A. INTRODUCTION.

In this session we shall focus on some environmental matters in a broad view. The most relevant article in the Treaty is art 130 r. We shall make an interpretation of this fairly general article. But the Treaty also consist of other relevant articles. For instance art 2 which states that "respecting the environment" is one of the pillars which the common market and the economic union shall build upon. Later on we shall focus on the possible conflict between economical and ecological interests. Art 36 is also consisting a restriction concerning the development of the common market. The prohibitions and restrictions on imports, exports or goods in transit described in art 30-34, are modified by this article. Such restrictions can be justified for instance on the grounds of the need of protection of health and life of humans, animals or plants. Many environmental issues are regulated in the secondary legislation. For instance Directive 75/439 and Directive 78/319 which are giving the Member states the possibility to use taxes in the sector of waste oils, and toxic and dangerous waste - in accordance with the polluter pays-principle. And in Directive 94/22 - the so called "oil directive" - concerning "the conditions for granting and using authorizations for the prospection, exploration and production of hydrocarbons", the Member States can use protection of the environment as a criteria (among others) for authorization. Art 6 in this Directive states that the Member States may to the extent justified by national security, public health, protection of the environment and so on, impose conditions and requirements" for this activities. Today and for the future environmental aspects are and will be taken into account in a much greater degree. And environmental matters are taken into account in all areas of the European Community. Art 100 also claims that the proposals from the Commission concerning environmental protection shall be based on a "high level of protection." We shall now take a closer look at the general principles and the more specific principles concerning the jurisdiction of the European environmental law.

B. GENERAL AND SPECIFIC PRINCIPLES REGARDING THE JURISDICTION OF EUROPEAN ENVIRONMENTAL LAW AND THE INTERPRETATION OF ARTICLE 130r

1. General and specific principles The general principle developed by the Court are: -The principle of proportionality --The principle of legal certainty and legitimate expectation -The principle of equality -Fundamental rights -In addition to these there are a number of other principles of less principal value The specific principles regarding the environmental law are listed in art 130 r: -The high level of protection-principle -The precautionary-principle -The prevention-principle -The source-principle -The polluter pays-principle -The integration-principle -The safeguard-clause

