EUROPEAN COMMISSION. Better Regulation "Toolbox" This Toolbox complements the Better Regulation Guideline presented in in SWD(2015) 111

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1 EUROPEAN COMMISSION Better Regulation "Toolbox" This Toolbox complements the Better Regulation Guideline presented in in SWD(2015) 111 It is presented here in the form of a single document and structured around various chapters containing individual tools. It is also available and intended to be used as a series of web-tools which are downloadable from the Commission's Better Regulation web site. The Toolbox presents a comprehensive array of additional guidance to assist practitioners in the application of Better Regulation. Users are not expected to read and apply each individual tool but to use the toolbox selectively and with common sense. Questions about this toolbox can be sent to units C1, C2, C3 and C4 of Directorate responsible for Smart Regulation and the Work Programme in the Secretariat General.

2 Better Regulation Toolbox This Tool Box complements the main guidelines on Better Regulation in SWD (2015) 111. It provides more specific and operational guidance to those involved with the various Better Regulation instruments. The Tool Box is structured around 8 main chapters: Chapter 1 presents the key principles and concepts underpinning Better regulation at the European Commission; Chapters 2 presents tools for carrying out an Impact Assessment (IA); Chapter 3 presents tools for assessing specific impacts, whether they are estimated prospectively in the context of IA or retrospectively when carrying out evaluations or Fitness Checks; Chapter 4 provides a short summary of how to facilitate and verify the transposition and conformity of EU law; Chapter 5 describes how to establish monitoring systems; Chapter 6 provides guidance on how to carry out Evaluations and Fitness Checks; Chapter 7 lays out how to consult stakeholders in the context of Better Regulation; Chapter 8 summarises methods to identify, assess and quantify costs and benefits and provides insight into how to use Visual Aids and present quantitative data. The tools below are comprehensive and are expected to cover the relevant aspects of all initiatives and policy interventions. They are advisory in nature and following them is not compulsory except in a few cases (such as the format of documents submitted to the Regulatory Scrutiny Board) which have been identified in the main Better Regulation Guideline.

3 Table of Contents CHAPTER 1 GENERAL PRINCIPLES OF BETTER REGULATION...6 Tool #1: Principles of Better Regulation...7 Tool #2: Evidence Based Better Regulation...14 Tool #3: Legal basis, Subsidiarity and Proportionality...21 CHAPTER 2 HOW TO CARRY OUT AN IMPACT ASSESSMENT...27 Tool #4: What steps should I follow for an IA?...28 Tool #5: When is an IA necessary?...33 Tool #6: IAs for Spending Programmes & Financial Instruments...37 Tool #7: IA requirements for Social Partner Initiatives...41 Tool #8: Format of the IA report...45 Tool #9: How to undertake a proportionate IA...54 Tool #10: Stakeholder consultation in the context of an IA...59 Tool #11: How to analyse problems...65 Tool #12: Risk Assessment and management...73 Tool #13: How to set objectives...80 Tool #14: How to identify policy options...82 Tool #15: The choice of policy instruments...86 CHAPTER 3 HOW TO IDENTIFY IMPACTS IN IMPACT ASSESSMENTS, EVALUATIONS AND FITNESS CHECKS...96 Tool #16: Identification / screening of impacts...97 Tool #17: Impacts on sectoral competitiveness Tool #18: Impacts on Research & Innovation Tool #19: The "SME TEST" Tool #20: Impacts on Competition Tool #21: Impacts on the internal market Tool #22: External trade and investment Tool #23: ICT assessment, the digital economy and society Tool #24: Fundamental Rights & Human Rights Tool #25: Employment, working conditions, income distribution and inequality Tool #26: Impacts on Education Culture and Youth Tool #27: Impacts on health Tool #28: Impacts on consumers

