Background Chapter 28 of Agenda 21 declares that many problems linked to sustainability can be solved only at a local level. The preparatory document to the 6th Community Action Programme clearly lists - among priorities - the integration in the decision-making process of environmental issues with economics, together with a strong commitment by local communities and the greater involvement of citizens. Sustainable development is strictly bound to the concepts of measurement, evaluation, calculation. Firstly, a sound environmental accounting system can supply comparable data (essential both for diagnostic and performance evaluations) and, secondly, can speed up actions by providing greater transparency to their hidden costs. Last but not least, environmental accounting is the best instrument for handling the delicate question of how to give an economic value to natural resources. The major expected result lies in the creation of a transferable tool for improved economic and environmental decision making at local and city levels. The tool should enhance multi-stakeholder and partnership territorial management processes and environmental management systems by providing greater legitimacy to environmental accounting and reporting. Objectives The main aim of the CLEAR (City and Local Environmental Accounting and Reporting) project, was to create a transferable environmental accounting tool for improved economic and environmental decision-making at local and city levels. The tool was intended to enhance multi-stakeholder and partnership territorial management processes and environmental management systems by providing greater legitimacy to environmental accounting and reporting. The expected results were as follows: - first accounting and environmental budgets for discussion and approval by 18 local authorities. The process aimed to improve both environmental and overall governance; - a City and local environmental accounting and reporting system for all city and local partners; - an improved set of indicators and indices; - a set of CLEAR Principles and practices for environmental reporting and accounting of local authorities, and guide book and a permanent internet platform to apply and monitor the use of CLEAR principles and implementation practices; - dissemination of the project's results at national and international level. Results The project led to the elaboration of environmental accounting methods and developed a tool, which can be formally linked to the planning, budgeting and accounting processes of a city or local authority. CLEAR is the first Italian project for environmental accounting applied to local authorities. It has resulted in “environmental budgeting” drawn up and approved by 12 Municipalities and 6 Provinces in Italy. Experimentation at the local level was implemented by the beneficiary, the Ferrara Municipality, together with 17 other Italian municipalities and provinces. An assessment of the experiences and dissemination at the national and international level (through many workshops and seminars), was carried out with the support of the French association Les EcoMaires and the Emilia-Romagna Region. During the period October 2001-September 2003, the partners carried out the following: 1) operational layout and start-up 2) local experimentation 3) experiences' integration and CLEAR method 4) dissemination Through these phases, the environmental accounting of the participating local administrations was carried out. By means of this instrument, the local administrations aimed at improving the processes of local governance, to integrate the policies, to focus the management process, to improve the quality of public accounting and finally to improve transparency and stakeholders' participation. . According to a follow-up interview carried out by the LIFE external monitoring team in 2004, the 18 partner local authorities have continued to cooperate and to maintain their environmental budgeting systems. The working group “Facciamo i conti con l’ambiente” has also been set up to support any municipalities wishing to apply CLEAR procedures. The use of the project methodology is underway in a further five municipalities and the system has been successfully extended to private firms with substantial public participation involved in the transport, water and waste sectors. See the project website, which remains active.