2. The general principles In addition to the explicit rules laid down in the Treaty and secondary legislation, the Court of Justice has developed certain general principles of law, inspired by the national laws of the Member States. A distinction may be drawn between "general principles" on the one hand and "fundamental rights" on the other, but the Court has stated that the fundamental rights constitute an integral part of the general principles of law which the Court is bound to uphold. The Court can hardly be said to have exceeded its jurisdiction by its recourse to these principles. No treaty regime can be interpreted in a legal vacuum. Art 164 states that the Court of Justice shall ensure that in the interpretation and application of the Treaty "the law is observed". This term is wide enough to cover the principles as well. See also art 173 concerning the grounds of invalidity of Community acts : Infringement of "any rule of law" and art 215 which provides that the non-contractual liability of the Community shall be determined "in accordance with the general principles common to the laws of the Member States". a) The principle of proportionality This is one of the most oft-invoked principles. The principle holds that "the individual should not have his freedom of action limited beyond the degree necessary for the public interest." (case 11/70) For instance : In exercising their powers the Institutions must ensure that the amounts which commercial operators are charged are no greater than is required to achieve the aim which the authorities are to accomplish. The principle constitutes a constraint upon the Community legislative activities. But it also can be resorted to in assessing the legitimacy of State action otherwise authorized under the Treaty. For instance: in cases of different eco-taxes, in cases regarding protection of the environment as a criteria for authorization or in cases regarding grounds for exceptions from articles in the Treaty ( art 36 and art 48.3). b) The principle of legal certainty and legitimate expectation The principle of legal certainty requires that those subject to the law should not be placed in a situation of uncertainty as to their rights and obligations. The related concept of legitimate expectation constitutes an important aspect to this principle: those who act in good faith on the basis of the law as it is or seems to be, should not be frustrated in their expectations. The Court has held that the Member States are bound to implement directives in a way which meets the requirements of clarity and certainty. The principle of legal certainty militates against administrative and legislative measures taking effect without adequate notice to persons concerned. In case 98/78 the Court stated: "A fundamental principle in the Community legal order requires that a measure adopted by the public authorities shall not be applicable to those concerned before they have the opportunity to make themselves acquainted with it." The principle of legitimate expectation operates to protect individuals where they have acted in reliance upon measures taken by the Community institutions. These principles are relevant for the environmental sector. The secondary legislation comprehends a lot of regulations, and the regulations are often very detailed and compelled. c) The principle of equality This is a further principle binding upon the Community in its administrative and legal activities. Differentiation between comparable situations must be based on objective factors. The principle applies in the relationship between the Community institutions and its officials, and the Court has stated that "according to the Court's consistent case law the general principle of equality is one of the fundamental principles of the law of the Community civil service." The principle of equality provides a basis for the judicial review of measures adopted by the Community in all its various activities. The Community cannot treat different polluters differently and taxes must be equal to all contractors or commercial operators. d) Fundamental rights The Court has referred to specific provisions of the European Convention on Human Rights in a number of judgments. For the purpose of applying art 173, which provides for the judicial review of Community legislation, and for the purpose of applying art 215, which provides for the tortious liability of the Community, certain fundamental rights will be taken into account as a part of Community law. These rights are to be deduced from the common constitutional principles of the Member States and from international treaties binding upon the Member States. These propositions are exclusively concerned with constraints on Community legislative or executive action, not with restrictions on the activities of Member States. e) Some other principles The categories of general principles which the Court will uphold do not appear to be closed. For instance the Court has stated that it is a general principle that a person whose interests are affected by a decision taken by a public authority must be given an opportunity to make his point of view known. And the right to be assisted by counsel has been recognized by the Court as a general principle of law. The general principles of "good administration" clearly provide fertile ground for judicial development. A further principle which has been invoked by the Court as a guide to the construction of secondary legislation is that of Community preference. We shall now take a closer look at the more specific principles related to the European environmental law. 3. The principles of European environment policy a) The high level of protection-principle As already mentioned, art 100a(3) provides that the internal market proposals from the Commission shall be based on a high level of environment protection. Why isn't the same obligation directed to the ultimate decision-making body - the Council ? And why is the principle mentioned only in the context of the establishment of the internal market? The "Maastricht-Treaty" changed this. Art 130r(2) does not refer to proposals from the Commission, but to the "Community", in other words including the Council. And there is no doubt that the art is legally enforceable: Community policy "shall aim" at a high level of protection. It is better to aim high than to be comfortable. b) The precautionary principle This principle has it roots in German environmental law as the Vorsorgeprinzip. This means that if there is a strong suspicion that a certain activity may have environmentally harmful consequences, it is better to act in a legally way before it is too late, rather than wait until scientific evidence is available. It is better to be safe than sorry. c) The prevention principle This principle allows action to be taken to protect the environment at an early stage. It is now not only a question of repairing damages after they have occurred, but to prevent those damages to occur at all. The principle is not as far-reaching as the precautionary principle. The Third Environmental Action Programme focused strongly on the prevention principle and the Environmental Impact Assessment Directive (EIA Directive 85/337) states that "the best environment policy consists in preventing the creation of pollution or nuisances at source, rather than subsequently trying to counteract their effects". It is better to prevent than repair. It is better to take steps at an early stage. d) The source principle The environmental damage should preferably be prevented at source, rather than by using the "end of pipe technology". This principle also implies a preference for emission standard rather than environmental quality standards, especially to deal with water and air pollution. The principle was applied by the Court in the Walloon Waste case (Case 2/90 Commission vs. Belgium) in determining to extent Walloon measures restricting imports of foreign waste were discriminatory. The Court held that the principle means that every local authority must take those measures which are necessary to ensure the reception, processing and removal of its own waste. The waste must be disposed of as close as possible to the place of production in order to limit its transport as far as possible. See also case 422/92. It is better to strike at the root of the evil. e) The polluter pays principle This principle is one of the cornerstones of Community environment policy. It is important that the costs connected with the protection of the environment against pollution should be allocated according to the same principles throughout the Community. Partly because this is compatible with the proper functioning of the common market. The First Action Programme on the environment is based on the principle that charging the polluters will encourage them to reduce that pollution and endeavor to find less polluting products or technologies. The principle can also be implemented by imposing environmental standards because setting standards helps to ensure that the polluter bears the cost of pollution. Several references to the polluter pays principle can be found in the secondary legislation. For instance Directive 75/442 on waste, Directive 75/439 on the disposal of waste oils and Directive 78/319 on toxic and dangerous waste. It is better to let the polluter pay than splitting the bill. f) The integration principle This is a very important principle which states that environmental objectives must be integrated in other policy sectors. Environmental objectives : The Treaty refers to "environmental protection requirements" This includes the objectives of art 130r(1) and the other principles in art 130r(2), and