4 Tool #29: Territorial impacts Tool #30: Developing countries Tool #31: Resource efficiency CHAPTER 4 IMPLEMENTATION, TRANSPOSITION & PREPARING PROPOSALS Tool #32: The implementation plan Tool #33: Transposition checks Tool #34: Drafting the explanatory memorandum CHAPTER 5 MONITORING THE APPLICATION OF AN INTERVENTION Tool #35: Monitoring arrangements and indicators CHAPTER 6 EVALUATIONS AND FITNESS CHECKS Tool #36: What is an evaluation and when is it required? Tool #37: Preparing for an evaluation Tool #38: Planning & The 5 year rolling evaluation plan Tool #39: Setting up an inter-service steering group Tool #40: Establishing an evaluation roadmap Tool #41: Designing the Evaluation Tool #42: Identifying the evaluation criteria and questions Tool #43: What key impacts must be considered? Tool #44: Stakeholder consultation in the context of Evaluation Tool #45: Conducting the evaluation Tool #46: Completing the Quality Assessment Tool #47: The Staff Working Document for Evaluation Tool #48: Disseminating the evaluation findings Tool #49: Follow up action plans CHAPTER 7 STAKEHOLDER CONSULTATION Tool #50: stakeholder consultation tools Stakeholder mapping tools Accessibility Data protection and Transparency Register CHAPTER 8 METHODS, MODELS AND COSTS AND BENEFITS Tool #51: Typology of costs and benefits Tool #52: Methods to Assess Costs and Benefits Tool #53: The Standard Cost Model for estimating administrative costs Tool #54: The use of Discount rates

5 Tool #55: Useful analytical methods to compare options or assess performance Tool #56: The use of analytical models in IA or evaluation Tool #57: Multi-Criteria Analysis Tool #58: Life Cycle Analysis Tool #59: How to use visual aids and present quantitative data

6 TOOL #29: TERRITORIAL IMPACTS 1. INTRODUCTION Living conditions as well as industrial structures, infrastructure endowment and geographical conditions vary substantially across the EU. EU's cohesion and regional policies are designed to mitigate these differences and ensure that poorer regions have means to address regional challenges. In spite of good progress in convergence across Europe on many parameters, there is still significant dispersion within the EU. Still many policy measures address specific territorial areas or have specific consequences concentrated in certain territories. For example, efforts to ensure more sustainable fishing is likely to have spatially differing impacts which vary according to the distribution of fisheries and their conservation status. In addition, the reduction of poverty and social exclusion is a common Europe 2020 objective, but the extent of the problem varies a lot across countries and regions. The territorial dimension may be relevant for impact assessments for two reasons. First, the impacts associated with the problem are often heterogeneously distributed across the Union. This means that the design of effective policy options will also bring about an uneven geographical distribution of impacts (costs and benefits). Second, a policy option may act unevenly to produce heterogeneous territorial impacts even where a problem is not necessarily unevenly distributed across the territory of the Union. In policy cases, where there is no particular territorial dimension, obviously there is no need for a detailed assessment of the territorial impacts. 2. HOW TO ASSESS IMPACTS ON TERRITORIES OF POLICY OPTIONS The impact on territories can be assessed using qualitative and quantitative methods as well as specific tools developed to support impact assessments or the consultation process. The approach relies on a description of the spatial distribution of four items: (1) The degree to which the problem or driver to be addressed is concentrated in some (types of) areas, Member States or regions; (2) The capacity of EU policies to respond to the problem/implement the policy; (3) The degree to which stakeholders indicate a need for a policy response in the relevant areas and regions? (4) The effectiveness of the policy response and its potential impact, which sums up the former issues. In some cases, the risk of asymmetric territorial impact is obvious. In other cases, only experts familiar with the issue can assess the risk of such asymmetric impacts. 214

