Let's spend it wisely

Malta has secured €805 million under the EU's cohesion, rural development and fisheries funding instruments. This allocation follows the recent political agreement between the European Parliament and the Council on the Union's financial framework for 2007-2013.

The largest portion of these funds, €728 million, is being allocated under the cohesion policy, which aims to reduce socio-economic and environmental disparities between the poorer and wealthier EU regions. Malta has managed to secure a relatively high share of aid, on a per capita basis. In a recent interview with The Times, the EU Commissioner for Regional Policy, Danuta Hubner, remarked that Malta receives more than twice the average per capita aid of the EU27 and six per cent more than the average per capita aid of the new member states. This is very heartening, particularly when one considers that as long as this funding is used within the parameters set by the relevant legislation, it is up to Malta to define its own priorities for funding.

The Planning and Priorities Coordinating Division within the Office of the Prime Minister has recently launched for public consultation a draft proposal on how it plans to spend these funds. This proposal, called the National Strategic Reference Framework document (NSRF), provides a blueprint with which future spending of this allocation must conform.

Environment plays an important role in the draft NSRF. It proposes that improvement in the quality of life through environmental protection should be one of the four key strategic objectives for the 2007-2013 programming period. This is reasonable given Malta's high population pressures (an average density of 1,274 persons per square kilometre), car ownership rates (863 vehicles per square kilometre), and given that we have the lowest per capita freshwater reserves in the Mediterranean. Malta also has a higher than EU average rate of per capita waste generation and green house gas emissions per unit of GDP, and a quarter of its territory is heavily urbanised.

This means that investments in projects such as improvement of waste management infrastructure and support to enterprises to improve their environmental performance will be funded through this programme. These environmental investments are essential given the lack of basic infrastructure in areas such as waste, and monitoring capacity, and the concern that a substantial number of enterprises are likely to face significant challenges in complying with environmental regulations.

However, I would argue that this approach is not enough to reverse the negative environmental trends and the general deterioration of the quality of the environment highlighted in the State of the Environment Report released recently by Mepa. In order to achieve maximum environmental benefit and prevent any possible harm that poorly designed projects may cause to the environment, the environmental dimension must be integrated or mainstreamed throughout all programmes and incorporated in each and every project. This is the so-called "horizontal" approach, which is complementary to the "vertical" approach described above where environmental projects are funded in their own right.

Indeed, certain environmental challenges, such as reducing emissions or adapting to climate change, can only be addressed if new buildings, roads, and business support schemes financed from cohesion policy funds consider issues that minimise the negative impact of the project on the environment, while maximising the potential environmental benefits.

This can also have knock-on benefits that actually improve the project in other ways, such as making the projects more cost-effective in their use of resources such as energy and water. Projects with an environmental dimension can also achieve cost savings through resource efficiencies in waste and materials savings. Better environmental performance and subsequent accreditation in an environmental management scheme such as EMAS or ISO 14000 can then lead to expanded markets through meeting higher consumer expectations and procurement standards.

A high quality environment can also attract high quality investment in the form of businesses and employees seeking a better quality of life. This is because making the best use of environmental resources and technologies creates better and more productive working environments. Projects and organisations that embrace environmental excellence would also improve their public image and help satisfy their corporate social responsibilities. The experience of programmes in some EU regions, such as in the UK South West region, has shown that embedding the environment at all levels within regional development programmes does help deliver more competitive and dynamic regional economies while bringing about social and environmental benefits. For public authorities, building in environmental considerations reduces the risk of non-compliance with environmental regulations.

Integrating environment into our investment programme in this way might also help us to spend the money more easily. It could help us select high quality projects and reduce delays in project appraisal. Environmentally successful programmes foster pride in the region, and build widespread political and community support. Finally, environmentally intelligent programmes will cultivate better relations with fund holders (for example, the EU) and auditors helping to avoid the risk of decommitment of funds.

We must remember that such a "horizontal" environmental dimension is not an add-on to projects, but a consideration that should drive projects. The environment is not an aspect to be traded off against others, but an organic and integral component of every economic and social activity that has the potential to maximise the socio-economic benefits of each project.

Lessons learned from the implementation of cohesion programmes in other EU member states should not be ignored. There is much documented evidence that failure to integrate the environment into funding programmes in the past has led to environmental degradation. For example, in the past, Structural and Cohesion Funds have been used throughout the EU to finance the expansion of the Trans-European Transport Networks (TEN-T), particularly roads, in the process sometimes slicing through areas of outstanding landscape beauty and causing political storms.

Having Malta's Operational Programmes for Structural and Cohesion Funds allocate funds for environmental improvements is not enough. If we really are intent on delivering sustainability, then Malta's NSRF must provide for the integration of the environment in each and every measure and project.

Dr Cassar is director-general, Mepa.