Project acronym: PROBALT (Improving societal condition for the Baltic Sea

protection)

Reporting period: 1.1.2009-31.12.2011, Year 3: 1.1.2011-31.12.2011

1. Executive summary

The overall aim of the PROBALT project was to make the prevention of eutrophication more effective by analysing the societal conditions for the effective protection of the Baltic Sea at national, regional (HELCOM) and European Union levels, and by examining nutrient trading as an instrument to more effectively combat eutrophication. Considering that the Baltic Sea has been the focus of environmental management efforts for 40 years, it is surprising that in reality the ecological state of the Baltic Sea is not improving. This implies that protective efforts such as international and national policies and regulations, as well as their implementation, have not been effective enough. The management of Baltic Sea eutrophication faces challenges from complex ecological characteristics of the eutrophication problem, societal differences across the Baltic Sea region, and the multitude of actors involved in governance efforts. Following on from these challenges, the awareness of the problem of eutrophication, as well as national and sub-national aspirations and the ability to address eutrophication in national policies and strengthen policy implementation, varies across the region. Traditionally, Sweden and Finland have been regarded as ‘forerunners’ when it comes to combating eutrophication, whereas the Eastern parts of the region have been less active in their environmental efforts. Recently, however, differences in the activities of countries have narrowed, for instance due to EU enlargement and the respective environmental policy unification across the Baltic Sea region. Also, Russia has demonstrated increased interest in the environmental protection of the Baltic Sea. Nevertheless, the lack of a legal Baltic Sea protection arrangement to cover all the coastal countries makes the situation intricate. On the basis of the case studies, PROBALT argues that in order to improve Baltic Sea eutrophication governance, four sets of measures need to be urgently undertaken at various governance levels ranging from international to local. These four sets of measures are:

1) A macro-regional, binding, cost-effective and fair agreement regarding the

prevention of eutrophication

It is evident that some sort of a transnational ‘primus motor’ for protection is needed. At the moment, two main alternatives for such a motor seem to stand out: the EU and HELCOM. Following the EU enlargement of 2004, the role of the EU in eutrophication governance changed significantly, as most of the riparian countries are now legally bound to implement various EU directives that either directly or indirectly affect the state of the sea. This enforcement power gives the EU the potential to enhance eutrophication prevention significantly within the eight riparian countries. However, from a pan-European perspective, the Baltic Sea environment appears to be a rather marginal problem. As a result, many EU directives are too lax for the environmentally sensible Baltic Sea. Moreover, the exclusion of Russia and other relevant countries within the catchment area is considered the EU’s biggest weakness as an international actor in the Baltic Sea region. With regards to the regional level arrangement – the HELCOM regime and the Baltic Sea Action Plan (BSAP) agreed upon within its framework – a number of problems also remain. Firstly, and in relation to international law, the BSAP and the underlying Helsinki Convention are not binding agreements: they can produce only recommendations. Accordingly, countries have the leeway to burnish their image by committing themselves to the BSAP ostensibly, and by taking only a few practical steps towards its implementation. As is shown by the case studies, the recommendations put forth by HELCOM do not necessarily materialise in national regulation. Secondly, in stemming merely from ecological principles, the BSAP leaves socio-economic and political questions related to the division of protective responsibilities unsolved; cost-effectiveness and net benefits are discussed implicitly, if at all. The large differences in the country-wise reduction targets lead to huge differences in abatement costs. When measured in monetary terms, improvement in water quality makes some countries better off or at least allows them to break-even, but Poland, Russia, Latvia and Lithuania face large negative net benefits. Is it any wonder, then, that commitment to abatement measures is difficult to achieve? Consequently, in order to motivate the parties to implement the planned measures of protection, a legally binding agreement is needed. Moreover, the agreement needs to take into account the financial standing of the countries and take the socio-economic heterogeneity of the Baltic Sea countries into account. In other words, to create incentives for implementation, the allocation of responsibilities should be cost-effective and fair. Mechanisms such as nutrient trading (see below), for instance, are among the possible solutions needed to improve these aspects. 2) The spatial and temporal specification of policies/measures

Currently, the region-wide frameworks (introduced by HELCOM and the EU) lead to inefficient protection policies at the national level – namely the inaccurate allocation of responsibilities and, ultimately, the waste of funds targeted at protection. Therefore, we argue that, due to the multiplicity of spatial and temporal scales relating to the problem of eutrophication (i.e. the regionality of the problem), a governance framework that takes the whole system as a starting point does not work. Instead, the specification of policy instruments and forms of implementation is

needed for agriculture in particular, the loads of which depend on the local features of individual field parcels. To a certain extent, administrative borders need to be neglected – not by enlarging the framework, but by adjusting them: protective policies should only be taken where the benefits are greatest. Spatial specification implies a bottom-up approach which focuses on specific situations and differentiating management practices alongside the strong involvement of relevant stakeholders. This approach better aligns the various EU and national policies, the recommendations put forth by HELCOM and the practical activities taking place at various levels. Furthermore, temporal specification, i.e. the definition of intermediate steps needed to achieve final goals, would facilitate the implementation of policies and improve the effectiveness of Baltic Sea protection. Such temporal dimension is built into NEFCO’s suggestion to develop a nutrient trading system in the Baltic Sea, for instance. Starting nutrient trading between point sources would quickly bring reductions in nutrient loads – in contrast to the inevitably slow progress achievable in agriculture. Nutrient trading has two favourable features: the initial allocation of load permits also works as a means by which to redistribute net benefits more evenly, and the reduction in nutrient loads is achieved with the lowest possible costs. 3) The more effective and thorough integration of different policy sectors

Various land-based activities undertaken across the catchment area either directly or indirectly affect the state of the sea. Therefore, the state of the Baltic Sea cannot be improved by exclusively focusing on marine/water protection, but protective activities should be closely linked to all societal activities in the catchment area. When the land-based activities affecting the problem of eutrophication are targeted, many policy sectors become intertwined with the environmental policy sector. The usage and nurturing of the Baltic Sea thus exceeds the administrative borders – not only in geographical terms but also in terms of policy sectors. This indicates that the protection of the Baltic Sea from eutrophication should be seriously taken into account in most administrative branches and in every policy sector, both at the national level and within the EU. Most importantly, the environmental effects of agricultural policy, which actually undermine the achievements of agri-environmental policy regarding water protection, call for exhaustive reform of the former. In addition, trade-offs and synergies between environmental policy and industrial, energy, transport and fisheries policies should be more systematically taken into consideration. 4) Increasing publicity, environmental awareness and deliberative democracy

