Over the review period (1998-2005), the Czech Republic’s economy grew relatively slowly (+16%), and underwent further structural changes and integration in the European economy. The country acceded to the European Union in May 2004. Imports and exports of goods and services represent more than two-thirds of GDP, and more than 75% of the economy has been privatised. In percentage of GDP, the country has been the leading recipient of foreign direct investment among OECD countries. While the service sector share in the economy has grown to 58.2%, agriculture has declined to 3.4% and industry still represents 38.4%.

During the review period, SO2 concentrations in ambient air were significantly reduced. Emissions of SO2 and VOCs decreased by 48% and 16% respectively, dropping below the 2010 ceilings of the Convention on Long-range Transboundary Air Pollution and related European Directives. Monitoring and reporting of air quality has improved, notably for heavy metals and persistent organic pollutants. The Czech Republic is one of the few OECD countries with a national legal basis for combating light pollution. During the review period, the Czech Republic reformed the institutional framework for the energy sector. It enacted two new energy laws, created new institutions, adopted an energy policy with energy efficiency and environmental objectives, and partially opened up energy markets. Energy companies were restructured and partially privatised. Price distortions among different types of energy (including direct subsidies to producers) were generally reduced and prices paid by end-users are now much closer to the cost of supply, while prices paid by industry for electricity and oil remain well below the OECD average.

During the review period, good progress was made with legislation and institutions. The EU accession process was the driving force behind a revision of the legislative framework for biodiversity protection and nature conservation. Improvements in administrative capacity, including inspection and enforcement, were also made. A network of protected areas was established, within the national ecological network of protected areas (including landscape sites and monuments, elements of the Territorial System of Ecological Stability). The list of Natura 2000 sites under the Habitat and Bird directive (SCI and SPA) was adopted by the government. The return of some fish species was observed. The natural renewal of the forests increased. Land-use planning and land-use mapping helped bridge the gap between the management of landscape and protected areas and the use of natural resources. Environmentally sound agriculture developed. Ecological restoration of landscape was supported at all administrative levels.

Over the review period, some progress was made in decoupling environmental pressures from economic growth with respect to SOx and VOC emissions, water withdrawals, and waste generation from the energy, manufacturing and agriculture sectors, although often at a slower rate than in the early and mid-1990s. Integration of environmental concerns into sectoral policies (e.g. transport, industry, mining) also progressed, with the least success in the energy sector. The restructuring process initiated in the 1990s to rationalise coal production and reduce subsidies is still underway and cross-subsidies to households from industrial consumers in the energy sectors are ended. A National Strategy for Sustainable Development was approved at the end of 2004 and monitoring of its implementation has been proposed. An ecological tax reform is currently under consideration...

Environmental information is generally of high quality and easily accessible. Annual national reports on the state of the environment have been available since 1993, supported by annual reports for the 14 regions. Acts on the access to environmental information have been in place since 1998, and the Aarhus Convention was ratified in 2004. The Government Council for Sustainable Development, created with the participation of civil society representatives, has established several working groups, including for the promotion of Local Agenda 21. Good inter-ministerial cooperation led to adoption of the National Programme on Health and Environment. An ongoing survey evaluates contamination levels in several products, materials and environmental media, and monitors public health...

The Czech Republic has managed its international and European action concerning the environment both rigorously and efficiently. It has been timely in preparing and adopting documents with precise objectives and deadlines for ratifying and implementing multilateral environmental agreements (MEAs) and in preparing for accession to the European Union. It has also satisfactorily negotiated the environmental acquis, transposing numerous EU Directives into national law and negotiating transition periods for just three Directives that are particularly expensive to implement. The Czech Republic has fulfilled or is on its way to fulfilling its international obligations, especially with regard to the Montreal Protocol, the Geneva Convention on Long-range Transboundary Air Pollution (CLRTAP) and the Kyoto Protocol. Lastly, the Czech Republic has taken active steps to increase its development assistance and foster bilateral co-operation...