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ECONOMIC ASPECTS OF SUSTAINABLE DEVELOPMENT IN HUNGARY

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INTERNATIONAL COOPERATION

Decision-Making: Coordinating Bodies   

The governmental decision making process for international cooperation and trade is based on the ministries and authorities taking into account the business sector. The Chamber of Commerce, for example, has a significant role in trade-related decision making.

Decision-Making: Legislation and Regulations 

No information is available.

Decision-Making: Strategies, Policies and Plans  

No information is available.

Decision-Making: Major Groups Involvement  

No information is available.

Programmes and Projects 

No information is available.

Status 

In the previous years of the transitional period, there was no extra budget or special state fund for promoting sustainable development activities in developing countries. Nevertheless, Hungary is interested in various international cooperative mechanisms, in particular those offered by the UN system. Hungary has participated as an observer on the Environmental Policy Committee of the Organisation for Economic Co-operation and Development (OECD) since 1992, becoming a full member of the organization in 1996.

Pan-European cooperation is regarded as important. The issue of European integration is one of the most important priorities at the governmental level and Hungary aims to join the European Union (EU) as soon as possible. Hungary signed a trade agreement with the EC in 1988. The Phare Environmental Sector Programme launched in 1990 was a significant step in bilateral cooperation. An Association Agreement with the Commission of the European Communities was signed in 1991 and enacted in 1994.

Challenges

No information is available.

Capacity-building, Education, Training and Awareness-raising  

No information is available.

Information

No information is available.

Research and Technologies  

No information is available.

Financing

No information is available.

Cooperation

No information is available.

 

 

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This information was provided by the Government of Hungary to the fifth session of the United Nations Commission on Sustainable Development. Last Update: 1 April 1997.

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TRADE

Decision-Making: Coordinating Bodies   

No information is available.

Decision-Making: Legislation and Regulations 

No information is available.

Decision-Making: Strategies, Policies and Plans  

No information is available.

Decision-Making: Major Groups Involvement  

No information is available.

Programmes and Projects 

No information is available.

Status 

The Hungarian economy is going through a period of substantial transition to a market economy characterized by features of deep recession from the mid 1980s. Large-scale structural and ownership changes have taken place in recent years, which are expected to lead to a more efficient economy. Parallel to the recession, industrial production has fallen back to the level of the 1970s. As a consequence, emissions caused by industries have fallen, and the quality of environment in certain regions has improved.

The first stage of the economic changes was characterized by increasing unemployment, a relatively high inflation rate, an increasing poverty gap, and a worsening standard of living for large groups of people. At present, there are already significant positive signs in terms of balancing the state budget, meeting foreign debts, a decreasing inflation rate, and increased efficiency of key economic sectors.

The process of privatization, new management restrictions, and the development of new enterprises all function together to develop a more environmentally sound business sector. This kind of operation is involved increasingly in trade activity of Hungary. The scientific and technological community, together with the education and culture sector, have a role in the modernization process according to a comprehensive governmental initiative. This initiative deals primarily with the preservation of national scientific activities, the qualitative development of a research network, and the improvement of material-technical conditions that are necessary for effective operation.

During the 1960s and 1970s, the country conducted an active policy to foster the acceleration of development in various developing countries. These activities have essentially been reduced for the present transition stage as a consequence of the substantial domestic socioeconomic changes and the corresponding national priorities, the scarcity of various resources, and the changing orientation in international trade and collaboration.

Hungary has good connections with various developing countries in terms of trade. A remarkable part of this trade is completed by taking into account the particular production/trading conditions of the relevant developing country partners. A significant part of the exports contain products and technologies of the industrial and agricultural industry sectors.

Challenges

No information is available.

Capacity-building, Education, Training and Awareness-raising  

No information is available.

Information

No information is available.

Research and Technologies

No information is available.  

Financing

No information is available.

Cooperation

No information is available.

 

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This information was provided by the Government of Hungary to the fifth session of the United Nations Commission on Sustainable Development. Last Update: 1 April 1997.