In order to achieve the good ecological status of the Baltic Sea by any given date, it is of crucial importance to strengthen environmental awareness concerning Baltic Sea eutrophication – especially in Germany, Poland, the Baltic States and Russia. This could be done by increasing the publicity and media attention concerning the problem of eutrophication – as has been done in Sweden and Finland in recent years. Higher environmental awareness opens up possibilities for public pressure, everyday activism and greening of business culture – all of which are increasingly important environmental policy-making instruments. Increased awareness concerning various

double benefits that may emerge from combating eutrophication could convince the public that the problem is worth acting upon. Positive effects could be expected, both in regard to other environmental objectives such as climate protection and biodiversity and in terms of socio-economic interests – which include improved drinking water quality, cost savings through the increase of fertiliser efficiency and improved conditions for the tourism and fisheries sectors. Finally, the importance of deliberation concerning environmental issues in general and stakeholder participation in the definition of relevant environmental policies and activities in particular, cannot be exaggerated. In order to improve Baltic Sea protection, scientific knowledge and respective rationalities need to be complemented by the experience and knowledge of relevant stakeholders at all levels of governance.

2. Description of activities in Year 3 and comparison with the original

research and financial plan

The objective for the third reporting period (1.1.2011-31.12.2011) of PROBALT was to finalise the work for i) analysing societal conditions for the effective protection of the Baltic Sea though various case studies (WP1), ii) examining nutrient trading as an instrument for more effective protection (WP2), and iii) to continue increasing national concern about the state of the Baltic Sea in individual countries (WP3). Out of the PROBALT partners, the Finnish Institute of International Affairs, the European University at St. Petersburg, and the Division for Peace and Conflict Research of the Institute of Social Sciences, Christian-Albrechts-University Kiel contributed to WP1, while the Department of Economics and Management from the University of Helsinki was responsible for the work carried out in WP2. The research results of PROBALT have been published mainly in English, but in order to increase the national concern about the state of the Baltic Sea, articles have also been produced in German, Russian and Finnish. The key findings of WP1 and WP2 and the subsequent policy recommendations are presented in the scientific report “Governing the blue-green Baltic Sea – Societal challenges of marine eutrophication prevention” published in the FIIA report series (see Pihlajamäki and Tynkkynen 2011 (Eds.); FIIA REPORT 31). The production of the report has delayed the finalisation of some of the scientific articles, but these are expected to be published within 2012 (see more details below). The coordinating partner, FIIA, was responsible for the execution of the objectives of work package 3, but the other partners also contributed to the activities of WP3. The list of activities in WP 3 is given under chapter 4. The building of political capacity to

protect the Baltic Sea (Work package 3), page 15. More detailed description of the work carried out in WP1 and WP2 by each partner is give below.

Finnish Institute of International Affairs, Coordinating Partner

The Finnish Institute of International Affairs (FIIA) was responsible for carrying out the following case studies: Finland, Sweden, Denmark, Poland, the Baltic States and HELCOM. The case studies were finalised in 2011, apart from the Denmark case study, which had to be left out due to lack of resources1. While the case studies relating to Finland, Sweden and the Baltic States were carried out by researcher at the Institute, the case studies of Poland and HELCOM were outsourced to the University of Gdansk and the University of Tampere, both of which have been involved in the realisation of the project the past three years. The outcomes of the work in WP1 correspond to following deliverables: Deliverable 1.1

Pihlajamäki, M. and Tynkkynen, N., 2011. The Challenge of Bridging Science

and Policy in the Baltic Sea Eutrophication Governance in Finland: The

perspective of Science. AMBIO 40:191–199.

Pihlajamäki, M. and Tynkkynen, N. (Eds), 2011. Governing the blue-green

Baltic Sea – societal challenges of the marine eutrophication prevention. FIIA-report 31/2011.

Following chapters from the FIIA REPORT 31 (Pihlajamäki & Tynkkynen, (Eds.), 2011) report also contribute to D1.1:

Chapter 5: Jokela M., 2011. The Baltic States – at a crossroads of different

environmental development paths.

Chapter 8: Schönach, P., 2011. Sweden – a pioneer with implementation

inefficiencies. Chapter 9: Pihlajamäki, M., 2011. Finland – No easy solutions left.

D1.1 published before 2011:

Jokela, M., 2010. Uusia virtauksia Itämeren suojeluun: Ensimmäiset

kokemukset yksityisen ja julkisen sektorin yhteistyöstä rohkaisevia (New

currents in the Baltic Sea protection: the first experiences from the private-

public partnership are encouraging). FIIA Briefing Paper 63 (2010), Helsinki

Deliverable 1.4: Dmochowska B. and Szaniawska, A., 2011. Poland - looking for a higher

environmental awareness. Chapter 6 in Pihlajamäki, M. and Tynkkynen, N. (Eds), 2011. Governing the blue-green Baltic Sea – societal challenges of the marine eutrophication prevention. FIIA-report 31/2011.

Deliverable 1.5

1 In the spring 2011, two of the researchers at FIIA went on parental leave, which decreased the human

resources at FIIA. This in turn affected the overall budget. FIIA will return the unused part of the

funding to BONUS.

Tynkkynen, N., 2011. The future of HELCOM: adaptation or abolition? Chapter 2 in Pihlajamäki, M. and Tynkkynen, N. (Eds), 2011. Governing the blue-green Baltic Sea – societal challenges of the marine eutrophication prevention. FIIA-report 31/2011.

