- 22746 ENV I RO.N Mi E N T ; -: 6XX t ~~D E P A R T M E N T :a m e-* A P E R 5PAPER NO. 81 . . . w TOWARD ENVIRONMENTALLY AND SOCIALLY SUSTAINABLE DEVELOPMENT 'ENVIRONMENTAL ECONOMICS SERIES Country As'sistance 'Strategies and -the Environmen t Priya Shyamsundar Kirk Hamilto. Lisa Segnestam Maria Sarraf S. Fankhau.er . July 2001 The World Bank THE WORLD BANK ENVIRONMENT DEPARTMENT Countrv Assistance Strategies and the Environment Priya Shyamsundar Kirk Hamilton Lisa Segnestam Maria Sarraf S. Fankhauser July 2001 Papers in this series are not formal publications of the World Bank. They are circulated to encourage thought and discussion. The use and citation of this paper should take this into account. The views expressed are those of the authors and should not be attributed to the World Bank. Copies are available from the Environment Department, The World Bank, Room MC-5-126. Contents ACKNOWLEDGMENTS V EXECUTIVE SUMMARY vii Chapter 1 Introduction 1 Concepts and Methods 2 Chapter 2 An Environmental Review of Country Assistance Strategies 7 Problem Identification and Treatment 7 Mainstreaming Environmental Concerns 9 Poverty-Environment Linkages 10 Discussion 11 Chapter 3 Testing a Practical Approach through Country Studies 15 Azerbaijan 18 Dominican Repubic 21 Pakistan 24 Tunisia 28 Zambia 32 Discussion 35 Chapter 4 Toward Better Practice 37 Tying Environmental and Resource Concerns to Economic Outcomes 37 Integrating Environmental Issues into Sector and Macro Strategies 38 Making Connections between Poverty Reduction and Environmental Efforts 39 Strengthening the Information Base 42 Improving the CAS Process 42 Conclusion 44 AppendixA Analytical Matrices 45 Envirorunental Economics Series iii Country Assistance Strategies and the Enviromnent Appendix B Environmental Indicators 57 NoTEs 63 REFERENCES 65 BoxEs 1 PRSPs, the CDF, and CASs 2 2 Review Methodology 8 3 Rwanda - Country Profile 9 4 Mainstreaming Natural Resource Depletion in Mongolia 11 5 Managing Poverty-Related Environmental Degradation in Lesotho 11 6 Case Study Methodology 16 7 Macroeconomic Management of Natural Resource Revenues in Botswana 39 8 A Joint Poverty-Environment Program in Panama 40 9 Poverty and the Environment in Pakistan: Strengthening the Information Base 41 FIGURES 1 Dimensions of poverty and links to the environment 4 2 CAS and environment decision tree 5 3 Problem identification and diagnosis 9 4 Treatment of environment 9 5 Mainstreaming environmental issues 10 6 Treatment of incentives 10 7 The poverty-environment nexus 11 TABLES 1 CAS analytical matrix 3 2 FY99 CAS ratings 13 3 Environmental analysis matrix - Argentina 17 4 Environmental indicators for Tunisia 43 iv Environment Department Papers Acknowledgments We would like to thank the Kingdom of Norway departments, Sherif Arif, Aziz Bouzaher, and the government of Switzerland for helping Hassan Fazel, Maria Donoso Clark, Nicolas to fund this study. This work would not have Mathieu, Marisela Montoliu Munoz, Konrad been possible without their generous support. von Ritter, Tanya Yudelman, Robert Robelus and Phyllis Pomerantz for their guidance and We received excellent comments from our two assistance. We also wish to acknowledge Bank reviewers, Zoubida Allaoua and Anders Ekbom, colleagues, and government and NGO for which we are very grateful. We would like to representatives who discussed various CAS- thank our colleagues in the regional related issues with us. Environmental Economics Series v Executive Summary Introduction study that considers data from 110 countries shows that at least 10 countries have Developing countries face immense challenges negative genuine savings, that is net savings in attempting to achieve economic growth and in these countries become negative when poverty reduction. It is also clear that these natural resource depletion, pollution, and long-term goals cannot be attained by educational, health, and R and D svstematicall eltn environmental systematically depleting environmental investments are taken into consideration. resources. In fact, careful management of Another 40 countries have declning wealth natural resources and environmental quality is per capita even with positive genuine often necessary to sustain improvements in savings. Thus population growth in economic development and to ensure that combination with environental economic policies result in welfare gains. degradation places many countries squarely Current trends insinuate that development on an unsustainable development path. policies have largely ignored the impacts of environmental degradation on peoples' Given the evidence linking environmental wellbeing. degradation with serious negative welfare * Every year about 5 to 6 million people in impacts, it becomes important to understand developing countries die due to how the World Bank's policies, particularly its environment related diseases stemming Country Assistance Strategies (CASs), can be U ~~made more response to environmental concerns. from water and air pollution. Furthermore, the lives of over 1 billion people are at risk Country Assistance Strategies are a central part from desertification and dryland of the policy process that determines World degradation. Bank support to client countries. Each CAS presents a comprehensive picture of a country's * Natural resources are an important source economic development, identifies the of income and security to many poor govermnent's principal concems and makes a people-for example, nearly 3 billion case for new World Bank services. Because of people depend on fuelwood as their main this important role, it becomes necessary to source of energy for cooking and home ensure that environmental considerations heating. However, countries with large feature in CASs and that their role in promoting populations such as China, India, Vietnam, development outcomes is fully exploited. Thailand and Sri Lanka face increasingly critical shortages in fuelwood supplies. This report is the outcome of a CAS and Environment program that was started in the * Environmental degradation has negative World Bank's Environment Department in 1998. micro and macroeconomic impacts. A recent The aim of the program was to identify practical Environmental Economics Series vii Country Assistance Strategies and the Enironment constraints to incorporating environmental Latin America and Caribbean region were concerns into CASs and to develop a logical reviewed. framework for doing so. The report draws lessons based on research and review of Bank The review attempts to answer three broad activities, identifies best practices, and makes quesfions: i) Do CASs identify environmental recommendations that can be applied to Bank concerns and use Bank instruments to address operational work. these concerns? ii) Are natural resource and environmental issues mainstreamed by linking Methods them to policy concerns in general and macro and sectoral (environmnental and non- The analysis presented in this paper is based on envrnental initiatie in ptlH two key efforts: a review of CASs undertaken in anditonwhat entiare inmnal ou and to what extent are environmental outcomes fiscal year 1999, and five participatory case linked to changes in incentive mechanism such studies of on-going CASs. The CAS and as pricing and property rights? iii) To what Environment program also included a extent are environmental strategies lnked to retrospective study of how environmental poverty reducton efforts? management influences development outcomes. p In order to address these questions, CASs were A number of broad conceptual frameworks ranked on the basis of key criteria such as were developed during the CASE program that identification and treatment of environmental can be used to incorporate environmental issues, whether or not environmental issues concerns into the CAS. The first is an analytical were mainstreamed, whether the CAS included matrix that provides a summary snapshot of the a discussion of incentive mechanisms and links between economic development and the whether connections between poverty reduction environment. This matrix is useful to efforts and environmental concerns were understand the "big picture" about a country identified. Each CAS received a grade from 1 to and its environmental challenges. Another 4 in each category. Chapter 2 in this report important conceptual tool, which builds on the presents details about the review methodology analytical matrix, is the CAS and Environment and findings. decision tree. The decision tree uses information in the analytical matrix and identifies a strategic Country Case Studies process for prioritizing among different environmentalo priorinterventions. ChtereThe main aim of the country case studies was to enviromenta interentios. Chater 1identify a framework for ensuring that CASs discusses these and other analytical tools used idntiypramew envsurin Thas in the AS andEnvironnent Pogram.incorporated environmental issues. The case in the GAS and Environment Program. study countries were Azerbaijan, the Dominican The Environmental Review Republic, Pakistan, Tunisia and Zambia. These countries were selected to reflect different stages An environmental review was undertaken of of economic development and different thirty-seven CASs developed in 1999. The main continents. objective of the review was to obtain a baseline understanding of how CASs treated Each country study involved a series of environmental concerns. Nine CASs from practical steps to identify the country's Africa, one from the Middle East, eleven from environmental challenges, outline their the Eastem Europe and Central Asia region, underlying causes, and highlight the economic nine from South and East, and six from the outcomes that were most likely be influenced by viii Environment Departmnent Papers Executive Summary these environmental issues. This information Policy issues are generally addressed through was discussed with Bank and non-Bank lending for environmental policy reforms and stakeholders. At the end of each case study, a integration into sectoral strategies. Incentive CAS paper was presented to Bank country mechanisms such as tariff reform and property teams. The paper included a description and rights issues feature in several CAS, but not as diagnosis of environmental problems, a "CAS frequently as other policy concerns. There is, analytical matrix" that allowed the reader to however, very little integration of draw logical conclusions about the links environmental considerations into between environment and development macroeconomic analysis or reforms. outcomes, and a set of environmental indicators that compared the country's environmental Perhaps the most significant resultfrom the status with other similar countries and environmenital review is that insufficient attention is identified changes over time. Chapter 3 paid to the links between poverty reduction and discusses the case studies in detail and draws environmental change. More than half the lessons based experiences in each country. reviewed CASs failed to connect poverty and environmental concerns. Where these links are Findings from the Environmental Reveiw addressed, they are mostly within the context of The review of FY 1999 CASs indicates that natural resource management. environmental considerationsfeature in almost all Toward Better Practice CASs. Most CASs identify environmental concerns in the CAS analytical matrix and in The last chapter in this report presents a set of many cases in the CAS text as well. A majority practical actions to improve the environmental of the CASs have a lending or non-lending quality of CASs based on the learning that project related to environmental or natural emerged from the case studies and the resource issues. environmental review. A second important lessonfrom the review is that Integrating Environmental Considerations there exist significant regional differences in the into Country Activities treatment of environmental issues. The East Asia CASs do well while the Eastern European and One of the best ways to influence the CAS is to Central Asian CASs do relatively poorly in their mainstream environmental issues into different consideration of environmental issues. The high country activities. The Country Assistance consderaion f eniromentl isues.The igh Strateg is the final product of a series of actions score received by East Asian CASs results from thatgy is negfinaipon a s ions consistent efforts to mainstream environmental that include negotiations and discussions issues and the use of innovative economic tools among country team members and government in doing so. The low score received by Eastern agencies, project outcomes, and country European and Central Asia partly reflects a priorities. Any efforts to integrate major focus on transition related issues in these environmental concerns into country activities countries. In general, there is a need to will trickle down into the CAS. strengthen the environmental quality of CASs in low-scoring countries. There are ample The country studies show that environmental issues opportunities for these countries to learn from can be integrated into CASs by identifying linkages best practices across the Bank. between economic development and environmental change. For example, in the Dominican Republic, Environmental and resource considerations are Tunisia and Zambia, a strong connection was currently mainstreamed into CASs in several zvays. identified between tourism, a major driver or Enviromnental Economics Series ix Country Assistance Strategies and the Enironment potential driver of economic growth, and interventions can support poverty reduction environmental degradation. This analyses is efforts. reflected in final versions of all three CASs. Thus, where either environmental conservation Poverty-environment interactions need to be better offers a means for economic development or understood through careful analytical work. This degradation is beginning to have negative can be done through sector work, which will impacts on growth, countries are likely to be help establish priorities and identify more open to environmental interventions. mechanisms for Bank intervention. Better analysis of on-going environmental projects and The country studies also suggest that in situations their poverty impacts would also help improve where the link between economic development and knowledge and highlight best practices. For environmental change is dynamic and longer-term example, while access to clean water has a in nature, discussions on mainstreaming needs to be significant impact on the health of the poor, rooted in lengthy negotiations among task-managers. very few 1999 CASs identify the poverty Often, this makes the difference between a CAS dimensions of water and sanitation projects. that reads well and a CAS that produces high- Environmental outcomes of poverty-reduction quality environmental outcomes. activities also need to be better understood. The World Bank routinely supports projects that In general, environmental issues can be give poor people secure tenure over their land, mainstreamed into CASs by: help improve water-use efficiency, and increase * Reforming sectoral policies that impact investments in natural resources. Scrutinizing environmental issues. Particular attention such projects to identify how natural resource needs to be paid to energy and management and poverty reduction infrastructure policies. complement each other would help mainstream * Ensuring that countries with a huge foreign environmental concerns. exchange dependence on natural resources develop sustainability criteria for managing Integrating environmental components into poverty both their natural resources and the revenue related studies would help improve knowledge about streams from resource depletion. poverty-environment interactions. A particularly * Identifying prices, property rights, fiscal important opportunity presents itself in the and other incentive mechanisms that Poverty Reduction Strategy Papers (PRSPs) and influence enviromnental considerations. Poverty Assessment (PA) work routinely T'hese mechanisms can be used to correct undertaken in Bank client countries. If PRSPs environmental externalities or improve and PAs are broadened to include questions on envirnmentl exernaltiesor imroveenvironmental health and the resource efficiency of resource allocation.enio etahalhndhersuc dependence of the poor, the Bank and partner Linking Environmental Efforts to countries would be in a better position to Poverty Reduction develop environmental strategies that help the poor. CASs need to examine the links between i) the health of the poor and the environmental determinants of Finally, CASs may need to identify the trade-offs bad health, including poor water quality and between environmental sustainability and poverty quantity, and air pollution; and, ii) poor rural reduction. Clearly there are some interventions households and natural resource determinants of that can reduce poverty and stem income and security. These are two key environmental degradation. However, any mechanisms by which environmental medium to long term strategy will need to x Environment Department Papers Executive Summnary assess trade-offs and a sound CAS cannot loose Development Indicators. Thus, the costs of sight of the long run. including a set of environmental indicators would be low relative to their likely benefits. Four strategic actions would help in better linking environmental efforts to poverty Another obvious knowledge gap is that limited reductions strategies. These include: amotunt of environment related analytical and sector work is available to inform lending. Environmental * Sending a consistent message about the ESWs in the 1999 CASs were almost exclusively links between poverty and the environment. focussed on National Environmental Action CAS efforts need to examine the links Plans (NEAPs). Notwithstanding the between the health of the poor and the poor importance of NEAPs, the analytical work on water quality and quantity and air the environment seems insufficient to address pollution; and, poor rural households and the complex set of specific challenges faced by the natural resource determinants of income client countries. In general, Economic and and security; Sector work that is finished during the CAS * Knowledge development. This can be done fiscal year is critical both for informing country through careful sector work and by teams and because it catches the attention of integrating environmental components into non-environmental country team members and poverty studies; the government. * Monitoring Impacts. New environmental projects need to be designed to identify Organizing and presenting information in a poverty outcomes. On going poverty and structuredfashion can result in an improved CAS. A environmental projects need to be reviewed CAS analytical matrix was used as a key to understand poverty-environment links organizing mechanism for identifying links and to highlight best practices. between environmental problems and economic * Understanding Trade-Offs. To the extent development in the case studies. The matrix that CASs are integrated into longer-term arrays information about country-specific strategies such as the Comprehensive environmental sectors and issues in columns Development Framework, they will need to against rows representing i) a summary of identify wins and losses. issues; ii) identification of driving forces; iii) delineation of links between the environmental Strengthening the Informationi Base issue and macro, sectoral and project-level actions; and iv) policv and institutional issues. The environmenital reviewv and country studies This matrix was extremely useful in presenting inidicate that better use of indicators and analysis of information to country teams. changes in environimental trends is merited. Comparative environmental indicators that The CAS is only as strong as the information either show trends over time or indicate base that supports it. Consequently, the differences among countries are useful for following recommendations are made: