetter environment can be made.

Elsewhere, the Commission explains that the incremental cost of the amendedDirective – i.e. the compliance cost over and above the cost of the original Directive– would be zero.

The most exhaustive inquiry into the Directive is unquestionably that of theUK House of Lords (House of Lords 1994, 1995). Their analysis comes close toa benefit-cost assessment. They were themselves scathing in their criticism of theCommission for not pursuing some benefit-cost assessment. Thus:

It is unacceptable that policy formulation has reached the stage of formal pro-posal from the Commission for revision of the bathing waters directive withoutthe attachment of a menu of individually costed measures. The Committeedeplores that a soundly based cost-benefit analysis has not yet been produced.(House of Lords 1995, para 25)

Compliance cost estimates for the UK were produced by the House of Lords com-mittee. These are shown below and include some costs for the urban waste waterdirective (UWWD) which has as one of its effects the improvement of bathingwaters:

Original BW Directive UK£ 1.7 billion

Original UWW Directive UK£ 7.3 billion

over 10 years. The costs of the proposed revisions depend on the extent to whichvarious forms of treatment would be required. Under various scenarios:

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A : secondary treatment and filtration of effluent and disinfection by UV radiation,cost £ 200–490 m p.a.

B,C: different levels of secondary treatment, and UV radiation for discharges withina certain distance of bathing waters. B would cost £ 140–310 m p.a. and Cwould cost £ 55–130 m p.a.

D : insignificant new requirement, negligible cost.

Self-evidently, these estimates are not consistent with the view that the incrementalcost of the revisions is zero (or that the proposal is ‘cost neutral’ as the Commissionput it). On the enterovirus standard the House of Lords states:

it is hard to see how the Commission could have thought that the new standardwould not entail costly capital expenditure . . . . (House of Lords1995, para 15)

What of the benefits from a revised Directive? The House of Lords expert assess-ment was that there might be small gains in terms of reduced gastro-intestinalsymptoms and eye, throat and ear infections. Their view was that the benefits ofthe enterovirus standard, the most costly part of the revisions, were zero.

The only available cost-benefit analysis is by Georgiou et al. (1998) for theUK. This estimates benefits using a contingent valuation study in Eastern England.Average willingness to pay per household per annum to secure bathing water of theoriginal EC standard are £ 16–18. Interestingly, these benefit figures are similar tothe incremental costs of the proposedrevisedDirective. However, the willingnessto pay figures should really be compared with the costs of complying with theinitial Directive.

2.5. OVERALL ASSESSMENT OF PAST POLICY

These case examples suggest clearly that, until the early 1990s, very little by wayof formal policy appraisal procedures were used to evaluate European Union Direc-tives. In some cases, virtually no assessment of benefits and costs was undertaken,even at the qualitative level. Exceptions include the European carbon/energy taxwhich was evaluated by consultants on a number of occasions. Table I gives someindication of the execution of formal appraisals by year. Table I is based on a librarysearch at the European Commission. Most titles and keywords indicate clearly thecontent of the studies, so that the table is likely to be fairly accurate. Given thenumber of document titles supplied it has not been possible, however, to checkthe content of those where the title is ambiguous. In compiling the table, formalappraisal has been taken to mean cost-benefit analysis, cost-effectiveness analysis,i.e. any study must offer some analysis, however crude, of the costs of complianceand must offer some indication of benefits. For completeness, however, studiesof costs alone are included as shown. Impact studies, i.e. those dealing with thephysical impacts of pollutants, are excluded. Needless to say, they are nonethelessa critical element in any risk assessment.


Table I. Formal Appraisals of environmental issues or directives in the EuropeanUnion

Issue Year Number of studies

Biodiversity 1987–1997 None

Common agricultural policy 1996–1997 2

Internal market 1988–1989 15

1992 1

Benefits assessment (general) 1989–1990 2

Economic instruments 1988 1

1990, 1992–1993 4

Carbon-energy tax 1992–1995 9

Air pollution 1987 2

1991 1

1994–1995 3

1996–1997 2

Fifth EAP 1994 3

Costs of control 1993 1

EIA 1995 1

Noise 1996 1

Water pollution 1988 1

1989 9

1992–1996 17

Solid waste 1990 1

1992 2

1994–1996 8

Priority setting 1996 1

Table I suggests some important results. First, some sort of formal appraisal wasundertaken on water pollution and on the impacts of the Single Market before 1990.The number of studies indicated is deceptive, however, since they are often studiesrepeated for separate countries, or, in the case of water pollution, for different sub-stances. Nonetheless, the fact that impacts were measured for individual MemberStates is an indicator of the importance of the issue. The multiplicity of studieson water tend to reflect the significant number of key pollutants involved in waterpollution. The other major targeted area for simulations of costs and effectivenesswas the carbon-energy tax. In turn, this proposed Directive attracted probably the

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single largest opposing lobby of any Commission proposal, so that the studies area natural outcome, anticipated or ex post, of that process. Studies of Directives perse remain very few and these tend to be concentrated into the period since 1994.

3. New Policy Appraisal in the European Union

Since the early 1990s formal appraisal procedures have improved and are appliedmore widely.