Papers in the process:

D1.1 Pihlajamäki, M. Societal challenges of the more effective eutrophication

prevention of the Baltic Sea in Finland (working title) D1.5 Tynkkynen, N. Analysing the multi-level governance of the Baltic Sea

environment (working title)

In addition to the general day to day project coordination and management activities, in 2011 FIIA has been actively disseminating the results of PROBALT and organised a final seminar for the project (see below: 4. The building of political capacity to

protect the Baltic Sea (Work package 3)) Division for Peace and Conflict Research of the Institute of Social Sciences of the

Christian-Albrechts-University Kiel

The case studies on the EU and Germany were completed in summer 2011, which is in accordance with the original research plan. In addition, the results of the project have been made available to the public and to stakeholders with the help of various dissemination activities throughout the project period, in particular during the last year (for details see below). The German PROBALT-team also contributed as a co-organiser to the realisation of the project’s final conference in Berlin on 29 November 2011. The outcomes of the cases on Germany and the EU contribute to following deliverables: Deliverable 1.2

Schumacher, T., 2011. Germany – no priority for Baltic Sea protection, Chapter 7 in Pihlajamäki, M. and Tynkkynen, N. (Eds), 2011. Governing the blue-green Baltic Sea – societal challenges of the marine eutrophication prevention. FIIA-report 31/2011.

Paper in the process:

Schumacher, T. (ready for publication). Erfolge und Schwächen der deutschen

Ostseeschutzpolitik”, scientific article, 15 pages

D1.2 published before 2011

Schumacher, T., 2009. Deutschlands Anteil an der Eutrophierung der Ostsee.

Universität Kiel, Institut für Sozialwissenschaften, PROBALT Working Paper, Oktober 2009.

Deliverable 1.6

Schumacher, T., 2011. The capacity of the EU to address marine

eutrophication. Chapter 3 in Pihlajamäki, M. and Tynkkynen, N. (Eds), 2011. Governing the blue-green Baltic Sea – societal challenges of the marine eutrophication prevention. FIIA-report 31/2011.

Paper in the process:

Schumacher, T., Engaging the EU in Baltic Sea protection. Scientific article, 25 pages, ready for publication.

European University at St. Petersburg (EUSP)

Due to the refuse of the funding of the Russian team by the Russian Basic Research Foundation for 2011, it has not done any further research of the Leningrad oblast case, which was initially planned for 2011. The EUSP team, however, has participated fully in the work of the common project meeting and writing of the common final project paper2. It has also prepared a Working Paper on the Russian case of its participation in the international cooperation on the Baltic Sea protection policy. The outcomes of the work carried out by the EUSP contribute to the following deliverable: Deliverable 1.3:

Nechiporuk, D., Nozhenko, M, and Belokurova, E., (Forthcoming). Participation of Russia in the International Cooperation on the Baltic Sea

Protection., CGES Working Paper, 10, 2011

Dmitry Nechiporuk, D., Nozhenko, M. and Belokurova, E., 2011. Russia – a

special actor in Baltic Sea environmental governance. Chapter 4 in Pihlajamäki, M. and Tynkkynen, N. (Eds), 2011. Governing the blue-green Baltic Sea – societal challenges of the marine eutrophication prevention. FIIA-report 31/2011.

D1.3 published before 2011

Nechiporuk D., Nozhenko M. 2010. The problems of the protection of the

Baltic Sea in the regions of the Russian Federation: The example of the

Kaliningrad region. In The Baltic Region, 2010, № 2, P. 122-130. (Available also in Russian)

University of Helsinki In 2011, the task of the University of Helsinki in WP 2 was to finalise the

examination of how to create a nutrient trading system in the Baltic Sea. This was the first time nutrient trading was applied in an international context. NEFCOs recently published report (2009) provided the starting point for the analysis of the applicability of nutrient trading in the Baltic Sea protection. The purpose in the PROBALT project was to study crucial features missing from the report, namely, 2 This has been enabled by financial support from the PROBALT budget of the Finnish Institute of

International Affairs

ecological impacts and welfare gains of trading as well as incentives of individual countries to participate in such a trading program. A special task was to examine the ecological effectiveness of nutrient trading. First it entails analysing how to treat non-point sources in relation to point sources. Second, it requires examining the trading rules to ascertain that water quality will not be worsened in any part of the Baltic Sea. Lastly, the gains of trade among polluting sources and the overall impacts on welfare at the national scale would provide a basis to infer the political willingness of each country to participate in the nutrient trading program. The outcomes of the research contribute to the following deliverable: Deliverables of WP2:

Hautakangas, S. and Ollikainen, M.,2011: Making the Baltic Sea Action Plan

workable: a nutrient trading scheme. In Pihlajamaki, M. ja Tynkkynen, N. (eds.): Governing the Blue-Green Baltic Sea. Societal challenges of marine eutrophication prevention. FIIA Report 31. Helsinki. Markku Ollikainen: Protecting the Baltic Sea – a challenge to the

international policies. Baltic Rim Economies, 1/2011, pp. 59-60. Ollikainen M. 2010. Itämerensuojelu on Suomen ja Ruotsin käsissä. Ulkopolitiikka 47, 32-35. (Title in English: Protection of the Baltic Sea depends on Finland and Sweden)

Ollikainen M. 2010. Itämeren suojelu – kansainvälisen ympäristöpolitiikan

haaste. Tieteessä tapahtuu 28, 3-6. (Title in English: Baltic Sea – a challenge for international environmental policy) Paper in the process: Hautakangas, S., Ollikainen, M., Aarnos, K. and Rantanen, P., 2011: Nutrient

abatement potential and abatement costs of urban waste water treatment

plants in the Baltic Sea Protection. Forthcoming.

University of Helsinki has also been actively involved in disseminating the PROBALT results (see below: 4. The building of political capacity to protect the Baltic Sea (Work

package 3)).

