Annex F. Terminology

The report uses several other terms, which are listed below to ensure a common understanding of the concepts, approaches and methods used for environmental protection in OECD members, the European Union and in Kazakhstan.

Abatement cost refers to expenditures, which reduce the direct pressures on natural assets (for example from air emissions or waste disposal). The calculation of imputed abatement costs does not require the definition of absolute environmental quality levels or standards but of reductions in levels (for residual flows in particular). Ideally, imputed abatement costs should always be calculated as the sum of direct and indirect cost effects of additional prevention measures.

Best available techniques (BAT) encompass different terms and definitions in OECD member countries.

  • The European Union (EU) Industrial Emissions Directive (2010) defines BAT as “the most effective and advanced stage in the development of activities and their methods of operation, indicating the practical suitability of particular techniques for providing the basis for emission limit values and other permit conditions designed to prevent and, where this is not practicable, to reduce emissions and the impact on the environment as a whole”. More specifically, “Best” means that the techniques are the most effective in achieving a high general level of protection of the environment as a whole. “Available” refers to the development on a scale that allows implementation in the relevant industrial sector, under economically and technically viable conditions. “Techniques” are both the technology used and the way in which the installation is designed, built, maintained, operated and decommissioned. To help authorities, businesses and other interested parties determine BAT, the European Commission organises an exchange of information between experts from the EU member states, industry and environmental organisations. BATs are determined by a technical working group steered by the European IPPC Bureau. This process results in a Commission Implementing Decision establishing the BAT conclusions for each sector, which are laid out in the BAT reference document (BREF).

  • Some countries also include innovative and cutting-edge techniques among their BAT. Some policies do not refer to BAT, but rather point to other similar concepts, such as available techniques, Best Available Control Technology, Best Techno-Economically Available Techniques and Best Practical Options.

  • In this report, for the sake of consistency and simplicity, the term BAT refers both to BAT and all similar concepts.1

Damage (environmental) is an environmental harm, or risk of harm, caused by activities by an organisation, for which remediation may be needed and cost recovery required. Environmental damage should be clearly distinguished from financial damages, which are financial losses or costs arising from many different causes. Some of these causes may be environmental impacts arising from regulated activities.

Damages (fault-based) is an approach used by the regimes in Kazakhstan and Eastern Europe, Caucasus and Central Asia in which financial penalties are applied to (any) non-compliant activity (typically breaches of emission limits set in permits). It assumes that environmental damage has been caused, whether this has actually happened. The OECD defines “fault-based” damages as penalties or payment imposed for violating a law or breaching a limit, and not simply the absence of a need to prove negligent or intentional conduct.

Emissions cover substances emitted into environment media (air, water, soil) usually from industrial or agricultural processes. The focus of this report is mainly on emissions into air from industrial stationary sources.

Emission limit values (ELV) are absolute limits for emissions, set for a specific sector. For specific installations, ELV are set out in permits as conditions. ELV shall be based on BAT, without prescribing a technology. The competent authority shall, at least annually, assess the results of emission monitoring to ensure that emissions under normal operating conditions have not exceeded the BAT-AEL (Associated Emission Levels). These are ranges of emission levels obtained under normal operating conditions using a best available technique or a combination of BAT, as described in BAT conclusions. They are expressed as an average over a given period, under specified reference conditions. Kazakhstan might use the concepts of maximum permissible emissions for an operator (MPE) or maximum permissible discharges for a project (MPD).

End-of-pipe solutions are methods used to remove already formed contaminants from a stream of air, water, waste, product or similar. These techniques are normally implemented as a last stage of a process before the stream is disposed of or delivered.

Environmental Code (as amended) is the document that codifies the environmental legislation in Kazakhstan. The first version was published in 2007. A significant number of amendments have been introduced into the Environmental Code (62 times over 2007-17). The main objective of the environmental legislation is to promote sustainable development of the country, including the transition to a green economy, to ensure a healthy and supportive environment for present and future generations. This codification attempt has been rather successful, making environmental legislation easier to use and understand by public authorities, businesses and the public. Codes in Kazakhstan have a higher legal value than laws, which brings an indisputable value to this codification effort. In 2011, the Law on Amendments to Legislation related to Environmental Issues introduced amendments to eight legal acts and added two new chapters into the Environmental Code on the regulation and assessment of greenhouse gas (GHG) emissions and capture. The amendments also referred to waste management and environmental audit (UNECE, 2019[10]).