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CHANGING CONSUMPTION PATTERNS

Decision-Making: Coordinating Bodies   

The body primarily responsible for the consumption issue is the Ministry for Environment and Regional Policy, in cooperation with Parliament and the Government. Other ministries and state agencies are responsible for particular consumption-related areas. For example, energy, trade, or tax related issues are primarily coordinated by the Ministry of Industry, Trade and Tourism; Hungarian Energy Agency; and the Ministry of Finance respectively. Certain national level water management and regulation problems are the main responsibility of the Ministry of Transport, Telecommunication and Water Management.

Decision-Making: Legislation and Regulations 

The Act on Public Procurement enacted in 1995 is regarded as an important legislative measure to influence public consumption patterns. According to this Act, public procurement should be based on environmental interests. The role of local authorities (governments) and the private sector is also increasing rapidly in influencing consumption and production attitudes.

Environmental taxation has been introduced as an instrument to influence consumer behaviour. Since 1990, corporations with environmental programmes have been able to take reductions in taxes on corporate profit. Starting in 1991, 20% of environmental investments could be deducted from taxes. Since 1992, enterprises with foreign participation and meeting certain conditions have enjoyed 100% tax abatement for products and equipment serving environmental protection. Excise taxes on liquefied natural gas and PB-gas have been used since 1990 to ensure the competitiveness of environmentally sustainable fuels. Motor vehicles fitted with catalytic converters have enjoyed excise tax abatement since 1992.

Environmental fines play an important role in changing consumption and production patterns although, according to experience, the efficiency of this instrument has not been sufficiently significant. As of 1995, the following fines have been introduced: land protection fine, sewer fine, environmental fine, air pollution fine, noise and vibration fines, and nature conservation fine. Specific product fees exist on fuels, tires, refrigerators, packaging materials, and accumulators. The fees collected go to the Central Environmental Fund to be granted, upon application, to finance environmental protection activities. Another fee on water volume used goes to the Water Management Fund.

A system of eco-labeling has been introduced. Awards are given to deserving products, and the right to use the eco-label is granted for a maximum of 2 years. Hungary was the first, among countries with similar economic and political situations, to establish a system of eco-labeling. The first experiences have indicated that this mechanism has been successful in promoting wider use of environmentally sound products and change in consumption patterns.

Decision-Making: Strategies, Policies and Plans  

Environmental strategy has to be handled not as an isolated but rather as an integral part of the economic development programme. A series of recently adopted environmental laws, other sector-oriented legal instruments, and the new National Environmental Programme are based on this approach.

Decision-Making: Major Groups Involvement   

Several fora have been established for interagency coordination and cooperation with representatives of various stakeholders. Such consultative mechanisms are provided by the Hungarian Commission on Sustainable Development (CSD) and the recently established National Environmental Council. There are several other consultative and advisory boards and commissions in which major groups are represented (such as associations of local governments, environmental NGOs, associations and chambers of entrepreneurs, trade unions, association for consumer protection, etc.).

Programmes and Projects 

No information is available.

Status 

Economic development is a key national target. Its sustainability, however, is not considered to mean a limitation of development and consumption for Hungary, but rather to conduct economic and efficient management of natural resources. By using environmental protection, economic incentives, legal regulations, and increasing public awareness; economic development can be achieved with more efficient material and energy use, and with fewer environmentally hazardous wastes and emissions.

Recent changes in production and consumption patterns have been basically determined by economic recession and the transition to a market economy. Following an extended period of stagnation, industrial production decreased at an even higher pace from 1990 onward, falling to the level of the 1970s. In general, industrial and agricultural production has decreased as well as energy use. Industrial structures have also changed: metallurgy, the construction materials industry, and the machine industry, for example, have declined. This can be considered unambiguously positive for the environment. The general decrease of industrial production reduced direct emissions and, in certain regions, resulted in an improved state of environment. Both structural changes and the large-scale liquidation of industrial companies significantly reduced emissions of air pollutants. The volume of industrial wastewater effluents requiring treatment was also significantly reduced.