most likely also the policy aspect referred to in art 130r(3). The principle leads to a general obligation on the Community institutions to reach an integrated and balanced assessment of all the relevant environmental aspects when adopting other policy. However, we can not say that the Community environment policy has been given some kind of preference or priority over other policy areas. The integration principle states that protection of the environment is at least taken into account or consideration, even when commercial policy is involved or other decisions are being taken. Possible conflicts between environmental and commercial policy will be resolved against the background of the case law established by the Court of Justice. Restrictions of trade is permissible as long as the environmental measures are not discriminatory and do not entail restrictions that go beyond what is strictly necessary for the protection of the environment (the proportionality-principle). Has the integration principle any legal enforceability? Not directly, but it has some legal consequences: For instance, it can play an important role where the Court has to choose the proper legal basis of environmental measures. In the Chernobyl I case (case 62/88) the issue was whether Regulation 3955/87 on the conditions governing imports of agricultural products originating in third countries following the accident at the Chernobyl power station, was rightly based on art 113 rather than art 130s. The Court held that the provision contained in the second sentence of art 130r(2), "which reflects the principle whereby all Community measures must satisfy the requirements of environmental protection, implies that a Community measures cannot be part of Community action on environmental matters merely because it takes account of those requirements." In the TiO2 case (case 300/89) the Court confirmed this. "That principle implies that a Community measures cannot be covered by art 130 s merely because it also pursues objectives of environmental protection." Another legal consequence of the integration principle is that the principle broadens the objectives of the other powers laid down in the Treaty. The two mentioned cases demonstrate that 2environmental objectives" can be pursued in the context of the Community's common agricultural policy and its internal market policy. And in the Pinaud Wieger case (Case 17/90) the Court held that the achievement of freedom to provide services in the transport sector can only be attained in the context of a common transport policy "which takes into consideration the economic, social and ecological problems". The integration principle will potentially play a very important role when the Commission is considering whether or not to grant an exemption under art 85(3) and the Commission's practice of granting aid under art 92(3). And it is also possible that the principle will effect the question of validity of a directive or regulation. In the Chernobyl I case the Court is stating that the secondary legislation must satisfy the requirements of environmental protection. But only in very exceptional cases will a measure be susceptible to annulment or being declared invalid because the environmental objectives seem not to have been taken sufficiently into account. In case 585/93 (Greenpeace vs. Commission) concerning financing by the Commission of several infrastructure projects - two power stations on the Canary Islands - an action has been brought for annulment because of infringement of the integration principle. We note that the principle refers to "Community policy". The integration principle will not have any direct legal effect for the Member States, only indirect effects. National environmental laws cannot be reviewed directly in the light of art 130r(2) of the Treaty. It is better to integrate than to separate the environment as a political issue. g) The safeguard clause Art 130r(2) provides that a directive or regulation may include a safeguard clause allowing the Member States to take measures to protect the environment in cases of urgency. See for an example Directive 91/414 art 11. Art 130t entitles the Member States to take more stringent protective measures than those adopted pursuant to art 130s, and the safeguard clause described in art 130r(2) will be of less importance due to this. It is better to let the Member States act in cases of urgency than to wait until the Community is ready to regulate the upcoming problems. We shall now take a look at the policy aspects to be taken into account before we interpret the objectives of European environment policy. 4. The policy aspects to be taken into account According to art 130r(3) the Community shall take the following into account in preparing its environmental policy: a) available scientific and technical data b) environmental conditions in the various regions of the Community c) the potential benefits and costs of action or lack of action d) the economic and social development of the Community as a whole and the balanced development of its regions. I will focus on the last mentioned aspect. Different environmental policies may be adopted depending on the economic and social development of certain regions. See for an example Directive 88/609 art 5 where Spain is temporarily entitled to apply less stringent emission standards than those normally laid down by the directive. Apart from giving certain Member States the power to derogate from Community standards, the element of economic and social development can also be translated in terms of financial support by the Community for those States which Find it difficult to meet the standards required by a directive. See for an example art 130s(5). 5. The objectives of European environment policy Art 130r(1) consists of the objectives to be pursued by the Community policy: a) preserving, protecting and improving the quality of the environment b) protecting human health c) prudent and rational utilization of natural resources d) promoting measures at international level to deal with regional or worldwide environmental problems. a) Preserving, protecting and improving the quality of the environment The term "environment" is given no further definition. Advantage: flexibility. Disadvantage: certainty. In the pre-Maastricht period, the territorial limitation was a matter of discussion ;- Can the Community also act to preserve the environment outside the Community? This problem of interpretation has largely been resolved due to the fourth objective of art 130r(1). The Community is also entitled to concern itself with local and regional environmental problems. Art 130r does not contain any restriction in this respect. The term "preserving, protecting and improving" is also very wide and flexible. It affords the possibility to take environmental measures of any kind;- measures of a preservative, curative, repressive, precautionary and active nature are all covered by the expression. b) Protecting human health This term is wider than the term "public health", but the Court has made the distinction a bit unclear, for instance in the Fumicot case (case 272/80). Here the applicability of art 36 to measures restricting the importation of plant protection products was at issue. Art 36 concerns the protection of health and lives of humans, animals or plants, and does not talk of the "public health". However, in its judgment the Court equates the two concepts. Another problem of interpretation concerns the fact that the article only refers to human health. But the protection of the flora and fauna fall within the scope of the first objective of art 130r(1). c) Prudent and rational utilization of natural resources The Final Act declared that the Community's activities in the sphere of the environment may not interfere with national policies regarding the exploitation of energy resources. What precisely should be understood by "natural resources" is not entirely clear. In the Stockholm Declaration natural resources are taken to mean: natural resources of the earth including the air, water, land, flora and fauna and especially representative samples of natural eco-systems. Wood, minerals, water, oil, gas and chemical substances fall within this definition. As an illustration the following political items fall within the scope of the definition: waste disposal, policy on urban areas, coastal areas, mountainous areas, disaster policy, water management, an environmentally friendly agricultural policy and energy-saving. In other words the objective has a wide scope. And it has been the basis for a whole range of very detailed directives, for instance Directive 92/42 on efficiency requirements for new oil- and gas-fired hot-water boilers. d) Promoting measures at international level to deal with regional or worldwide environmental problems An important part of European environment policy is not concerned primarily with protecting the Community's own environment, but the environment outside the Community. For instance: Regulation 2455/92 concerning the export and import of certain dangerous chemicals, the measures in Regulation 259/93 concerning the export of waste to countries outside the EC and Regulation 348/81 concerning the protection of whales. In addition the Community is a party to several multilateral conventions which have an extraterritorial objective, such as the 1985 Vienna Convention for the protection of the ozone layer and the 1992 Framework Convention on Climate Change. We shall note that the Community must give respect to common international law if art 130r does leave room for extraterritorial action. Otherwise the Community could easily be told to mind its own business.

