83260 WPP WATER PARTNERSHIP PROGRAM WPP Briefing Note 5 / December 2013 BRIEFING NOTE: A Regional Approach to Reducing Pollution in the Adriatic Sea Manuel Mariño (Lead Water and Sanitation Specialist & Project Team Leader, World Bank), Amanda Goksu (Operations Officer, World Bank) The Adriatic Sea is a cultural and economic anchor of the Mediterranean region, best known for its deep blue water, sandy beaches, and biodiversity. The 75 million residents of its six riparian countries (Italy, Slovenia, Croatia, Bosnia and Herzegovina, Montenegro, and Albania) depend on the Adriatic for recreation and economic activities such as tourism, transport, and fishing (see box below). Unfortunately, this critical water body is increasingly endangered by contamination. Pollution generated by solid and liquid waste has created eutrophication,1 degraded groundwater and destroyed natural habitats and landscape. These factors combined threaten local economic growth, especially in the five countries that comprise the eastern Adriatic. Such complex issues cannot be addressed by any of these countries acting alone. This shared challenge requires a unified response. The Water Partnership Program (WPP) was instrumental in identifying pollution hotspots for priority investments in the eastern Adriatic. These investments, aimed at addressing the sea’s major economic, environmental and coastal management challenges, are now being planned through the Adriatic Sea Environment Program (ASEP), to be funded by several regional stakeholders investing up to an estimated €400 million. ASEP has been launched with the approval of the first regional project for Croatia and Bosnia and Herzegovina, intended for piloting viable solutions to address transboundary pollution in the Adriatic. Background ENVIRONMENTAL BENEFITS OF THE ADRIATIC SEA The Adriatic is a semi-enclosed sea, forming a distinct sub-region within the Mediterranean. It is the most important tourist and recreational area in Europe and a major maritime route for goods transported to central and southeastern European markets. TOURISM 30 million visitors per year, Over 50 million people live within the sea’s catchment area, of which about 20 percent live half of whom visit the eastern on the coast. The migration of people towards coastal areas and the growing number of sea- Adriatic shoreline, generating related activities are putting considerable pressure on the marine ecosystem. The Adriatic has €14 million in revenue. an abundance of endemic flora and fauna, including some rare and threatened species along the eastern coast, which is relatively less polluted than the western.2 But these ecosystems are subjected to heavy metal contamination and an excessive flow of nutrients from agricultural drainage and urban wastewater, stemming from coastal sources as well as from rivers draining MARITIME TRANSPORT into the sea, especially the Po River in Italy. Additional risks include oil spills, solid waste, and 19 seaports each handling more water discharged by ships.3 than 1 million tons of cargo per year. FISHERIES 1. Eutrophication refers to excessive levels of nutrients in a water body that cause a dense growth of plant life (especially algae) and animal death from lack of oxygen. 2. Sea currents flow through the Adriatic in a counterclockwise direction, thus bringing cleaner waters up the east- ern coast and returning increasingly polluted water down the western coast. High socioeconomic value 3. Large quantities of drifting waste (particularly plastics) are transported northwest by the Sirocco, a Mediterranean for coastal and island wind that comes from the Sahara and reaches hurricane speeds in North Africa and Southern Europe. communities. Adriatic tuna and shellfish farming have the potential for significant development. The Water Partnership Program (WPP) is a World Bank program funded by the governments of the Netherlands, Denmark and the United Kingdom. The WPP aims to enhance the World Bank’s performance on reducing poverty through the mainstreaming of pragmatic approaches for Water Resources Management and development, the improvement of quality BIODIVERSITY and effectiveness of Water Service Delivery, and the mainstreaming of water services and 7,000 animal and plant management in climate-resilience, inclusive green growth. species, many of which are endemic to the sea. 2 / HTTP://WATER.WORLDBANK.ORG/WPP As members of the European Union (EU), Italy and Slovenia The Adriatic Sea is often used as an informal dumpsite and already meet its environmental standards. However, four countries its water quality is degraded by both point source pollution on the eastern Adriatic are candidate countries for EU accession, (e.g. effluent from wastewater treatment plants) and non-point and membership requires tougher environmental standards.4 A source pollution (e.g. agricultural run-off), which greatly affects member country since just 2013, Croatia is looking to maximize the ecosystems, fishing, and recreational use of the water. opportunities membership brings, especially the absorption of a large amount of EU Structural Funds. Building local capacity to absorb such funds would ensure that Croatia can make the investments needed to meet pollution reduction targets. In response to demand from countries to address these challenges, the World Bank developed the Croatia and Bosnia and Herzegovina Adriatic Sea Environmental Pollution Control Project (ASEPCP), aimed at providing technical assistance and generating funding proposals to reduce pollution throughout the basin. The ASEPCP, which will benefit an estimated 235,000 people, is the first