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There is widespread concern that the costs of reducing environmental
pollution in Eastern Europe will divert resources that would otherwise
be available for industrial modernization. In Discussion Paper No. 482,
Research Fellow Gordon Hughes argues that the general level of
exposure to major pollutants in Eastern Europe is in fact not high in
relation to levels in the OECD countries, although there are a number of
severely damaged areas. Even without specific environmental policies,
the process of general economic reform, together with the energy
conservation induced by higher energy prices, will reduce emissions by
nearly 50%. A modest fraction of the general investment in industrial
modernization will solve the remaining problems of current emissions
provided that sensible systems of environmental charges are enforced.
Eastern Europe will then be faced with the problem of cleaning up the
aftermath of past industrial activity, but this can be tackled over an
extended period, as it has been elsewhere. This paper was presented at a
November lunchtime meeting, which is reported in greater detail in this
issue of the Bulletin. |