C. SOME ENVIRONMENTAL MEASURES ADOPTED AT COMMUNITY LEVEL

1) Water The Commission has adopted a wide range of provisions for the protection and improvement of the aquatic environment. For instance: -Directive 75/440 reg the surface waters for the abstraction of drinking water. -Directive 76/160 regarding the quality of bathing water. -Directive 76/464 regarding protection of the aquatic environment from certain dangerous substances. -Directive 78/659 regarding the water supporting fish life. -Directive 80/68 regarding the groundwater. -Directive 80/778 regarding the water for human consumption. -Directive 91/271 regarding the urban waste water treatment. -Directive 91/676 regarding the protection of waters from pollution by nitrates from agricultural sources. Implementation of the legislation proved extraordinarily difficult. Partly because of the considerable differences from one country to another. The Member States must gradually step up their efforts to meet the Community quality standards. The situation at the present, is far from satisfactory. 2) Air The Community reached in 1987/88 a decision on emission standards for new cars, marketed in 1993 or later. These cars have to be equipped with catalytic converters. No rules for existing cars were laid down. Product-related provisions were also adopted on the lead content of petrol(Directive 85/210), but the real situation of consumption of unleaded petrol is at the present rather unsatisfactory. Directive 84/360 provides for a System of Special authorization for emissions to the atmosphere from pollutant industrial plants, but to what extent the requirement for existing plants are observed, is unclear. Directive 88/609 is regarding emissions from large combustion installation which are to be reduced by certain percentages with 1980 as the reference year, and Directive 89/369 and Directive 89/429 are regarding the prevention and reduction of air pollution from new and existing municipal waste incinerators. Directive 92/72 on ozone concentrations obliges the Member States to regularly measure ozone concentrations and to warn the population where the concentrations exceed certain limits. The Community joined in the international efforts to protect the ozone layer from chlorofluorocarbons. In 1980 it was decided to freeze the CFC production at 1976 level. Regulation 91/594 is concerning the control of imports, exports, production and consumption of these substances. It is to be noted that measures concerning other substances with a less destroying effect are based on art 130s and the Member States can introduce more stringent measures to protect the environment pursuant to art 130t. The Community is also party to the Geneva Convention on long-range transboundary air pollution, which establishes several principles and promotes co-operation and the exchange of information. 3) Noise Community noise protection-measures taken so far exclusively concern standards for certain products, in particular transport media, and the directives set maximum noise emission standards for these products. 4) Chemicals Also the Community measures in the field of chemicals are targeted at specific products or production processes. 5) Nature Conservation In 1992 the Council adopted a general Directive on the conservation of natural habitats and of fauna and flora (Directive 92743). The Community intends to become party to 1973 CITES Convention to improve protection of endangered species of flora and fauna. 6) Waste The Community has been legislating on waste since 1975. However, its declared aim of bringing about integrated waste management in the Community has not been achieved. Directive 75/442 defines the concept of "waste" and lays down general obligations of waste management. Directive 78/319 on toxic and dangerous waste was replaced by Directive 91/689 on hazardous waste. Directive 84/631 regarded the transfrontier shipment of hazardous waste, but it proved inadequate to stop illegal waste transports and was replaced by Regulation 259/93. There is also a general Directive on the transport of nuclear waste, which essentially is requesting an authorization for each transport. These general Directives are supplemented by Directives on specific types of waste: for instance Directive 75/439 on the disposal of waste oils and Directive 91/157 on the waste from batteries and accumulators. There are many reasons for the relative lack of success to achieve the declared aim of reaching an integrated waste management : a uniform definition of "waste" and "hazardous waste" has not been achieved, the repartition of responsibilities between the Union and the Member States is not clear, waste management plants were seldom drawn up and forwarded to the Commission, there is a shortage of waste recovery and disposal facilities in the Member States and the Commission has failed to monitor the directives in a transparent Community-wide manner. 7) General measures The Community has tried to develop general legal instruments which are applicable to all environmental media and sectors, but this has proved to be less successful. Directive 90/313 on the freedom of access to environmental information came into effect as late as in 1993. In 1992 the environmental fund, LIFE, was created. The fund is equipped with 400 mill ECU for four years and aims at assisting in the financing of pilot and demonstration projects, clean technology, technical assistance and habitat and species conservation. In 1993 a General Consultative Forum was established which groups trade and industry, environmental organizations, consumers and trade unions, and which has the function to increase public participation in environmental decision-making at Community level. The Community is also party to a number of international environment Conventions. A Greenbook on liability for environmental damage might lead to the drafting of new and better legislation at a later stage.

D. THE EUROPEAN ENVIRONMENTAL POLICY AND THE USE OF MARKET-BASED INSTRUMENTS

1. Introduction

As a consequence of the Communities legislation in the form of Council directives and regulations, the Community has achieved a significant degree of success in many fields concerning the threats to public health and the environment. Though the legislation is far from complete, it provides a very solid foundation for the further steps which are required to be taken. On 18 March 1992, the draft of the Communities Fifth Action Programme for the Environment, which sets policy targets and a new strategy for the period ending in the year 2000, was approved unanimously by the Commission. According to this Programme, there will be a continuing need for legislative measures, particularly in respect of the establishment of fundamental levels of environmental care and protection, Community commitments to wider international agreements and common standards and control to preserve the integrity of the internal market. But it is also imperative to focus on the causes of environmental problems such as the human activity, human values in relation to the environment and natural resources and human behaviour and consumption patterns. In order to bring about a substantial change in the current trends and to involve all sectors of society in a spirit of shared responsibility, the fifth EAP proposes to develop and apply a broader mix of "instruments". The environmental policy should rest on four main sets of instruments: - Legislative instruments - Market-based instruments - Supporting instruments - Financial support mechanisms. The increasing use of market-based instruments is not new. In 1990 it was proposed by the "Task Force on the Environment and the Internal Market" that the environmental objectives should be achieved in an economically efficient manner. The polluter pays principle and the economic incentives for environmental improvement, are of significant importance in this respect.