3. Gained scientific results

The concise summaries of the different case studies of WP1 and the key findings of the nutrient trading analysis in WP2 can be found below (see 3.1 and 3.2). Based on the case studies as well as on the results of WP2, in order to improve the Baltic Sea eutrophication governance PROBALT project puts forth four set of policy recommendations that are urgently needed at various governance levels ranging from international to local. These are:

1) A macro-regional, binding, cost-effective and fair agreement regarding the

prevention of eutrophication

2) The spatial and temporal specification of policies/measures

3) The more effective and thorough integration of different policy sectors

4) Increasing publicity, environmental awareness and deliberative democracy

3.1 The analysis of societal conditions for the effective protection of the Baltic Sea

(Work package 1)

Summary of the Case European Union

Since the completion of Eastern enlargement a major responsibility for addressing Baltic Sea eutrophication lies with the EU. The European level provides strong institutions to facilitate decision-making in all relevant policy sectors and to enforce the implementation of environmental regulations. However, measures taken by the EU have so far not been sufficient to significantly improve the state of the Baltic Sea. In particular the EU’s Common Agricultural Policy does not take the ecological characteristics of the region into consideration. Instead, it provides false incentives since it generally encourages farmers to increase production and to extent areas under cultivation.

To improve the EU’s capability to address Baltic Sea eutrophication it is crucial to raise awareness for the sea’s vulnerability in Brussels. Moreover, since marine eutrophication is an issue that is unlikely to become a significant driving force within European policy-making it is important to connect the issue to other, more prominent environmental topics and to emphasize potential double benefits and added value. For example, increasing fertilizer efficiency should not be regarded merely as a measure to combat eutrophication, but should also be allocated to the “more popular” context of combating climate change. Also, economic advantages, for example in terms of lower expenses for fertilizer application and drinking water treatment, could be emphasized. Double benefits from combating eutrophication emerge, for instance in the tourism and fisheries sectors. Explication of interrelations with other policy areas may also help to address the strong policy fragmentation which so far has hampered the integration of environmental considerations into the Common Agricultural Policy.

Furthermore, European regulations and policies should become more flexible, in order to meet regional specific environmental requirements. Implementation could be enhanced if – at the same time – too heavy financial burdens for the concerned regions and distortions of competition especially in the agricultural sector would be prevented. Summary of the Case HELCOM

For several decades, the Helsinki Commission HELCOM as a regional environmental regime has formed the centre of international efforts to combat environmental problems in the Baltic Sea, including eutrophication. Despite the minor positive impact on the ecological state of the sea, HELCOM has served as a viable arena for discussion for various governmental and non-governmental actors, maintaining a large network of environmental policy advocacy. At the moment,

HELCOM is at a crossroads where a number of challenges are to be met. In many respect, the future of HELCOM seems to depend on the successful implementation of the Baltic Sea Action Plan (BSAP). The plan has many linkages to various EU instruments; in this respect, they supplement each other. The BSAP suffers from many problems that are emblematic to HELCOM in general: It is based merely on ecological objectives and omits socio-economic aspects; it is also expensive to implement and the allocation of responsibilities does not pay enough attention to the heterogeneity of the region.

First and foremost, HELCOM should reconsider its role and status vis-à-vis the European Union, which through its legally binding instruments is increasingly regulating the use and nurture of the Baltic Sea. The existence of HELCOM is legitimized perhaps only by the current situation in which Russia as a non-EU member country appreciates HELCOM as a cooperative forum for the Baltic Sea protection. Yet, HELCOM is seen too scientific and too benign to work effectively.

In order to legitimize its existence and specify its role in comparison with the EU, HELCOM needs to move from science to action. In practice, this implies adopting a pragmatic approach in which emphasis is put on assisting in the implementation of the proposed actions. To facilitate this move, HELCOM should capitalise region’s various policy networks and launch closer cooperation with all the relevant stakeholders. A more systematic participation of stakeholders, not only scientists, in the definition of activities is a precondition for successful implementation of the BSAP and, more generally, for the future of HELCOM.

Summary of the Case Germany Germany is the only coastal state which contributes more to nitrogen

pollution of the Baltic Sea via atmospheric deposition than via water-based inputs. Emissions from agriculture, traffic and energy production account for the major sources of German nutrient inputs. The Baltic Sea environment is however not a prominent topic within public debates on the environment in Germany. Rather, the issue is subordinated to other challenges that are regarded as more urgent, e.g. combating climate change or phasing out nuclear energy. A possible way forward would therefore be to connect eutrophication policy to these topics in order to emphasize double benefits. Agricultural reforms should thus be designed in a way which ensures reductions of greenhouse gases and ammonia emissions as well as nutrient run-off at the same time. Another important move would be to develop agri-environmental measures more in accordance with regional specific socioeconomic and natural conditions. Currently, there is a lack of agri-environmental programmes which in particular suit to the requirements of the larg-scale and highly productive farm structure in Northern Germany.

Summary of the Case Finland

From the political perspective, the failure to meet the nutrient reduction targets required to combat eutrophication in Finland, are due to the conflicting interests between different sectors, insufficient implementation of the instruments, their poor functioning, or complete lack of them. The prerequisites for more effective eutrophication prevention are, first, that in addition to regional (unified) protection plans there should also be local protection plans that are tailor-made for

the local conditions. Furthermore, the financial resources should be reallocated to areas where there is most nutrient reduction potential. Second, in order to enhance implementation, the decision-making process should be based on wider analysis including socio-economical aspects. It is outmost important that different stakeholders are included in the policy-making process. There should also be adequate advisory services available for, for example, farmers and households outside sewage networks. Third, the more effective integration and harmonisation of different policy sectors requires that the Baltic Sea protection is seen as a possibility, not as a threat. Fourth, there is a call for legally binding protection agreement on national (agriculture) and international levels (coastal countries) in order to avoid unfair division of the costs and benefits.

Summary of the Case Russia

The coastal strip of the Baltic Sea in Russia is very small, but is very much polluted and therefore important for the whole problematization. Despite the involvement of Russia in HELCOM activities from the very beginning, its own input to the Baltic Sea protection activities of the organization was not consistent. The reconstruction of the treatment facilities of St. Petersburg was the only real contribution to the elimination of anthropogenic sources of eutrophication.

