For comparison, EU Member States spent almost 2% of GDP in 2018 on environmental protection. From year to year, the structure and composition of expenditures are almost unchanged. The main expenditures are the protection and use of natural resources, the elimination of pollution, the conservation of the nature reserve fund, the disposal of waste, basic and applied research, other activities. The focus of this article is on environmental issues in the state budget.
Local budgets (which separately approve expenditures for similar functional categories) are equally important and deserve attention in a separate article. Despite the fact that spending is increasing in absolute terms, it is worth remembering that inflation is eating it up. The average consolidated budget for the environment is about 0.3% of GDP.
Budget expenditures on environmental protection, UAH million.
Source: State Treasury reports. The chart shows the classification by functional feature (in the state budget waste management and pollution elimination refers to overcoming the consequences of the Chornobyl disaster)
Expenditures on ecology from the state budget in 2020 will be covered by the newly created Ministry of Energy and Environmental Protection of Ukraine. Its annual budget is UAH 16.1 billion, which is 1.4% of total budget expenditures and 0.4% of GDP. But it should be understood that these are not only means of protecting the environment. Expenditure from the former Ministry of Energy and Coal was also transferred to the new ministry’s budget. Among the biggest costs of a joint ministry are water management, restructuring of the coal industry and overcoming the aftermath of the Chernobyl disaster. In total, these articles cover 71% of the Ministry’s budget. Programs for nature protection, conservation of nature reserve fund, protection and protection of forests, reduction of greenhouse gas emissions will cost about 1.3 billion UAH or 8% of the expenditures of the Ministry of Energy. Consider these programs as they are the largest in terms of costs and directly relevant to the environment. As not all budget programs for 2020 are freely available, most of the analysis is based on the 2019 budget programs.
The structure of the passport of the budget program is as follows: purpose, purpose of the program, activities to be implemented within the program and performance indicators of the program. There are usually many metrics, and there are four types – cost, product, efficiency, and quality. In this post, we focus on the performance of budget programs because, in our opinion, they should reflect the progress towards the goal of the program.
WATER: The State Water Agency received UAH 4.9 billion or 30% of the Ministry of Energy’s total expenditures. The largest program is “Operation of State Water Management Systems”. The main goals in the passport of this program for 2019 are to reduce the level of water pollution, improve their ecological status and provide the economy with water resources. However, the quality indicators of this program are more about meeting economic needs rather than reducing the level of water pollution and improving its environmental status. Only two of the nine criteria for evaluating the success of the program – namely, the proportion of measurements of water quality indicators that meet the standards of error and the level of updating of fixed assets – can be related to the “environmental objectives” of the program. However, even with these indicators, it is difficult to understand the progress made towards achieving these goals, as there is no data on the existing and target levels of pollution. Because program quality metrics are not goal-bound, it is sometimes difficult to understand what is being achieved and whether it can be traced back to existing metrics. In addition, the developers of the program do not specify what research work is carried out within the program and to what end these works are directed.
PRESERVATION OF THE NATURAL RESERVATION FUND AND ENVIRONMENTAL PROTECTION: The Ministry of Energy and Environment is responsible for the implementation of the three programs, with a general budget of 931 953 million (5.7% of the total budget). The success of the Conservation Fund will be measured by the conservation status of species of plants and animals listed in the Red Book. This is the main purpose of the program. Thanks to this program, two reserves with a total area of more than 40 thousand hectares will be created in 2020. In our opinion, the drawback of the program is that the quality index determines the conservation of the number of plant and animal species included in the Red Book at the same level, and not the “output” of individual species from the Red Book due to an increase in their population.
The purpose of the separate program “Implementation of Measures to Implement the Environmental Priorities” is very abstract – to improve the state of the environment. In 2019, funds under this program were used for the protection and rational use of aquatic, natural, plant and animal resources in the regions of Ukraine, including the reconstruction of Sofiyivka Park and the construction of a shelter for keeping homeless animals in Uman, the reconstruction of greenhouse facilities in Drohobych and other activities. Quality indicators are the degree of implementation of these projects. The main disadvantage of this program is the availability of 25 quality indicators. That’s a lot. At the same time, only a few are directly related to environmental improvements. For example, installing licensed software in the State Inspectorate is an important thing, but the implementation of this measure is unlikely to affect the environment.