2. A survey of the market-based instruments

a) Environmental leavies Environmental levies can provide an incentive for polluters to limit their emis- sions. There are various forms of levies: - Emission levies: Levies on the discharge of pollutants into air, water or on the soil and of the generation of noise, calculated as to the quantity and quality of the pollutant. - Product levies: Levies on products with features which are harmful to the environment when used or disposed of. - Tax differentiation. This can discourage the consumption of polluting products and simultanously encourage the consumption of cleaner alternatives, while having a neutral impact on the budget. Such measures may be applied in different forms: Excise taxes or through a differentation of VAT tariffs;- in this respect a number of fiscal-based stimuli and exemptions can be modified, for instance to encourage public transport, to change spatial structure of housing and instrustrial activities, to discourage decaying of houses and to stimulate renovation. We must differentiate between financing and incentive levies. The financing levies may be desirable as sources of revenue, for instance for financing subsidies, and may have an incentive impact only as a side-effect. The incentive levies are created in order to establish price levies, and their revenues are in principle of secondary importance. We must also differentiate between emission levies and user levies. Emission levies are levied on the discharge of effluent and are calculated as to the quality and/or quantity of the pollution load. User levies are levies paid for services rendered by authorities, for instance for collection and removal of municipal waste water and solid waste. The user levies are not generally meant to have an incentive effect. We must also draw a clear distinction between emission levies and product levies. Emission levies may in general be limited to stationary sources. If the product levies are levied on products which are traded across borders, trade distortion may occur if users of such goods buy them in Member States where these charges are not levied. b) Tradeable emission permits Where direct regulation provides "permits" for certain levels of emissions, polluters may buy and sell these permits. When the present emissions are unevenly spread, as in the case for CO2 emissions, and when emission permits are equally distributed per capita, tradeable emission permits will automatically result in a financial transfer from the most polluting to the least polluting regions and inhabitants. c) Deposit-refund systems In deposit-refund systems a deposit is paid on potensially polluting products. When pollution is avoid by returning the products or their residuals, a refund follows. d) Enforcement incentives These incentives, such as non-compliance fees (penalise polluters who exceed environmental standards) and performance bonds (payment to authorities which is return when the polluter performs well according to his licence), are directly linked to physical regulation. e) Financial aid In spite of the general presumption against subsidies inherent in the polluter pays principle, there may in certain circumstances be a possibility for limited financial assistance to polluters. f) Industry agreements These agreements encourage polluters to acept certain standards in order to avoid a situation which may put larger financial burdens on them. g) Environmental liability The most important element here is the switch of burden of proof : the polluter has to prove his innocence. 3. The basic idea: the polluter pays principle In order to avoid distortions of competition affecting trade and the location of investments , the costs connected with the protection of the environment against pollution, must be allocated in accordance to the same principles throughout the Community. This concept was adopted as early as in 1975. The most important principle, in this respect, is the polluter pays principle. According to the Commision, standards (legislative instrument) and charges (market-based instruments), or a possible combination of the two, are under the PP-principle, the major instruments available to public authorities for the avoidance of pollution. The market-based instruments encourage the polluter to take the necessary measures to reduce his pollution. If the polluter does not reduce the pollution he will be charged and this creates environmental protection-money for the Community. There must be noted that the PP-principle was formulated as one of the basic principles of the European environmental policy already in the first EAP - but not before 1986 it was introduced in art 130r(2) of the EC-Treaty. 4. Market-based instruments in EAP and the EC-Treaty a) First EAP (1973-1976) Already here the possible use of market-based instruments (MBI) was pointed out. A stydy had to be made about this issue. We find one example of the use of MBI in the policy from this period, namely art 14 in Directive 75/439 on the disposal of waste oils (the financing of indemnities must be in accordance with the PP-principle). b) Second EAP (1977-1981) The Commision announced that it would continue with the study. The only example of the possible use of MBI in the second EAP-period, can be found in art 11(2) in Directive 78/319 on toxic and dangerous waste. c) Third EAP (1982-1986) Nothing was said about MBI in general. There was some declaration regarding the possible use of a specific MBI, namely environmental charges. d) Fourth EAP (1987-1992) Here the development of a clear policy concerning MBIs and the introduction of the MBIs, started. "....also include various economic instruments (such as taxes, charges, state aids, tradeable discharge permits and agreements with polluters). The Community has an important role in the development of pollution control instruments of an economic character.... Any such measures must of course be used in ways which are consistent with the principles of Community environmental policy - notably the "polluter pays principle" and the preventive approach. Finally the Commission intends to consider the scope for the better definition of responsibility in the environmental field. More concretely the Commission intends to consider the use of economic instruments in the field of air pollution, water pollution, protection against noise, nature protection and waste management. During the fourth EAP-period the following MBIs were developed: - Deposit-refund system: Art 7 in Directive 91/157 on batteries and accumulators containing certain dangerous substances. - Eco-label: 23.3.92 the Council adopted a regulation on a Community eco-label award scheme. - Eco-taxes: 3.8.92 the Commission published a proposal for a Council directive introducing a tax on carbon dioxide emissions and energy. - Eco-audit: 27.3.92 the Commission published a proposal for a Council regulation allowing voluntary partcipation by companies in the industrial sector in a Community eco-audit scheme. - Liability: 4.10.89 the Commission published a proposal on civil liability for damage caused by waste (irrespective of fault). e) Fifth EAP (1993-2000) Here the end of the domination of the legislative instruments is introduced. Instruments of direct regulation will be supplemented with MBIs. Economic valuations can help economic agents to take environmental impacts into account when they take investment or consumption decisions. To get a more environmentally effective pricing mechanisms the following measures are required: - Evaluation of the natural and environmental resource stocks of the Member States in economic terms. - Development of renewable resource indicators for Member States to show the rates at which natural resources are used and renewed ( water resources, soil formation, growth and harvesting of forests, fish populations and cathes etc.) - Extension and adoption of the traditional tools of economic statistics on the basis of researc at national and European level, including modification of key economic indicators, such as GNP, to reflect the value of natural and environmental resources in generating current and future incomes and to account for environmental losses. - Development of meaningful cost benefit analysis methodologies. - Redefinition of accounting concepts, rules, conventions and methodology so as to ensure that the consumption and use of environmental resources are accounted for as part of the full costs of production and reflected in market prices. - Enterprises should disclose in their annual reports details on their environmental policy and activities, disclose in their accounts the expenses of environmental programmes and make provisions in their accounts for environmental risks and future environmental expenses. The fundamental aim of these instruments will be to internalise all external environmental costs of the product - from the source through production, distribution, use and to the final disposal. The environmentally friendly products must be competitive to the products which cause pollution and waste. The most important category of economic instruments consists of levies. They play an important role in the field of water pollution and waste disposal. But in line with the PP-principle, there should be a progressively reorientation towards discouraging pollution at source and encouraging clean production processes through market signals. Responsibility for levies on emissions from stationary sources has traditionally been a task for national and local authorities. The Community must ensure that the levying systems are comparable, to avoid distortions of competition within the Community. Another very important MBI is the fiscal incentives. We already have differentiated duties being applied by the Member States in the case of unleaded and leaded petrol, and we have the proposal for a Council directive on excise duties on motor fuels from agricultural sources and the energy/carbon tax envisaged. This evolution will be encouraged, but every care should be taken to avoid increases in the overall burden of taxation. State aids, involving direct and indirect subvention systems, form a third category of economic instruments. The Commission has already adopted a framework for environmental state aids in order to guarantee an orderly system in the Community which is compatible with the PP-principle. Fiscal deductions to encourage investments in environmental equipment and clean production processes, is coming into increasing use. A fourth category of MBIs to be developed is environmental auditing. In the first instance this has to be seen as an internal management tool which should indicate the performance of resource management, including use of raw materials, energy consumption, productivity levels and waste. We must highlight areas of risk, indicate performance on risk prevention and management and audit levels of safety and health in the work place. For share-holders, investors, financial and insurance institutions, such resource-based audits would provide a performance indicator as important as traditional financial accounts. Finally, an integrated Community approach to environmental liability will be established. The concept of "shared responsibility" ensures that damages is remedied and prevents further damages to the environment. In line with the objective of prevention at source it will provide a very clear economic incentives for management and control of risk, pollution and waste. f) MBIs in the EC-Treaty The Treaty does not contain provisions which stimulate the use of MBIs. Art 130s can be used to adopt provisions of a fiscal nature (130s 2), and according to point 5 the Council can make appropriate provisions regarding financial aid. The question whether the future art 130s(2) could be the legal basis for European environmental taxes is still unanswered. 5. Future prospects for market-based instruments a) Eco-levies 3.8.92: proposal for a Council directive introducing a tax on carbon dioxide emissions and energy. The general principles in the proposed directive are: - To bring about changes in the use of forms of energy in favour of less- polluting sources. - Tax will be levied on fossil energy sources as regards its objective of limiting carbon dioxide emissions. - Renewable sources of energy will be excluded from the scope of the tax. - Harmonised monitoring arrangements will be introduced. - In order to safeguard the competitiveness of the Community industry, exemptions and reductions may be granted to energy-intensive firms. - The introduction of the new tax will not result in an increase in the overall tax burden. b) Eco-label 23.3.92: ASdoption of a regulation on a Community eco-label award scheme. Some of the general principles of this regulation are: - Intension: to promote the design, production, marketing and use of products which have a reduced environmental impact during their entire life cycle, and to provide consumers with better information on the environmental impact of products. - Food, drink and pharmaceuticals are not subject to the regulation. - The conditions for awarding the label shall be defined by product groups - The competent body concludes a contract, covering the terms of use of the label, with each applicant. c) Eco-audit 27.3.92: proposal for a Council regulation allowing voluntary participation by companies in the industrial sector in a Community eco-audit scheme. The intension is to promote improvements in the environmental performance of industrial activities through the establishment and implementation of environmental protection systems by companies. Evaluation and information. 6. Conclusion The Commission and the European Community as a whole are making progress in the development and the use of MBIs. This change of policy is illustrated in the fifth EAP. There are 5 target sectors for the use of MBIs: - The industry sector (environmental auditing, ecological labelling, market-based pricing systems for consumption and use of natural resources etc.) - The energy sector ( CO2 and energy tax, voluntary agreements etc.) - The Transport sector (road taxes and different forms of road pricing, fiscal incentives, charges, high parking fees etc.) - The agricultural sector (CO2 and energy taxes, road pricing, encouraged use of public transport etc.) - The tourism sector (same measures as for the transport sector.) However, the Community cannot decide its way out of the environmental problems.The problem is to implement the use of the MBIs: The introduction of an obligatory eco-audit was made impossible by pressure-groups and the eco-tax has evoked a lot of criticism and will be impossible to implement without a similar action by for instance the US and Japan. This shows the long knowing fact that everybody is pro-environment as long as they do not have to pay or as long as their interests are not endangered.