Despite their willingness to fulfill its international commitments to improve the environment of the Baltic Sea, the Russian authorities have not been able to overcome some systemic problems including the following: - weakness of the regional structures responsible for the of the environmental

policies in coastal areas. These structures consider commitments to HELCOM primarily as the responsibilities of the federal government, but not of the level of subjects of federation;

- lack of coordination among the various levels involved in the protection of the Baltic Sea, including the reconstruction of treatment facilities in the regions;

- lack of an effective system of environmental monitoring at both federal and regional levels;

- lack of knowledge and technologies for the reconstruction of treatment facilities;

- weakness of civil society and NGOs in general, and its impact on the environmental policy of Russia in particular which has also a negative impact on the overall level of public awareness about the state of the Baltic Sea and environmental problems in general;

- a gap between state authorities, mass media, scientific community, civil society institutions and the public opinion in general. It is very difficult to make some prognoses about the future Russian policies

and whether Russia will really fulfill its obligations and commitments to HELCOM. Much will depend on how Russia will survive the global financial crisis and how the new presidential period will be characterized.

Summary of the Case Sweden

The main obstacles in Sweden’s Baltic Sea protection policies are deficiencies in policy implementation, the insufficient cost-effectiveness of measures and the ambivalent and difficult position of agriculture as a major stakeholder. The

agricultural and environmental sectors have conflicting views about the perception of the realistic and desired goal setting in eutrophication abatement, the degree of agriculture’s responsibility to it and on the principles how to achieve the abatement goals. Mutual mistrust of the sectors has hampered good cooperation and deliberation, traditionally vital in Swedish decision-making. The slowness or inadequate implementation of decisions is rooted in three main problems, namely weakening of the work intensity after the finalization of an action plan, a lack of governmental pressure to force municipalities to implement existing legislation and a financial and prioritizing problem on the local level. The generous finances available for anti-eutrophication work are not used cost-efficiently, which could be enhanced especially through regionalized prioritizing. Politicians should take use of the intellectual potential of both scientific and lay knowledge, which needs to be communicated more efficiently in order to help the decision-makers to translate the findings into concrete policy formulations. Finally, broad cross-level and cross-sectoral commitment to eutrophication abatement needs to be enhanced. Summary of the Case Baltic States

Firstly, the Baltic States case study provides an overview of the development of environmental policies, especially eutrophication policies, in the Baltic States. Secondly it explains the main challenges of eutrophication prevention. In short, the critical evaluation of the protection policies was divided into following 5 categories: administrative challenges, research challenges, awareness and attitudes, diffuse vs. point source loading and cross-border cooperation.

As a conclusion, the EU has served the main catalyst of environmental development in the Baltic States. However, the accession process and the membership have set out strict time limits in order to harmonize legislation and environmental administration to EU standards, leaving the newly established environmental administrations and legal systems under huge pressure in terms of human, technical, financial and institutional capacities. First and foremost, cooperation and communication between different actors should be intensified, both horizontally and vertically, in order to supplement human resources, the lack of which burdens state administrations in all Baltic States. This requires mental change, delegation of work and new cooperation structures and forums. Furthermore, higher education, along with better financial recourses and power distribution are among the key tools to meet the current administrative challenge. Finally, also general strengthening of grass-root environmental awareness is needed in order to generate political pressure to increase the status of green values and politics.

As the Baltic States case study mainly focused on state level actors and operations a clear need of further research of local level was identified. This is justifiable, as municipalities have become the focal actors in the implementation of various environmental services, e.g. agricultural services and waste water and water management, but on the same time the vertical shift of power has not increased their economical resources, human capacity or the level of expertise. As a result, especially small municipalities face serious problems in caring out their new responsibilities.

Summary of the Case Poland

Poland is still regarded as the largest exporter of nitrogen and phosphorus to the Baltic Sea, however an objective reasoning of such situation is required. However, as researchers point out, the problem of eutrophication requires for instance a discussion in the historical aspects, for example to what extend the excessive production of biological matter in the past years and is accumulation in deep sea areas have an influence on long-term release of phosphorus from bottom sediments. Another aspect is the agricultural area, where Poland covers 50% of the total agricultural area in the catchment area of the Baltic Sea. What is more a substantial part of the Baltic Sea catchment area is within the Polish borders and more than 40% of the population living in the Baltic Sea basin is Poles. When calculated per capita or per 1 ha, the numbers of the runoff of nutrients look significantly better in comparison to other Baltic countries. In the last ten years there has been observed a significant reduction in the runoff of nutrients from the Polish territory to the Baltic Sea. It was mainly the Polish accession to the European structures forces us to pro-ecological actions and after the 1989 system transformation, the water purity has became the one of the main issues in national environmental goals. Now, as the other countries located within the catchment area of the Baltic Sea, Poland has worked on a political and instrumental level to minimize discharges of nutrients with the aim of combating eutrophication of the Baltic Sea, in line with the Baltic Sea Action Plan. The drivers for the Polish authorities have been the Helsinki Convention with its HELCOM Recommendations, and European directives focusing on nutrient enrichment and water quality. In fact EU directives and enormous financial resources coming from the EU contributed to a giant cultural step in Poland in the environmental field, also, still very slowly, but somehow raising social awareness. Still, however, having no political character and being insufficiently communicated to the public, the problem of eutrophication of the Baltic Sea is underestimated in Poland.

3.2 The examination of nutrient trading as an instrument for more effective

protection (Work package 2) Summary of the main findings

The key findings are introduced in the report published by the FIIA report No 31, but further analysis has been carried out since this publication. To examine nutrient trading, it was necessary to produce reliable data on abatement costs. This work was a time consuming activity. Especially challenging part was to collect information on the urban waste water treatment plants (UWWTP) in order to find out the amounts of nitrogen and phosphorus they process, how much they abate and what are the reduction potentials to reach certain predetermined abatement levels; as well as the abatement costs in the treatment plants. This large a sample, containing around 25 % of the UWWTPs in the Baltic Sea catchment area, hasn’t been available before. Also, the cost analysis based on real data in different-sized treatment plants was the first ever carried out. With this information we were able to produce the results which showed that the costs of reducing nutrients in the UWWTPs are remarkably lower than previously thought. The marginal abatement cost of nitrogen at 90 % level is 10.60 Euros per kg while, for instance, in Gren

(2008)3 these vary from 12 to 79 Euros/kg. As for phosphorus, the difference is even larger. Our analysis shows that the marginal cost is 15.73 Euros per kilo, while in Gren (2008) they vary between 41 and 130 Euros/kg. Our cost-estimates were derived solving a cost-minimization problem.