Environmental taxes, a subset of market-based instruments, are taxes “whose tax base is a physical unit (or a proxy of it) that has a proven specific negative impact on the environment. Four subsets of environmentally related taxes are distinguished: energy taxes, transport taxes, pollution taxes and resources taxes” (OECD, 2005[11]). Tradable pollution permit systems, henceforth emissions trading systems, similarly put a price on processes or products with a proven negative environmental impact. It may be worth noting that the definition of environmental taxes does not explicitly link the tax to the size of the environmental damage, or the external cost, but instead only refers to the tax base. Nevertheless, environmental taxes are often implicitly understood to be taxes that aim to improve alignment of tax rates with (marginal) external costs (OECD, 2017[12]).

Environmentally related taxes (ERT) are defined as “any compulsory, unrequited payment to general government levied on tax-bases deemed to be of particular environmental relevance” (OECD, 2004[13]). Here too, there is no explicit connection to external costs. That is to say, environmentally related taxes “particularly affect the environment” whether this is the policy intention or not, and whether tax rates align with external costs or not. In the remainder of this report, the term environmentally related taxes will be used except when there is reference to marginal external cost pricing alone. This term is preferred because alignment with marginal external costs is one of several potential policy objectives that influence tax rates, meaning that referring to environmental taxes is potentially too narrow to describe policy practice now and going forward (OECD, 2017[12]).

In Kazakhstan, a payment is only considered to be a tax if it is stipulated by the Tax Code. In the case of pollution from stationary sources (e.g. industrial plants), taxes are levied based on each enterprise’s ELV. They are calculated both for emissions within the ELV and above the ELV. Authorities may impose administrative non-compliance payments/penalties for pollution exceeding the ELV set in project documents and environmental permits. In addition to taxes and administrative penalties, emissions of pollutants above the permitted ELV are subject to monetary damages via a judicial system.

In the remainder of this report, we will thus refer to environmental payments or environmentally related taxes interchangeably for three types of payments:

  • Environment payments for emissions within the emission limits (environmental taxes/charges or pollution taxes), as a tax payment for authorised emissions, and are defined in the Tax Code.

  • Non-compliance payments/penalties, which are paid for emissions above the emissions limits and set in the Administrative Offence Code.

  • Monetary pollution damages, which are a monetary compensation for environmental damage, for example from industrial air pollutants. They are defined in the Environmental Code (as amended). The Government Resolution №2 535 dated 27 June 2007 provides the detailed calculation method.2 Although, as analysed in Chapter 3, monetary pollution damages have no links with “the state budget funds” in OECD member countries. Such compensations are not funds to be collected by the state. Instead, the remediation is usually conducted by the party responsible for the damage under an administrative or court order.

  • Other environmentally related taxes relate in Kazakhstan to transport or usage of natural resources. However, they are not part of the scope of this report, which is focused on industrial air pollutants.

Environmental ambient quality standards (EQS) lay down the maximum allowable concentration of a substance in air, soil or water. Environmental quality standards can be introduced nationwide or for particular geographical areas, such as counties or municipalities. The starting point for an environmental quality standard can be knowledge of what human beings and the natural environment can withstand. The standards may also be seen as policy instruments for achieving the environmental quality objectives in the long term.

Environmental non-compliance response comprises any actions taken by the competent government authority alone or in co-operation with other institutions to correct or halt behaviour that fails to comply with environmental regulatory requirements (OECD, 2009[14]).

  • Non-compliance responses may be designed to perform one or more functions, such as: return the violator to compliance; correct internal company management problems that may result (or have resulted) in negative environmental impacts; impose a sanction to punish the violator while also deterring others; remove the economic benefit of non-compliance; or correct environmental damages.