Consumption of coal has been reduced considerably due to the introduction of nuclear energy. The single nuclear power plant provides about half the electric energy for the country. Since 1990, total energy use has increased, especially within the residential sector. General consumption of goods has declined in recent years. This trend does not result from more environmentally conscious consumers, but from lowered income levels.

The phase of economic development in which Hungary is in now can result in very quick and (from the environmental perspective) very favourable reconstruction in the production sector. First of all, there is a great possibility for restricting obsolete industrial technologies and replacing them with environmentally sound ones. In this way, economic modernization can also yield the proper environmental benefits. The best and cheapest way of protecting the environment is prevention. At the moment, the most serious environmental hazards, and those which directly threaten human health, can be stopped only by modernization. Cleaning equipment, joined to obsolete technologies, is very expensive, and does not eliminate the pollution of the environment. It only delays the real solution to the problems.

Challenges

No information is available.

Capacity-building, Education, Training and Awareness-raising  

No information is available.

Information

No information is available.

Research and Technologies

No information is available.  

Financing

No information is available.

Cooperation

No information is available.

 

 

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This information was provided by the Government of Hungary to the fifth session of the United Nations Commission on Sustainable Development. Last Update: 1 April 1997.

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FINANCING

Decision-Making: Coordinating Bodies   

No information is available.

Decision-Making: Legislation and Regulations 

The main purpose of the Act on Environmental Product Charges is to create the necessary financial resources for the mitigation and prevention of environmental damages caused by certain products. Product charges must be paid for the following products: fuels, tires, refrigerators, packaging materials, and accumulators.

Decision-Making: Strategies, Policies and Plans  

No information is available.

Decision-Making: Major Groups Involvement  

No information is available.

Programmes and Projects 

No information is available.

Status 

At the present stage of transition to a market economy, financial resources are insufficient to serve the rapid recovery of the economy and simultaneously solve accumulated environmental problems. Thus, the activities undertaken have been mainly directed at enhancing the implementation of Agenda 21 within Hungary only.

Environmental investments in proportion to GDP rose from 0.5% in 1985, to 1.5% in 1986 and 1987, and fell to 0.6% in 1991. The proportion began to grow again from 0.9% in 1992 to 1% in 1993. This indicator does not say much about the transitional economy, however, because the investments are too general.

In critical sectors, such as mining, metallurgy and the chemical industry, environmental protection investments are significant, while in high-earning branches, such as tourism, expenditures are minor. The share of the whole retail sector in environmental investments hardly surpasses 1%. There is a real danger that the crisis sectors will not be capable of maintaining environmental protection. As in much of the world, investment in water protection dominates in Hungary.

Implementation of the polluter-pays principle is difficult because of the economic transition. This is true not only in bankrupt branches, but also under the sphere of privatization. The question is whether new owners should bear responsibility for pollution caused by enterprises which were previously state property, or whether the state (that is, the tax payers) should shoulder this responsibility. Both solutions create controversy. If the state takes responsibility, it would be the subject of unrealized and unsupervisable obligations. It would also be forced to determine responsibility, which might then limit individual polluters from finding investors.

Challenges

No information is available.

Capacity-building, Education, Training and Awareness-raising  

No information is available.

Information

No information is available.

Research and Technologies  

No information is available.

Financing

The Central Environmental Fund, administered by the Ministry of Environment and Regional Policy, is a public fund which promotes the prevention, reduction, and elimination of threats to the environment. At least 75% per cent of the financial resources of the fund are granted as direct support or loans for investments promoting the protection of the environment. The Water Management Fund promotes the implementation of certain tasks in the water management sector, including the economical use of water and protection of water management. The assets of this fund come primarily from payments of a water resources fee.

The Regional Development Fund, administrated by the Ministry for Environment and Regional Policy, promotes development policies utilizing regional resources to foster the social and economic renewal of regions. The legal basis of the fund is the Act on Regional Development and Physical Planning (1996). The fund's financial resources are granted as soft loans (interest rate subsidies: 30%), with a loan moratorium of 2 years.