project in a regional pollution control initiative. The project team requested support from the Water Partnership Program (WPP) to help identify areas with high pollution loads and then prioritize and plan investments across the eastern coast. Source: Albania. © Genti Shkullaku, World Bank/Flickr Step 1: Identifying the Hotspots A WPP-funded rapid assessment of hotspots concluded that 18 percent of all pollution hotspots5 in the Mediterranean are found in the Adriatic, which is significantly more than would be expected given its relative size. While most of the hotspot sites lie on the eastern coast, in absolute numbers the more developed and densely populated western coast contributes significantly more to the pollution of the Adriatic Sea. Agricultural activities in the Po River basin are recognized as the major cause of the eutrophication in the North Adriatic coastal zone. To identify the most urgent sub-projects, the study looked at 41 potential pollution hotspots across the basin and classified 27 of them as hotspots. Six of these are priority sites requiring immediate action to avoid further environmental degradation, and all six are located on the eastern shore. The study confirmed that the principal environmental problems and main pollution sources of the Mediterranean had remained more or less unchanged since 2006.6 The largest investment needs for reducing pollution at the country level are for wastewater and solid waste management, while the main regional challenge is controlling ballast waters from maritime transport (one of the main culprits in the spread of invasive species). Another major hurdle is the lack of continuous environmental monitoring data needed to make better-informed The WPP study identified 27 pollution hotspots (orange dots) in the decisions and evaluate the results of environmental protection activities. Adriatic and 6 priority hotspots (red dots), all of which are located on The adoption of joint environmental monitoring systems and a regional its eastern shores. platform for exchanging data was identified as a priority intervention. 4. Montenegro and Serbia are formal candidates, while Albania and Bosnia and Herzegovina are potential candidates. 5. As identified by the European Economic Area in “Priority Issues in the Mediterranean Environment” (Copenhagen: EEA, 2006). 6. As identified by the European Economic Area in “Priority Issues in the Mediterranean Environment” (Copenhagen: EEA, 2006). A REGIONAL APPROACH TO REDUCING POLLUTION IN THE ADRIATIC SEA / 3 Step 2: Prioritizing Investments The WPP study estimated the investments needed to reach compliance with EU standards and regulations at €1.76 billion, of which €853 million are already being METHODOLOGY FOR HOTSPOT ASSESSMENT implemented as part of a larger umbrella strategy to clean up the Mediterranean by 2020. Several institutions are providing financial and technical support toward The WPP study defined a pollution hotspot site as a these efforts. In the Adriatic, the major contributors include the Mediterranean coastal area that is a recipient of pollution, regardless Action Plan (MAP), the Adriatic Ionian Initiative, and the Strategic Partnership for the of its source. This means that pollution sources can Mediterranean Large Marine Ecosystem (MedPartnership).7 Despite these efforts, be located far inland but still contribute to marine an additional €910 million still needs to be raised, about half of which would be pollution at the hotspot site. The methodology for needed for the priority hotspots (see graphs below). ranking the sites takes into account the impact of pollution on ecological, socioeconomic, and public As a result of the study, the World Bank has prioritized investments in Croatia and health factors. Six weighted criteria were used in Bosnia and Herzegovina under the $30 million ASEPCP loan. The loan includes the ranking process: size of the population affected; a $6.8 million grant from the Bank’s Global Environment Facility. The grant will be potential for public health hazards; potential for used to establish a pipeline of bankable investments to reduce pollution from land- economic losses; potential impact on biodiversity and based sources and technical assistance will be provided to help both countries ecosystem services; and degree of trans-boundary acquire funding for as well as design and implement pollution reduction projects. and trans-regional effects. Pressures most likely to The grant will also finance a regional subproject to strengthen regional and national arise in the future from existing development strategies pollution monitoring networks and capabilities, and to harvest good practices and for the coastal regions (tourism, fisheries, oil winning, draw lessons from the subprojects as they are implemented. and the like) were also taken into account. WPP’S ASSESSMENT OF INVESTMENT NEEDS IN THE EASTERN ADRIATIC Country Major Challenges as Identified by the WPP-funded CURRENT INVESTMENT AND FUNDING GAP Hotspot Assessment (MILLION EURO) Montenegro • Main pollution source: untreated wastewater; others include nutrient loads from river discharges • Wastewater management infrastructure has improved Funding Gap-Other 507 over the last decade but funding is required for treatment 853 Funding Gap - capacity and sewerage networks in the coastal municipalities Priority Hotspots 404 Current Investment Croatia • Main coastal pollution source: solid waste; there are almost no sanitary landfills on the coast and there are numerous dumping sites • Major source of nutrient loads is the Neretva River, which INVESTMENT NEEDS BY COUNTRY AND TYPE discharges