  • The common classification of non-compliance responses is based on the different branches of law authorising each measure (i.e. the type of liability): administrative, civil and criminal. Administrative measures/penalties are applied by a government agency. Civil and criminal measures are imposed, respectively, by civil and criminal courts and are sometimes referred to as judicial response. The general purpose of administrative enforcement is to restore compliance. Civil enforcement generally addresses damage caused to persons or property. For example, civil judicial enforcement in the United States is intended to punish and deter and does not seek compensation for private parties. Criminal enforcement seeks penalties (that may include prison time for individuals) for egregious unlawful behaviour.

Industrial facility consists of several installations.

Installation represents a site-associated equipment and processes regulated under an environmental permit, for example as specified by the Industrial Emissions Directive. In this report, the term plant might also be used.

Liability for environmental damage or environmental liability in most OECD member countries, and in EU legislation, obliges the responsible party to bear the costs of restoring the environment. This would entail restoration to its original state prior to damaged caused or, where this is not possible, to provide for restoration of an equivalent amount and/or level of natural resource or environmental services. The assessment of environmental damage in the OECD is primarily based on resource equivalency analysis to estimate the needs and costs of restoring affected resources or environmental services. The remediation scope may be mandated by law or left to the discretion of the competent authority. Such an authority would determine specific measures using criteria such as technical feasibility, effectiveness and efficiency.

Maximum allowable concentrations (MAC) are binding limits for all users of a given environmental medium, such as air.

Market-based instruments (MBI) are one of several categories of environment policy instruments. They “[…] seek to address the market failure of 'environmental externalities' either by incorporating the external cost of production or consumption activities through taxes or charges on processes or products, or by creating property rights and facilitating the establishment of a proxy market for the use of environmental services” (OECD, 2007[15]). This definition refers to “internalisation of external costs”, which ensures the damage caused by pollution is reflected, or at least better reflected, in market prices. Market-based instruments are different from regulation-based approaches to reducing environmental damage, as the latter do not directly modify prices, even if compliance of course is costly in general. OECD analysis explained why price-based instruments tend to reduce pollution at lower costs than regulations (OECD, 2017[12]).

Natural resource damage assessment is a process that emphasises remediation measures following damage to the environment to offset the loss of natural resources and their services rather than merely seeking to collect monetary damages from the polluter.

Polluter-Pays Principle is the principle according to which the polluter should bear the cost of measures to reduce pollution according to the extent of either the damage done to society or the exceeding of an acceptable level (standard) of pollution (see Box 2.1).

Primary, complementary or compensatory remediation. Primary remediation, as understood in the context of the EU Environmental Liability Directive for instance, seeks to return the damaged natural resources and/or impaired services to, or towards, baseline condition (Bullock and O’Shea, 2016[16]).

  • Complementary remediation addresses the fact that primary remediation may not result in fully restored damaged natural resources/services. It seeks to provide a level of natural resources and/or services similar to that which would have been provided if the damaged site had been returned to its baseline condition.

  • Compensatory remediation refers to action to compensate for interim losses of natural resources and/or services that occur from the date of the damage to when primary remediation is complete. This compensation consists of additional improvements to protected natural habitats and species or water at either the damaged site or at an alternative site, not financial compensation to members of the public.

Operator is defined as any natural or legal, private or public person who operates or controls the occupational activity or, where this is provided for in national legislation, to whom decisive economic power over the technical functioning of such an activity has been delegated. This includes the holder of a permit or authorisation for such an activity or the person registering or notifying such an activity. This report might also refer to a resource user or an operator of regulated activities.

References

[16] Bullock, D. and R. O’Shea (2016), “Valuing environmental damage remediation and liability using value estimates for ecosystem services”, Journal of Environmental Planning and Management, Vol. 59/9, pp. 1711-1727, http://dx.doi.org/10.1080/09640568.2015.1085842.

[3] Chapman, D. and K. LeJeune (2007), 6A: Review Report on Resource Equivalence Methods and Applications (July 2007) Resource Equivalency Methods for Assessing Environmental Damage in the EU (REMEDE), Sixth Framework Programme, Priority 8.1 – 1.5, REMEDE, http://www.envliability.eu/docs/REReviewUS_D6A_Stratus_FINAL.pdf.

