1. DEREL – Development of Environmental and Resources Engineering Learning
Assessment of Negative Externalities in Environment Case of Albania (Environmental Externalities)
Aida GJIKA
Faculty of Economy, University of Tirana, Albania
TEMPUS DEREL seminar in Novi Sad, April, 2014

2. Outline of the presentation:
Theoretical aspects regarding externalities in environment
Legal Framework
Assessment of the environmental externalities in Albania
Evaluation
Conclusion

3. Externality
The costs and benefits which arise when the social or economic activities of one group of people have an impact an another, and when the first group fail to fully account for their impact (Mas-Colell et al. 1995; ExterneE, 1995)
Welfare economists aim to maximize individual and social welfare through optimal resource allocation
A problem of Market failure (not efficient way of organization)
Internalize costs

4. Legal Framework (1/3)
No clear and well defined legal framework ( the right to be informed about environment)
Implementation, but only the legal framework regarding taxes and fees has been improved
the differences that there are may lead to difficult choices with respect to the allocation of scarce resources.
The legal and institutional gaps at the national and local level
However, a number of agreements:

5. Legal Framework (2/3)
Signed 7 International Conventions for different environmental issues
Created 7 Developmental Strategies for different aspects of the environment
20 laws approving different International Protocols, Agreements and Amendments
Over 20 amendments of existing laws
Over 80 Council of Ministers decisions related directly to environment 
Over 20 Directives and over 5 Regulations

6. Legal Framework (1/2)
Now the Ministry of Environment, Forests and Water Administration (MoEFWA)
Unfortunately, information about impacts of environmental and its degradation is limited
No regular data and not updated (2011)
Only 2 international reports on Environment Performance Review (2002; 2012) and 1 national reports
Monitoring progress, evaluation of data and assessment of policy efficiency need to be strengthen.
This challenge necessitates an improved institutional background and the improved operation of responsible institutions.

7. Main problems:
linked to its historic legacy of a centrally planned economy.
Water Pollution
Air pollution
Land degradation
Biodiversity losses
Disaster risks
Climate variability and change

8. Assessment: Quality of Air Emission of CO2 in Albania Deforestation
Purity of sea (Quality of beaches)

9. Quality of Air measured by PM10 and LNP
PM10 – particulate matter concentrations, fine suspended particulates less than 10 microns in diameter
Mixture of solid and liquid particles
Capable of penetrating deep into the respiratory tract and causing significant health damage
Gas released by automobiles

10. Quality of Air measured by PM10 and LNP
Source: Environmental, Forest and Water Administration Ministry (2011)

11. PM10
Allowed level of these gases are 60 μg/m3/year or about 50% higher than the level allowed by the European Union which has an average of  40 μg/m3.
2-7 times higher
Dangerous Area from WHO

12. Quality of Air-Presence measured by PM10 and LNP
LNP- floating solid particles
The presence of dust particles in air
Source from construction and poor quality of roads

13. Quality of Air-Presence measured by PM10 and LNP
Source: Environmental, Forest and Water Administration Ministry (2011)

14. Air Pollution
Nitrogen dioxide (NO2) and Sulfur Dioxide (SO2) are components of smog and causes of acid rains.
Very easily human organism and can cause lung diseases, increase the chance of receiving viruses, eye irritation or skin diseases.
Acid rain

15. Air Pollution measured by sulfur dioxide
Source: Environmental, Forest and Water Administration Ministry (2011)

16. Air Pollution measured by nitrogen dioxide
Source: Environmental, Forest and Water Administration Ministry (2011)

17. Interpretation and possible reasons
The current situation does not appear problematic.
Nevertheless, Albania is still at relatively high levels despite not being an industrialized country
Te data are average of all urban areas, including the rural which lower the average
The goal should not be an overall average below the limits of the European Union, but rather a level below 40 μg/m3 for every area
Focus also in the cities where are located factories in their vicinity such as Kruja

18. Air Pollution measured by carbon dioxide
Source: World Bank (2011)

19. Deforestation (illegal chopping)
Source: Environmental, Forest and Water Administration Ministry (2011)

20. Quality of beaches
Public Health Institute (2012)

21. Taxes and Fees
Environment policy in Albania underdeveloped, consist of control and regulatory taxes
Few market instruments
Taxes on used vehicles (fuel tax. Cleaning tax, environmental fines, forestry and fishery fines)
Share of environmental taxes: 0.41% of GDP
No other pollution emission sources
Deficiency in monitoring infrastructure

22. Further research: Evaluation
EF = Emission Factor
HR = Heat Rate in Btus/kWh;1
VED = Value of Environmental Damage, in ¢/lb.

23. Conclusions Implementation problem Not available data, no research
Problem 1: Air pollution
Improvement in other aspects
Need to evaluate for internalizing
Need to address to policies, reforms SHR and LR

24. Thank You!