CLEAR: the first European project for local authorities on environmental accounting by Ilaria Di Bella

Heading towards sustainability means bringing clearness on how to manage the environment and how to promote involvement and responsibility. Now is the time to set a “tool box” for administrators working on the territory.
At the local level, not only in large towns but in small ones as well, environment is a very concrete problem involving the control of pollution and the quality of the territory, protection policies and strategic opportunities, resources availability and their social distribution.

What are the environmental effects of territorial policies today? In other words, how much does the environment cost, or better, how much each single authority is already spending to handle these problems? And how much it shall or should spend in the future? According to estimations, at a national level, the cost of the environment is somewhere around 2% of the GDP; at a local level, this cost varies between 18 and 22%. These problems and costs are still expressed according to administrative criteria only and do not appear in the public budget.

How to explain and enhance this expenditure to citizens and to the government?
To head towards sustainability, public administrators need new and simple tools that are adequate to collect, record, manage and communicate costs and environmental benefits for all their actions on the territory. These tools may give birth to new projects, important challenges and new policies.


What is CLEAR
CLEAR (City and Local Environmental Accounting and Reporting) is the first Italian project for environmental accounting applied to local authorities. It foresees “environmental budgeting” to be drawn and approved by 12 Municipalities and 6 Provinces in Italy.
The project which was born in October 2001 and shall be finished in October 2003 was approved and 50% co-financed by the European Commission as part of the LIFE-ENVIRONMENT program. The total value of CLEAR is 1.928.664 Euro.
In English, CLEAR means limpid, transparent, clean and “to clear” means to clarify. Clarify public accounts, bring to light the environmental costs of development. Give local administrators the possibility to take decisions, aware of the effects and impacts of policies on the environment.
CLEAR is testing the first law proposal on environmental accounting for Municipalities, Provinces, Regions and Government, presented in ’97 by senator Fausto Giovanelli and subscribed by all parliamentary groups. The proposal acknowledges all the recommendations included in the V Action Program on Environment of the European Union, stressing the importance of environmental accounting for a sustainable development. The Italian Senate is now studying this law proposal.

What is new in CLEAR
New institutional process
CLEAR is an innovative project because it inserts the environmental accounting, thus the organized and systematic information on the state of the territory and of natural resources, into the institutional process of democratic management.
This means that Municipalities and Provinces which are partners of CLEAR shall not only draw up environmental budgets but shall examine, discuss and approve them following the same procedures as for the financial budget and balance sheet.
Administrators shall thus assume the responsibility towards their voters not only for the economic data on development but for ecological data as well.

New decision-making process
Thanks to CLEAR, the environmental accounting leaves experts’ laboratories and goes straight to the bodies. To draw up the environmental budgeting, local administrators will be brought face-to-face with territory stakeholders.
CLEAR foresees to achieve a flexible model of environmental budgeting, so that each body, starting from a common base, may customise a “made-to-measure” budget, depending on its own specific management requirements.

New governance
The approval of the financial budget and the “green” one during the same session will allow useful debates enabling to identify and explain the environmental effects of economic and sectorial policies.
This means that territory management shall ground on a natural (and transparent) base of knowledge of the environment resource values, thus accounts can be optimised making policies more eco-efficient.
Designed this way, the environmental accounting may become one of the most efficient instrument in the “tool box” for a renewed governance.

Who takes part in CLEAR
CLEAR’s prominent players are 18 Italian local authorities, of small, medium and large size, located in the North, Centre and South of Italy, in very different territories.
The leader is the Municipality of Ferrara. Municipalities of Bergeggi, Castelnovo ne’ Monti, Cavriago, Grosseto, Modena, Pavia, Ravenna, Reggio Emilia, Rovigo, Salsomaggiore, Varese Ligure as well as Provinces of Bologna, Ferrara, Reggio Emilia, Modena, Naples and Turin take part in it.
These 18 players are a representative sample also because of their frequent municipality-province partnership, which is one of the variables that the project shall take into consideration to set vertically-integrated local territorial policies.

Local authorities taking part in the CLEAR project, are leaders in environmental monitoring and in effectiveness / efficiency control of these policies. In fact, all of them have already adopted at least one environmental management tool or environmental accounting system to help policy makers in taking decisions. Besides writing periodical Reports on the State of Environment, they have all adopted the “Local Agenda 21” procedures for a sustainable development and are members of the Italian “A21L” Coordination.
The other partner of the project is the Emilia Romagna Region, which coordinates the local experiences on the territory with a view to a possible expansion of the “CLEAR Method” to Regions.

Where does CLEAR lead
The project is born to improve local governance on environment and to provide administrators with practical tools to support their decision-making process.
CLEAR has been divided in three phases. During the first (October 2001 - December 2001), the project was launched and started and the methodology perfected.
The second phase (year 2002) is devoted to the coordinated testing and it foresees that each partner will draft its own environmental budgeting. The structure of the budget, the organisation of data and the procedures used are the same for all partners, but each document will be different as it will acknowledge the administrators’ and the community’s requirements. During discussion and monitoring workshops, Municipalities and Provinces study and share the contents and the method. Finally, Town and Province Councils will approve the environmental budget as they do for the financial budget and for other planning documents.
During the third phase (January 2003 - October 2003), participants will take stock of the various experiences and of collectively acquired knowledge; on these basis the “CLEAR Method” will be prompted, taking into consideration the accounting principles, the procedures and the best practices.

The great number of local authorities taking part and their representativeness ensure that the “CLEAR Method” may be easily reproduced and extended to other Municipalities and Provinces, and in the future to Regions as well.

What happens with CLEAR
The local environmental budget
It is a document which records all that happens to the environment of a certain Municipality during one year. For example: how much waste has been produced, how much water has been consumed, how much soil has remained unbuilt, if and how green has increased or decreased, the level of air pollution, how much energy has been produced and consumed, how many resources have been used or made available.
The local environmental budget does not include only numeric data (physical and/or financial) but also information on the environmental results of policies implemented or to be implemented by the public administration. If for example, a Municipality has decided to grant new planning permissions, the environmental budget shall record the expected ecological impacts (increase in the production of waste, increase in the energy produced and consumed, state of the green, parks and gardens, condition of the uncultivated land etc.). If a Province has decided to build a cogeneration plant, the environmental budget shall record the environmental results related to it (disposed waste, produced energy, used energy etc.).
With time, there shall be a final environmental balance sheet including results of implemented policies, and a budget containing the information and analysis about future planning.

Data and indicators
There are numerous available data on the condition of the environment and on the relationship between economy and ecology, which are collected and processed according to various models and methods. CLEAR proposes local administrators to choose the most significant and useful ones according to their specific requirements and adopt them to assess the liveability of the urban environment.
To reach this target, CLEAR grounds on a series of statistic tools internationally validated and used, such as: pressure indicators (measuring the pressure of human activity on the environment in terms of pollution and the policies implemented); sustainability indicators of the European Commission; the Ecological Footprint; the SERIEE (Système Européen de Rassemblement de l’Information Économique sur l’Environnement, a system of specific satellite accounts along the traditional financial budgeting), the EPEA (belonging to the SERIEE and used to assess the effectiveness and efficiency of the expenditure to be made to protect the environment).