Comparing the abatement costs in UWWTPs with the preliminary ones in agriculture shows immediately us that the phosphorus abatement is far more expensive in the short run in agriculture than in the treatment plants. In the long run, as the amount of phosphorus cumulated in soil, will eventually decline, there will be cost-effective reduction possibilities in agriculture as well. In contrast to phosphorus, costs of nitrogen abatement in agriculture are roughly of the same level as costs in UWWTPs. The first cost-effective gains seem to be gathered mainly in agriculture, but soon the nitrogen reductions in treatment plants become cost-effective as well. To sum up, our findings show that the low hanging fruits are reductions in waste water treatment plants in phosphorus abatement and reductions in both agriculture and treatment plants in nitrogen abatement.

The next step was to analyse how to organize a nutrient trading scheme in order to reach the predetermined reduction levels of nitrogen and phosphorus by BSAP. Our finding on phosphorus demonstrated that nonpoint sources would not be able to contribute to trading in the short or intermediate run. Therefore, we ruled agriculture out and started with a trading system including only point sources (so far UWWTPs) following at the same time NEFCO’s suggestion to include first only point sources in the trading system. NEFCO’s argument was that point sources are easier to monitor than non-point sources and the technology is well-defined. There is a lot of abatement potential left in UWWTPs and it’s relatively cheap way to begin with. Thus, we set the reduction targets to more ambitious level than in EU’s urban waste water directive or HELCOM recommendations, that is, overall 90 % reduction in nitrogen and 95 % reduction in phosphorus. These overall targets will then be traded between the littoral countries and in result the amount of nitrogen in the Baltic Sea would be reduced annually by almost 82,000 tons from nearly 110,000 to less than 30,000 tons, while the amount of phosphorus would decrease a bit over 9,000 tons from over 11,000 tons to approximately 2000 tons. These reductions account for 63 % and 70 % of the total nitrogen and phosphorus reductions agreed in BSAP, respectively. All this could be achieved in a few years by investing in UWWTPs. The above could be achieved cost-effectively by nutrient trading. The design of the nutrient trading system is as follows. Trading is organized on a cap-and-trade basis. Cap is defined as the allowed loads based on reduction of 63% of nitrogen and 70% of reduction of phosphorus. Trading ratio is 1:1 implying that any installation wishing to increase one unit of nitrogen or phosphorus is required to buy one unit from another installation. This means that we do not take into account transfer of nutrients – trading takes care of a large cleaning; other means are then used for regional fine tuning. Thus, in these respects trading resembles that of emissions (for instance, the European Union Emissions Trading Scheme). In contrast to conventional emissions trading systems, we postulate an additional requirement that now treatment plant is allowed to increase their loads above the pre-trade level.

3 GREN, I.-M. 2008. Costs and Benefits from Nutrient Reductions to the Baltic Sea. Report 5877. Naturvårdsverket.

This feature reflects the regional nature of nutrient loads and takes care that no hot spots emerge during trading.

During the nutrient trade, the permits would be traded up to the point where the costs are minimized, the permit prices being the aforementioned 10.60 Euros/kg for nitrogen and 15.73 Euros/kg for phosphorus. These cost-efficiency results do not depend on the initial allocation of the permits, as is a well-established fact. However, initial allocation has an impact on the position of installations in the permit market: by and large, those with a plentiful initial allocation of permits relative to their needs become sellers and receive extra revenue, while those with a scarce allocation will become buyers. Thus, we used the initial allocation of nutrient permits to make the net benefits between the Baltic Sea countries more even. Giving Poland 80 % of all the permits and distributing the rest 20 % to all the other countries in relation to their share of a certain set of side payments, which are direct transfers of money in order to equalize the burden among the countries. The initial allocation makes installations in Poland, Latvia and Estonia sellers of nitrogen permits, while phosphorus permits are sold by installations in Estonia, Germany and Poland. UWWTPs in Poland would gain particular benefit from trading, to the tune of more than 92 million Euros, reducing their total costs to below 400 million Euros. Estonia and Latvia together would gain almost 13 million Euros. The biggest buyers would be Denmark, Finland and Sweden. The total cost of achieving, cost-efficiently, around 70 per cent of the BSAP targets for nutrients is 745 million Euros, meaning it only accounts for approximately 30 per cent of the cost originally estimated for the whole BSAP.

The solution is relatively cheap, mostly thanks to improved nitrogen abatement technology, while trading works as a means of equalizing the cost burden between countries. The initial allocation reduced Poland’s costs by a considerable 20 per cent, and both Estonia and Latvia benefit from trading. Other countries are buyers, and they will benefit from buying by reducing their abatement effort slightly.

Our analysis shows that a suitable initial allocation of permits can be used to moderate the cost differences between the Baltic Sea countries. However, under a free initial allocation of permits, a complete equalization of the total cost burden may not be possible. Things change if the countries decide to auction the permits to the installations and let them trade the permits in after-markets. The revenue collected from the auctions would then be reallocated to installations, in order to equalize the cost burden or net benefits. An auction would be a quick way of solving the financial needs of countries having large investments, and in our case, assuming an efficient auction took place, the countries would gather roughly 328 million Euros. Auctioned permits resemble an international nutrient tax that could be imposed on UWWTPs and used in a common financial pool to arrange the side payments to installations between countries. The sum of 328 million Euros would therefore allow a fairly decent equalization of costs between countries and thus improve the willingness of each country to support the nutrient trading system. The further analysis including agriculture as a non-point source and industrial point sources is under way. Some of the anticipated results are touched on earlier in this text, but adding non-point sources to the trading system brings also certain technical issues to be solved. First, the loads in agriculture are more arduous to monitor.

Second, weather conditions cause considerable stochasticity in the agriculture. Third, we must decide the trading ratio between the point and non-point-sources, assuming that we don’t build separate trading systems. However, as said above, for phosphorus trading would be difficult but for nitrogen possibilities are much better.