E. THE EUROPEAN ENVIRONMENTAL TAX POLICY

1. Introduction The Council and the Commision are countinuosely talking about the use of fiscal instruments in the European environmental policy, but during the years 1972-1992 almost nothing has been done in this field. Just recently the Commission has discovered that the environment could be the "ideal fiscal milk cow" to resolve the problem of unemployment in the Community. However this leads to a wrong goal for the fiscal environmental policy : Raising money instead of protecting the environment. 2. Greenspeak and policy declarations The quality of the environment in Europe is worse than ever - in spite of the ambitious EAPs adopted by the Council in 1973, 1977, 1983, 1987 and 1993. Big words like "polluter pays", "sustainable development", "best available technology" etc. have realised next to nothing in the battle against pollution. The impression is given that protection of the environment is a prominent goal of the general European policy, but the reality shows that environmental protection is subjected to the objectives and priorities of the money-making and other policy areas, such as industry, energy, agricultural and transport. The traditional form of policy instruments in forms of direct regulation directives impose a low level of environmental protection and the instruments are often badly implemented in the national environmental policies. The Commission and the Council have been unable to use other and more efficient policy instruments, such as MBIs in general and fiscal instruments in particular. The reason for this non-use is that these measures have a much more disrupting effect on the conomy. So in spite of the greenspeak and the expressed intension to use MBIs in the environmental policy, very little has been done up to now. The first policy declaration of intent in favour of MBIs was presented in the firste EAP (1973), nothing was done regarding fiscal environmental policy in the second EAP (1977), but the Community stated that charges were a sufficient measure in the environmental policy in the third EAP (1983). In the fourth EAP (1987) examples of policy fields where environmental taxes could be used, are given. The break-through in the debate about the use of fiscal instruments in the European environmental policy came in 1990 when the "Task force on the Environment and the Internal Market" was published. The fifth EAP (1993) fully approve MBIs as a supplement to direct regulations. The White paper of the Commission of December 1993 entitled "Growth, competitiveness , employment - The challenges and ways forward into the 21st century", stated the double role of the fiscal environmental instruments : The jobcreation through "green techonology" and the alternative financial source compensating for the reduction of labour costs. 3. European fiscal environmental policy instruments adopted In the just mentionned White Paper, it seems like the environmental protection is only an expected spin-off of the developing European environmental tax policy. The number of European fiscal environmental policy instruments adopted, is indeed very small. We shall look at the most important ones, and we note that each of these fiscal environmental policy instruments is embedded in a directive of which the first goal is not the protection of the environment, but the realization of the Internal Market. a) Clean cars Legislation: Directive 91/542«s modification of Directive 88/77 and the modifications of Directive 70/220 by Directives 89/458, 91/441 and 93/59. Tax incentives in respect of motor vehicles: New emission values for new vehicles(1993). b) Silent cars Legislation: The modification of Directive 70/157 by Directive 92/97. New sound level values for new motor vehicles(1993). c) Leaded and unleaded petrol Legislation: Directive 92/82 : Minimum rate (since 1.1.93) of excise duty on leaded petrol = 337 ECU per 1000 litres. For unleaded petrol the rate is 287 ECU per 1000 litres. d) Vehicle taxes, tolls and charges for the use of certain infrastructures Legislation: Directive 93/89. e) Waste oils and toxic and dangerous waste Legislation: Directive 75/439 and Directive 78/319. According to the polluter pays principle. f) Conclusions 1) The number of european fiscal environmental policy instruments adopted is very low. 2) They are all of recent date, with exception of the possible use of taxes in the waste sector. 3) The instruments have an optional character: the Member Staters are not obligated to use them. 4) The Community stays in the "background" and allows the Member States to operate within European established "borders". 5) The fiscal stimulation is not frequently proposed by the Commission, but is inserted in the final version of the draft Directive by the Council. 6) The conditional allowed use of ecological fiscal incentives limits the fiscal competences of the Member States. 7) Almost all instruments adopted are to be situated in the field of air pollution reduction. 8) The instruments adopted illustrates the application of the principle of integration: the environmental considerations are integrated in the transport policy, the fiscal policy and the product policy. 9) The national use of fiscal incentives in favour of clean and/or silent cars have now come to a halt. But the excise duty regulation for environmental purposes seems to be promising. 10) The phased harmonization of the vehicle taxes shows that not only through an ecologisation of the existing indirect taxes, but also through an ecologisation of the existing direct taxes, environmental goals can be purchased. 4. Proposed European fiscal environmental policy instruments At the present, there are two important proposals for a directive that contain fiscal environmental policy instruments: One on excise duties on motor fuels from agricultural sources and one introducing a tax on carbon dioxide emissions and energy. The first mentionned proposal provides that the Member States must charge reduced excise duty on certain motor fuels from agricultural products. The last mentionned proposal forms part of the overall strategy of stabilizing carbon dioxide emissions in the Community at 1990 level by the year of 2000. This has not yet been adopted. The Commission is proposing to amend its existing proposal in order to incorporate elements of flexibility which will overcome the obstacles which have emerged during the Councils discussions: The implementation of a harmonized tax should be preceded by a transitional period during which the Member States are free to set the tax rates product by product. The rates set in the Commissions orginal proposal , should be target rates. The Member States are so to speak off the hook. Conlusions: There are few new proposals, they are all orientated towards the reduction of air pollution and they illustrates different applications : differ- entiated excise duty rates based on ecological motives and an environmental tax which is consistent for the whole Community(for the first time). The orginally proposed uniform European tax on CO2-exhaust and energy could have been the break-through for the development of a European environmental tax law... 5. Proposals for a European environmental tax policy The Community does not have a clear view on the development of a European environmental tax law;- there is no debate and no eleborated policy line. The Community should create a policy framework on which European fiscal environmental policy instruments are being developed, proposed and adopted. The Community will only develop, propose and adopt fiscal policy instruments according to an economic analysis. The necessity of a European environmental tax policy and legislation can be listed in the following 5 reasons: 1) The necessity of a European coordinated and harmonized tax system to avoid trade barriers and distortions of competition. 2) The necessity of a European organized clean up of the different national tax measures/systems. 3) The increase of the effectiveness and efficiency, since the instruments of direct regulation have proven their ineffectiveness. 4) The necessity of European elaborated fiscal environmental policy instrumentsfor the approach to mondial environmental problems, taking into account that national fiscal environmental oilicy instruments mostly will be insufficient for the approach to these problems. 5) The necessity of European tax initiatives because of the fact that Member States are not always prepared to introduce national environmental tax measures, out of fear for their own competition position. The protection of the environment should be the central goal, not the creation of new jobs or financial means. Legal framework: Three pillars, based on the principle of subsidiarity and the principle of integration. Pillar one: A European conducted "clean up" of the present environment unfriendly regulations in regional and national legislation. Pillar two: A European conducted use of ecological fiscal incentives. Pillar three: A European conducted use of environmental taxes. First pillar: The "ecological clean up" of the present environmental unfriendly regulations in the Member States should be the first task of the Community. Depending on their contents such "clean up"-measures should be based on art 130S(2) (ecological measures which are primarily of a fiscal nature), art 130S(1) (ecological measures which are not primarily of a fiscal nature), art 100 (harmonisation of direct taxes) or art 99 (harmonisation of V.A.T. and excise duties). Second pillar: A tripartite system of ecological fiscal incentives should be developed by the European Community, taking into account the application of the subsidarity principle and the integration principle. 1) The first level should consist of European controlled national and/or regional ecological fiscal incentives for national environmental problems. The controll can take the following shape: Firstly, notification to the Commission, based on Directive 83/189 concerning norms and technical prescriptions. Secondly, checking with art 92 concerning forbidden state aids. Thirdly, checking with art 95 concerning forbidden tax discrimination. 2) A second, following, level consists of national and/or regional ecological fiscal incentives, recommended and/or harmonised by the European Community, for supra-national environmental problems. 3) Finally, a third level consists of ecological fiscal incentives, constructed by the European Community, for international environmental problems. Incentives of this latter kind could be designed via the European harmonised exise-duty-legislation. Directive 92/12 has to be broaded to different products. These incentives could also be constructed via the V.A.T.-legislation. Third pillar: Also here a tripartite system of environmental taxes should be developed by the European Community, taking into consideration the application of the subsidiarity principle and the integration principle. 6. Conclusion The development of a European environmental tax policy has been considerably threatened by the typical disease of the general European environmental policy and the "Greenspeak". Our hope can be expressed that the European Community takes into account the above mentionned-vision and pillars, and that the Community will realise the expressed will concerning the use of fiscal environmental policy instruments.

F. ENVIRONMENTAL POLICY AND COMMERCIAL POLICY- TRADE-RELATED ENVIRONMENTAL MEASURES (TREM) IN THE EXTERNAL RELATIONS OF THE COMMUNITY

