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This report examines the implications for Poland of complying with the European Union's environmental directives. It starts by discussing the importance of establishing efficient institutions to set policies, enforce legislation and monitor results. Improving institutional capacity will not be financially costly, but will require significant investments of effort and time. The report then assesses the likely effect of EU directives on the private sector, concluding that, with certain exceptions, the directives should not affect the competitiveness of Polish industry. The third section discusses the costs of the public investment program mandated by EU rules. It estimates that public investment of between US$ 22 billion and US$ 43 billion will be required, depending on how directives are interpreted in Poland. If operations and maintenance costs are included and the investment costs spread over the life of the investments, the total annualized costs come to US$ 120 to US$ 270 per person per year for twenty years. The report highlights the substantial cost implications of different interpretations of the directives and also outlines ways in which Poland might phase the investments for greatest local benefit. The fourth chapter addresses options for financing this investment, including making best use of EU grant financing for environment. The report finds that price rises should be manageable for households if the investments are phased in over a long compliance period and if investments are interpreted flexibly.

Publisher: World Bank

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