Cooperation

No information is available.

 

 

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This information was provided by the Government of Hungary to the fifth session of the United Nations Commission on Sustainable Development. Last Update: 1 April 1997.

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TECHNOLOGY

Transfer of Environmentally-Sound Technology

Decision-Making: Coordinating Bodies   

No information is available.

Decision-Making: Legislation and Regulations 

No information is available.

Decision-Making: Strategies, Policies and Plans  

No information is available.

Decision-Making: Major Groups Involvement  

No information is available.

Programmes and Projects 

The National Environmental Programme, adopted by the Government in 1996 and currently being considered by Parliament, underlines the importance of eco-efficiency and indicates the key directions for the promotion and implementation of this concept. Training and public awareness issues are also considered by this programme. The success of the programme depends on financial resources for its implementation, in particular for the development and application of environmentally sound technologies and related capacity building. Environmental investments in proportion to GDP rose from 0.5% in 1985, to 1.5% in 1986 and 1987, and fell to 0.6% in 1991. The proportion increased again to about 1% annually during the period of 1993-1996. According to the Programme, the direct environmental investments should grow to 1.7% by 2002.

The National Programme for Environmental Research and Development is being formulated jointly by the Ministry for the Environment and Regional Policy, and the National Committee of Technological Development. The programme places special emphasis on improving the technical and technological conditions for environmental protection. Elements of this programme include: development of environmentally sound public utilities; technologies for healthy drinking water supply; environmentally-sound technologies integrated into production; material, energy and water saving technologies; and environmental sanitation. A special eco-labeling system was recently introduced under the initiative of the Ministry for Environment and Regional Policy.

Status 

No information is available.

Challenges

No information is available.

Capacity-building, Education, Training and Awareness-raising  

No information is available.

Information

No information is available.

Research and Technologies

No information is available.  

Financing

No information is available.

Cooperation

Research and technological cooperation with developed countries is of fundamental importance for Hungary. Emphasis is on the development of technologies for the use of new and renewable energy resources and environmentally sound vehicles, agriculture, waste management, etc. Hungary supports the creation of an international information network at sub-regional, regional, and global scales. To enhance environmentally sound production processes, governmental and international support for the private sector is necessary.

Hungary participates in the following areas of international cooperation: (1) bilateral international agreements with several countries; (2) R&D programmes of the European Union (EU); (3) 72 COST programmes (European Cooperation in the Field of Scientific and Technical Research); (4) as a member of EUREKA (a Europe-wide Network for Industrial R&D) since 1992, and is currently participating in 35 projects; (5) as a member of the European Laboratory for Particle Physics (CERN) and through a cooperation agreement with the European Space Agency (ESA); (6) cooperation with the scientific programme of the North Atlantic Treaty Organization (NATO); and (7) cooperation with the Commission of Scientific and Technological Policy of the Organisation for Economic Co-operation and Development (OECD).

 

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This information was provided by the Government of Hungary to the fifth session of the United Nations Commission on Sustainable Development. Last Update: 1 April 1997.

 

 

Biotechnology

Decision-Making: Coordinating Bodies   

The biotechnological R&D programmes are conducted in academic research institutes. Some of the regulatory tasks and programmes are under the aegis of the Ministry of Agriculture; the Ministry of Industry, Trade and Tourism; and the Ministry for Environment and Regional Policy. There is now a special concern about biosafety and the establishment of an interministerial body is planned to consider the problems related to genetically manipulated organisms, and to assist policy-planning and the formulation of relevant regulations.

Decision-Making: Legislation and Regulations 

No information is available.

Decision-Making: Strategies, Policies and Plans  

No information is available.

Decision-Making: Major Groups Involvement  

No information is available.

Programmes and Projects 

No information is available.