drawing attention to problems and for * A set of standard environmental indicators prioritizing among environmental issues. need to be incorporated into CAS Furthermore, monitoring and evaluation of long appendices. term changes is practically impossible without * More analytical and Economic and Sector use of indicators. Yet, very few environmental work would help make the case for indicators are used in CASs. This information is environmental issues and identify routinely collected as part of the World intervention strategies. In reality, Environmental Economics Series xi Country Assistance Strategies and the Enironment competition for ESW resources is immense; recommended that CAS support be included in it would therefore be useful to consider the work program agreements for regional creation of altemate funding mechanisms, environment department task managers. There such as ESMAP, for supporting analytical may also be a case for dedicating additional work. resources within these departments for a CAS Organizing environmental information in strategist. CAS analytical matrix (see Appendix 1) would help country teams identify driving Finally, stakeholder supportfor environmental forces and prioritize among different issues is likely to become increasingly importantfor problems. the CAS. As the CAS becomes a participatory process, support for environmental concems Improving the CAS process will be required from governments as well as Resource and time constraints severely constrain the civil society. In the long-term, strong southem ability of regional staff tofocus on the CAS. environmental NGOs will be important for the Environmental issues need a CAS champion. In CAS process. A positive extemality from any most of the case study countries, regional Bank-support to NGOs is that it is likely to have environment department staff did not have an influence on internal processes such as the sufficient time to work on a CAS strategy. It is CAS. xii Environment Department Papers 1 Introduction Developing countries face immense challenges investments are taken into consideration in attempting to achieve economic growth and (Hamilton 2000). Another 40 countries have poverty reduction. It is now increasingly declining wealth per capita even with obvious that these long-term goals cannot be positive genuine savings. Thus population reached by systematically depleting growth in combination with environmental environmental resources. In fact, careful degradation places many countries squarely management of natural resources and on an unsustainable development path. environmental quality is often necessary to sustain improvements in economic This paper explores mechanisms by which the development. Nonetheless, current trends World Bank's policies can be made more indicate that development policies have largely responsive to the links between environment ignored the impacts of environmental and development.' In particular, it focuses on degradation on peoples' wellbeing. the Bank's Country Assistance Strategies (CASs) and identifies mechanisms by which the * Every year about 5 to 6 million people in environmental quality of CASs can be developing countries die due to improved. environment related diseases stemming Country Assistance Strategies are a central part from water and air pollution (World Bank of the policy process that determines World 2001a). Bank support to client countries. Each CAS • Natural resources are an important source presents a comprehensive picture of a country's economic development, identifies the of income and security to many poor . . i people-for example, more than 1.6 billion government's principal concerns and makes a people-fependon exaless fore thane1.6biln case for new World Bank services. Because of pivelihople depd oorestsan one-forthei ofthethis important role, it becomes necessary to livelihood. Yet, more than one-fifth of the esr htevrnetlcnieain ensure that environmental considerations world's tropical rainforests have been feature in CASs and that their role in promoting cleared since 1960 (World Bank 2001b). development outcomes is fuly exploited. * Environmental degradation has negative In general, CASs represent an important micro and macroeconomic impacts. A recent opportunity for the World Bank and client study that considers data from 110 countries countries to jointly assess progress and gain a shows that at least 10 countries have multi-sectoral perspective on their actions. As negative genuine savings, i.e. net savings in specified by BP 2.112, the CAS "indicates how these countries become negative when the Bank's objective of helping countries to natural resource depletion, pollution, and reduce poverty and its sectoral objectives-such educational, health and R and D as human resource development (including Environmental Economics Series Country Assistance Strategies and the Environment gender issues), environmentally sustainable mission of the World Bank Group is the clear development, and private sector development- advantage of such an approach. are incorporated into [a] strategy and reflected in the policy dialogue." Usually, CASs are B undertaken every 2-3 years. PRSPs, the CDF, and CASs The CAS represents a key point of intervention The CAS will be influenced by new processes such as for integrating environmental concerns into the CDF and the PRSPsf Bank operations for better development outcomes. In general, environment and natural Recent innovations at the World Bank, such as the resource issues are unevenly treated in CASs. Comprehensive Development Framework (CDF) and Poverty Reduction Strategy Papers (PRSPs), are likely to have an impact on the CAS. The CDF challenges and their linkage to the development is being piloted as an approach to increasing de- process is often weak; data and indicators velopment effectiveness in a number of countries; relating to the environment and natural key aspects of the CDF include an emphasis on resources are lacking; and environment rarely longer term issues, a more holistic approach to features in the section for the Board agenda. development, country ownership, and collabora- tion with other partners in development. PRSPs Typically, the environmental component is have been mandated by the Boards of the World isolated from core issues, i.e. environment is Bank and IMF as a condition for access to debt treated as a sector, and not as a cross-sectoral relief under the Highly Indebted Poor County concern. (HIPC) initiative. The PRSP is intended to be a comprehensive strategy for poverty reduction written by candidate countries, spanning poverty In seeking to improve the treatment of diagnosis, design of policy interventions, and enviromnent in the CAS, the goal is not to insist monitoring and evaluation. In CDF and PRSP on every CAS including an environmental countries, the CAS document is likely to become component. Rather, there is a need for a less a comprehensive strategy document and more strategic approach to the CAS itself. For a business plan resulting from CDF and PRSP pro- instance, facing certain circumstances, a country ing CAS and the envisorts of lessons concen may decide to focus all of its efforts during the what follows will be useful both in CAS prepara- CAS period on one or two key issues, such as, tion and in directing the upstream processes that governance or macro economic stability. In feed into the CAS. other cases, because of the heavy involvement of bilateral donors in environmental areas, the Bank may decide not to work in this field. This report presents an overview and draws Under these conditions, it may not make sense lessons from a series of tasks undertaken to for the CAS to be "greened" in a conventional analyze Country Assistance Strategies.3 The manner, i.e. there will be no need to highlight objectives of this study were to develop a environmental problems and identify solutions framework for incorporating environmental in the CAS. However, it will still make sense for issues into CASs and to identify the practical country teams to try to mainstream constraints that lead to environmental issues environmental concems into other non- being ignored. This report is based on two key environment sector strategies. Thus, a key activities: a Review of thirty seven CASs and element of a more strategic approach to the CAS five in-depth Country Studies. is the linkage of environmental management to Concepts and Methods development outcomes and, more specifically, to poverty outcomes. Greater alignment The interactions between economic and between environmental objectives and the environmental systems are complex, dynamic 2 Environment Department Papers Introduction and often not obvious. However, these analytical matrix, is the CAS and Environment interactions are real and have serious short and decision tree. The decision tree uses information medium-term effects on the welfare of people, in the analytical matrix and identifies a strategic particularly the poor. They also critically affect process for prioritizing among different the quality of development pathways and environmental interventions. whether development will be sustained over time. Policy processes such as the CAS need to Table 1 presents the CAS analytical matrix. The recognize these serious implications and act on matrix shows how environmental changes them on the basis of available information. In influence and are influenced by development this section we present some ideas and strategies and outcomes. In order to understand techniques that can be used to understand the the connections between environment and linkages between economic changes and the development in a specific county, the following environment and to design interventions. quest-ions are asked: A number of broad conceptual frameworks were developed during the CASE program that t What key environmental challenges does can be used to incorporate environmental the country face? concerns into the CAS. The first is an analytical . What factors drive change in these matrix that provides a summary snapshot of the environmental variables? links between economic development and the * How are the poor affected by these environment. This matrix is useful to environmental problems? understand the 'big picture' about a country * How do these environmental factors either and its environmental challenges. Another influence or are influenced by macro and important conceptual tool, which builds on the sectoral strategies and existing institutions? Table 1. CAS analytical matrix Natural resources management Pollution control Global issues Key environmental and | Water Urban air Biodiversity Climate resource problems Irrigation Forests pollution pollution conservation change Current issues - local, regional, global Driving force, e.g.: - population growth; - poverty; - inequality Macro policies - impacts Sector policies - impacts Poverty Links - health - income - security Projects / Programs Impacts Environment / Resource Institutional issues Environrnental Economnics Series 3 Country Assistance Strategies and the Environment The CAS analytical matrix forces us to seek households are dependent on local natural answers to these questions and to summarize resources for their livelihood. Factors that affect them succinctly. As shown in the Table 1, the the quality, quantity, and productivity of these matrix arrays key environmental issues in resources have considerable impact on their columns and includes rows that raise the above income and security. Secondly, environment- questions. These rows and columns can be filled linked diseases impinge severely on poor with secondary information available in World people and this in turn has an impact on their Bank and other publications. The issues ability to be productive. specified in the columns will, of course, be different in different countries. While the analytical matrix and Figure 1 provide background information on how Within the context of the analytical matrix, we environmental considerations can affect would like to draw attention to the row on development outcomes, they do not necessarily poverty links. The World Bank is currently set priorities. Given the number and magnitude attempting to sharpen its poverty mandate by of development problems facing Bank client tying most of its lending and policy advice more countries, it is extremely important to be able to strategically to poverty reduction. It is therefore prioritize among different competing needs. It is essential and timely to highlight the impact of therefore useful to have a strategic process for environmental changes on the poor. making decisions about CAS interventions. Figure 2 presents a CAS and Environment In a recent paper, Bucknall and others (2000) decision tree that identifies one such strategic show that different types of environmental process. changes influence different dimensions of As shown in the CAS and Environment decision poverty. They outlne the dimensions of poverty, tree, there are four key questions that need to be as grouped in the World Development Report addressed for resource/environmental issues to (WDR) 2000/01, and draw attention to their be considered a priority for the CAS: environmental determinants. The same conceptual framework is useful in filling in the * Is the environmental problem under poverty row of the analytical matrix and is consideration a reversible or irreversible reproduced in Figure 1. Figure 1. Dimensions of poverty and links to the environment WDR groupings Dimentions of poverty Determinants As Figure 1 shows, there is clearly an Opportunity Income and Natural resource base environmental facet mptio to poverty. < > f Health |}- Access to medicinal plants Arguably, the most Access to clean water important ways in andsanitation which negative Air quality enviroghment t Security Vulnerability Ecological fragility changes hurt the . poor are by P in Climate change affecting their mp-wParticisionming income and their Epwre decisionmaking Resource rights health. As Figure 1 Note: Modified from "Poverty and Environment," a background paper to the Environment suggests, poor Strategy 2000. 4 Enviromnent Departnent Papers Introduction problem, that is, can the environmental process. There are, however, caveats that apply. change in progress be reversed in the short For example, in the case of irreversible or medium term (for example, air and water problems, Bank actions may be necessary even pollution) or can it be reversed only in the if the issue does not fall directly within the very long run (such as climate change, objectives set by the CAS. A safe minimum safe- aquifer depletion, biodiversity loss)? guards approach may have to be taken in dealing with irreversible problems such as * Does it affect poverty reduction outcomes? climate change or biodiversity loss and such If so, is this because it affects the health of problems may have to be addressed through the poor or because it has a more direct GEF grants and technical assistance even if they impact on their incomes and the natural do not lend themselves directly to CAS related resources on which they depend? interventions. This Chapter outlined the broad analytical * Is the problem closely tied to economnic framework used in the CAS and Environment growth concerns? Will deterioration in the Program. The rest of this report is divided into environment have a direct effect on growth three chapters. Chapter 2 presents a Review of in the short to medium term or in the long fiscal year 1999 CASs and ranks them according term?4 * Given its poverty and/or Figure 2. CAS and environment decision tree growth links, should this Environmental issue (for example, water) environmental problem be a GAS priority, i.e. does it help address the over arching I F goals set for the Bank by the Reversible Irreversible . current CAS? If the answer to the last question is a yes, then the environmental issue under consideration should be addressed within the CAS. As Poverty link suggested in Figure 2, a final step Health and Income and Short/medium Long-term is to then identify environiment productivity vulnerability term effects effects and non-environment sector strategies (presented in the analytical matrix) to address the Not problem. These strategies could clot be implemented through a ..............linked.to variety of lending, AAA and Linked to CAS priorities , CAS grant instruments. This ...... priorities conceptual process can be repeated for all the key environmental issues presented in the analytical matrix.n_s Environmental interventions interventions (lending Figure 2 presents a set of rules for (lending and nonlending) and nonlending) making decisions during the CAS Envirornmental Economics Series 5 Country Assistance Strategies and the Environment to their treatment of environmental issues. Azerbaijan, Dominican Republic, Pakistan, Regional differences are discussed, best Tunisia and Zambia. Key environmental practices examined, and recommendations concerns in each country are analyzed and CAS made for future CASs. The methodology used strategies presented. The chapter then examines for the review is described in Chapter 2 and is practical challenges to mainstreaming tailored to suit the specific needs of an environmental issues. The last chapter, Chapter evaluation. Chapter 3 discusses the CAS process 4, identifies lessons learned and presents in five countries. The countries presented are recommendations. 6 Environment Department Papers An Environmental Review of Country Assistance Strategies In order to understand the environmental to what extent are environmental outcomes performance of Country Assistance Strategies, linked to changes in incentive mechanism thirty seven CASs undertaken in fiscal year 1999 such as pricing and property rights? were reviewed. 5 CASs have been periodically reviewed from different perspectives (Ekbom iii) To what extent are environmental strategies and Bojo 1997, MDOPS 1998, ESD 1995). The linked to poverty reduction efforts? main purpose of this review was to assess the quality of the treatment of environment and CASs were also evaluated on a number of more natural resource issues in CASs. A secondary narrow categories such as whether or not objective was to test a simple approach for environmental indicators were identified and reviewing CASs that future reviews could use to whether stakeholders were consulted. A more monitor changes. Finally, the review served as a complete explanation of the review mechanism for identifying best practices within methodology is presented in Box 2. the Bank. Of the CASs reviewed, nine CASs are from In this review, CASs are assessed and ranked Africa (AFR), one from the Middle East, 11 from according to key criteria, regional variations the Eastern Europe and Central Asia (ECA) assessed, and lessons drawn based on the region, nine from South and East Asia (SAS and rankings and regional differences. Several over- EAS), and six from the Latin America and lapping themes were used to analyze CASs. Caribbean (LAC) region. In general, the review These themes reflect Bank priorities as well as shows that given the range of development practical mechanisms through which practica mechanims throuh whichproblems faced by Bank client countries, FY environmental issues can be incorporated into problems face byiBanent coues fY CASs 1999 CASs give environmental issues their fair share of attention. Resources are targeted toward environmental concerns and CASs were assessed to answer three broad environentissues areman d questions: ~~~~~~~environmental issues are mainstreamed through questions: sectoral policies and incentive mechanisms. However, there is significant variation in the i) Do CASs identify environmental concerns and use Bank instruments to address these quality of treatment given to environmental concerns? matters. Thus, there is considerable scope for learning from examples of best practice. ii) Are natural resource and environmental Problem Identification and Treatment issues mainstreamed by linking them to policy concerns in general and macro and This section assesses the extent to which CASs sectoral initiatives in particular? 