7 Box 1. Example of the 2009 White Paper on adapting to climate change The impact assessment supporting the White Paper discussed the spatial distribution of climate change (item 1). A description of the ecosystems and human systems described the capacity to respond (item 2). The assessment discussed the actors, including those at the local and regional level, involved in setting up adaptation strategies (item 3). The potential territorial impact (item 4) depended on the interaction of the previous three items. A correct assessment of the territorial dimension of the problem will help shaping properly targeted policy options. It can also avoid conducting policies in those areas and regions, where no policy response is needed. This could create legal, compliance or administrative costs. The relevant territorial unit or grouping may vary from case to case and should be proportional to the question at hand. It could be specified at the Member State level or in terms of geographical characteristics such as for instance coastal areas, mountainous regions or densely populated areas. In other cases, there may be a need for singling out those administrative regions which are disproportionally affected by a certain policy measure. 3. CHARACTERISING THE PROBLEM Spatially relevant statistics and information and statistics are routinely collected, aggregated and made available by local and regional authorities, Member States, the Commission and other EU agencies and bodies (see section 4 for some examples). This can be used to characterise a particular problem and to understand whether the problem is characterised by territorial impacts which are unevenly distributed across the Union. Box 2. Examples where the problem is spatially uneven The sensitivity of terrestrial and aquatic ecosystems to acid rain varies across the Union as a function of the underlying geological rock and soil types which means that some air pollution emissions sources contribute more to the environmental damage than others once transport in the atmosphere is considered. The ecosystem sensitivity can be mapped. Measurement by the Member States show that the quality of bathing waters and rivers varies across the Union this can be overlaid with spatial information about the various economic activities which occurs in river basins across the Union. The relative wealth of regions in the Union varies significantly which is taken account of in the Union's cohesion and state aid policies. Similarly, unemployment varies significantly across the Union. Susceptibility to a changing climate will vary across the Union. Some regions will be susceptible to flooding, encroachment of the sea whilst others are sensitive to reduced rainfall and drought. 215

8 If the nature of the problem is spatially varying then it is important to characterise this early in order that policy options can be designed properly but also in order to be able to assess the territorial impacts associated with each of the policy options. The IA process requires that a baseline be constructed to show how the problem is likely to evolve in the absence of policy intervention. If the data allows, a projection should be made to show to what extent the problem is likely to grow in the future. Projections with a sub-national component including demographic, economic and land use projections can help to show the likely evolution of the issue at stake. If the spatial distribution of an issue cannot be measured directly, it can sometimes be derived from case studies or the scientific literature. In some cases, another measure with a similar spatial distribution can be used as a proxy indicator. For example, opening up trade in textile sector may mean that regions with an uncompetitive textile industry will see high redundancies in that sector. If no data is available on the regional competitiveness of the textile industry, regional employment growth in that sector may help to assess which regions could be more vulnerable. 4. MODELLING INTERACTIONS A model can support an impact assessment, especially if the policy addresses a problem driver that is strongly linked to other issues. For example, trade policy can have an impact on the agricultural sector or new transport infrastructure can influence economic growth and land use changes. The Joint Research Centre has developed six models 332 with a sub-national component, including RHOMOLO, LUISA and TRANSTOOLS. Ideally, all models would use the same baseline scenario based on Eurostat s and ECFIN s long term projections. 5. TOOLS TO SUPPORT THE QUANTITATIVE ASSESSMENT OF TERRITORIAL IMPACTS ESPON has developed a tool to help summarise this information into an overall impact. With the ESPON ARTS instrument one can assesses policy impacts using a vulnerability approach. This approach uses three elements: exposure, sensitivity, and impact. This excel-based instrument allows people by following a process of 9 steps to get a quick impression of the territorial impact based on exposure and sensitivity. Different combinations can easily be tested. An online version including options for seeing impacts on maps is currently being developed and will be available at 6. CONSULTATIONS CAN HELP TO REVEAL ASYMMETRIC IMPACTS The stakeholder consultation process foreseen in the impact assessment can be used to collect data and information about the issue to be addressed and the impact of the policy option from outside the European Commission. Stakeholders may have access to more information and thus be in a good position to judge the risk of an asymmetric impact. Therefore, the consultation could include a question to check whether the public or the stakeholders expect the policy to have an asymmetric impact. 332 See the Modelling Inventory Database & Access Services (MIDAS) Portal 216