1. Introduction Free trade and the protection of the environment share an uneasy relationship. The Tuna-Dolphin case, the Danish Bottle case (302/87) and the Walloon waste cae (2/90) have highlightened that fact. In this section we will make a systematic survey of the various trade restrictions motivated by environmental reasons, which the Community applies in its relationship with third countries. By trade-related environmental measures (TREMs) we understand measures whose justification is primarily the protection of the environment, but which take the form of trade instruments. We shall examine those measures designed to protect the environment which directly and specifically regulate imports to and exports from the Community. Measures restricting the Communitys external trade for the purpose of protecting the environment concern trade in wildlife, waste and substances and products that may be dangerous for the Earths atmosphere. 2. Trade in wildlife Regulation 3626/82 was adopted to implement in the Community the Convention on international trade in endangered species of wild fauna and flora (CITES). The main purpose of CITES is to protect wild fauna and flora against over-exploitation through international trade. All the Member States are parties to CITES, with the exception of Greece and Ireland. The Community has not yet been allowed to become a party to CITES. Regulation 3626/82 also provides for stricter trade restrictions than those laid down in CITES. The regulation authorizes Member States to maintain or to take stricter measures, consistent with art 36, to protect species to which the Regulation applies. The Commision has presented to the Council a draft regulation to replace Regulation 3626/82 and this regulation deals with all aspects of Community trade in wild animals and plants, whether internal and external. There are also specific regulations : - Regulation 348/81 regarding the import ban of cetacean products for commercial purposes (The whale Regulation). The Regulation has lost much of its practical importance due to the adoption of regulation 3626/82. There are two pro-whaling countries: Iceland and Norway. If Norway were to join the European Community, it would have to comply with both the specific whales Regulation and Regulation 3626/82. Together these two regulations prohibit both trade in whales products and whaling itself. - Directive 83/129 : The Member States are required to forbid the importation into their territory of skins of pups of harp and hooded seals and series of derived products. - Regulation 3254/91: The importation into the Community of pelts and other products derived from fur-bearing mammals shall be forbidden (1.1.95). The regulation deals with the use of leghold traps, which the Community held to be an inhuman and indiscriminate way of capturing and killing wild animals. 3. Trade in tropical timber The protection of tropical forests has become one of the great environmental challenges of our time. The Community is party to the International Tropical Timber Agreement (ITTA), which was signed in Geneva in 1983. This agreement does not regulate trade. It provides a framework for cooperation. The Community should take more decisive action concerning the international trade in timber, not only to protect tropical forests from destruction, but also to safeguard the homogeneity of the internal market. 4. Trade in waste and dangerous substances There is now a general tendency to move away from the former regime of laissez faire, where the free flow of waste and hazardous substances (from high to low-norm territories) seemed to be the rule. These shipments are no subject either to notification to a prior informed consent system (PIC) or in some cases to a total ban. Three important points regarding the status of waste under the Community law, has now been declared: - The concept of waste : This includes substances and objects which their holders are disposing of even when they are capable of economic reutilization. The definition is now found in art 1 of Directive 91/156. - Waste as Article of Commerce : Wastes, even non-recyclable wastes, are goods. This was the conclusion in the Wallon waste case. In the attempt to defend the ban of the import of waste into Wallonia, Belgium contended that the elimination or the discharge of waste that could not be recycled or reused, fell under the treaty provisions applicable to services. But the Court stated that objects which are shipped across borders to give rise to commercial transactions fall within the scope of art 30, whatever the nature of the transaction. - Movements of Waste and the Proximity Principle : Waste = Goods, and therefor subject to the rules on free movement. But there is an increased tendency to ban these movements. The legitmacy of such a ban, when it affects intra-Community trade, was the central issue in the Wallon waste case. The Court did not acknowledge the discriminatory character of the import ban enforced by the Wallon Region, but stated that account had to be taken of the special nature of waste and the links between wastes and their place of production. The import prohibition was therefor considered not to be discriminatory. The Court based the decision on the source-principle. (Each country/region/city shall clean its own house.) So the principle of free movements has to yield when wastes are involved. The judgement in the Wallon waste case has also external implications: The Community shall deal with its own waste, and restrictions on movements of waste with third countries may be imposed by a Member State at least in the case of lack of Community legislation. Restrictions on the Export or Import of Waste From or Into the Community: - Directive 84/631/Directive 86/279 is the main legal instrument with respect to transfrontier shipments of hazardouswaste within and from/into the Community. The Directive is based upon the PIC-system. - The LomŽ IV Convention : Concerning the ACP countries. Art 39 : The Community shall prohibit all direct or indirect export of hazardous and radioactive waste to the ACP countries. - The Basel Convention : Concerning the control of transboundary movements of hazardous waste and their disposal. The Community has signed this Convention, and the Convention is in many respects stricter than Directive 84/631. - Directive 84/631 may soon be replaced by a much more comprehensive legal instrument. The draft regulation aims at ensuring that the Community becomes self-sufficient in waste disposal. And with respect to shipments of waste to and from third countries the regulation intends to bring Community legislation into line with the LomŽ and Basel Conventions. Exports of waste intended for disposal are prohibited, except to EFTA-countries which are parties to the Basel Convention. Exports of waste intended for recovery are prohibited except to OECD- countries/non OECD countries which are parties to the Basel Convention. Exports and imports of waste which are not prohibited are submitted to the PIC-procedure. - Regulation 2455/92 : Trade in dangerous chemicals - a common system of notification supplemented by the PIC-procedure. 5. Trade in CFCs The Community is a party to the Vienna Convention and the Montreal Protocol which are concerning the protection of the ozone layer. The exports of CFCs from the Community to countries which are not parties to the Montreal Protocol, is banned (1.1.93). The imports are also prohibited. Exports/imports between parties to the Protocol are allowed within certain limits which are sceduled to decrease. See Regulation 594/91. Stricter measures have been adopted by the Community. Some Member States have announced their intension to eliminate the production and use of CFCs on their territory. And the States in the Community will finally reach the zero level. 6. The connection between TREMs and Community Law As we have seen the Community uses external trade instruments to further environmental objectives. What is the proper legal basis for the adoption of TREMs by the Community? And which powers remain to the Member States? And what is the relationship between TREMs and the internal market? The Maastricht Treaty leaves art 113 essentially unchanged, but modifies art 130 in some significant ways. The most important changes concern the decision-making process. But art 113 is still the most important legal basis for TREMs. When TREMs fall within the scope of art 113, Regulation 288/82 authorizes Member States to adopt or maintain TREMs vis-vis third countries as long as the Community does not act. The measures must be notified to the Commision. If TREMs fall within art 130s the Member States remain free to act, since the competence to act is shared by the Community and the Member States. The 1982 CITES Regulation and the 1981 whales Regulation authorize Member States to take more stringent measures. These regulations have been adopted on the basis of art 235. Art 113 and art 100a share a functional relationship as well. What are the consequences for the Community internal trade which result from the adoption of TREMs by Member States acting alone? As mentionned, a Member State can adopt TREMs vis-a-vis third countries in the absence of specific Community legislation. To prevent trade deflection, external restrictions haver to be accompanied by similar restrictions in intra-Community trade. These secondary trade restrictions must be consistent with art 36 and the Cassis de Dijon case law. This must also be the case when Member States enter into international agreements prescribing the adoption of TREMs. On the whole, the adoption of TREMs by the Community has as much to do with the protection of the internal market as with the protection of the environment. The Court of Justice recognized that fact in its Chernobyl I judgement. 7. Conclusion The Community increasingly resorts to external trade measures to protect the environment, perticulaly third countries«s environment and the global commons. The adoption of such measures at the Community level is, in large part, justified by the need to ensure both the external and internal coherence of the single maket. TREMs should as a matter of Community law be based on art 113 and art 100a(4) should extend not only to internal, but also external trade.