6 How and identify and respond to environmental Environmental Econornics Series 7 Country Assistance Strategies and the Environment Box 2 Review Methodology A set of 37 FY1999 CASs were reviewed by region. The indicators or criteria used to review the CASs that are presented here are: Problem identification-were the key environmental problems in the country identified? Was there an at- tempt to identify underlying factors that lead to environmental problems? * Treatment-were the problems addressed with specific interventions? * Mainstreanming-were environmental concerns mainstreamed into other sector and macro activities (at the project, institutional or policy level)? Was there reference to environmental policy reforms in the CAS? * Incentives-Is there any analysis of economic incentives such as property rights and pricing issues, and their implications for natural resources/environment? * Poverty-was there a link made between poverty and the environment? There is inherently some overlap between these categories. For example, poverty-environment linkages often leads to a focus on property rights - this is an issue that is picked up in the category on Incentives as well. Each category received a grade from I to 4 (1= issue not mentioned / not addressed; 2= marginally satisfacto- rily addressed; 3= satisfactorily addressed; 4= best practice). The scale used is a relative scale rather than an absolute one. For example, a grade 4 simply means that it is the best practice among the set of CASs reviewed and should be adopted, but does not mean that it is the absolute best that can be done. The categories are given equal weight in the analysis. This is simply a practical solution to difficulties that would arise in identifying weights. Ranking is also inherently a combination of objective categorization and subjective judgement; thus, small variations between countries may not be significant. CASs were assessed on a few other categories, but there was no ranking assigned. These categories were: * Indicators-is a table of environmental indicators included? * Is there an IDA/IBRD environmental loan or GEF project? If so, what is its main focus? * Does the CAS include a strong link between environmental change and economic development? Does it include an environmental project? Was there stakeholder participation in CAS preparation? Was ESW or other knowledge based activities undertaken prior to the CAS? Note: This was a checklist to see if any strong statemnents could be made about the CAS if the above indicators did exist. Further details are provided in Shyamsundar and Harnilton (2000). concems. A key result is that environmental CAS program matrix.7 In general, most CASs issues feature in almost all CASs. use informnation from National Environmental Action Plans to outline the country's chief Figure 3 shows that the majority of CASs did a environmental concems. satisfactory job of identifying and diagnosing environmental concems. Most CASs include a Figure 4 summarizes the extent to which brief description of environmental problems enviromnental concerns are addressed through faced. In cases where the text does not refer to lending, non-lending and grant instruments. environmental concems, some diagnosis of There are very few countries that do not have problems and strategy analysis is found in the some form of on-going or proposed Bank 8 Enviromnment Department Papers An Environmental Review of Country Assistance Strategies Figure 3. Problem identification and Figure 4. Treatment of environment diagnosis Problem Identification Treatment 4 - -. 4 3 _ 3 ------- W 2 Of_ CY 2 2' 1wYw 1w 0 10 20 30 40 0 10 20 30 40 No. of CASs No. of CASs Ranikinigs: 1= issue not mentioned/not addressed, .2 marginally satisfactorily addressed; 3 =satisfactorily addressed; 4 = best practice. support for environmental activities. Also, as the Figures show, problem identification and Box 3 | diagnosis in the CAS documents do not Rwanda-Country Profile necessarily reflect the actual amount of In Rwanda and several other African CASs, a text environmental work done in the country by the box was used in the introductory pages to pro- World Bank. In several countries, environmental vide a quick description of the country. Incorpo- rating envirounment into these boxes is a good way interventions were included CAS matrices and to treat environmental concerns as part of the over- tables, but there was little diagnosis of all development problem. The Rwanda country environmental problems or discussion of profile included separate paragraphs on several solutions. different issues including the environment. The paragraph on environment is fully reproduced below: In approximately half a dozen cases, environment featured among the objectives of Population: the CAS. The Vietnam CAS stands out in its Economic base: discussion of sustainable development. It is the Economic Development: only CAS that has as its objective the promotion Environment: The large scale movements of popu- lation and livestock since 1990 have put severe of "quality and sustainability" of development pressure on the environment, increasing defores- and "protection" of nature. The Panama CAS is tation and encroachment of protected park lands. another excellent example where Population encroachment is threatening the frag- environmentally sustainable development is one ile ecological zone in the northwest, including the mountain gorilla habitat in the DRC/Uganda/ of three main objectives of the development Rwanda triangle. The massive destruction of live- agenda. The Panama CAS includes a fairly stock in some parts of the country during the geno- detailed diagnosis of environmental concems, cide is starving the soil of nutrients previously analysis of driving forces, and description of provide by animal manure. Bank support. Political Outlook: In several of the African CASs, a text box was used to provide a general up-front description of the country. This is an good tool for quickly Environmental issues are mainstreamed into summarizing environmental concems and core CAS agendas in a variety of ways. treating them as part of the overall development Mainstreaming refers to actions taken in macro challenge. An example of such a text box is and non-environmental sectors to understand reproduced below. the environmental implications of their Environmental Economics Series 9 Country Assistance Strategies and the Environment strategies and to incorporate environmental into sectoral and macro strategies (water concems into their activities. This can be either reforms in Vietnam and India, budget reforms at the policy or project level. Policy changes in Mongolia, energy policies in the Philippines). within the environmental sector were also treated as a mainstreaming activity. Environmental links to macro and trade issues were rarely found in the CASs reviewed. As Figure 5 indicates, over half the reviewed However, Mongolia is a good example of a CASs did a satisfactory or more than country that does identify links between macro satisfactory attempt at mainstreaming. This was GDP growth and natural resource depletion. usually through incorporating environmental Natural resource depletion issues are concems into agricultural and rural sector mainstreamed through a technical assistance activities, water sector strategies or in some program on national accounts and by moving cases energy reforms. In some cases, towards a long-term strategy for fiscal mainstreaming happened through management of copper revenues. The Mongolia enviromnental policy changes. CAS's treatment of risks from ignoring resource Mainstreaming of environmental issues can also depletion should be replicated by other resource be assessed by considering how and to what dependent countries. Box 4 provides further extent incentive mechanisms that are linked to details. environmental change are addressed in the CAS. Figure 6 shows to what extent pricing and Poverty-Environrment Linkages property rights issues feature in the CAS. In general, there was a greater focus on policy Perhaps the most significant result from the reform in general relative to fixing tariffs, prices CAS Review is that insufficient attention is paid and property rights (which form a subset of to the links between poverty reduction and policy reforms). environmental change. As depicted in Figure 7, more than half the reviewed CASs failed to Policy issues featured in the CASs in different connect poverty and environmental concems ways. In Latin America, there was support for (this large number is partly driven by the strengthening environmental policies and disconnect between poverty and environmental regulations; in Eastem Europe accession to EU issues in the ECA countries). Those CASs that was a major driver of environmental regulations did identify the impacts of environmental (especially in Hungary, Lithuania and Bulgaria); degradation on the poor, did not pursue this and the Asian CASs incorporated environment issue further in terms of specific interventions.8 Figure 5. Mainstreaming environmental Figure 6. Treatment of incentives issues Mainstreamed Incentives 4 4 4 - 0 10 20 30 40 0 20 40 No. of CASs No. of CASs Rankings: 1= issue not mentioned/not addressed, 2 = marginally satisfactorily addressed; 3 = satisfactorily addressed; 4 best practice. 10 Envirrnment Department Papers An Environmental Review of Country Assistance Strategies I Box 4 Box 5 Mainstreaming Natural Resource Managing Poverty-Related Depletion in Mongolia Environmental Degradation in Lesotho Resource depletion fuels growth (1985-96) The Lesotho CAS builds on the premise that "ru- 20,000 - _ ==- = _ _ '=: ral poverty is a cause and consequence of the seri- X .. ---- . --,-- - - ous environmental problems confronting a 10,000- .Lesotho." The CAS goes on to make a clear dis- 5,000 -- tinction between the impact of environmental 0 degradation on the urban and rural poor. Urban 1 2 3 4 5 6 7 8 9 10 11 12 Year problems are linked to health problems, while ,___G - rural environmental degradation is linked to a -GDP - - - - - Corrected GDI decline in income levels. Urban environmental Note: Based on Ministry and Nature and Environment, degradation is managed through the govern- Mongolia. Mongolia CAS, 1998. ment's programs that upgrade the basic infrastruc- ture of the poor-potable water, sewerage and Resource depletion is calculated as the value of solid waste disposal. Rural environmental degra- extracted copper and gold in the ground, plus the dation is viewed as "a formidable challenge to environmental damage to forest and pastureland poverty reduction in Lesotho," and "is manifested from agricultural/livestock production. Because in severe soil erosion, resulting in diminished soil mineral resources and pastureland are such im- fertility and crop yields, deforestation and range- portant economic assets, traditional national ac- land overgrazing." The government, with the sup- counts (which ignore these resources) do not ad- port of the Bank, EU, and other donors is devel- equately measure growth and savings. While this oping a comprehensive agricultural sector may be reasonable in the short run..., it is not sus- investment program (ASIP) to address these tainable and ... depresses future incomes. Further issues. analyses will highlight the need to boost savings through macroeconomic and sectoral reforms (Mongolia CAS 1998). Nicaragua and Panama are two other countries that also focus on poverty-environment Figure 7. The poverty-environment nexus linkages. The Nicaragua CAS clearly spells out the link between poverty alleviation and Poverty rational exploitation of natural resources. In the 4 Panama case, the link is operationalized 3 through a project, the Rural Poverty and 0 2 - ------------- Natural Resources Project that is piloting 1 community-based and production-oriented 0 20 40 activities. In general, poverty concerns are more No. of CASs often linked to natural resource degradation Rankings: 1= issue not mentioned/not addressed, 2 = margin- and less frequently linked to the health impacts ally satisfactorily addressed; 3 = satisfactorily addressed; 4 of water and air pollution. best practice. Lesotho is a good example of CAS that does Discussion focus on the interactions between poverty and Table 2 summarizes how the thirty seven CASs the environment. The CAS identifies the for FY99 scored on five broad categories and existence of feedback mechanisms between gives regional summaries. Scoring is on a 4- rural poverty, population pressure, environmental degradation and economic slow- point scale with I being the minimum score and down. Box 5 describes how the Lesotho C'AS 4 indicating best practice. As the table indicates, addresses these issues. the overall score was 2.35. Thus, on average Environmental Econornics Series 11 Country Assistance Strategies and the Environment CASs rate roughly one third of the way between received partly reflects a major focus on "marginally satisfactory" and "satisfactory." transition related issues. These differences also There is clearly room for improvement. likely reflect differences in regional strategies and efforts put into the CAS by regional In conclusion, environmental considerations environment departments. In general, there is a feature in almost all CASs. Most CASs have a need to strengthen the environmental quality of lending or non-lending project related to CASs in low-scoring countries. environmental or natural resource issues. However, there is considerable variation in the The CAS review clearly indicates that identification and analysis of underlying consideration of poverty-environment driving forces. A good analysis of linkages is very poor. As Table 2 shows, the environmental problems in the CAS is usually mean score on 'poverty links' (1.78) is the lowest related to the availability of economic and among the different variables considered.9 sector work on the environmental issues. Poverty-environment links are addressed mostly within the context of natural resource Several CASs attempt to mainstream management. A comparison of regional environmental and resource considerations. differences shows that the average CAS in the Policy issues are generally addressed through Asia performed better than the others. lending for environmental policy reforms and Countries in the Eastem Europe and Central integration into sectoral strategies. Incentive Asia region paid scant attention to poverty mechanisms such as tariff reform and property issues and scored a minimum rank of 1. rights issues feature in several CAS, but not as frequently as other policy concerns. In general, Emphasis on "selectivity" may lead to a environmental issues can be mainstreamed into decline in emphasis on environmental CASs by: i) reforming sectoral policies that considerations. Selectivity and prioritizing are impact environmental issues; ii) ensuring that important to the CAS process and outcomes. countries with a huge foreign exchange Nonetheless, a focus on selectivity can side-line dependence on natural resources develop environment activities - which are often not sustainability criteria for managing both their "perceived" to be as central to development. natural resources and the revenue streams from Mainstreaming environmental considerations resource depletion; and iii) identifying prices, will only partially mitigate this effect of property rights, fiscal and other incentive selectivity. mechanisms that influence environmental considerations and using these mechanisms to Better use of environmental indicators and correct environmental externalities or improve analysis of changes in environmental trends is efficiency of resource allocation. required. Monitoring and evaluation of long term changes is practically impossible without There exist significant regional differences in use of indicators. Except in the case of South the treatment of environmental issues . The Africa, none of the other countries presented a regional CAS rankings for environmental table of environmental indicators. This performance range from 2.97 in East Asia to 1.81 information is routinely collected as part of the in Eastern Europe and Central Asia. The high World Development Indicators. Thus, the costs scores East Asia CASs receive result from of including a set of environmental indicators consist,nt efforts to mainstream environmental along with the social and economic tables in the issues and the use of innovative economic tools CAS would be low, while the long term benefits in doing so. The low score of ECA countries are likely to be high. A strong recommendation 12 Environment Department Papers An Enviromnental Review of Country Assistance Strategies Table 2. FY99 CAS ratings Identify issues Treat issues Mainstream Poverty links Incentives applied Avg. Gabon AFR 3 3 3 1 2 2.50 Gambia 2 2 3 1 1 1.67 Kenya I I I I I 1.00 Lesotho 4 3 4 4 3 3.33 Malawi 3 3 2 2 2 2.50 Mali 2 2 2 1 1 1.50 Rwanda 3 3 3 2 2 2.50 S.Africa 4 3 4 2 - 2 3.00 Senegal 3 3 3 2 1 2.17 Yemen 3 4 4 3 3 3.33 Albania ECA 3 3 1 1 2 1.83 Belarus 1 2 1 1 1 1.17 Bulgaria 1 3 2 1 1 1.67 Croatia 2 3 2 1 1 1.67 Hungary 1 3 3 1 1 1.83 Kyrgyz Rep 3 3 3 1 3 2.67 Latvia 2 3 2 1 2 2.00 Lithuania 1 2 1 1 2 1.50 Macedonia I 1 2 1 1 1.17 Moldova 1 2 2 1 2 1.67 Tajikistan 2 2 2 1 1 1.67 Uzbekistan 3 3 4 1 3 2.83 Bangladesh SAS 3 4 3 3 2 2.83 India 2 4 4 3 3 3.33 Nepal 2 3 3 2 2 2.33 Lao PDR EAS 3 3 3 2 3 2.67 Malaysia 3 2 2 1 3 2.50 Mongolia 4 4 4 4 3 3.83 Philippines 2 4 3 2 2 2.67 Thailand 4 4 3 2 2 3.00 Vietnam 3 4 3 3 3 3.17 Bolivia LAC 2 2 2 1 2 1.67 Guatemala 2 2 2 2 3 2.17 Mexico 3 3 3 2 3 2.83 Nicaragua 3 3 3 3 3 3.00 Panama 4 4 3 4 3 3.50 Trinidad & Tobago 3 3 2 1 2 2.17 Averages Total 2.49 2.86 2.62 1.78 2.08 2.35 AFR 2.80 2.70 2.90 1.90 1.80 2.35 ECA 1.75 2.50 2.08 1.00 1.67 1.81 SAS 2.33 3.67 3.33 2.67 2.33 2.83 EAS 3.17 3.50 3.00 2.33 2.67 2.97 LAC 2.83 2.83 2.50 2.17 2.67 2.56 Rating scale: Region codes: 1 = issue not mentioned/not addressed AFR = Africa 2 = marginallv satisfactorily addressed ECA = Eastern Europe and Central Asia 3 = satisfactorily addressed SAR = South Asia 4 = best practice EAP = East Asia and Pacific LAC = Latin America and the Caribbean Note: Yemen, as the only MENA country, is classified with AFR. Environrmental Economics Series 13 Country Assistance Strategies and the Environment is that a set of standard environmental were almost exclusively focussed on National indicators be incorporated into CAS Environmental Action Plans (NEAPs). appendices. Notwithstanding the importance of NEAPs, the analytical work on the environment seems Another obvious gap revealed in this review is insufficient to address the complex set of the limited amount of environment related specific challenges faced by client countries. analytical and sector work available to inform More ESW, particularly on cross-sectoral issues, lending. Environmental ESWs in the 1999 CASs seems merited. 