Status 

The use of biotechnology is still at an early stage in Hungary. Biotechnology is considered as one of the most dynamic disciplines of the last few decades. It is applied not only for technologies using genetically manipulated microorganisms, but in a much wider sense, including the production and application of enzymes, and the production of hormones. The main fields of development and application of biotechnology are the following: soils, water pollution treatment, degradation by biotechnological means; production and processing of biomass, industrial production, and recycling processes.

Regarding soil related applications, the main task is compost recovering with adequate microorganism content. Thus, the bacteria species in the soil should be selected according to the original conditions, and if necessary, genetically modified microbes should be introduced into the soil by compost. There are also two essential biotechnological procedures to be performed and studied in Hungary. First, in order to intensify nitrogen fixing, the number of nodule bacteria is increased; and second, large quantities of xenobiotics in soil are degraded by genetically modified microbes, since they consume the contaminant.

For water pollution treatment, the removal or reduction of nitrogen and phosphorous content of waters can be solved by biological and biotechnological means. Such methods are being developed and tested for treatment of waters with high nitrogen and phosphorous content and also for proper cleaning of industrial, agricultural, and communal wastewater to prevent the pollution of rivers and lakes. Typically, genetically modified microorganisms can be successfully used for treatment of wastewater from various industrial plants. Different technologies are being developed for the treatment of communal wastewater and the sludge (mainly useful biomass) produced in wastewater treatment stations.

Because of the importance of agricultural production in Hungary, biotechnical methods are being developed and will play an increasingly important role in the future in particular for that sector. A bio-industrialization programme is now planned for production of biomass (primary and secondary plant biomass, primary and secondary animal biomass, food processing, and feed production). Some results have been achieved for plant biomass production, where conventional selection methods can solve both the yield quantity and the quality problems, but biotechnology has an increasing role.

Biotechnological methods are also being developed for food preserving and storing. These preserving techniques should offer longer life-time, and preserve the vitamin content and the biological value at a high level with an acceptable aesthetic form. Applied biotechnological and food processing research institutes have a key role in the development of these techniques.

More concrete progress has occurred for biotechnological applications in industrial production, especially for medical and paramedical products, including enzymes and intermediaries. In this area, the most important field is the production of factor vaccines. Production of antibiotics is also a significant area where Hungary has some traditions. Special attention is being paid to new resistant microorganisms and beta-lactase derivative antibiotics.

Challenges

No information is available.

Capacity-building, Education, Training and Awareness-raising  

No information is available.

Information

No information is available.

Research and Technologies

No information is available.  

Financing

No information is available.

Cooperation

Hungary takes part in various international programmes on biotechnology development and is also an active participant in the negotiations on the planned biosafety protocol to the Convention on Biological Diversity. The international programmes of the following agencies are particularly relevant to Hungary: the United Nations Food and Agriculture Organization (FAO), the United Nations Environment Programme (UNEP), the United Nations Industrial Development Organization (UNIDO), and the Organisation for Economic Co-operation and Development (OECD).

 

 

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This information was provided by the Government of Hungary to the fifth session of the United Nations Commission on Sustainable Development. Last Update: 1 April 1997.

Click here to link to the Biosafety Information Network and Advisory Service (BINAS), a service of the United Nations Industrial Development Organization (UNIDO), which monitors global developments in regulatory issues in biotechnology.
Click here to go to the Web Site of UNEP's International Register on Biosafety.
Click here for the International Centre for Genetic Engineering and Biotechnology Biosafety WebPages

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INDUSTRY

Decision-Making: Coordinating Bodies   

No information is available.

Decision-Making: Legislation and Regulations 

No information is available.

Decision-Making: Strategies, Policies and Plans  

No information is available.

Decision-Making: Major Groups Involvement  

No information is available.

Programmes and Projects 

No information is available.