[7] Chapman, D., C. Scott and E. Özdemiroğlu (2018), “Economic value for equivalency analysis”, Equivalency Methods for Environmental Liability: Assessing Damage and Compensation Under the European Environmental Liability Directive, J. Lipton, E. Özdemiroğlu, D. Chapman and J. Peers (eds.), Springer Netherlands, Dordrecht, http://www.springer.com/la/book/9789048198115.

[5] Desvousges, W. et al. (2018), “Habitat and resource equivalency analysis: A critical assessment”, Ecological Economics, Vol. 143/74, pp. 74-89, https://www.sciencedirect.com/journal/ecological-economics/vol/143.

[2] European Commission (2013), Environmental Liability Directive: Training Handbook and Accompanying Slides, European Commission, Brussels, http://ec.europa.eu/environment/legal/liability/pdf/eld_handbook/ELD%20Training%20Handbook%20-%202%20days_en.pdf.

[8] Hanley, N. (2002), The Economic Value of Environmental Damage, M. Bowman and A. Boyle (eds.), Oxford University Press, https://global.oup.com/academic/product/environmental-damage-in-international-and-comparative-law-9780199255733?cc=fr&lang=en&#.

[4] Lipton, J. et al. (2018), Equivalency Methods for Environmental Liability, Lipton, J, E. Özdemiroğlu, D. Chapman and J. Peers (eds.), Springer Netherlands, Dordrecht, http://dx.doi.org/10.1007/978-90-481-9812-2.

[9] Martin-Ortega, J., R. Brouwer and H. Aiking (2011), “Application of a value-based equivalency method to assess environmental damage compensation under the European Environmental Liability Directive”, Journal of Environmental Management, Vol. 92/6, pp. 1461-1470, http://dx.doi.org/10.1016/j.jenvman.2010.12.001.

[12] OECD (2017), Environmental Fiscal Reform: Progress, Prospects and Pitfalls, OECD Report for the G7 Environment Ministers, OECD Publishing, Paris, https://www.oecd.org/tax/tax-policy/environmental-fiscal-reform-G7-environment-ministerial-meeting-june-2017.pdf.

[6] OECD (2012), Liability for Environmental Damage in Eastern Europe, Caucasus and Central Asia (EECCA): Implementation of Good International Practices, OECD Publishing, Paris, http://www.oecd.org/env/outreach/50244626.pdf.

[1] OECD (2009), Determination and Application of Administrative Fines for Environmental Offences: Guidance for Environmental Enforcement Authorities in EECCA Countries, OECD Publishing, Paris, https://www.oecd.org/env/outreach/42356640.pdf.

[14] OECD (2009), Ensuring Environmental Compliance, Trends and Good Practices, OECD Publishing, Paris, https://doi.org/10.1787/9789264059597-en.

[15] OECD (2007), “Market-based instruments”, in OECD Glossary of Statistical Terms, Business and the Environment: Policy Incentives and Corporate Responses, OECD, Paris, https://stats.oecd.org/glossary/detail.asp?ID=7214.

[11] OECD (2005), “Environmental taxes”, in OECD Glossary of Statistical Terms, Business and the Environment: Policy Incentives and Corporate Responses, OECD, Paris, https://stats.oecd.org/glossary/detail.asp?ID=6437.

[13] OECD (2004), “Environmentally related taxes”, in OECD Glossary of Statistical Terms, Business and the Environment: Policy Incentives and Corporate Responses, OECD, Paris, https://stats.oecd.org/glossary/detail.asp?ID=6270.

[10] UNECE (2019), Environmental Performance Reviews: Kazakhstan, Third Review, Environmental Performance Reviews Series, United Nations Economic Commission for Europe, Geneva.

Notes

← 1. The term “techniques”, as referred to in this report, relies on the definition used in the EU Industrial Emissions Directive. It describes techniques as both (i) the technologies used by industrial installations; and (ii) the way in which installations are designed, built, maintained, operated and decommissioned. The OECD recognises the important distinction between techniques for prevention versus control of industrial emissions. The BAT documents referred to in this report include both prevention and control techniques.

← 2. With amendments and additions as of 21 June 2016. See http://adilet.zan.kz/rus/docs/P070000535_. Only Kazakh and Russian versions are available.

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