14 Environment Departrnent Papers Testing a Practical Approach 3, through Country Studies Environmental changes can have significant influenced by these environmental issues. This impacts on the welfare of people in developing information was discussed with Bank and non- countries. Policies that result in negative Bank stakeholders and final recommendations environmental impacts can, over-time, or were made to Bank staff who worked on CASs. indirectly, have serious negative development In general, the premise underlying this outcomes. On the opposite spectrum, approach was that the CAS could be influenced environmental interventions can result in by a) providing structured information to positive development outcomes. Because of the country teams, govemment officials and other importance of Country Assistance Strategies stakeholders; b) engaging Bank staff and other reforming policies, it becomes important to stakeholders in discussions about ensure that they do not ignore environmental environmental issues; and, c) drawing their impacts. attention to the importance of linkages between development outcomes and environmental This chapter focuses on five CAS country change. The participatory methodology used in studies. These case studies were undertaken as the case studies is more fully described in Box 6. part of a CAS and Environment program started in 1998. The aim of the country studies was to Atrthenend ea cas tudenvironmental - . ~~~~information and their links to development identify a framework for ensuring that CASs consieredand nco~rate envronmntaloutcomes were presented to Bank country teams in a CAS paper that included a "CAS analyhcal issues. The case study countries included matrix," written text, and environmental Azerbaijan, the Dominican Republic, Pakistan, indicators. The "CAS analytical matrix" is a key Tunisia and Zambia. These countries were organizing mechanism for identifying the selected to reflect different stages of economic connecions between environmental problems development and different continents. There and economic development. This matrix arrays was also a practical element involved in information about country-specific choosing the case study countries. The choice environmental sectors and issues in columns partly depended on the tining of the CAS and against rows representing i) a summary of whether country teams were interested in issues; ii) identification of driving forces; iii) obtaining additional environmental input for delineation of links between the environmental the CAS. issue and macro, sectoral and project-level actions; and iv) policy and institutional issues. Each case study involved a series of practical An example of such a matrix for Argentina is steps to identify the environmental challenges presented in Table 3. facing the country under consideration, outline their underlying causes, and highlight the While Argentina has several important economic outcomes that were most likely be environmental challenges, Table 3 highlights Environmental Economics Series 15 Country Assistance Strategies and the Environment Box 6 Case Study Methodology The first phase of each case study included: * The development of a partnership between the case study team and the country team embarking on a CAS * Stocktaking of available documents on environment and economic development issues from the Bank, gov- emments, global organizations, NGOs, and academia * Identification of key environmental concerns and underlying causes and institutional constraints to sound environmental management * Identification of environmental indicators for the case study country. Once the basic information about the country had been collected, this information was presented in an orga- nized manner to the CAS country team. The information was presented in a 'CAS analytical matrix.' An ex- ample of such a matrix is presented in Table 3. Following the development of the analytic matrix was a process for setting priorities and recommending inter- ventions. This process included: * Travel to the countries to discuss priorities with govermment, NGO and academic groups and fill data gaps * Discussions with regional Environment Department team members and the country team * Linking information within the CAS analytic matrix to specific economic activities that were a priority for the government and the Bank. Based on these discussions, a CAS and Environment note was prepared for the country team. This note in- cluded a discussion of priorities, a set of indicators, the analytical matrix and a matrix of country environmen- tal and non-environmental programs and their environmental impacts. This note was the final input into the CAS process and document. only three of these-forest resource recommends a CAS environmental strategy. management, water pollution management and Appendix 1 and 2 present CAS analytical solid waste issues. The factors that influence matrices and environmental indicators these three environmental concerns are associated with each CAS environmental represented in the 'rows' of this matrix. strategy. The chapter concludes by identifying the characteristics of an environmentally sound The next section in this chapter presents a CAS. It draws lessons from the analysis summary of the environmental input that was undertaken and the effort to influence the CAS used to inform the CAS in each case study in each country. Recommendations are made country. Each CAS input includes a brief based on these lessons. analysis of key environmental issues and 16 Environment Department Papers Table 3. Environmental analysis matrix - Argentina Key issues Forests management Water pollubon management Solid and hazardous waste Current issues Between 90,000 and 120,000 ha of natural forests and Groundwater pollution (arsenic pollution and salinization). One of the most About 47,000 tons/yr. of hazardous wastes are produced in - local woodlands are lost each year. important pollution problems because of associated health-risks and the the Province of Buenos Aires alone; Hazardous waste is E - regional Almost 1% of GDP was spent on damage repair after the irreversibility of contamination. illegally unloaded in open air dumps, septic tanks, and 1992 and 1982 floods, which are partly attributable to Surface water contamination (from industrial effluents & untreated sewage) leaching pits; Some open air dumps raise concernn due to 8 - global deforestation of watersheds; Major cause of property damage (in combinatbn with flooding), amenity loss inadequate location, design and operation; Burning of solid O 3.1n million ha were inundated in 1992 causing the and ecological damage in and around major urban areas and several inland waste in open air dumps contributes to particulate pollution 3.1 million ha were inundated in 1992 causing the ~~~~~~~~~~~~~~~~~~~in the air; evacuation of more than 121,000 persons. An estimated 1.5 lakes; million head of cattle and 30% of soybean plantings in In several inland locations the water bodies are polluted enough to affect Garbage piles up in empty lots and local streams-problems Formosa and Misiones, and Chaco's cotton crop were water treatment plants. Health impacts are therefore more likely there than arise from inadequate buffering from inhabited areas, affected in metropolitan Buenos Aires. accessibility to scavengers and children, location in low areas subject to flooding and contamination of groundwater. Driving force, e.g.: The native forests are under pressure from All urban pollution problems are expected to increase as more people move All of the urban pollution problems are expected to - population growth expanding/shifting agriculture and overgrazing. to urban areas. This may be especially true for poorer areas since increases in increase as more and more people move to urban areas. - poverty Floods are expected to become more severe as rural poverty have resulted in migration to urban areas. This may be especially true for poorer areas since the - inequality deforestation increases. detected increase in rural poverty has resulted n increased migration to urban areas. Impacts of macro Macroeconomic instability has contributed to loss of native policies forests through / by: i) limiting job opportunities for the poor, who turn to subsistence agriculture in and around forests; ii) inflation, which boosted the demand for land as a long-term illiquid hedge and cattle as a short-term liquid hedge. This has lead to expansion of the frontier at the cost of native forests; iii) making Government funds scarcer, depriving protected areas of effective protection. Impacts of sectoral Tariffs on the import of pulp and paper products, grants for Little monitoring of ambient water quality and virtually no analysis of health No specialized facilities for offsite treatment or safe disposal policies tree planting, and regulations requiring replanting, have effects and other economic costs. of hazardous wastes; Control over quality of wastes resulted in natural forest conversion to plantations; Surface water contamination. None of the provinces have adopted deposited in landfills leads to hazardous wastes being Lack of an inventory of native forests and a solid knowledge environmental quality objectives for surface waters; dumped illegally under uncontrolled condition; base has hampered development. The pollution discharge fee stipulated by Decree 2125/80 was never Low tariffs and the same tariffs for all waste generators; No implemented. discharge fee reflecting cost of removal, treatment and safe disposal of each type of waste. Impacts of projects Existing pollution management projects are expected to improve the current Existing pollution management projects are expected to and programs situation in some of areas. improve the current situation in some of areas. Poverty impacts Approximately 28% of Argentina's poor are located in areas Groundwater pollution Open air dumps are adjacent to irregular settlements where at high risk from flooding; Health-risk exposure for large share of households, including a major share of most households depend on groundwater; Native forests are the basis for the production of many the poor; Only 24% of the rural population have access to safe water, 17% Poorly buffered dumps result in children and other from forest products, benefiting mostly rural poor populations; have access to piped water, and only 3% have connections to sanitary sewers; nearby settlements having easy access. A complete lack of support for small farmers has made it The rates of incidence of diarrhea reached 27% in Misiones and 39% in Salta difficult to undertake tree planting; among children aged 0-4. Sedimentation from soil erosion is more likely to affect poor people's health due to dirty water. Environment / No national laws re watershed management exist; instead it Fragmented activities among agencies leading to overlapping jurisdictions, Absence of facilities for the treatment and disposal of Resource Institutional is the responsibility of the provinces. weak monitoring and enforcement of standards; hazardous wastes; Practical responsibility of municipalities, issues The coordination and management of water resource data is weak due to the but legal responsibility of provinces results in problems. privatization of 'Agua y Energia' system. Country Assistance Strategies and the Environment Azerbaijan environmental challenges and their links to The Azerbaijani CAS was approved in Auguist 1999. economic development. This is followed with a The dAzeradijamond below shs a zerovedaijan'ust 1proposal for a CAS environmental strategy. The data diamond below shows Azerbaijan l Further details about the underlying forces that environmental position relative to comparable low drive environmental change in Azerbaijan and income countries. This case study was undertaken by their sectoral and macro links are presented in a Samuel Fankhauser. matrix in Appendix 1. Infant mortality Key Environmental Issues rate (per '000 Water Use and Pollution. Compared to other countries with similar per capita income, Azerbaijan has a relatively advanced system of Withdrawal for C02 emissions urban infrastructure that was inherited from the agriculture (% of Z - per unit of GDP Soviet Union. Nonetheless, piped drinking total freshwater o(kg per $ water is provided to less than 50 percent of the population, and those who do receive water obtain it at a subsidized rate. Generally, water is Access to of low quality and not potable. Hot spots for urban areas water pollution are the Apsheron Peninsula (% of urban) (including Baku and Sumgait) and the Caspian Sea. The two main sources of pollution are Azerbaijan Low Income Countries industry and oil exploration, with insufficient waste water treatment also contributing to the problem. Azerbaijan also has a high rate of Azerbaijan is a country that is rich in oil and annual water withdrawals. About 74 percent of other natural resources. Careful management of the water is used for irrigation with water losses these resources, particularly its oil wealth, will being as high as 50 percent. Key actions to be critical for Azerbaijan's economic improve water supply efficiency and quality development. Azerbaijan also suffers from are: improvements in irrigation efficiency, severe environmental degradation, a legacy improved water utility management (including from industrial activity prior to independence. loss reduction and cost-based pricing), and, Its main environmental problems include high improved solid waste and waste water levels of air and water pollution in certain hot management. spots, inefficient water use, low energy efficiency, and high carbon emissions per capita. Air Pollution and Greenhouse Gas Emissions. Air pollution problems in Azerbaijan are While Azerbaijan faces many environmental concentrated in a small number of 'hot spots': 96 challenges, there is also considerable potential percent of measured emissions occur in 5 cities. for environmental improvements through win- The major sources of air pollutants are power win measures. With small adjustments, priority plants, industry and vehicular traffic. Industrial development projects can result in decline has lead to a temporary improvement in environmental benefits. Some of these air quality, although this trend has been opportunities are outlined below. The following partially offset by an increase in pollution-per- section summarizes the environmental input unit-output, the virtual absence of pollution provided to the CAS country team. It includes prevention and abatement measures, and an an assessment of Azerbaijan's key increase in the vehicle fleet. Particulate matter 18 Envirornment Departnent Papers Testing a Practical Approach through Country Studies emissions appear to be especially harmful with international importance is sturgeon. Since 1991 estimated health costs amounting to about 3-4 the stock of sturgeons has declined from 140 percent of GDP (NEAP 1998). Azerbaijan also million animals to 35 million animals or less. has relatively high per capita emissions of The main reasons for the decline are over- greenhouse gases-5 tolO times higher than fishing, management problems, and pollution. countries with similar per capita incomes. One The first two problems are addressed under main source of emissions is oil exploration, and Bank projects. the fact that a significant amount of associated gas is vented, rather than captured and put to CAS Strategy productive use. Another reason appears to be Given the urgency of the problems faced in the very low energy efficiency of the country. Azerbaijan, environmental issues have been a This latter issue would be most appropriately priority for many donors. The focus so far has addressed in the context of overall reform of the been on environmental clean up, the Caspian power sector. sea, capacity building, and activities related to global conventions. While invested sums have Azerbaijan Re s Exploirectation.l nexractive e n been significant, they are small relative to needs Azerbaijan has a direct and negative effect on and many projects have been pilot activities. In water and air quality. The extent of future the short term, Azerbaijan needs to tackle pollution will be largely determined by the pollution hotspots, which can lead to significant quality of in-built mitigation measures and improvements in welfare and economic overall environmental regulation and performance. It is recommended that the CAS enforcement. The indirect effects of the oil boom exploit win-win opportunities that are are less clear. The income effect from oil wealth complementary to other transition and reform is likely to lead to more demand for priorities and support environmental standards environmental resources, but may also lead to a that reflect pollution risks and budget switch from low-quality domestic goods to constraints. imports (further helped by the expected appreciated of the exchange rate). Examples A long-term environmental strategy in would be resurgence of timber imports (easing Azerbaijan would center around a framework pressure on domestic forests) and perhaps for sustainable development and growth. This natural gas, which was replaced by cheaper strategy would focus on management of domestic mazut for balance of payment reasons. resource rents related to oil wealth; better In the long-run mechanisms have to be put in environmental management capacity at all place to make the exploitation of oil resources levels of government; and deepening and compatible with sustainable development. consolidation of environmental improvements with measures beyond the immediate priorities, Natural Resouirces and Ecosystems. While forest for example, solid waste and waste water statistics do not show noticeable deforestation, management and lead phaseout. there is evidence of rapid deforestation around refugee camps and areas affected by the 1992- The Azerbaijan country team recognizes the 94 war with Armenia over Nagorno Karabakh. need for environmental improvements, and the Without other sources of energy, internally envisaged lending program includes several displaced people have had to rely on fuelwood. components that should enhance the quality of This problem is partially, but not fully the environment in Azerbaijan. The main addressed by the Bank's Pilot Reconstruction environmental recommendations that were Project. Another resource of national and proposed for the CAS are outlined below. Enviromnental Economntcs Series 19 Country Assistance Strategies and the Environment Lending and On-goinig Activities. Azerbaijan has where small changes in non-environmental an on-going Environmental Support Program. sector lending can result in environmental Also proposed is a new project, the Azerbaijan improvements. Examples of such opportunities Environimental Investment and Management include: pollution reduction through energy Project, which focuses on privatization and efficiency measures, for example, reduced environmental education. The environmentally transmission and distribution losses in the sound privatization component of the new power sector as part of a program for project would help (i) achieve environmental commercialization of the power sector, improvements and support the privatization of improved water quality and efficient use highly polluting enterprises, (ii) establish a through the proposed agriculture / irrigation consistent framework for integrating project, and public sector reform at municipal environmental issues into the privatization, (iii) levels. Improved licensing and control measures introduce management tools and liability for sturgeon fishing in the context of standards for assessing environmental damage restructuring the relevant state enterprise from privatization and for managing (Azerbalygh), capturing currently vented environmental liabilities, (v) finance pilot natural gas as part of the restructuring of the oil environmental assessment studies for highly sector, and strengthening environmental sensitive enterprises, and (vi) provide related management as part of public sector reform are training and assistance for environmental other examples. assessment. Economic and Sector Work. Azerbaijan's urgent The environmental education component would pollution problems and associated health risks support the development of a comprehensive need to be addressed. It is proposed that environmental education system through (i) economic and sector work be undertaken to developing of curricula for environmental define and identify options for establishing education at primary, secondary, and college environmental standards that reflect pollution education levels and teacher training materials, risks and budget constraints. (ii) conducting teacher training in selected schools,(iii) educational campaigns targeting Technical Assistance. Azerbaijan would benefit affected populations in environmental sensitive from technical assistance to ensure that its or polluted areas, and (iv) improving linkages management of oil wealth is consistent with among the State Committee for Environment, sustainable development. Support for Ministry of Education, Teachers Associations, developing a green accounting program and environmental NGO's and community groups. systems for managing resource rents are recommended. Integration of Environment in Sectoral Lending. There are several opportunities in Azerbaijan 20 