Risk assessment has it most formal status in the context of somechemi-cal risks. Commission Directive 93/67/EEC lays down procedures for assessinghuman and environmental risks from substances notifiable under Council Direc-tive 67/548/EEC. These guidelines relate to new and existing chemicals. Newchemicals are subject to the guidelines if produced by Member States in quanti-ties larger than 1000 tonnes per year. Existing chemicals are scrutinised for ‘highpriority’ chemicals which are then subject to the guidelines, individual chemicaltesting being parcelled out among Member States. The guidelines have strongsimilarities with US EPA guidelines (Mazurek 1996) and involve hazard identi-fication, dose-response assessment, exposure assessment and risk characterisation.The dose-response analysis identifies ‘zero damage’ thresholds known aspredictedno effect concentrations(PNECs) based on extrapolations from test data to the realenvironment. Exposure assessment, as one would expect, assesses the expectedactual concentrations of the chemical as a PEC – apredicted environmental con-centration. Risk characterisation involves assessing the ratio of PEC to PNEC. IfPEC/PNEC> 1 the chemical is likely to be of concern, but if PEC/PNEC< 1 norisk reduction measures are required beyond those currently applying (PEC/PNECratios have their analogue in the concept of ‘exceedance above critical load’ in theacidification context).

Chemical risk assessment in the EU clearly contains some of the basic elementsof overall risk assessment. Missing from the formal guidelines is any indicator of‘stock at risk’, e.g. population levels exposed to risk ratios in excess of unity, but theassessor’s report on the risk assessment would appear to require some informationon this aspect. There is, however, no mention of cost. This is consistent with riskassessment in the narrower sense but not in the broader sense of a managementtool. Cost-effectiveness cannot be derived. The most detailed guidelines on riskassessment, with a scope far wider than the EU chemical risk procedures, havebeen produced by the United Kingdom (UK Department of the Environment 1995),but even this is weak on references to costs.

Broader cost-benefit assessments of Directives have recently been introducedby the European Commission in light of Article 130r and the statements of intentin the Fifth Environmental Action Plan. European Commission (1997) reportsthat cost-benefit or cost-effectiveness appraisals have been carried out for poten-tial new measures on water quality, municipal waste disposal, plastics recycling,


paper recycling, the CO2/energy tax and the effects of civil liability systems. Asexamples:

(a) in 1994 the European Commission revisited Directive 83/369/EEC (1989)which related to the prevention of air pollution from the incineration of municipalwaste. The rationale for reconsideration was that the original Directive dealt withtechnologies which had become outmoded, that concern about dioxin and heavymetals emissions had increased, and that cross-media pollution (controls in onesector resulting in increased emissions in another) was of greater concern. It wasalso proposed to introduce far more stringent controls on ‘conventional’ pollutantssuch as particulate matter, sulphur and carbon monoxide. Internal Commissionstaff evaluated the costs and benefits of the stricter standards (Litvan 1994). SEMAGroup (1994) investigated the relative merits of recycling and incineration, and afull cost-benefit study is reported in AEA Technology (1996). In this last study,benefits were expressed in both monetary and non-monetary terms. The essentialfinding was that the Draft Directive yields net benefits for areas where populationexposure is greatest, but net costs for other areas. Benefit estimates are dominatedby the health impacts of nitrate aerosols (part of the ‘cocktail’ of pollutants inparticulate matter). By weight of pollutant, the greatest impacts come from dioxins.

(b) Holland and Krewitt (1997) report a cost-benefit appraisal of the planned EUAcidification Strategy, and suggests health benefits greatly in excess of the likelycontrol costs, even allowing for the fact that latter are ‘end-of-pipe’ technologycosts which themselves tend to exaggerate true control costs. Currently (1998), newair quality targets are being appraised with the use of cost-benefit studies. In thesecases, several studies have been commissioned from consultants. Interestingly, thestudy dealing with lead (IVM et al. 1998) suggests that strict controls of airbornelead would not pass a cost-benefit test. Yet there is no hint that this will affect thesetting of standards for lead concentrations.

(c) Besides incineration, municipal waste disposal has been subjected to a numberof economic appraisals. This reflects the ‘new’ risk assessment philosophy of theCommission along with the fact that waste has been targeted as an important areaof EU policy. Thus there are Directives in place or planned on incineration, landfill,recycling and packaging waste, the last having been the subject of extensive debatewithin the Union (see above). The study by Coopers and Lybrand and others (1997)provides a cost-benefit overview of alternative waste disposal options ranked byinternal (financial) costs and environmental damages, and has already been dis-cussed above. Touche Ross (1994) carried out a cost-benefit analysis of the LandfillDirective and SOFRES et al. (1997) have completed a cost-effectiveness study ofvarious policy options for plastics waste.

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4. Conclusions

Formal policy appraisal has emerged only recently in the context of EuropeanUnion environmental policy. Given the extent of legislation over the past fewdecades, this neglect must have imposed significant economic costs on Mem-ber States. Exactly what those costs are cannot be determined without detailedretrospective analysis, and even this appears to be extremely difficult given thenon-availability of data, itself the result of the lack of appraisal. Nonetheless, wehave suggested from various case studies that these costs are likely to have beensubstantial. Since the early 1990s, the European Commission has changed its pro-cedures to reflect the requirements of the Single European Act. Risk assessment,cost-effectiveness analysis and cost-benefit analysis are now fairly routine. Exactlywhat role they will play in shaping policy remains to be seen. There are some hintsthat findings that run counter to political wisdom may not survive the decision-making process. In all other respects, the new emphasis on formal procedures ofappraisal is to be welcomed. While the findings of such appraisals will always bedisputed, theprocessof undertaking them confers greater rationality on Europeanenvironmental policy.

Acknowledgements

I am greatly indebted to Ger Klaassen of DGXI at the European Commission forinvaluable assistance in locating the bibliography of appraisals carried out by or forthe European Commission and which forms the basis of Table I. Neither he nor theCommission is responsible for the interpretation I have made of it. I am especiallygrateful to two referees for most constructive comments on an earlier, and verymuch longer, version of the paper.

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