4. The building of political capacity to protect the Baltic Sea (Work

package 3) In WP3, the PROBALT project aimed to improve the effectiveness of eutrophication governance by producing policy recommendation for overcoming obstacles to the effective protection of the Baltic Sea (see e.g. FIIA REPORT 31: Pihlajamäki and Tynkkynen (Eds.) 2011) and by raising the awareness about the state of the Baltic Sea in

the individual countries by disseminating information about the PROBALT project, its research results and the problem of eutrophication in general in various forums; for example by organising journalist training on annual basis, launching and maintaining the project website (www.probalt.fi) 4 , organising stakeholder seminars, giving lectures, presenting conference papers, and by publishing the PROBALT report (Pihlajamäki and Tynkkynen 2011, Eds.) and scientific articles. The practical implementation of project outputs between 1.1.2011 and 31.12.2011 are listed below (scientific articles and other publications (including the policy

recommendations) are listed above under the chapter 2. Description of activities in

Year 3 and comparison with the original research and financial plan):

Journalist training

As a continuation to the journalist training events organised in Gdansk (2009) and Helsinki (2010), the PROBALT partner from the European University at St. Petersburg organised an “EU Info Day” press conference with the support of the Press-Club «Green Lamp». The title of the Third EU Info-Day was “Ecology of the Baltic Sea: What Can Be Done through the International Cooperation?”. Several PROBALT members participated in the event. For more information, please see: greenlamp.

Stakeholder seminars organised by PROBALT (Deliverable 3.7)

25 May 2011: The third in the series of expert discussion on Baltic Sea affairs was arranged by the PROBALT team in Kiel. In contrast to the previous discussions, which concentrated on European initiatives for marine protection, this time the focus was on the German position in the fight against Baltic Sea eutrophication. The keynote speech was given by Jochen Lamp, head of the Stralsund based WWF Baltic Sea office for Germany.

29 November 2011: PROBALT Final seminar (titled: How to save Europe’s most polluted sea? Societal challenges for Baltic Sea eutrophication prevention) was organized in Berlin. In addition to presentations from the PROBALT participants on the key findings of the project, outside expert were engaged to the event:

4 The project webpage will stay up for the time being.

- An opening statement was given by Klaus von Lepel, Coordinator of the Task Force for the German Presidency of the Council of the Baltic Sea States 2011-2012, German Federal Ministry of Foreign Affairs - Opening comment for the panel discussion was given by Dr. Wera Leujak, Federal Environmental Agency (UBA) - Dr. Tobias Etzold, SWP Berlin, acted as the moderator of the event.

Conference papers

Mia Pihlajamäki: Improving societal conditions for the Baltic Sea protection in Finland. 8th Baltic Sea Science Congress 2011, St. Petersburg (Russia) 23-26.8.2011

Sami Hautakangas: Combating eutrophication – What simple arithmetic tells us. 8th Baltic Sea Science Congress 2011, St. Petersburg (Russia) 23-26.8.2011 Dmitry Nechiporuk: Making Progressive Borders: The Main Ecological Problems of

the Baltic Sea and their Impact on Maritime Borders. Remaking Borders, First EastBordNet Conference, 20-22 January 2011, Monastero dei Benedettini, Catania, Italy. Schumacher, Tom: Good Governance auf See – Institutionelle Herausforderungen der internationalen Meerespolitik. Maritime Convention 2011 Mare Balticum conference, organized by Deutsches Maritimes Institut and griephan in Berlin.2 November 2011

Presentations at seminars and other dissemination activities:

Markku Ollikainen: Metsät, vesi ja kestävä metsätalous. (Forests, water and sustainable forestry) Forest science Days 26.10.2011. Helsinki. Markku Ollikainen: Baltic Sea - challenges for science and politics. Henvi Science Day 7.4.2011. University of Helsinki. Pihlajamäki Mia: The results of the Finland case study. The Rotary Club of Katajanokka, 6 September 2011 Pihlajamäki, M: Improving Societal Conditions for the Baltic Sea Protection. Roundtable discussion with visiting Polish experts (political scientists and journalists) at the Finnish Institute of International Affairs. 17 October 2011 Markku Ollikainen: Improving Societal Conditions for the Baltic Sea Protection. Bonus Forum 24.10.2011. Gdansk. Pihlajamäki Mia: Improving Societal Conditions for the Baltic Sea Protection. The Bonus highlight to the European Community – event in Brussels, 8 November 2011 Schumacher Tom: The results of the PROBALT project were presented to the Working Group on European Affairs, Baltic Sea affairs included, of the

parliamentary faction of the Social-Democratic Party (SPD) of the Schleswig-Holstein state parliament. 1 December 2011 Ollikainen Markku and Pihlajamäki Mia: Improving Societal Conditions for the Baltic Sea Protection. Press conference organized by BONUS secretariat and the Academy of Finland, Helsinki 22 November 2011

Dmitry Nechiporuk, Karmo Tüür: Cross border cooperation - Myths and reality. Peipsi Forum IX “Sustainable regional development and cross border cooperation in the EU external border areas and EU direct neighbourhood”. Tartu 24 November 2011. Elena Belokurova, Maria Nozhenko: participation at the 12th International Ecologic forum “Baltic Sea Day”, 21-22.03.2011 Lectures

Belokurova Elena: EU-Russian Cooperation: the case of the Baltic Sea, course on the EU Politics and Policies, MA and PhD Programme in Political Science and Sociology, European University at St. Petersburg, St. Petersburg. 1.04.2011. Belokurova Elena: EU-Russian Cooperation: the case of the Baltic Sea, course on the EU Politics and Policies, MA Programme in Political Science and Sociology, European University at St. Petersburg, St. Petersburg. 1.04.2011. Sami Hautakangas: Wastewater treatment in the Baltic Sea region. (Jätevesien

puhdistus Itämeren alueella.) Politics and economics of Baltic Sea protection -course at the University of Helsinki (Itämeren suojelun talous ja politiikka –kurssi.), Helsinki. 21.11.2011.