Environment Department Papers Testing a Practical Approach through Country Studies Dominican Republic tourism is a key consumer of domestically produced goods. For example, 30 percent of the Thismod bcAS washfinaize DominJunc1999 Thep datademand in the agricultural sector comes from diamon belowshows ominicn Repulic'sthe tourism sector. In general, sustainable environimental position relative to comparable lower deveopm sector wll bucialf nzidde inome ounties. his asc tiid wasdevelopment of this sector will be crucial for a middle income countries. This case stuldy was, cotne poitv soiladeooi undertaken by Lisa Segnestam and Kirk Hamilton. dopmen insthe scount Unfora development in the country. Unfortunately, the current type of inexpensive mass-tourism and Under 5 mortality its exponential growth have not been very (per '000 live births) beneficial for the environment or visitors. It is important that emerging problems associated with the structure of this sector be analyzed and 0.5 p addressed. C02 emissions \ Depletion of (kg/'87$ GDP) natural resources Water, sewage and solid waste. Water supply, sewage and solid waste influence health and economic activities in the DR, particularly because of their impact on the tourism sector. In Rural population comparative terms, access to potable water in density the DR is well below average access among - DR comparable income groups. Tourists are affected - Lower middle income by water pollution, sewage in the ocean, and solid waste in natural areas. For instance, British tourists decreased by almost 20 percent between The Dominican Republic (DR) is dependent on 1997 and 1998 as a result of illness from natural resources for a number of significant unsanitary water supply. Furthermore, solid economic activities. Priority areas where waste spillage acts as a disincentive for environment and development are clearly investors, decreasing foreign capital inflows to linked are tourism, water supply, and sewage the country. Tourism also increases production and solid waste management. Medium and of solid waste and sewage both through longer term issues that are also need attention increases in the number of visitors and in include land tenure and land use planing, informal dwellings that arise around tourist mining, environmental information and areas. Despite private sector interest and the education, and watershed management. In importance of clean water and waste general, the close ties between natural resources management for economic development, the and economic growth in the DR ensure that government's efforts in this area have been sound environmental management is an hampered by lack of resources, management, important development objective, and land-fills. A related major issue that needs Key Issues to be addressed is the lack of waste regulations in informal communities that grow around Sustainable Tourism. Tourism is the DR's largest tourist areas. source of income. In 1998, despite a strong hurricane, 4 percent of GDP came from tourism. Lack of environmental awareness and The tourist sector also has strong horizontal and understanding of the links to health have vertical linkages, i.e., any decline tourism will contributed to current problems associated with contribute to a decline in other sectors since solid waste and sewage management. Enhanced Environmental Economics Series 21 Country Assistance Strategies and the Enviromnent education in general, and environmental broader program of community-based natural information and education in particular, would resource management. be very important to stem degradation. There is also a need for efficient transfer of information Land tenure and land-use planning. The land to stakeholders, especially between provincial tenure system in the DR is characterized by and municipal governments. large government holdings and few private owners. Distribution of productive low lands is Mining. The mining sector in DR is small but skewed, pushing many landless rural workers has considerable potential. Unfortunately, it to either marginal lands or to the country's faces several institutional problems. urban areas. Those that move to the marginal Uncertainties concerning environmental lands often overexploit the land due to unclear regulations, lack of enforcement of mining property rights. Parts of publicly owned land policies, insecurity of tenure, and inadequate are used for sugarcane plantations, cattle information systems all contribute to the chalenge facd b thesectr. heseprobems ranching or other types of production that are challenges faced by the sector. These problems both environmentally harmful and economically have contributed to a decline in mining revenues. Mineral exports were about $250 sub-optimal. million in 1996/97 and declined to $150 million millon i 199/97and eclied o $10 miion Almost 40 percent of the land in the Santo in 1998. In 2004, mineral exports are expected to Almo pren of thelani the ato be $10 million if no action is taken. However, in mDomingo area is illegally possessed at this a scenario with mining reforms, these figure momentue st Thea ofta wl functin could be in the range of $400-500 million per land tenure system. This system is from the year. From an environmental perspective, beginning of the century and is not designed to mining reforms would need to address gaps in handle the 32,000 transactons per year that are environmental norms and regulations and currently carried out. The resulting problems control mining related pollution. An important are noticeable in the tourist sector - illegal use pollution problem that needs to be addressed is of protected areas for tourism is rampant. In ground and surface water contamination as a general, the DR needs a better system of land result of acid water generated from sulfide rock tenure and land-use planning in order to exposure to the atmosphere. efficiently use its land resources. Watershed management. Upstream deforestation CAS Strategy has had severe economic and environmental hashadsevueres eonomicwaneeds evironmSenal are DR's environmental strategy for the CAS needs consquenes fr wterseds n D. Seeralare to focus on issues that are most important from affected by sedimentation (up to 50 percent in a development perspective and for poverty some cases) increasing the costs of managing redclon. Thisplie ensur thatD hydropower reservoirs. In response, the reduction. This implies ensuring that DR's Ministry of Agriculture has recently initiated a tourism sector continues to be a leader in reforestation program. So far, approximately economic development, mitigating problems 10,000 hectares have been planted with trees. such as water pollution, and reforming existing The project contributes both to reforestation and land tenure and land-use planning systems. It is increased employment opportunities in upland recommended that this be carried out through areas. However, this program is in effect a tree- lending, enhancement of on-going projects, growing subsidy to private landowners. It is economic and sector work and technical likely that these funds would be better used in a assistance. 22 Environment Department Papers Testing a Practical Approach through Country Studies Leniding anid enhancement of on-going projects Currently, there are several initiatives being undertaken in this area by the Inter-American Water and Waste Sector. The World Bank Development Bank. These efforts may be supports several projects related to waters sewer ceomplmented Throg acti s une te and waste management. However, some of existmng judicial . rorm am. these projects could be enhanced by adding on existig judicial reform program. new components. For example, it would be Economic and Sector Work and Technical desirable to add an information compoinent to Assistance. Two pieces of analytical work were existing solid waste management and recommended for inclusion into the CAS. wastewater disposal projects in tourist areas. In particular, it would be appropriate to add an Tourism. It is important that economic and sector education component on health effects to the work be undertaken on constraints to and new Leaming and Innovation loan on waste- opportunities for low volume high-retur management. Another option would be to tourism. Tourism related questions that need to provide funding to education-focussed NGOs to be addressed include: what kinds of regulatory work on health and waste-management issues. systems need to be in place? What are some Lastly, it would be useful to address the role of opportunities for eco-tourism and health- the informal sector in recycling waste and tourism? How can bigger hotel-chains with their identify mechanisms to evaluate and support stringent environmental standards can be on-going waste-management activities at the promoted? The existing satellite accounts for community level. community level. tourism, developed by the DR could be a source of information and/or a point of departure for Watershed Protection and Land-Use pla g this study. If and when the country decides to Watershed degradations asr problem arrange semiars with experts, the Bank may be with major cost implications for managing able to play a catalytic role, helping the process hydropower reservoirs. Projects focussed on to get sa rted. stemming degradation in watersheds need to to get started. give careful attention to issues of poverty Mining. A technical study is recommended on a reduction and stakeholder participation. An mining strategy for the Dominican Republic. expansion of the existing watershed project to This study would need to identify mechanisms include poverty alleviation, rural development, for reforms in four areas: institutional, legal, and community-based natural resource environmental, and enterprise and management is recommended. privatization. It would be desirable to use an .. . . ~~~~incremental approach to move this forward. Another area where additional work is required is in land-use planning and land tenure reform. Enviromnental Economics Series 23 Country Assistance Strategies and the Environment Pakistan are presented in detail in Appendix 1. What follows is a brief description of these problems The CAS was postponed because of political changes adrcm endation ior thes. in Pakistan. However, the informationi presented below was usedfor preparing an environment Key Issues strategy, which in turn will act as input to the CAS. This case study was undertaken by Priya Agricultural Sustainability and Water Use. The Shyamsundar. International Water Management Institute estimates that Pakistan is among 17 countries in the world that are likely to face the most severe Infant mortality water scarcity in the future (Seckler 1998). Part rate (per 000 live of the underlying driver of this looming births) problem is Pakistan's irrigation system. The Indus Basin Irrigation system (IBIS), which Commercial Freshwater provides the bulk of the water for irrigated energy use per agriculture, is plagued by inadequate drainage, capita (kg of oil resources per low delivery efficiency, distribution inequities, equivalent) capita (cu m) and wasteful water-use. This has resulted in large-scale water-logging and salinity problems, which are further aggravated by emerging saccess to groundwater scarcity. Groundwater use has sanitation (% of been critical for agricultural growth in Pakistan, but rapid increases in use have lead to over- exploitation and intrusion of saline water into Pakistan Low Income freshwater aquifers. Pakistan's economy has seen impressive growth Natural Resource Degradation. Deforestation is in the eighties and early nineties. However, this perceived to be a major problem in Pakistan, growth has not been accompanied by partly because of its implications for environmental and social improvements. The biodiversity loss and partly because of poor general decline in Pakistan's environmental people's dependence on forests. Official health is supported by several facts: water statistics suggest that there has been a 27 availability has declined from 5,300 cubic percent increase in forest area between 1980-81 meters per capita in 1951 to a borderline 1,200 and 1996-97. However, various other sources m 3/cap today; roughly 38 percent of Pakistan's suggest that Pakistan has been deforestng its irrigated land is water logged and 14 percent sgetta aitnhsbe eoetn t irrgatned land, ios watere lefogged d 1a ercten 3small area of forests by about 3 percent per year saline; and, forests were deforested at a rate 3 adta od ims a edcesn pecn pe yea in th eihis .Bnrn and that woody biomass may be decreasing percent per year m the eighties (Banuri andbeen4prctto6ecnterya(Bui Khan 2000, World Bank 1997a, WDI 1999). between 4 percent to 6 percent per year (Banuri Finally, water polution is a major concer with and Khan 2000, Biodiversity Action Plan 1998). an estimated 60 percent of infant mortality Furthermore, 80 percent of Pakistan's attributed to it (World Bank 1997b). It is also rangelands are estimated to be degraded (NCS estimated that environmental degradation costs 1992). Pakistan approximately 3.2 percent to 5.5 percent of GDP. Water Pollution. Water pollution is perhaps the most serious environmental problem facing Pakistan's key environmental problems, their Pakistan. An estimated forty percent of hospital driving forces and cross-sectoral determinants beds are occupied by people with water related 24 Environment Department Papers Testing a Practical Approach through Country Studies diseases; 60 percent of infant mortality is importantly, only about 17 percent of these associated with water-related infections and households used stoves with chimneys (Hosier parasitic diseases (World Bank 1997b). Data also 1993). This is a significant problem, particularly indicate that Pakistan and Bhutan rank second because it affects poor women and children the among 31 Asian countries in annual diarrheal most. episodes among young children (WHO 1995). Transport and industrial pollution are the Water pollution in Pakistan has three main principal contributors to dirty outdoor air. sources: domestic and municipal waste, Diesel dominates the transport sector (almost 69 industrial pollution and agricultural run-off. percent of total transport fuel demand in 1997 Domestic and municipal waste seems to be the was met with diesel), increasing human most important source, though the evidence on exposure to small particulates. Another problem this is limited (PNCS 1994). While there have is gasoline lead content-average lead content is been improvements in municipal water supply .39 grams per liter (which is similar to levels in services, increasing piped water supply without India and China). The government has sought addressing hygiene and sanitation problems to introduce higher standards for clean fuel, but will not sufficiently improve water quality. this program has yet to be implemented (Aziz Currently, only 39 percent percent of Pakistan's 1999). population has access to sanitation services (WDI 1999). This suggests that an important CAS Strategy10 priority for Pakistan is to develop strategies for Pakistan faces some very serious economic and wastewater disposal in order to decrease environmental problems. At this juncture in contamination of drinking and cooking water. Pakistan's development, it is critical that environmental strategies are closely tied to key Energy Use and Air Pollution. Pakistan isecnmcojtisadtoheGvret' dependnt on aturalgas, ol, andeconomic objectives and to the Govermnment's dependent on natural gas, oil, and hydroelectricity for its commercial energy poverty reduction efforts. The following needs. The share of petroleum products in strategy emerges from this basic premise. energy supply is forecasted to steadily increase Lending and on-going projects and reach 40 percent by 2010 (Aziz 1999). As the share of petroleum products in energy supply Capacity Strengthening and Implementation of increases, energy demand and prices will drive Environmental Regulations. The Bank recently economic development both directly and closed the Environmental Protection and through their impact on foreign exchange Resource Conservation Project. The goals of the reserves. This will also have a marked impact project were to strengthen environmental laws on air pollution and the economy's greenhouse and protection agencies and help rehabilitate gas intensity. selected watershed and rangeland areas. While this project has been successful in initiating Indoor and outdoor air pollution are both major regulations and strengthening the issues in Pakistan. Indoor air pollution environmental capacity of the government, problems stem from dependence on traditional there is clear need for additional support that fuels, which make up 85 percent of total fuels builds on past achievements and failures. consumed by Pakistani households (GOP 1998). In the early 90s, about 46 percent of biomass The World Bank is currently considering dependent households cooked indoors, at least developing the next phase of its support for during some parts of the year. More environmental activities in Pakistan. The Environmental Economics Series 25 Country Assistance Strategies and the EnvironIment following actions will be a key priorities: Development Authority, privatization and i) implementation of EIA regulations; growth of independent power producers, ii) enforcement of National Environmental privatization of gas distribution companies, Quality Standards; and, iii) continued efforts to implementation of theft and loss reduction strengthen the Ministry of Environment and programs, and increases in electricity tariffs. improve coordination between different Policy reform has resulted in a 21 percent environmental agencies. Pakistan has a vibrant increase in electricity tariffs, including environmental policy community that has reductions in cross-subsidies to households and identified increased transparency, inclusion of agricultural tube wells owners. This will likely NGOs, mainstreaming of environmental issues, motivate conservation and a stemming of local and improved monitoring as important goals. pollution and climate change impacts. Increased Thus, any new lending would also need to cost of energy use will also motivate water ensure that these issues are given due conservation. The new structural adjustment recognition. loan also requires the creation of new petroleum and gas regulatory authorities that will provide Rural Poverty and the Environment. Any new a regulatory framework to encourage private Bank supported environmental activites need sector development in this area. Gas sector to have a poverty focus. This suggests that reforms are required to encourage development lending related to rural water and indoor air of Pakistan's indigenous gas resources. While pollution and natural resource management there are clearly foreign exchange benefits from should receive priority. An urgent need is this action, natural gas is also a cleaner energy lending for waste water disposal systems that souce natuel gas is als a S02 end can complement water supply projects in rural C02 emissions. areas. Further details about poverty- environment concerns in Pakistan are presented Many opportunities to link economic and in the next chapter. environmental reforms remain. For example, Integration with Macro and Sectoral Lending. In the further reforms are needed in the petroleum last year, the Government of Pakistan has sector. Distortions include direct subsidies to agreed to several economic reforms (PFP 1999). inefficient refineries and high tariffs on Reforms related to public finance, energy use petroleum imports, making it less attractive for and agricultural development are likely to have new entrants into the refining industry Another positive environmental impacts. Other reforms policy issue that needs to be addressed is the that are growth-inducing may simply price differential between diesel and gasoline. that are growth-inducing may simply exacerbate certain environmental problems that Low administered prices of diesel and kerosene are a result of production externalities. T relative to petroleum increase demand for these negotiating a new structural adjustment loan fuels and also lead to gasoline adulteration. The with the World Bank, the Government of tax element in gasoline/HOBC price is about Pakistan is proposing to undertake a series of 55-60 percent and for diesel about 15-20 percent reforms in order to promote good governance. (Aziz 1999). This results in the price of gasoline These reforms, which hope to improve being almost twice that of high speed diesel, transparency, decrease corruption and increase which is a highly polluting fuel. bureaucratic efficiency, will help the environmental sector. Agricultural Sector Reforms. Proposed reforms in the agricultural sector will also have beneficial Energy Sector Reforms. Recent energy sector environmental effects. Reduction in fertilizer reforms include reform of the Water and Power subsidies will increase incentives for integrated 26 Environment Departrnent Papers Testing a Practical Approach through Country Studies nutrient management techniques. The full Techtnical Assistanice anid Dialogute. As economic realization of these benefits will depend on the reforms lead to industrial growth, availability of extension services to good complementary policies to stem pollution are practice. Other new reforms include needed. Pakistan has already made progress in strengthening of land titling and registration, trying to institute pollution charges on which should decrease uncertainty over industries that do not comply with National ownership and encourage investments in land. Environmental Quality Standards. There is now There also seems to be new government agreement between industry and NGOs to a commitment to decrease public sector proposed charge of Rs 50 per pollution unit to interventions in factor and output markets, be achieved by charging 10 percent in year one which should help remove price distortions that and escalating to 80 percent in year five (Khan lead to unsustainable cropping patterns. 