Another innovative mechanism was the establishment of a PREVair scheme by the "Maison de l'Environnement" of Chalon-sur-Saône, through a "banking pool" of several local banks under the aegis of the Chamber of Commerce and Industry of the Bourgogne region.

Other banks in Dijon, Grenoble and Troyes have expressed their interest. Internationally, ECO-Conseil is in discussion with banks in Spain and Portugal to transfer PREVair there. The division of labour between the bank and ECO-Conseil is approximately as follows: the bank deals with all financial questions and final contractual issues, ECO-Conseil deals with the technical assistance aspects, and outreach outside of France.

ECO-Conseil representatives have presented the PREVair scheme at UNEP meetings (at the occasion of the international celebrations for World Environment Day in Beijing and Pretoria), at a meeting of the Global 500 Forum of UNEP (Kuala Lumpur), and in such diverse countries as the Philippines and Argentina.

4. Relevance for Central and Eastern Europe

The process of economic restructuring in CEEC will lead to the number of SMEs increasing sharply, as has already happened since 1989. Unfortunately, such SMEs collectively pollute a lot, and create a diffuse pollution which is very expensive to fight. It in particular leads to much higher than otherwise needed expenditures on wastewater treatment plants. (This is one of the reasons why the Agence de l'Eau Rhin-Meuse  -  the French governmental agency in charge of water quality in the Rhin-Meuse river basin -  is one of the several central government agencies member of the Comité PREVair.)  

Since the capital stock of SMEs is being (re)constituted very fast at the present time, it is important that new investment incorporate as much as possible sound environmental considerations, to avoid future costly end-of-the-pipe adjustments.

That is the main rationale for trying out this SME environmental financing scheme in Central and Eastern Europe. Such a programme could make the difference between an SME investing the absolute minimum it needs now, and a better equipment which it otherwise would not consider.

The agricultural aspect of PREVair may be especially relevant in CEE countries which struggle with a restructuring of their agriculture, with large potential problems if restructuring leads to a large number of farm hands losing their livelihoods (e.g. rural exodus potentially adding to strain in cities and crating social unrest, as well greater as political instability), but also opportunities if private farms can obtain investments to modernize, and e.g. produce high-quality agricultural goods for exports with continued low synthetic chemical input (under an "organic" label?).

The restructuring of Eastern European agriculture is the major (budgetary) obstacle to a quick integration of many countries in the EU, as the extension of the present EU Common Agricultural Programme would stretch the capabilities of all present EU members, even the most "pro-widening". This is of course also a problem inside the EU, including one of the largest environmental ones. 

Maybe the introduction of PREVair type schemes can be one of the steps required to "soft land" Eastern European agriculture. In this case, the need for an agriculturally-trained eco-counsellor would be even more important, as bankers usually know even less about agriculture (except specialized banks) than they do about industry and services.

In 1993, ECO-Conseil started a project of sustainable regional development for the region of Baranya in Southern Hungary (with, among others, the Ormansag Foundation as main partner, winner of the 1995 UNEP Global 500 Award). In the course of this project, a local bank became interested in the PREVair scheme and made a pre-feasibility study for the introduction of the scheme in Baranya.  We therefore decided to try to create the right enabling environment for a potential transfer of PREVair to Hungary as a pilot-project, for potential expansion to other CEE countries.  To promote the personal contacts which might create the necessary trust for the transfer, we organized visits of French bankers to Hungary, as well as visits of Hungarian bankers to Alsace. 

In addition, national and international should seek to focus on the most salient bottlenecks preventing such mechanisms from being adopted in other circumstances.  It is probable that such bottlenecks are already well-know documented ones, and already on the agenda of international institutions, but whose linkage to the SME problem might give a new impetus to the political will and priority-setting necessary to solving them.

Such priority-setting may be helped if it were more clearly communicated to policy-makers the tremendous positive impact which a healthy middle segment of the economy brings with it. The positive reinforcement and virtuous circle resulting from a strong and vibrant small to medium size business sector on the social and political stability of a country is difficult to overestimate.  A strong SME sector is not only the basis of a diversified and resilient economy, as well a creator of local employment, but also the basis for a strong middle class. It is the growth of a broad middle class which is the driver of a civil society which can serve as an antidote to political abuses of power. It may be observed that stable democracies (i.e. those without significant casualties due to internal civil strife such as in India) are the ones which also possess the broadest middle class, as well as the strongest medium sized business sector.

In this case, it may be justified to say that economic empowerment truly leads to political empowerment, and that strong SMEs are one of the keys of a stable democratic order.

5.2   specific conclusions and recommendations

While detailed quantitative details about reduced emissions are not available (partly because of the reluctance of SMEs to face the hard facts of their pre-investment pollution levels), the 8 year multi-million environmental investments track record of PREVair in over 300 small companies has shown that it is possible the overcome the traditional problems associated with SMEs.  Further research to evaluate the exact quantitative environmental benefits would be useful, to prove without a doubt the effectiveness of the PREVair approach.

SME problems, mainly high costs associated with project identification and evaluation, are borne by a variety of actors, but mainly the bank.  In turn, the bank is able and willing to take a risk because of the strong trusting relationship which it has established with the European Institute ECO-Conseil (an environmental capacity-building NGO) over the years, and because it can dispose of a human infrastructure which was created by the capacity-building efforts of ECO-Conseil, i.e., the training of eco-counsellors. The second major success factor is the widespread ownership by stakeholders represented in the Committee of Experts. These experts, coming from national, regional and local government and administrations, business and farmers associations, training bodies and an NGO, as well as private companies, feel a personal stake in the success of PREVair, and after the visible success of the scheme, pride in their contribution to make local SMEs more environmentally sound.

Thus this multi-sector government-business-NGO partnership is a crucial factor in the sustainability of the programme.

Finally, a key question to ask is whether the overall economic and social environment, including the existence of social safety nets etc., is a necessary condition for the success of PREVair, or just another positive enabling factor.  The recent transfer of PREVair to other regions of France, including ones with much lower per-capita income, will bring some empirical data to bear on this question (remember that Alsace has the second-highest per-capita income after the Paris region). It would also be interesting to test PREVair in the less favourable type of economic environment which predominates today in Central and Eastern Europe.