agricultural run-off and untreated municipal wastewater originating upriver in Bosnia and Herzegovina 500 400 Million Euro Albania • Main pollution sources: solid waste and untreated 300 wastewater; there are no coastal sanitary landfills; waste is being dumped close to rivers and streams or near the sea 200 • Prevailing sea currents carry waste from Albania towards the 100 coasts of Italy, Croatia, Montenegro, and Greece 0 Albania Bosnia Croatia Montenegro & Herz. Bosnia & • No pollution hotspot sites identified, but the coastal zone is Herzegovina an endangered area Environmental Remediation • Major municipal point-source pollution sources located Reduce Non-Point Sources inland, within the Adriatic Sea basin Solid Waste Management Wastewater Management 7. The MAP currently involves 21 countries bordering the Mediterranean and the European Union. The MedPartnership is led by UNEP/MAP and the World Bank and financially supported by the GEF and other donors, including the EU and all participating countries. 4 / HTTP://WATER.WORLDBANK.ORG/WPP Step 3: Mobilizing Shared Resources By identifying the major pollution zones and their associated clean-up as such as MedPartnership and the Adriatic Ionian Initiative, can be costs, the WPP has helped spur client countries and donors into action. used to assist these countries in designing and implementing the The results of the hotspots study were discussed at a GEF Biennial necessary institutional and sector reforms. In particular, donors can help International Waters Conference where stakeholders conveyed their strengthen regional capacity for improved coastal zone and integrated interest in developing the ASEP which is currently being designed water resource management. The combined efforts of the riparian under the World Bank’s leadership and is expected to cover part of the countries and donors are helping to not only remediate contaminated investments needed in priority areas (see graphs above). This political sites, but to ensure that the fast-paced economic growth that will buy-in is critical for long-term, regional collaboration to meet pollution accompany EU membership will not lead to further ruin of the Adriatic reduction targets. Sea and its shared benefits. The buy-in for the ASEP program led the project team to request additional WPP support to undertake a socioeconomic analysis of potential policies and projects. The main objective of the assessment was to look at the TO IMPROVE THE QUALITY OF THE ADRIATIC’S WATERS, impacts of pollution on cities, civil society and tourism, and then use real options analysis to evaluate fiscal impacts of mitigating interventions. THE RIPARIAN COUNTRIES MUST WORK IN CONCERT The team carried out risk analysis of alternative investments in control, TO DEVELOP PROJECTS, ATTRACT FINANCING, AND abatement and decontamination, and used the results to evaluate and recommend options. This additional WPP-funded work has helped MONITOR ENVIRONMENTAL CHANGES. further refine the priority investments. The two WPP assessments have laid the foundation to secure up to €404 million for regional, national, and municipal measures that reduce ACKNOWLEDGEMENTS pollution throughout the Adriatic. Transboundary challenges, like pollution from maritime transport, the spread of invasive species, and This activity was made possible by the World Bank project team: eutrophication, will require regional solutions. At the same time, countries Manuel Mariño, Sanyu Lutalo, Diego Rodríguez, Ivica Trumvic, and will be using projects like ASEPCP to translate these regional goals into Mike Webster. Consultants included Dr. Roko Andričević (University of national investments that promote economic growth. Split) and Mak Kišević (Safege). Production of the briefing note was supported by Amanda Goksu and Ingrid Pakulski Van de Kamp. To improve the quality of the Adriatic’s waters, the riparian countries must work in concert to develop projects, attract financing, and monitor REFERENCES environmental changes. World Bank (2013). Adriatic Sea Environment Program: Rapid Assessment However, investments alone will not be sufficient. The right institutional of Pollution Hotspots for the Adriatic Sea. Washington, DC: World Bank. frameworks are needed for concerted transboundary action and national initiatives to be effective and sustainable. Existing organizations, such The Water Partnership Program (WPP) supports technical assistance and analytical work, and bolsters project preparation and imple- mentation across all water sub-sectors and water-related sectors in all World Bank Borrowing Member Countries. WPP activities are coordinated through nine Windows: six Regional Windows managed by the Bank’s Regional water units, and three Windows managed by the Water Anchor - the Expert Support Team, the Programmatic, and the Water Anchor Windows. The WPP is coordinated by a Program Management Team based in the Water Anchor of the Transport, Water, and Information & Communication Technology (TWI) Department of the World Bank. © 2013 The World Bank. This work is a product of The World Bank with external contributions. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of The World Bank, its Board of Executive Directors or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions: The material in this work is subject to copyright. Because The World Bank encourages dissemination of its knowledge, this work may be reproduced, in whole or in part, for noncommercial purposes as long as full attribution to this work is given. Any queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202-522-2422; e-mail: pubrights@worldbank.org.