Status 

One of the positive signs of the socioeconomic transition in Hungary is the increased environmental awareness within the industrial sector. Most big enterprises and a few small and medium sized enterprises have themselves adopted sustainable development policies. The Government supports this trend through policies to encourage increasing the efficiency of resource use, including reuse, recycling, and waste reduction. Interest groups and representatives of enterprises track new environmental regulations and comment on planned changes. The Ministry of Environment and Regional Policy has consulted, for example, with the Hungarian Association of Plastic Industry on the necessity and technical possibilities of phasing out CFCs used in plastic foam production. One of the most active organizations in this context is the Environmental Committee of the Hungarian Federation of Employers.

Enterprises in the chemical industry, refineries, several producers of building materials, paper factories, food producers and some other enterprises have adopted, to some extent, the stewardship concept and, based on it, formulated and introduced environmentally sound technological, managerial standards and practices. This progress is reinforced by changes to international trade regulations, the increasing share of trade with the industrialized countries, and the related environmental requirements. Changes to the tax and price systems related to natural resources, energy and raw materials represent a further essential factor. Environmental product charges and fines for environmental pollution also contribute to these changes.

Business ventures focusing on environmental protection have increased rapidly in Hungary. The large scale privatization process has also contributed to changing attitudes. The State Property Agency which coordinating privatization, takes into account "inherited" environmental problems and sets the environmental criteria for new owners. Quality control systems and certificates, in relation to the International Standards Organization standard ISO 9000 for example, are spreading within Hungarian industry. Businesses are becoming "green" enterprises, such as the Hungarian State Railways Conference which is expanding its services in an environmentally sound way. In the banking sector, environmental concerns and responsibilities have increasingly been taken into account.

Despite these positive signs, the state has not adequately regulated industry from an environmental point of view. Price regulations on certain environmentally hazardous products (for example, detergents and fertilizers) have not been introduced.

Following an extended period of stagnation, industrial production decreased at an even higher pace from 1990 onward, falling to the level of the 1970s. In general, industrial and agricultural production has decreased as well as energy use. As a consequence, emissions caused by industries have fallen, and the quality of environment in certain regions has improved. Industrial structures have also changed; metallurgy, the construction materials industry, and the machine industry, for example, have declined. This can be considered unambiguously positive for the environment. The general decrease of industrial production reduced direct emissions and, in certain regions, resulted in an improved state of environment. Both structural changes and the large-scale liquidation of industrial companies significantly reduced emissions of air pollutants. The volume of industrial wastewater effluents requiring treatment was also significantly reduced.

Challenges

No information is available.

Capacity-building, Education, Training and Awareness-raising  

No information is available.

Information

No information is available.

Research and Technologies  

No information is available.

Financing

No information is available.

Cooperation

No information is available.

 

 

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This information was provided by the Government of Hungary to the fifth session of the United Nations Commission on Sustainable Development. Last Update: 1 April 1997.

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TRANSPORT

Decision-Making: Coordinating Bodies   

No information is available.

Decision-Making: Legislation and Regulations

No information is available. 

Decision-Making: Strategies, Policies and Plans  

No information is available.

Decision-Making: Major Groups Involvement  

No information is available.

Programmes and Projects 

The Hungarian Government has urged local governments to prepare traffic control measures which contribute to emission reduction. A City Bus Greening Programme has been introduced to focus on the replacement of old bus motors with environmentally sound ones which meet European Union (EU) emission standards.

Status 

Businesses are becoming "green" enterprises, such as the Hungarian State Railways Conference which is expanding its services in an environmentally sound way.

Emissions of sulphur, nitrogen compounds, and other air pollutants cause significant environmental problems in Hungary. Emissions from traffic are now the major source of air pollution, while those from industry have decreased over the last two years, mainly due to the economic recession. Mortality related to air pollution is slightly increasing.

Challenges

No information is available.

Capacity-building, Education, Training and Awareness-raising  

No information is available.

Information

No information is available.

Research and Technologies

No information is available.  

Financing

No information is available.

Cooperation

No information is available.

 

 

* * *

This information was provided by the Government of Hungary to the fifth session of the United Nations Commission on Sustainable Development. Last Update: 1 April 1997.

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SUSTAINABLE TOURISM

No information available.

 

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