G. ECONOMY AND LAW - ART 30 AND ENVIRONMENTAL PROTECTION

1. Art 30 and the environment Environmental issuses and their relationship with questions of art 30 are not frequently studied. One reason is that the environmental policy is a relatively new concept within EEC Member States. Environmental law within the EEC is only about 25 years old, and its theoretical concept, structure, sources, tools, instruments, enforcement and efficiency vary among the Member States. And since environmental law is regularly conceived as national law and since an integrated conception of environmental law hardly exists, attention focuses more on individual measures which this or that Member State adopts, than on an integrated concept. 2. Environmental protection under the EEC Treaty Art 130 R. Community measures to protect the environment may be based on art 130 S, but also on art 84 (transport), 99 (fiscal measures), 43 (agricultural measures), 100 A (internal market) and 113 (commercial policy). The system of shared competence (between the Community and the Member States) aims at optimizing the environmental protection. Where the Community does not protect the environment, it mist not prevent Member States from doing so. 3. Art 30, 34 and 36 and the environment Art 30 prohibits quantitative restrictions and measures of equivalent effect which restrict the free circulation of goods. It addresses measures adopted by Member States, but also measures taken by Community institutions and to a certain extent by private persons or groups. Waste is regulated by secondary legislation, and the Court has stated that waste falls within the scope of art 30 (the Walloon waste case, case 2/90 - see the analysis from the student-group). Art 34 prohibits quantitative restrictions on exports and all measures having equivalent effect between Member States. Art 36 provides that art 30 to 34 "shall not preclude prohibitions or restrictions, justified on grounds of ... the protection of health and life of humans, animals or plants..". Such prohibitions or restrictions are however, not permitted to be used as a means of arbitrary discrimination or a disguised restriction on trade between Member States. The Court interprets art 36 restrictively. Thus, while some environmental measures might be considered to aim at the protection of health or life of humans, animals or plants ("direct effect"), the majority of environmental measures will not be capable of being subsumed under art 36. The restriction on the use of CFC«s in products aims at the protection of the ozone layer. The damage of the ozone layer may increase diseases of humans, such as skin cancer, but the measure remains an environmental measure, since the health risk of humans is an indirect one. The requirement of nature protection and more generally of the protection of the environment is not geographically limited under the Treaty. A Member States may protect fauna and flora in another Member States where there is a threat to life of plants or animals. 4. The Danish-bottle case - case 302/86 In this case the Court recognized that the protection of the environment was such a manadatory requirement which could justify restrictions to the free circulation of goods. In this case the Commission attacked a Danish regulation which introduced a deposit-and-return system for drink containers, and the Commission considered the system to be incompatible with art 30. This view was followed by the assessment of the Advocate General, but not by the Court. The Court held that Denmark was entitled to introduce a system of waste prevention which required the introduction of a deposit-and-return system, even though this created a difficulty for non-Danish producers and traders to comply the system. Denmark was entitled because the system aimed at the protection of the environment. Denmark had prohibited the use of metal cans, and requested that all other drink containers had to be authorized, in order to try to standarize bottles and other containers, all in order to reach a particular high number of returns. Under certain conditions, foreign traders who marketed less than 3000 hl drinks per year in Denmark, were not obliged to use authorized (standardized) containers. The Commission accepted that the ban of metal cans was taken in order to protect the environment, and therefor tis ban was not attecked in Court. As regards the requirement of licensing containers, the Court admitted that the Danish measure was capable of achieving a higher number of returns than a simple deposit-and-return system, but the Court did not accept that only traders with less than 3000 hl turnover in drinks were exempted from asking for a licence. The Court indicated that Denmark was entitled to fix the degree of protection of the environment which it wanted, and if this degree required a deposit-and- return system which might represent a restriction to the free circulation of goods, this had to be accepted under art 30. But when Denmark wanted to introduce even better measures, these measures were considered excessive, since they were not really necessary (the principle of proportionality). The conclusion seems be that a Member State is free to fix the degree of protection of the environment if this degree is "reasonable", whatever that is. In the case of a conflict the free-trade-considerations seem to prevail over the environmental considerations. But the Treaty attaches a great importance to the protection of the environment, and the environmental requirements should be a component of other Community policies. In view of this importance, we must conclude that in the absence of Community rules, it is the Member States which decide which degree of protection they want for the environment. See the analysis of the cases( Danish-bottle-case and the PCP-case) from the student-groups, and page 124-127 in Ludwig KrŠmers article on "Environmental protection and art 30 EEC Treaty". 5. Discriminatory or disproportionate national measures While it is up to the Member States to decide on the degree of environmental protection they want to achieve, the individual measures will have to be assessed as to whether it is an arbitrary discrimination or a disguised restriction on trade, or in the terminology used by the Court in the context of art 30, whether the measure is proportional to the degree of protection aimed at. Not many cases are known where discrimination plays a role. In 1988 Ireland had planned to prohibit the use of metal cans for beer. Since metal cans offer considerable advantages for the transport of drinks - as compared to bottles - the effective impact of such a ban on imported beer would have been enormous. Environmental considerations could be invoked for such a ban since - and this is the difference with the Danish ban of metal cans - the ban was to be limited to beer cans. (However, the environment is affected in the same way, whether the metal cans stem from softdrinks or from beer). The point was that importers would have been more seiously hindered than Irish brewers. Upon the intervention of the Commission, ireland abandoned its plans. Any import restriction on waste constitutes an arbitrary discrimination and is therefor incompatible with art 30. More generally, wherever a national measure leads directly or indirectly, actually or potensially, to a different treatment between national economic agents and those from other Member States, there seems to be arbitrary discrimination. As to the proportionality principle, the Court seems to attach particular importance to the question whether there are less restrictive means available. It is appropriate to analyse local/regional and national measures in the light of their relationship with the principle of proportionality. -Local/regional measures: The Belgian local authorities of Mol raised a tax on the transport and storage of radioactive waste, required to reduce the negative impact which the nuclear waste transports had on the local situation. Such a measures are within the decision-making power of the local authority, and there is no problem of such measures being a restriction on trade. For other examples see KrŠmer page 130-133. -National measures: The main problems raised in the relationship between environmental policy and art 30, deal with product bans, restrictions of use and taxes. The ban of products does not raise specific problems. So far there are no complete list of all national bans or severe restrictions of products and no general Community legislation which regulate for the whole of the Community, the ban or restriction of substances and products. See the examples on page 134 in KrŠmer. Several Member States - Luxembourg, Denmark, Germany, The Netherlands - have taken measures to prohibit products containing CFC«s or substitute substances for CFC«s, and have gone further than the Community regulation. The national measures are justified under art 130 T, but the prohibition containing CFC«s is not a "more protective measure" and such bans should be assesed under art 30 since there are no Community-wide bans of products. No case against a Member State which has banned CFC-containing products has ever been brought before a national court. However we must also have in mind that in accordance with the traditional interpretation of the proportionality-principle, the measures by a singel Member State will most likely be dispropriate since the measures would not be capable of reaching the objective : the better protection of the ozone layer. But the Member States are - in the absence of Community rules - entitled to introduced measures as they deem adequate to protect the environment. The "environment" is not limited to the national environment of each Member State. If all Member States banned the marketing and import of CFC-containing products, the ozone layer would, to the benefit of life and health of humans, plants and animals, be preserved. Under these circumstances, a single Member State«s measure cannot be considered a disguised restriction on trade (disproportionate) just because other Member States did not follow the same line and ensure adequate protection of the ozone layer. For other examples, see KrŠmer page 137-140. In the area of taxes and charges, the proportionality principle - which would mean in particular that a specific tax rate would only be compatible with art 30 if a lower tax rate does not reach equivalent results - clearly has no role at all to play. Indeed, lower taxes or charges are allways possible, and environmental taxes and charges do not hace as their only objective to contribute to a better protection of the environment. In 1991 the Commission suggested a new model of EEC legislation - in order to reconcile environmental and internal market constraints. Under this model, legislation should fix standards to be achieved within two steps. Fiscal incentives would be allowed to anticipate compliance with Community standards. the viability of this model, which is not yet used outside the car sector (emission-standards), remains to be seen. 6. Conclusions Environmental protection is an important objective, and the provisions aim at an optimization of the protection, not only within the Community but also outside the Community limits. The task of protecting the environment is shared between the Community and the Member States. In the absence of Community measures to ensure the protection of the environment, it is up to the Member States to take protection measures. Environmental protection requirements under the Treaty are not subordinate to the free circulation of goods. It has to be decided case by case which objective prevails in a concrete case. The Member States are entitled to fix the degree of environmental protection, in the absence of Community rules. Such measures may nor constitute an arbitrary discrimination or disguised restriction on trade. The measures may also aim at the protection of the environment outside the territory of a Member State, in particular of life and health of animals and plants, but also of sufficiently parts of the environment, provided that there is a risk to the environment.