This internalisation of environmental costs can be ensured by imposing environmental regulation or taxes.

A prerequisite for effective implementation is adequate levels of financial support, primarily at Member State level, but also from EU funds; Improving the quality of environmental regulation, and applying the principles of Better Regulation to improve the effectiveness of environment policies; Actively encouraging the development and deployment of environmental technologies and stepping up efforts to promote eco-efficient solutions and define common standards and benchmarks.

The overall figures for annual administrative burden relating to environmental regulation as a whole are difficult to assess, but they have been estimated to be €150 million per year in Denmark and €387 million in Sweden, compared to €1.2 billion in the Netherlands.

The Plan recognizes the key role of environmental regulation as a driver of eco-innovation and foresees a review of environmental legislation.

4. Modernising the role of the public authorities and in particular improving the co-ordination of regulatory policies by: a) ensuring that the European Whole Vehicle Type-Approval system functions efficiently throughout the Union and that the administrative procedures and technical prescriptions of the relevant separate Directives are adapted where necessary, in order to make the system fully operational for all new cars by January 1998; expanding the European type approval system to other vehicles than cars and undertaking efforts to harmonise car registration procedures which act as an obstacle to the smooth functioning of the internal market; b) verifying that new safety and environmental regulations ...[+++] in the automotive field are in accordance with the Treaty and cost-effective and that regulatory policy objectives, which must be based on a strategy with clear priorities and a definite timetable, are consistent; recognising also that high safety and environmental standards can also be an advantage on the global marketplace provided that the rules of the internal market are respected; c) encouraging, wherever appropriate, voluntary agreements between the automobile industry and public authorities in order to address environmental objectives; particular importance is attached in this context to agreements to improve fuel efficiency of automobiles; d) developing further the partnership between the industry and the Commission which was used to prepare the Auto- Oil programme and which led to Commission proposals to reduce car emissions in 2000, noting that this partnership could be widened to include, inter alia, equipment suppliers and Member States' experts in view of contributions to the identification of measures for a subsequent stage to be based on the results of the first stage; e) ensuring a broad dialogue between the Commission, Member States, Automotive Industry, Distributors, Dealers and User Groups on issues concerning the automotive sector, notably ...

Costs incurred as a result of fines or penalties for non-compliance with environmental regulations and similar costs are excluded from the definition of environmental expenditures, but should nevertheless be disclosed either in the profit and loss account or in the notes accompanying the accounts.