Sami Hautakangas: Nutrien trading (Ravinnepäästökauppa). Politics and economics of Baltic Sea protection -course at the University of Helsinki (Itämeren suojelun talous ja politiikka –kurssi=, Helsinki. 12.12.2011. Schumacher Tom: a seminar for Master’s students at the Euro-University Tallinn on the successes and weaknesses of international efforts to protect the Baltic Sea. 22-24 March 2011 Schumacher Tom: a seminar for Master’s students from Finland, Estonia, Latvia and Lithuania at Humboldt-University of Berlin which took place in the context of the study programme “Master of Baltic Sea Regional Studies”. The focus of the seminar was among others on marine protection policies for the Baltic Sea. 31 October – 15 November 2011 Probalt in the media in 2011:

Radio

Discussion on the protection of the Baltic Sea with Satu Hassi, the member of the European parliament. Radio Suomi, 20.1.2011.

Markku Ollikainen: Baltic Sea protection. Phone interview for the broadcasting. Radio Nova 22.3.2011. Markku Ollikainen: Improving Baltic Sea protection and the state of the Archipelago

Sea. Radio Nova 21.11.2011. TV

Markku Ollikainen: Water protection program in agriculture is inefficient. TV4: News 22.6.2011. Markku Ollikainen: Waste water treatment plants key to improve Baltic Sea protection. MTV 3: News (news at seven pm. and ten pm.) 21.11.2011 Dmitry Nechiporuk: The Money of the European Union Will Not Come to Russia, 100TV, St. Petersburg. 25.08.2011 Newspapers

Markku Ollikainen: Maatalouden ympäristötukea on jaettu miljardeja, mutta vastoin

tavoitteita ravinnepäästöt kasvavat. Vihreä Lanka 30.9.2011

Markku Ollikainen: Maatalouden ympäristötuki tuottaa tappiota. Talouselämä 10.6.

2011

Markku Ollikainen: Ravinnepäästöt alenevat puhdistamoita kehittämällä. Maaseudun tulevaisuus 22.11. 2011. Markku Ollikainen: Ympäristötuki ollut tehoton. Helsingin Sanomat 9.6.2011. Markku Ollikainen: Östersjön förtjäner bättre. Hufvudstadsbladet 2.1. 2011. Mia Pihlajamäki and Markku Ollikainen: Tutkijat peräävät Itämeren suojeluun sitovaa

sopimusta/ Forskare efterlyser juridiskt bindande miljöavtal om Östersjön. STT mediapankki. Online. 21.11.2011 Mia Pihlajamäki and Markku Ollikainen: Itämerestä sitova sopimus : suojelu: rahalla

tuloksiin, kustannukset jaettava tasapuolisesti. Lapin Kansa. Print, page 40, 22.11.2011 Mia Pihlajamäki and Markku Ollikainen: Tutkijat peräävät Itämerelle sitovaa

suojelusopimusta. KALEVA, print, page 8. 22.11.2011 Mia Pihlajamäki and Markku Ollikainen: Tutkijat peräävät Itämeren suojeluun sitovaa

sopimusta. Forssan Lehti. 22.11.2011 Mia Pihlajamäki and Markku Ollikainen: Suosituksilla ei ole saatu Itämeren

rehevöitymistä kuriin. Aamulehti. Print, page 7. 22.11.2011

Mia Pihlajamäki and Markku Ollikainen: Bindande miljöavtal om Östersjön efterlyses :

jordbrukspolitiken har en så stark ställning att den lätt saboterar skyddet av

Östersjön. Västra Nyland. Print, page 12, 22.11.2011 Mia Pihlajamäki and Markku Ollikainen: Juridiskt bindande miljöavtal om Östersjön

eftersökes. Åbo Underrättelser, Print, page 9, 22.11.2011 Mia Pihlajamäki and Markku Ollikainen: Tutkijat peräävät Itämeren suojeluun sitovaa

sopimusta. Pohjalainen, 22.11.2011 Mia Pihlajamäki: Itämeren suojeluun vaaditaan sitovaa sopimusta. Salon Sanomat 22.11.2011

5. Further research and exploitation of the results

Several scientific articles are still work in process, but these are expected to be published within 2012. The PROBALT consortium is also considering writing a joint article based on the results. The results of PROBALT are expected to be exploited long time after the finalisation of the project. Some dissemination events, including a meeting with the Finnish Environment Committee, have been planned for next year (2012). Overall, the results of PROBALT project give scope for further research. The practical way how to renovate the governance institution, including spatio-temporal specification and sector integration could be studied through a broad range of local and regional level case studies. Policy scientists of the Baltic Sea region need to join forces to elaborate options for such a governance renovation. Nutrient trading scheme needs to be analysed in broad range of implications and prepared for its adoption on the policy level and subsequent implementation. Two doctoral projects are based on the work carried out in PROBALT and further research for needs for these projects has been shaped on the basis of the results. Further research plans have also been drafted. For example, an application for a new research project has been developed within the Kiel University Research Group on International Political Sociology by Prof. Dr. Dirk Nabers, Dr. Ulrike Kronfeld-Goharani and Dr. Tom Schumacher. The project’s title is “Crisis and Institutional Change in International Maritime Politics”. It includes case studies on politics addressing sea-dumped chemical weapons, ocean acidification and eutrophication. The envisaged project thus aims at further developing the results from the PROBALT project while at the same time placing the issue in a wider context. On the one hand, the geographical scope is widened as other regional marine environments beyond the Baltic Sea will be included into the analysis of abatement policies. On the other hand, the content-dimension will become broader as the intention is to compare eutrophication policies with the way how other highly complex challenges to the marine environment are being addressed.

Further research could be done in the Russian case on Leningad oblast: the case, which is very interesting, but could not be carried out because of the lack of funding of the Russian team in 2011. The further research should be also done on the future developments of the Russian and other countries’ policies in the framework of the new BSAP implementation. For example, for Russia many efforts are planned for 2012. It would be very important to evaluate them from the political science and sociological points of view. As the PROBALT-project deliverables and outputs are concentrated at the end of the project (2011) a thorough evaluation of the actual impact of the results has not been possible within the time limits of the project. Thus, one key topic in further research is impact evaluation of the PROBALT results. The focus should be on various stakeholders and the fields under examination could include e.g. awareness raising, media attention, stakeholder participation, new initiatives or new means of carrying through initiatives and new proposals in decision making processes.