In general, the first program mainly contains the wages and salaries of the people involved in the conservation of the nature reserve fund, while the second program includes capital expenditures (measures) to help preserve red-book species. In our opinion, these two programs are more focused on serving the economic needs of environmental institutions rather than protecting the environment.
Unlike in 2019, this year’s budget includes the program “Implementation of environmental measures, in particular to improve the environment”. This program is new and we could not find its text and we could not evaluate its goals and indicators accordingly. However, at least by name it looks similar to the above.
FOREST PROTECTION AND UPKEEP. Full name of the program is “Forestry and Hunting, Protection and Protection of Forests in the Forest Fund”. It allocated UAH 445 097 million (2.7% of the Ministry of Energy’s total budget). Previously, this program was implemented by the Ministry of Agrarian Policy and Food of Ukraine. Its main goals are the development of forestry, conservation of biological and landscape diversity of the territories. The main indicators of quality are the conservation of plant and animal species included in the Red Book; forest crop viability, increase of protective forest plantations and forest protection strips compared to 2018 (however, neither the area of such plantations in 2018 nor the area of their increase is specified). In this program, as well as in the program concerning the nature reserve fund, the indicators are focused on the conservation of plant and animal species, not on their restoration.
REDUCTION OF GHG EMISSIONS. This is also the task of the Ministry of Energy and Energy, which is allocated 3 million 808 thousand UAH (about 0.1% of the total budget of the Ministry of Energy). The first program focuses on measures to reduce greenhouse gas emissions. These include the warming of social security facilities and the development of international cooperation on climate change. Quality indicators include the amount of annual greenhouse gas emission reductions and the level of completion of major repairs (insulation). Another budget program allocates funds to the activities of the National Center for GHG Emissions. The quality indicators of this program relate exclusively to the monitoring and reporting of anthropogenic emissions and the absorption of greenhouse gases. A better combination of both programs might be needed: 1) how much emissions were recorded in the previous year, 2) what level the Ministry is aiming for in the next year, and 3) how they want to achieve it.
The central budget subsidy to local budgets for the implementation of environmental measures at communal property (UAH 580 million in 2019) has disappeared. From the point of view of decentralization, this may be perceived negatively, as local people are generally more aware of the urgent needs of people and nature than is evident from the center. However, independent estimates of the distribution of the “environmental” subvention confirm that such a decision is justified: in 2019, a significant portion of the subvention was allocated to areas that already have large amounts of environmental funds, and some measures did not pass the environmental impact assessment procedure or were even harmful.
The remaining programs (general management, fisheries, energy efficiency, environmental inspection, research, etc.) include expenditures of up to UAH 1 billion, which is generally less than a quarter of the ministry’s budget.
It is clear that the government has more urgent goals than the ecology reflected in the budget. That is why it is very important to properly manage the 0.2% of GDP budgeted for the respective programs this year.
The programs of the Ministry of Energy and Energy should be reviewed to identify achievable and measurable targets for them (not just “environmental improvements”). Also, review the quality of your apps
At present, quality metrics are mainly focused on the implementation level, but the link between goal and action is unclear and does not follow from the program descriptions. Ideally, quality metrics should reflect progress toward goals. Currently, only the budget request for the conservation of the nature reserve fund for 2020-2022 is the dynamics of changes from 2018 to 2022.
In addition, some indicators focus on maintaining the status quo rather than improving the situation (for example, the number of plant and animal species included in the Red Book). Another important topic for further consideration is the use of the environmental tax on the ground and the discussion of existing and possible tools to stimulate the improvement of the environmental situation in Ukraine.
The author doesn`t work for, consult to, own shares in or receive funding from any company or organization that would benefit from this article, and have no relevant affiliations