9 Box 3. Public consultation Sample questions: According to your knowledge and information, is this problem concentrated in certain areas, regions or Member States? Do you expect that this policy will have a disproportionately large impact on certain areas, regions or Member States? If yes, please indicate which ones and why. Under the 'Protocol on Cooperation between the Commission and the Committee Regions' (2012) the 'Commission services may ask for support from the Committee in preparing its assessment'. This may be particularly useful if the consultation investigates asymmetric impacts on regions or local authorities HOW TO MINIMIZE ANY NEGATIVE IMPACTS ON TERRITORIES Taking into account potential asymmetric impacts can increase the effectiveness and the efficiency of the policy. It can increase political support for a policy, boost the benefits while addressing excessive spatial concentrations of the costs. If costs are distributed in a highly asymmetric manner, the policy could be adjusted to reduce the costs of the policy on the most affected regions. If the policy itself cannot be adjusted, mitigation measures including the creation of another instrument to reduce the burden on these regions or areas should be investigated. The territorial assessment can also help the relevant regions and areas by making them aware of the EU policies under development so that they will be able to prepare and take most advantage of the policy once implemented. Three short examples can illustrate how negative territorial impacts can be reduced: (1) Reducing the concentrations of an airborne pollutant in cities to uniform level within a single deadline may be more difficult to achieve in some cities than others. Concerns about such difficulties may lead to pressure to allow higher concentrations. Assessing territorial impacts could identify such risks and ensure that the EU policy would be able to allow cities with very high concentrations a longer time frame based on clear criteria - to reach the necessary quality threshold, should they so wish. (2) State aid policy also differentiates its approach according to the level of development of a region and to the size of the market. For example, different possibilities to award state aid apply to areas with an abnormally low standard of living, to outermost regions and regions with low population density. (3) Growing global trade integrations tends to benefit the EU, but some regions specialised in a sector vulnerable to further trade integration/globalisation may face a high number of redundancies. The European Globalisation Adjustment Fund (EGF) was set up, in part, to address such negative asymmetric impacts. The EGF provides one-off, time-limited individual support geared to helping workers who have suffered redundancy as a result of globalisation. 333 Contact the SG-C2 for further information 217

10 Policies can be adjusted in five ways to address highly asymmetric territorial impacts: Adjust the policy for the entire Union or some of its parts (as for example State Aid policy does); Grant more time to implement a policy in some parts of the Union (as was done for the urban waste water directive during the accession negotiations); Exempt those parts of the Union which are unaffected by the problem from the policy; Use existing policies to address asymmetric territorial impacts (for example by using Cohesion Policy); Create a new instrument to address asymmetric territorial impacts if/when they arise (for example the European Globalisation Adjustment Fund) 8. INFORMATION SOURCES AND BACKGROUND MATERIAL Assessing territorial impacts: operational guidance on how to assess regional and local impacts within the Commission Impact Assessment system, SWD (2013) 3 final 334. Regional typologies: Local typologies: Cities and their commuting zones: The degree of urbanisation is described in this article and can be visualised interactively using the statistical atlas (General and regional statistics, chapter 14) Sub-national data sources: Eurostat has been expanding its sub national data offer in the recent years in two dimensions, more domains covered and more detailed geographical levels see website dedicated to sub-national statistics. In addition, Eurostat publishes geographical information such as reference topographic layers and specific thematic layers. The JRC develops geo-referenced datasets at European and global scale, many of which are relevant for regional or territorial analysis. These datasets cover themes as natural hazards and risk prevention, distribution of species, climate change, agriculture, land cover, soil data, etc. An updated inventory 335 of available datasets can be retrieved from the JRC Reference Data and Service Infrastructure (RDSI): Additionally, the JRC operates and maintains the INSPIRE geoportal giving access to data and services from Member States: For Commission services, this inventory can also be searched using the Geoportal: https://webgate.ec.europa.eu/inspire/geoportal/catalog/identity/login.page 218

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