1998). Unfortunately, this effort is currently stymied by disagreements over how revenues Economic and Sector Work. Anecdotal evidence obtained from these charges will be managed. and data on household energy use suggests that This is an area where the Bank may be able to indoor air pollution may be a very important help negotiate an agreement or inform Pakistan problem in Pakistan. Because of its impact on about experiences in other parts of the world. poor women and children, it is critical that the Continued dialogue with the government on health effects of indoor air be carefully and implementation of environmental regulations, urgently understood. It is proposed that a study integration of environmental concerns into of the health effects of indoor air pollution be sector strategies, transparency and increased undertaken. This study would also need to open-ness to NGO involvement is also analyze options for mitigating negative health recommended. impacts through education, new technology, subsidies for alternate energy sources, and policy reforms. Enviromnental Econornics Series 27 Country Assistance Strategies and the Enviromnent Tunisia years starting in 1997. The agreement is expected to play an important role in Tunisia's The CAS was finalized in March 2000. This case economic growth and to open wide potential for study was undertaken by Maria Sarraf and Kirk trade. However, it will also pose some Hamilton. The data diamond presented below shows challenges for the environment. The relation Tpnisia's environmental position relative to between trade and environment has caught the comparable couintries, attention of Tunisian officials, who expressed interest in understanding the various links between trade and the environment. rate (per '000 live births) Opening the trade regime gives greater access to new technologies, and these are often less Nationally Freshwater polluting and resource intensive than their older withdrawal for protected area agriculture (% of counterparts. The effects of liberalization on (% of land area) total) output entail both composition and scale effects. The composition of output in Tunisia will shift to reflect changes in trade protection, while Passenger cars growth overall should rise as a result of liberalization-the net effects of composition Tunisia Lower middle income and scale on pollution emissions and resource demand can only be estimated through detailed Tunisia leads the Middle East North Africa studies. Finally, while the FTA will increase (MENA) region with regard to environmental access to European markets for Tunisian protection. The strong institutional setup and producers, these producers will face an array of legislative framework have both contributed to product and packaging standards, and informal this success. The Government's commitment for requirements for cleaner production environmental protection is also reflected technologies, all of which are related to through the budget allocated in the most recent environmental standards and policies in the EU. five year development plan. Planned investments in activities related to ecology and Tourism and Coastal Zone Management. Tourism is environmental protection were increased by 67 an important economic activity in Tunisia. percent in the Ninth Plan in comparison with Between 1992-96, income from tourism the Eight Plan to represent 1.6 percent of GDP. amounted to US$ 1.4 billions. For the period Despite Tunisia's progress in environmental 1997-01, income is expected to be as high as awareness, many challenges still need to be US$ 2.1 billion s. More than nine tenths of addressed. On the basis of a CAS environment tourism activities are located along the coast. As addressed.io n tho Tuisin of a999, thenfollonent a result, intense tourism development has taken mission to Tunis in June of 1999, the following place along the coast and within close proximity key environmental issues, with strong hnks to to the beach. Tunisians are aware that pre- economic outcomes, were identified. serving their coast's natural beauty is crucial for Key Issues their economy and the GOT is committed to improve the management and planning of Trade and environment. Tunisia was the first tourism developments country in the MENA region to sign a free trade agreement (FIA) with the European Union. This The strategy of the National Bureau for Tourism treaty involves a full trade liberalization over 12 is to strike a sensible balance between the 28 Environment Department Papers Testing a Practical Approach through Country Studies promotion of tourism and the preservation of metals and bacteria and certain landfills are the environment. It's objective is to diversify starting to refuse the sludge because of lack of tourism's activities away from the "sun, sand space. and water" habits in order to reduce pressure on coastal resources. The following issues were Transport and Eniergy. In the transport and highlighted by the Government as requiring energy sector, three issues with environmental particular attention: improve the management linkages require particular attention: fuel of fragile areas; improve the capacity of the pricing, the adoption of less polluting fuels, and Coastal Observatory; fight beach erosion; and the promotion of renewable energy. Fuel prices improve environmental impact evaluations. have important incentive effects with regard to pollution emissions because they help Urban Environment. About 63 percent of determine the efficiency with which fuels are Tunisia's population live in urban areas with burned. Relative prices, particularly the price more than 40 percent in agglomerations of more for diesel relative to gasoline, are also important than one million inhabitant. Both industrial because fuels vary widely in their pollution and urban waste pose a constraint for environmental impact. Economic efficiency the quality of urban life. would therefore argue for diesel prices to be higher than gasoline prices. In 1996, the price of Annual industrial solid waste generated in main gasoline in Tunisia was $0.65/l compared to industrial centers and hospitals include about $1.08 /I in Europe while the price of diesel was 7,000 tons of heavy metals, 3,000 tons of $0.32/l compared to $0.75/l in Europe.12 It is infectious waste and 8.7 million tons of non- clear that price levels are substantially below hazardous waste."1 Municipal solid waste is European levels, and the relative price of diesel estimated at 2 million tons per year. The vs. gasoline is low in Tunisia compared with collection and transport of municipal waste is Europe well developed in Tunisia, however, waste Unleaded gasoline has been introduced in transfer and disposal still require major Tunisia, but still only represents a small fraction improvement. Because of the urgency of the of the market (about 4 percent of gasolne use in situation, 18 landfills and a composting plant 1997). Lead and sulfur emissions from the are under preparation, transport sector are particularly high in the region of Tunis and Sfax. With increasing Wastewater services are very well developed in rbanizaTin, air p i th trans Tunisa. I urba ares, 10 perent o theurbanizafion, air pollution from the transport Tunisia. In urban areas, 100 percent of the sector could become a serious threat to health. population has access to sanitation. Tunisia is, however, poory equipped wih storm wate Total energy use in Tunisia was estimated at 7.6 however, poorly equipped with storm water million ton of oil equivalent in 1996. About 13 sewers drainage systems. As a result, rain often percent was traditional fuel (fuelwood, causes flooding in certain areas, is slow to drain charcoal, and so forth) and 87 percent in urban centers, and can generate pollution commercial energy (crude oil, natural gas, and through infiltration. Resolving the issue of solid fuels, among others) In order to reconcile rainwater has been highlighted in the IX Plan. an increase in energy demand with protection of In addition to the rainwater problem, a large the environment, reliance on energy efficiency quantity of sludge is generated in treatment and renewable energies will become plants. In the past, part of the sludge was sold increasingly important in the years ahead. to farmers and the rest was dumped in landfills. Farms are currently reluctant to buy the sludge Natural Resource Pricing. Water pricing has a because of the potential presence of heavy critical impact on the efficient use of water Environmental Economics Series 29 Country Assistance Strategies and the Envirorunent resources, and this in turn can affect the quality and presently the "Greater Tunis Sewerage and of natural resources. Under-pricing irrigation Reuse Project" is under implementation. water, for instance, can lead to water-logging and salinization of soils. Evidence from the Transport anid Energy. The World Bank's ongoing early 1990's presents a mixed picture of "Transport Reform and Investment Program" irrigation prices compared to O&M costs in addresses the issue of clean fuels. One of the different regions of Tunisia, with some regions program's objective is to increase the use of less recovering costs while others fall short. Moving polluting fuels. The targets of the Program are towards an economic price for water is a a) to increase the market share of unleaded government priority, and this issue is being gasoline from 4 percent in 1997, to 20 percent in tackled in the Agriculture Sector Investment 2002 and 33 percent in 2005; b) to decrease the Loan and the Water Sector Investment Loan. sulfur content of diesel from 0.4 percent (as percent of weight) in 1997, to below 0.05 percent CAS Strategy in 2002; and c) to decrease the lead content of .. . . . I~~~~~~~~eaded gasoline from 0.4g/l in 1997 to below Tunisia has access to concessional financing for environmental projects from the European 0.15g/l in 2002. The program also aims at Union and bilateral donors. Therefore, the creating monitoring capacities for air pollution Union and bilateral donors. Therefore, the in lrects. Th.usino dee rcn comparative advantage of the World Bank lies should be raised in this program. in the non-lending services, which take advantage of the Bank's technical expertise and The climatic and econo.ic conditions in Tnsia wide experience, or in providing soft finance in are very favorable for the application of solar the form of GEF funds. water heating systems. The Global Environmental Facility has been financing a Lending and on-going projects project on "Solar Water Heating Systems in Tourism and Coastal Zone Management. The Bank Tunisia" that aims at instalhng about 50,000 m2 is currently preparing a project on the of solar collector areas by the year 2003. This "Management and Promotion of Cultural will allow a saving in energy use of about 6,000 Heritage" and an agreement has recently been toe, and will reduce an estimated 18,000 tons of reached for a GEF project on the "Protection of CO2 emissions per year. Marine Resources in the Gulf of Gabes." To assist the implementing agency setting up the Economic and Sector Work Coastal observatory, METAP13 is considering a Trade and the Environment. Since 1998 the feasibility study on the "Creation of a "MEDPOLICIES"'14 initiative has been Surveillance System for the Coastal Zone." conducting multiple studies to analyze the impact of environmental regulations (such as an Urban Environment. Through the METAP increase in water and energy price) on the program, a study on the "Control of Industrial export competitiveness of various countries in Pollution in Tunisia" has been completed and the MENA region (including Tunisia). Given the the Bank is providing technical assistance for level of Tunisian interest in trade and solid waste management in Tunisia through the environment in the context of the EU FTA, it is "Plastic Packaging Waste Collection and suggested that the World Bank offer substantial Recycling Project for Greater Tunis" and the Economic and Sector Work on trade, "Regional Solid Waste Management Project". environment and EU free trade. The ESW The Bank has also been involved in the would focus on the impacts of the FTA on the wastewater sector in Tunisia over many years Tunisia's environment. It would address issues 30 Environment Departnent Papers Testing a Practical Approach through Country Studies such as (i) the quality, packaging and creating negative environmental impacts (such recyclability of export products, and more as, the accumulation of seaweed and the broadly any effects that EU product standards spreading of rats along the structures). A new reflecting EU environmental regulations may system, successful on the Canadian coast, is have on production decisions in Tunisia; (ii) the currently being tested in Tunisia. The Bank, imposition of informal or voluntary could assist the GOT in finding appropriate requirements for cleaner production technology systems to fight erosion. This technical (through ISO 14000 and/or eco-labeling assistance could take the form of a study that schemes); and (iii) which sectors are likely to will identify the reasons why previous erosion grow as a result of the FTA and what impact measures have failed, and recommend a more might this have on natural resources (especially appropriate system for Tunisia. The study could water resource use) and on potential pollution be followed by a pilot project to test the emissions. suitability of the recommended measure. Technical Assistance oni Tourism and Coastal Zone Activities such as tourism, aquaculture, and Managemenit. The GOT is undertaking many other maritime exploitation have caused studies to identify the fragile zones located negative impacts on the marine environment. along the coastal area. The Bank could provide APAL lacks the technical expertise required to technical assistance to the Agency for the assess the damage caused by these activities. In Protection and the Planning of Coastal Areas order to enhance APAL's capacity in managing (APAL) to help them identify best practices for and preserving the coastal environment, the rehabilitation, management and protection of Bank could provide training to APAL's staff to those fragile zones. develop local expertise in a) assessing damages caused by various economnic activities on the A major task facing APAL is to find better ways coastal zone and on marine resources; and b) to fight erosion. Many anti-erosion structures developing adequate measures and policies to have been tested on the Tunisian coast, but in help mitigate those impacts and prevent further addition to being eyesores most have ended up degradation. Environmental Economnics Series 31 Country Assistance Strategies and the Enviroranent Zambia importantly, investments that add value to its natural resources would strengthen the The Zambia CAS wasfinalized in August 1999. The G ern es lould Zambia tho data diamond below depicts Zambia's environmental positio. relativ to countries with similar i.comes poverty by diversifying its sources of economic position relative to countries with similar incomes, rwh This case study was undertaken by Priya growth. Shyamsundar. Three main concerns dominate the natural resource and environmental sector in Zambia: i) Infant mortality historic problems with mineral resource rate (per th) live management and their macroeconomic impacts; ii) the need for safe water, sanitation and solid waste management; and iii) deforestation and i ln Annual its links to poverty. In addition, Zambia needs Irrigateop land ) t b * deforestation to, in general, make sure that its economic (% of crop land) change, 90-95) development path builds on its vast natural assets. Access to Key issues sanitation (% of urban population) Unsustainable Depletion of Min2eral Resources. In - Zambia -Low Income Zambia, economic development is closely and unavoidably tied to the health of the copper mining sector. In the last four decades, Zambia Historically, Zambia's mineral resources have hasigoneefrom.amiddle-incomeoArican countr been a critical source of income. Yet, resource has gone from a middle-income African country rents have not lead to sustained wealth cr-eation. to one of the poorest and much of this change can be directly linked to the decline in mining A simple indicator of this is its genuine saving inoe. iecessved econoedcand frign rate, a measure that reflects the true rate of income. Excessive economic and foreign savings in a country after accounting for natural exchange dependence on mining, decline in resource depletion, physical capital international copper prices, and mining sector depreciation, pollution and human capital mismanagement have all taken a significant toll investments. While gross domestic saving in on Zambia's growth. Zambia was 9.8 percent of GDP in 1997, genuine However, there have been several major saving was 1.9 percent. One obvious suggestion that emerges is that future depletion of natural promising reforms in the mining sector in the and physical assets need to be more carefully re- recent past. Privatization of mines and new invested. mining policies will likely result in re- investment in the sector and fuel exploration. With the exception of its long-term problems of Nonetheless, a key macro-economic issue in the mineral resource management, most other long term will be prudent management of environment and natural resource challenges in mining revenues. In the short and medium Zambia are relatively modest. In fact, Zambia terms, monitoring of mining related water and has a unique opportunity to get things right air pollution (from large and small scale before they go wrong. Any environmental safe mining), environmental impact assessments of guards instituted now would reflect a least cost new mines, and the environmental impacts of strategy that could help avoid more serious displaced workers from mining and related environmental challenges in the future. More sectors will need careful attention. 