from LCP in region SUPPORTED by “Berlin processes” Dr Zinaida Dimitrijevic Economically acceptable policy for investments in emissions decrement from LCP in region SUPPORTED by “Berlin processes” The overall aim of the Large Combustion Plants Directive 2001/80/EC is to reduce emissions of acidifying pollutants, particles, and ozone precursors. By Decision 2013/05/MC-EnC, Article 4(6) of Directive 2001/80/EC was adapted for the specific purposes of the Energy Community, including the period for using National Emission Reduction Plans which will expire on 31 December 2027.

Key characteristic of policy instruments Emission limit BAT Tax Tradable permits   equal damage cost auctioned by government given free Comand and control measures or Market based measures C M Industry pays abatement costs abatement costs + costs of residual damage Abatement costs + Auction price Abatement costs Government receives nothing cost of residual damage Proceeds of auction Nothing Incentives for reducing emissions none beyond limit none beyond specified BAT continuing pressure Government can reduce total number of permits from year to year Certainty of reaching emission target high depends on type of BAT low Set in BH

USA and lessons learned from SO2 allowance trading SO2 emission allowance trading program has been an environmental success. No criticism Title IV of Clean Air Act Amendments of 1990 was to reduce total annual SO2 emissions in the US by 10 millions relative to 1980 when total was 25,9 million tons The program mandated an allowance-trading system and specified that this goal would be accomplished in two phases. I phase-263 most polluting coal-fired electric generating units-Mississipi river II phase in 2000. cap was set on 8,95 million tons of SO2 mostly from electricity sector which is 50% of SO2 emissions in 1980 (17,5 million tons) The cost savings are substantial and contribute to the tremendous success of the program. Most of the cost savings have been achieved outside the formal allowance market, but the point of allowance tradeing is not to trade trade allowances The point is to give firms the flexibility to achive emission reductions in the least costly manner. Most air pollution regulation prior to the 1990 CAAA took a mich more prescriptive approach, either by setting uniform emission limits on classes of emmiters or by specifying the type of pollution-control equipment to be installed. Such requirements are relatively inflexible, imposing the same abatement path upon a range of heterogeneous facilities and ignoring the fact that the costs of compliance might vary widely across individual facilities depending on the age, technology characteristcs, operating conditions, and quality of fuel used. This type of inflexible environmental regulation came to be known by the somewhat pejorative term „command and control“ invoking visions of Soviet-style planning. A key question concerns cost-specifically, how the costs of achieving environmental objectives trough cap and trade compare with those of a „counterfactual“ (hypothetical alternative) command and control regulatory approach.

Several basic features are common to all cap-and-trade programs Several basic features are common to all cap-and-trade programs. First, government decides on the total (aggregate) quantity of emissions to be allowed under the program for a stated time period (usually per year)—that is, the “cap.” Next, government creates allowances (or permits”), denominated in quantities of the pollutant in question. The total number of allowances issued is equal to the cap.

Investments costs of TPP for compliance with LCP Directive

Investments costs of TPP for compliance with IE Directive Detailed analyses have found that the costs are one-half to one quarter of projections. Does 3.600.000.000,00 Eur worth enough to do something on different way?

BH case study Investment costs has been calculated based on KEMA study for TPP Kakanj and way of costs calculation based on European Commission, Integrated pollution prevention and control, Document on economics and cross-media effects, July 2006.

Scenario settings for BH DeSOx on TPP Kakanj-Unit 7 cca 12% of emission decreament DeSOx on TPP Ugljevik 50% of emission decreament Decreament of costs Increment of emissions

State of art in electricity sector in BH Units of thermal plants In operation since Planned year of decommissioning Installed power [MW] TPPT U3 1966 2013 100 TPPT U4 1971 2018 200 TPPT U5 1974 2023 TPPT U6 1978 2026 215 TPPK U5 1969 110 TPPK U6 1977 TPPK U7 1988 2030 230 TPPU U1 1985 2032 300 TPPG U1 1983 Still operates Planned to operate Building the new thermal unit is under the question-TPP Tuzla Unit 7; TPP Banovici and so on

„Berlin process“ So-called “Berlin process” aims to united Albania, Bosnia and Herzegovina, the Former Yugoslav Republic of Macedonia, Kosovo, Montenegro and Serbia because they are already united by the common goal of joining the EU. The Berlin process enjoys the support of the region and the EU alike, as an initiative to reaffirm the region's EU perspective by improving cooperation and economic stability within it.

Conclusions Bosnia and Herzegovina must prepare the necessary legal acts to ensure timely implementation of its National Emission Reduction-337.000.000,00 Eur In December 2015, former Yugoslav Republic of Macedonia submitted a National Emission Reduction Plan to the Secretariat, covering all large combustion plants in the country.-271.600.000,00 Eur The regulation provides in its transitional provisions that plants which are put into operation before its entry into force are allowed to exceed the emission limit values by 250% until 31 December 2025. As regards the Large Combustion Plants and Industrial Emissions Directives, Serbia should focus its efforts on preparing for the practical implementation of the directives, in particular via the reconsideration and update of the environmental permits of large combustion plants with the aim of bringing those in line with the emission limit values of the directives.- 710.700.000,00 Eur Ukraine –the ceilings have to provide a linear decrease between 2018 – 2028 for SO2 and dust and 2018 - 2033 for NOx-6.033.000.000,00 Eur

Over the Berlin process new Study has to be done Trading volume has increased over the life of the program and the robust market has resulted in an estimated cost savings of up to $1 billion annually, compared with the cost of command-and-control regulatory alternatives that were considered by Congress in prior years, representing a 30–50% cost savings. (Figure 1),

By experience of USA whole process of imposing tradeable permits could be shortened Significant set of data has been collected by Study on the need for modernization of large combustion plants in the Energy Community Annual implementation report 2015/2016 issued by Energy Community Secretariat also contains a lot of data for Member Countries