Title: Energy and environmental impact in Central and Eastern Europe: the case for international financial assistance

Authors: Erich Unterwurzacher

Addresses: European Energy Charter, Conference Secretariat, c/o CEC - DG XVII, rue de la Loi, 200, 1049 Brussels, Belgium

Abstract: The environmental conditions in Central and Eastern European countries and in the New Independent States of the former Soviet Union are alarming. Most of the environmental degradation is directly or indirectly linked to the energy sector. Measures to alleviate this damage should therefore focus on the adjustment of the energy system. This can best be achieved by the adoption of market principles which will reduce inefficiencies. However, there are substantial barriers to the speed and level of this adjustment, at least in the medium term. This paper gives an overview of the current situation of the energy system in Central and Eastern European countries and the environmental impact related to energy production and use. Furthermore, it describes the macro-economic situation in these countries which are currently undergoing severe and often painful adjustments and illustrates barriers to this adjustment process as far as the energy sector is concerned. Taking account of the financial limitations and the magnitude of the environmental problem it is argued that international financing institutions are best suited to facilitate the economic transition and to provide the initial and catalysing funds for investments. The paper also delineates steps and prerequisites for bilateral or multilateral cooperation, such as economic, legislative and regulatory reform as well as the reduction and elimination of barriers to trade. These steps are necessary to avoid misuse of public resources, both in donor as well as in recipient countries.

Keywords: environmental impact; Central and Eastern Europe; CEE; international financial assistance; economic transition; energy economics; energy policy; environmental degradation.

DOI: 10.1504/IJGEI.1994.063534

International Journal of Global Energy Issues, 1994 Vol.6 No.3/4/5, pp.139-147

Published online: 16 Jul 2014 *

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