32 Environment Departnent Papers Testing a Practical Approach through Country Studies Access to Safe Water and Sanitationi and Solid Waste cover, rural women are expected to spend 2 Maniagement. Access to safe water and sanitation extra days each month on fuelwood and water is perhaps the single most important collection - this has a significant additional toll environmental issue facing Zambians. An on the poorest households through impacts on informal indicator of this problem is the recent labor use in agriculture (World Bank 1994). increase in annual episodes of Cholera. Other Furthermore, deforestation related soil erosion indicators are equally compelling. Between 1985 and watershed degradation diminish the and 1994, the number of Zambians with access to sanitation decreased by 17 percent and those prouctivity ofvsuistencecfarmers. Unsustainable harvesting of charcoal also has with access to safe water decreased by '5 perhacenst.Co-incidentally,the inean mrai an impact on poverty - this is because it is both percent. Co-incidentally, the infant mortalityaniprntsucofnomadake rate in Zambia increased by 24 percent between an important source of income and a key 1980 and 1996 (WDI 1999). consumption good for the poor. Deforestation and its implications for poverty reduction will As of 1994, 64 percent of urban and 27 percent be an important long term priority for Zambia. of rural Zambians had access to safe water (WDI 1999). Some emerging solutions to this CAS Strategy urgent problem focus on community based Zambia's short to medium term strategy for water supply. The World Bank funded Urban addressing its environmental concerns needs to Restructuring and Water Supply Program focus on implementing on-going environmental supports some of this work. In addition to such reforms, building capacity among Zambians in support, there is a need for strong and sustainable development, and ensuring that consistent emphasis on implementing environmental strategies lead to economic institutional and legislative reforms that encouage pivat sectr an commnitygrowth and poverty reduction and that involvementr prinvmannates r and sunita economic policies result in sustainable changes. involvement in managing water and sanitation Over the lon term Zambia's ke projects. Reforms that focus on integrated water Ovironmenlg stegy is key assessment and use are a longer term priority. environmental strategy is to develop a good governance framework. To this end, the Deforestation and Poverty. With limited access to following recommendations are made. credit and markets, bush fallow forms of agriculture continue to be important in rural Lending and On-going Projects Zambia. Along with a 3 percent growth in rural Environmental Support Program I. The population, this has resulted in a deforestation Environment Support Program (ESP) 1 is the rate of 0.8 percent per year, a rate that is slightly current Bank funded program that tries to higher than that for Sub-Saharan Africa (WDI establish the basic rules for sustainable growth. 1999). 90 percent of deforestation in Zambia is attributed to agricultural conversion differThe ESP's current focus on harmonizing the (Mupimpila et al. 1995). A different form of differences between various laws wil be crihcal deforestation is seen in urban fringe areas which for ensuring that Zambia's growth is supply Zambia with charcoal and fuelwood. sustainable. Insttutonal capacity building in Charcoal and woodfuel consumption have environmental management, implementing increased over time and currently meet 71 community based pilot projects, and percent of Zambia's energy needs. strengthening the Environmental Council of Zambia and relevant sector ministries to The costs of deforestation are particularly heavy undertake environmental impact assessments on the poor. For example, with declining forest will be important issues for continued support. Enviromnental Economnics Series 33 Country Assistance Strategies and the Environment Biodiversity Conservation. A biodiversity the creation of diverse recreational experiences initiative is proposed for inclusion in the for tourists and whether these are substitutes or upcoming CAS. Key objectives here will be to complements to tourist opportunities in integrate unique use and non-use values neighboring countries. Therefore, a regional associated with biodiversity into the approach to tourism is merited. A preliminary development process and to provide market study on the potential for tourism in alternatives to deforestation. This activity is Zambia relative to other countries in Southern likely to be co-financed by GEF and will assist Africa is recommended. The study would need the government in meeting the goals of the to involve different stakeholders such as the Biodiversity Convention. Zambia Investment Center, the Environmental Council of Zambia and the Ministry of Tourism Integration of Environment in Sectoral Lending. A and Wildlife. very important strategy to ensure sustainable growth in Zambia is to incorporate Agriculture anid Environment. Concerns about environmental considerations into different deforestation are currently mainly the domain economic and social sectors. An existing model of the Environment Ministry. Yet, solutions to for this type of activity is the Bank funded deforestation and decisions about sustainable RoadSIP in Zambia, which has built land use will be driven by changes in environmental management capacity within the agriculture. There needs to be greater co- Roads Department. The new agriculture sector ordination between the Ministries of investment project will need to pay close Environment and Agriculture. Specifically, co- attention to issues of soil degradation, agro- ordination is required on issues such as agro- bydgto biodiversity conservation, deforestation linked biodiversity, integrated pest management etc. soil erosion, land zoning and planning, tree and ensure sustainability of agricultural growth. forest tenure outside gazetted forest areas and There is also a need to integrate activities of the the provision of extension services. The Bank- Water and Urban group with those of the funded Agricultural Sector Investment Project Environment group to address Zambia's critical included in its activities agro-forestry and soil water and sanitation problems. conservation issues, but the links between Economic and Sector Work agriculture and the environment need to be more systematically explored and addressed. Two important issues for Zambia's growth that We propose that this be done through Economic will have significant environmental impacts are: and Sector Work on rural strategy for Zambia. i) privatization policies and private sector development, and ii) agricultural development. Technical Assistance and Country Dialogue. Zambia has already undertaken major reforms Tourism. An area where environmental and to liberalize its economy, increase private sector privatization policies are closely linked and and community involvement, and ensure that which requires additional exploration is its land, water, wildlife, forest and mineral tourism. Tourism is seen by Zambians as an resources are factors that motivate sustainable important source of economic diversification growth. These new laws nudge the government and it can also contribute to forest conservation. to share ownership and control in many areas Tourism in Zambia has potential, but will face with other stakeholders. Implementing the new competition from well established tourist laws will not be easy. It will require education, destinations such as South Africa and emerging training and capacity building of communities, markets in Mozambique. It will also depend on the private sector and the government. In 34 Envirornent Department Papers Testing a Practical Approach through Country Studies support of good governance, continued comparative advantage relative to other education and dialogue with government donors). officials on policy implementation is * Reflects a motivation to learn and ensure recommended, emphasizing pilot projects that that the government is updating its own encourage community and private sector information set about environmental participation. More technical assistance and concerns-thus, there is a focus on dialogue is needed on instruments available for analytical information and knowledge environmental and socially sustainable development. development. Finally, environmental indicators * Attempts to monitor environmental change need to become part of all future CAS and includes monitorable indicators. documents in order to document and monitor * Takes environmental issues seriously by environmental change in Zambia. referring to them in the text, in the proposed lending and AAA table, and not just in the Discussion matrix. * Sets reasonable standards for performance The Country Assistance Strategy andiniaosnthcunyprgmmtix Environment program aimed at understanding constraints and opportunities for 'greening' CASs in which the CASE team participated CASs. In order to achieve these objectives, a were assessed to examine whether there were participatory approach was used whereby team indeed environmental CASs based on the above members attempted to improve the benchmarks. The following lessons are drawn environmental quality of CASs in selected from this analysis and from the knowledge that countries. In order to assess whether or not this emerged from participating in the CAS process. program was successful in "greening" CASs in the selected countries, it is important to outline Environmental issues can be mainstreamed by the characteristics of an environmentally sound identifying linkages between economic CAS. In general, an environmentally sound development and environmental change. For CAS: example, in the Dominican Republic, Tunisia and Zambia, a strong connection was identified * Provides diagnosis of underlying forces that between tourism, a major driver or potential result in environmental degradation. This driver of economic growth, and environmental diagnosis may appear in the test or in the degradation. This analyses is reflected in final matrix. versions of all three CASs. Thus, where either * Attempts to link environmental change to environmental conservation offers a means for key economic and sectoral policies and to economic development or degradation is poverty reduction, that is, environmental beginning to have negative impacts on growth, concerns are mainstreamed. country teams are likely to be more open to * Provides tangible evidence of how environmental interventions. mainstreaming is planned to be achieved through loans and policy reforms-this is Organizing and presenting information in a likely to be reflected in the text if task structured fashion can result in an improved managers have taken tangible steps to act CAS. Most of the CASs in the case study on mainstreaming opportunities. countries reflect a useful diagnosis and analysis * Responds to environmental concerns of environmental problems. The Tunisia CAS through either a loan, ESW, or technical even included the CAS analytical matrix as an assistance (unless the Bank has no Appendix. Except in the case of Azerbaijan and Environmental Economics Series 35 Country Assistance Strategies and the Environment Pakistan (where the CAS has been delayed), the environmental ESW. It would therefore be diagnosis and analysis of environmental useful to consider the creation of alternate concerns is found in the text of the CAS and in funding mechanisms for supporting analytical the country program matrix. This suggests that work. A model for such mechanisms is ESMAP a brief 5-10 page note and an environmental which supports energy-enviromnent studies. analytical matrix identifying environmental priorities for the CAS team are useful for Resource and time constraints severely strengthening the environmental quality of constrain the ability of regional staff to focus CASs. on the CAS. Environmental issues need a CAS champion. In most of the studied countries, Comparative environmental indicators that regional enviromnent department staff were either show trends over time or indicate simply unable to put the time into working on a differences among countries are also CAS strategy. Without changing the incentives extremely useful for drawing attention to and time constraints staff face and including environmental concerns and for prioritizing CAS support in work program agreements, the among environmental problems. Indicators are CAS is unlikely to get the attention it deserves. available for all major countries and should be However, on a positive note, because of the made a part of the CAS Appendix - the Zambia energy and effort it takes to mainstream CAS now includes a set of environmental environmental issues, any such efforts by indicators. This would provide also be a simple regional environment department staff are way for comparing changes between two likely to have a trickle-down effect on the consequent CASs . CAS. Another important lesson is that building Finally, stakeholder support for environmental blocks are crucial. Economic and Sector work issues is likely to become increasingly that is finished during the CAS fiscal year is important for the CAS. As the CAS becomes a critical both for informing country teams and participatory process, support for because it catches the attention of non- environmental concerns is required from environmental country team members and the governments as well as civil society. In general, government. Thus, ESW acts both as a in the long-term, strong southern environmental knowledge device and as a mechanism to NGOs will be important for the CAS process. A increase over-all support. However, in reality, positive externality from any Bank-support to competition for ESW resources is heavy and it is NGOs is that it is likely to have an influence on unlikely that there will be an increase in internal processes such as the CAS. 36 Environmnent Department Papers 4 Toward Better Practice There are several lessons that can be drawn mineral and pasture resources are potential from the review and analysis of country growth risks for Mongolia. The CAS assistance strategies. These lessons and suggests that Mongolia will need to change recommendations made can be broadly grouped its strategy of resource consumption and into five areas. wealth dissipation over the long run, and will need to invest in other types of Tying Environmental and Resource productive assets such as financial and Concerns to Economic Outcomes human capital. The greatest successes in getting environment Eco-Tourism as a source of economic and resource issues into the CAS have been where there is a clear link to growth and diversification in Zambia. In the last three economic development. For example, in the decades, Zambia has gone from a middle- Dominican Republic, Tunisia and Zambia case income African country to one of the studies, a strong connection was identified poorest-much of this change can be linked between tourism, a major driver or potential to excessive dependence on declining driver of economic growth, and environmental mineral income. Tourism is currently seen degradation. This analyses is reflected in final by Zambians as an important source for versions of all three CASs. economic diversification. It provided approximately 5 percent of export revenues In general, CAS country teams are likely to be in 1995, but is expected to grow with more open to environmental interventions when strategic investments. The Zambia CAS a) environmental management offers a means includes a budget for a preliminary study for economic development; b) degradation is on the potential for tourism in Zambia and a beginning to have negative impacts on growth; tourism related project in the years to come. or, c) there are political, social or financial risks This study and project could result in associated with degradation. Some examples of important opportunities to conserve how environmental issues can be and have been Zambia's forests and wildlife, while at the tied to economic outcomes in CASs in these same time meeting economic demands. three different ways are presented below: * Upgrading infrastructure and environmental * Resource depletion as a growth risk in management to meet European Union accession Mongolia. Given Mongolia's resource standards in Lithuania. Helping Lithuania dependence, the Mongolia CAS presents an meet the goals required for EU accession is analyses of economic growth after taking a major focus of the World Bank's assistance into account resource and environmental strategy. In this context, the Lithuania CAS depletion. It argues that depletion of proposes support for a number of projects Environmental Economics Series 37 Country Assistance Strategies and the Environment with strong environmental externalities. In general, mainstreaming environmental Most of these projects are related to concerns can be done by: upgrading infrastructure and strengthening the water and wastewater sectors. * Reforming sectoral policies that impact environmental issues. Of particular Integrated Water Management in Yemen to importance are efforts in the energy and prevent social disorder and hugefinancial costs: infrastructure sectors. The Yemen CAS recognizes the water scarcity problems are a critical constraint to aIdentifying prices, property rights, fiscal economic development and social cohesion. and other incentive mechanisms that The GAS also recognizes that these influence environmental considerations. These mechanisms can be used to correct problems cannot be solved within a single environmental exteralities, improve sector and proposes a multi-pronged efficiency of resource allocation, or remove strategy that includes infrastructure environmentalry harmful market rehabilitation, and adoption of new distortions. technologies, and urban and rural management of ground water. Ensuring that countries with a huge foreign exchange dependence on natural resources Snteorating Environmentralegies Issesidevelop sustainability criteria for managing both their natural resources and the benefit TIhe Country Assistance Strategy is the final streams from resource depletion. Macro product of a series of actions that include tools such as green accounting and revenue discussions among country team members and management for sustainable development government agencies, project outcomes, and can be used in this effort. country priorities. Thus, an important means for improving the environmental quality of CASs is Box 7 summarizes a study (Sarraf 2000) that by mainstreaming environmental concerns into shows how Botswana has been successful in sector strategies and country dialogue. managing its macro-policies to sustain income from natural resources. A good example of "operationalizing" the idea In cases where the hnk between economic of mainstreaming is presented by the India development and environmental change is CAS. The Indian CAS has a three-pronged dynanmc and longer-term in nature, approach to mainstreaming the envirounment: "i) mainstreaming of environmental issues into 'do no harm' policies to avoid and mitigate the GASs needs to be rooted in lengthy negotiations potential negative impacts of infrastructure, among task-managers. Often, this makes the power and other development activities, with a difference between a CAS that reads well and a focus on strengthening enforcement of CAS that produces high-quality environmental environmental laws and responding to project outcomes. The CAS team's experiences in clearance procedures; ii) integration of Azerbaijan and Pakistan are illustrative of the environmental issues into sectoral policies, with above point. For example, in Azerbaijan, attention to priority setting, cost-effectiveness, genuine saving was presented to the CAS task and implications for poverty; iii) global issues manager as an indicator of sustainable addressed by assisting India comply with Kyoto development and was initially included in the conference agreements." CAS. However, genuine saving is not found in 38 Environment Department Papers Toward Better Practice Box7 Macroeconomic Management of Natural Resource Revenues in Botswana Botswana is a real success stories among developing countries. Between 1966-89, Botswana was the world's fastest growing economy. It's GDP grew, on average, at 