Comptroller: Air pollution causes economic losses; defective infrastructure, corruption issues plague state
Economic losses stemming from air pollution amounted to approximately NIS 16 billion in 2015, according to a report released Wednesday by State Comptroller Joseph Shapira that also addressed corruption issues and defects in roadways and buildings.
More than half of the pollution-related loss stemmed from the electricity sector, including costs related to pollution reduction and medical costs and loss of labor from sick workers, according to statistics the comptroller obtained from the Environmental Ministry.
Part of the damage, the report said, was caused by the government’s failure to implement its own decisions in pursuing measures to increase clean energy and move away from carbon-dioxide producing energy sources.
Clean energy was supposed to have accounted for 5% of energy by 2014 and 10% by 2020. Instead, noted the report, clean energy in 2014 accounted for just 1.4% of energy and by 2015 that number was still only at 2%.
Israel, the report stated, is behind most European countries in this area.
Shapira pointed out that fossil fuels and other energy resources that are not clean not only cause climate change and harm humans physically, but also cause quantifiable economic harm.
Already problematic issues were exacerbated recently, he said, when there was a problem with the Tamar Reservoir, which led to “the need to use polluting and expensive energy sources.”
Among the infrastructure and safety issues highlighted by the report, Shapira wrote that the cement used for building here is low quality and below international standards.
Citing the September 2016 collapse of a parking area in the Ramat Hahayal neighborhood of Tel Aviv that killed six people, the report said failure to increase oversight and quality could “lead to tragic results” on a repeated basis.
Drawing attention to the likelihood that at some point in the near future Israel will experience more intense earthquakes, Shapira said many structures have not been built to withstand such a situation.
Similarly, the comptroller criticized the quality of the country’s bridges, pointing out that, as of 2016, 145 had the lowest or “donkey” quality rating, while another 959 had low ratings. He noted the August 14 incident in which a truck crashed into a bridge causing it to collapse, killing the driver and disrupting the use of major related roads.
In another area of safety, the report said oversight of gas use in residential areas continues to be defective, even after the January 2014 tragedy in Jerusalem’s Gilo neighborhood when three members of a family were killed in a gas explosion.
Shapira said there are just two inspectors to review an average of 1,500 gas-safety approval requests per year – meaning staffing is too small to ensure a careful review.
The Transportation Ministry responded to the report saying: “Most of the deficiencies mentioned in the report have been fixed or are in the process of being fixed. One needs to remember that the Transportation Ministry carries out projects in numbers that have not been matched since the founding of the state. Naturally, there are areas that need strengthening and improvement and we are acting to address them as quickly as possible.”
Although it did not provide detailed backup, the ministry contended that even the many deficiencies represented only 0.002% of the projects for which it is responsible.
Addressing corruption and financial inefficiency issues, the report said oversight of tax breaks for the real estate market is weak and leaves a vacuum in which tax fraud and black-market transactions can thrive.
Even though the comptroller would not oppose the idea of granting incentives to build new real estate projects in an effort to increase housing supply and thus reduce prices, he said the issue needed more oversight to block corruption and ensure efficiency.
“A stubborn struggle against the phenomenon of money laundering in real estate could potentially raise tax revenue, reduce housing demand, reduce inequality and raise the feeling of social justice,” the report said.
In the financial sector, the report criticized the Tax Authority’s decision to give a complete tax exemption to some NIS 4.4b. of profits of foreign investors without even setting criteria for which foreign investors will receive these generous exemptions. Those getting exemptions include foreign investors such as the British Apax Partners private equity group, which owns interests in major Israeli companies.
The Tax Authority has said the exemptions are reviewed regularly, but that in some instances foreign investors are given special treatment to encourage them to enter the Israeli market and help provide broad market stability.
Other areas Shapira said were defective included: administration of insurance for special needs for the elderly; regulation of pricing of airport goods; discrimination and poor oversight at the water authority; and inappropriate closed hiring processes for the defense contractor Rafael Advanced Defense Systems.
The report is expected to be sent to the European Organization of Supreme Audit Institutions as part of a review that was being conducted simultaneously by 15 countries. •