13.9 percent per annum between 1965-80, 11.3 percent between 1980-89, and continued to grow at an average rate of 4.1 percent between 1990-96. The country moved from being the 25t poorest country in the world in 1966, to become an upper middle economy thirty years later. Botswana's rapid economic growth is not entirely surprising given the discovery of important natural re- sources, mainly diamonds. What is remarkable about Botswana is the way in which this mineral boom was managed. While many developing countries have experienced important export booms through the discovery of natural resources or through a sudden increase in the price of an export commodity, many have been unable to properly manage associated windfall gains. At the end of the boom, countries have found themselves in a worse economic situation, suffering from balance of payment problems and debt crisis. The Government of Botswana has, on the other hand, succeeded in adopting economic policies that have sustained economic growth over a long period of time. Botswana's economic policies are guided by two main objectives: to avoid external debt and stabilize growth, and to encourage economic diversification (Sarraf 2000). Botswana has avoided excessive increases in expen- diture during boom periods. Instead, the government has accumulated international reserves during booms, and run budget surpluses (earmarked for stability spending) at the end of the boom. This policy has avoided drastic expenditure cuts during bad years and prevented inflationary pressures. The second main policy in- strument is management of the nominal exchange rate to avoid real appreciation of the local currency. This has been mainly achieved through the accumulation of international reserves. Preventing the local currency from appreciating has allowed other tradable goods to compete successfully on the world market, and hence en- couraged economic diversification. Thus, careful management of foreign exchange reserves, judicious use of budget surpluses, and economic diversification are critical for a successful management of natural resources revenues. This is an important lesson that other natural resource dependent countries can learn. the final version of the CAS. This happened at its lending and policy advice more strategically least partly because genuine saving was a to poverty reduction. Thus, the Bank's new relatively new concept that had not been Environment Strategy makes a major effort to internalized by the country team prior to the prioritize its environmental actions based on CAS. On the other hand, in Pakistan, the equally their impact on the poor. Given this strategic challenging problem of energy-environment shift in focus, it is now vital to link environent interactions is likely to find a place in the CAS. This is again partly because this is a well- discussed long-term issue within the country team. Thus, perhaps the best way to influenzce the The review of 1999 CASs shows that the link CAS is to mainstream environmental issues into between poverty and environment is generally different counftry activities. These efforts will not made. Where it is made, it is usually in trickle down into the CAS. terms of natural resource degradation and its impacts with very little attention paid to Making Connections between Poverty environmental health issues. There are, Reduction and Environmental Effortsenio etahalhsus.Trer, however, several best practice examples that can The World Bank is currently attempting to be identified - the Panama CAS is among them. sharpen its poverty mandate by tying most of Box 8 shows how the Panama CAS uses a Environmental Economics Series 39 Country Assistance Strategies and the Environment variety of strategies for dealing with poverty Box 8 and environmental issues jointly. A Joint Poverty-Environment The CAS case studies work suggests that Program in Panama poverty impacts of environmental change are Almost 40 percent of the Panamanian population difficult but not impossible to assess. In Box 9, a is poor, 22 percent are extremely poor, and 95 per- cent of indigenous peoples live in poverty. New qualitative assessment and ranking of poverty- data also indicates that inequality has markedly environment links in Pakistan is presented. As increased in the past 14 years. Given these condi- the Box suggests, viewing environmental tions, the 1999 CAS for Panama makes poverty considerations through a poverty lens would and inequality reduction its main focus. This over- lead Bank staff to focus on indoor air pollution all goal is supported with a number on-going and new environmental efforts including: in rural areas-a problem that affects poor women and children. * The Rural Poverty and Natural Resources Project, which is channeling investment and Several strategic actions would help in befter technical assistance to increase rural incomes several strategic achions would help mn better adcraldgaain linkking environmnental efforts to poverty adcraldgaain linkctiong environmental Thefose tclude pvery a* The Meso-American Atlantic Biological Corri- reductions strategies. These include sending a dor GEF grant which includes biodiversitv con- consistent message to Country Teams about the servation in indigenous areas links between poverty and the environment. * The Land Administration and Titling Project CAS efforts need to examine the links between which hopes to provide poor people with bet- i) the health of the poor and the environmental ter security over land assets and stem defores- determinants of bad health, including poor tation and soil erosion water quality and quantity and air pollution; The Utilities Restructuring Technical Assistance, and, ii) poor rural households and natural which will strengthen compliance with environ- and, ii) poor rural households and natural mental standards and help stem water pollu- resource determinants of income and security. tion that threatens the health of the poor as well These are two key mechanisms by which as rural ecosystems environmental interventions can support * The Canal Watershed Project that will help con- poverty reduction efforts. serve the Panama canal watershed through re- habilitation of degraded areas and promotion There is considerable need for knowledge of sustainable farming practices dvlpetopoeteiom kge *The Roads Rehabilitation Project, which will developmen t on poverty-environment linkages, strengthen environmental assessment capacity This can be done through careful sector work, and help mitigate environmental impacts of which will help identify problems and solutions roads. and gamer support of country team members. Another important task is to integrate environmental components into poverty Monitoring impacts of on-going and new studies. For example, poverty assessments are projects is another area where the link between routinely undertaken in the Bank and it may not poverty and environment can be enhanced. be too expensive to analyze the environmental New environmental projects need to be data that is already being collected or to add designed to view their impacts through a small environmental components to new data poverty-lens. Several on-going environmental collection efforts. Efforts to integrate projects have poverty impacts; reviewing these environment to poverty reduction strategy projects for poverty outcomes would help papers would be very important in the long- highlight best practices. Similarly, careful run. assessment of environmental outcomes of 40 Environment Departmnent Papers Toward Better Practice Box 9 Poverty and the Environment in Pakistan: Strengthening the Information Base Poverty numbers in Pakistan are high and indications are that they may be rising again. Since the mid-1990s, Pakistan has grown at an average rate of 4 percent per year-a rate lower than previous decades and insuffi- cient to significantly raise living standards for a population growing at of 3 percent p.a. (World Bank 1999c). In addition, a recent study (Mahbub-ul-Haq C'enter 1999) indicates that between 1990 and 1994 the absolute poor have increased from 24 million to 42 million, that is, the number of poor has almost doubled. These numbers become even more stark when viewed from a gendered perspective. Thus, poverty reduction is a serious concern for Pakistan. The 1990s have also seen major efforts in Pakistan to stem environmental degradation. Yet, available indicators suggest increasing degradation of environmental resources. This impacts Pakistan's most vulnerable house- holds by affecting their health, decreasing their income, and making them less resilient to natural and other shocks. Some of the links between poverty and the environment are qualitatively assessed in the matrix below. This assessment is based on a reading of secondary information and the analytical matrix on Pakistan pre- sented in Appendix 1. Environmental problems and their implications in Pakistan Sustainability concerns Poverty concems R = Reversible P = Primarily faced by the poor Environmenital MR = Reversible in medium term NP = Primarily faced by non- poor PopulotionAreas IR = Irreversible PNP = Faced by both problem ? not known most affected Water logging and MR ?PNP Sindh and Punjab salinity because of importance of agriculture Ground water IR ?PNP Balochistan depletion Soil degradation MR ?PNP Rain-fed areas Pesticide use R PNP Cotton growing farmers and economy because of importance of cotton Rangeland MR P Balochistan degradation Deforestation and IR PNP Sindh, Balochistan, and biodiversity loss mountainous areas Water pollution R ?P Rural and urban areas Indoor air pollution R P Rural Pakistan, children and women Outdoor air R ?NP Urban Pakistan pollution A poverty-environmental focus would lead us to rural Pakistan because the bulk of the poor live in rural areas. If emphasis was placed in the CAS on addressing problems that hurt the most vulnerable sections of society, then indoor air pollution becomes a priority. This is because it has very serious implications for the health and survival of young children and women. If on the other hand, the CAS priority was to address poverty environ- ment linkages where changes in the environment are irreversible, this would suggest a focus on ground water depletion and deforestation. Finally, if supporting economic growth was the main goal of the Pakistan CAS, this would lead to a consideration of water logging and salinity problems which have a tremendous negative impact on agricultural development. Environmental Economics Series 41 Country Assistance Strategies and the Environment poverty-reduction activities would also be organizing knowledge management resources- useful. It would also be extremely useful to for example, by creating "one-stop shopping" understand the impacts of joint poverty- for country-specific environmental information environment projects. and analysis. It would also be is useful to present information about environmental issues There are necessarily some trade-offs between in an ordered fashion such that links to sectors, poverty reduction efforts and concems about macro strategies, prices, etc are obvious. Table 3 sustainability and irreversibility. To the extent presents an example of such a CAS matrix for that CASs are integrated into longer-term Argentina. Other examples can be found in strategies such as the Comprehensive Appendix 1. Development Framework, they will need to identify wins and losses. Finally, grant resources need to be used to complement Economic and Sector work. This Strengthening the Information Base can be done through the development of global The quality of CAS inputs will be more or less overlays, and energy and environment reviews directly related to the breadth and quality of the and so on. information supporting them. A range of information enhancements can be used to improve the CAS. There are several CAS process issues that help or hinder options for "greening" CASs. One possible way to keep the Bank abreast of environmental conditions in client countries is Regional environmental departments face by undertaking a regular program of resource and time constraints, which constrain environmental assessments. This would be their ability to focus on the CAS. This affects the similar to poverty assessments or public CAS in two ways: i) during the CAS expenditure reviews and could be tied to the discussions, environment staff are unable to CAS cycle. These assessments could cover data, build their case based on indicators, analytical indicators, trends, policies, institutions and studies or discussions with stakeholders; and ii) analytical material. resource constraints that inhibit longer-term mainstreaming efforts also have an impact on Existing environmental indicators from the the CAS. Thus, an important consideration is to World Development Indicators could be easily change the incentives facing regional incorporated into CASs. Ideally these would be environment department staff to enable them to supplemented by local data and indicators, take the time to work on the CAS in particular, whose collection would be built into work and mainstreaming in general. programs. Table 4 presents an example of a set of indicators for Tunisia, and identifies where Roughly 40 CASs go to the Board each year, so Tunisia stands relative to other countries in the there is an argument for dedicating effort to region and in its own income group. Such CAS preparation. Options for dedicated comparative figures are particularly useful in resources include: i) a senior CAS strategist discussions with clients and CAS teams. position in the regional environment departments, with duties including managing Certain strategic efforts to organize information environmental assessments, organizing KM during the CAS process would also help. The material, and working with country teams on CAS knowledge base could be improved by CAS preparation; and ii) a CAS "SWAT" team- 42 Environment Department Papers Toward Better Practice Table 4. E&iviznTital inicatcas far TLnisa Indicator Tunisia Region Income Group Population (millions) 9 286 886 Urban population (% of total) 64.1 57.4 57.7 GNP per capita, Atlas method ($) 2,060 2,030 1,740 Environmental strategy or action plan (year prepared) 1994 Agriculture Land use, permanent cropland (% of land area) 12.9 0.7 0.8 Irrigated land (% of crop land) 7.8 35.5 15.0 Fertilizer consumption (100 grams/ ha of arable land) 329 675 405 Population density, rural (people per sq km) 116 522 449 Forests Forest area ('000 sq. km) 6 89 11,083 Forest area (% of total land area) 3.6 0.8 30.8 Annual deforestation (% change, 1990-95) 0.5 0.9 0.2 Biodiversity Mammal species, threatened I1 Bird species, threatened 6 Nationally protected area (% of land area) 0.3 2.2 4.3 Energy GDP per unit of energy use (PPP $ per kg of oil 7.2 3.3 equivalent) Commercial energy use per capita (kg of oil equivalent) 738 1,353 1,765 Electric power consumption per capita (kWh) 709 1,158 1,737 Share of electricity generated by oil (%) 15.7 47.6 12.3 Emissions and pollution CO2 emissions per unit of GDP (kg per PPP $ of GDP) 0.3 0.8 0.9 Total CO 2 emissions, industrial (,000 kt) 16.2 987.2 3,940.6 CO2 emissions per capita (mt) 1.8 3.9 4.6 Passenger cars (per ,000 people) 30 45 55 Water and sanitation Access to safe water (% of total population) Freshwater resources per capita (cubic meters) 439 1,044 11,805 Total freshwater withdrawal (% of total water 69.0 resources) Withdrawal for agriculture (% of total freshwater 86 89 75 withdrawal) Access to sanitation (% of population) Infant mortality rate (per ,000 live births) 28 45 35 National accounting aggregates (% of GDP) Gross domestic savings 24.3 18.2 19.1 Consumption of fixed capital 9.5 9.5 9.3 Net domestic savings 14.9 8.8 9.8 Education expenditure 5.5 4.4 4.1 Energy depletion 0.9 14.6 6.0 Mineral depletion 0.5 0.1 0.2 Net forest depletion 0.4 0.0 0.2 CO2 damage 0.5 1.0 1.5 Genuine domestic savings 18.0 -2.2 5.9 Environmental Economics Series 43 Country Assistance Strategies and the Envirorunent this has obvious disadvantages in terms of NGOs is that it is likely to have an influence on building relationships with country internal processes such as the CAS. departments, depth of country knowledge, and so on; and iii) more resources for regional Conclusion environment department staff to participate The economic development challenges faced by fully in the CAS. World Bank's client countries are immense and environmental issues are often a low priority. It will be easier to influence the CAS if a TeCSadEvrnetPormwsa consistent message is presented. This should Tte to undE nvironment al obviously not be at the cost of country-specific isses ca bnteratd io enWorank's issues and wuld rquire uildin the ssues can be integrated into the World Bank's issues, and would require building the... intellectual underpinnings to support the Country Assistance Strategies and to identify some of the constraints faced by Bank staff in message. Candidate messages include: i) tyn od o poverty and environment; ii) economic outcomes and the environment; and, iii) As this study has shown, there are number sustainable development, especially in non- renewable resource rich countries. wy nwihevrnetlcnieain can be addressed in CASs - this primarily requires understanding and acting on the Finally, stakeholder support for environmental cections betwndenv and connections between environment and issues is likely to become increasingly important economic development and poverty reduction. for the CAS. As the CAS becomes a To the extent that there are trade-offs between participatory process, support for economic growth and conservation of natural environmental concerns is required from resources or environmental quality, it iS governments as well as civil society. For . t m examle, n th Zamia ase tudy thecounry mportant to make these explicit so that example, in the Zambia case study, the country compensating action can be undertaken. In teamn's support for envirornmental issues general, knowledge development, capacity decreased when stakeholder meetings did not strengthening, and knowledge dissemination identify these issues as a key priority. In general, will be key in any effort to integrate strong southern environmental NGOs will be environmental issues into World Bank and important for the CAS process in the long-term. client country activities. A positive externality from any Bank-support to 44 Environment Department Papers Appendix A - Analytical Matrices Environmental Econornics Series 45 Azerbaijan Natural resources management Pollution Control Global Agriculture Oil Caspion sea Freshwater Air Soil Climate change Biodiversity Current issues Quality of agricultural Risk of Dutch disease, Dwindling sturgeon High water use, Pollution 'hot Pollution 'hot Very low energy Threat to land Unsustainable stock relative to spots' in Apsheron spots' in Apsheron efficiency and Caucasian Salinity of soils investment of oil Pollution 'hot spots' resources penninsula penninsula venting of gas; mountain forests, wealth around Apsheron Low connection Respiratory hence very high but badly rate, bad water illnesses; Lead GHG/cap understood issue quality Localized ____________ ____________ ____________ ___________ ____________ _______ ____ ____________ ___ ________ _________ d e feforestatio Driving force, e.g.: Mono-cultures Lack of public sector Open access fishing High irrigation Soviet legacy and Soviet legacy Obsolete industrial Not party to CBD, - population growth; Use of pesticides like capacity and demise of demand and high obsolete Obsolete processes hence no access to - poverty; DDT, toxic defoylants Inappropriate hatcheries; losses; technology industrial Delayed industrial GEF funds - inequality No preservation accounting framework Pollution; Subsidies affect Absence of processes restructuring IDPs incentive from Soviet legacy and viability of utilities, regulation & delay Lack of Energy prices?? property rights obsolete industrial prevent investments in restructuring of independent Water losses, unlined processes refining sector regulation water canals Lack of independent Small scale regulation particles' emitters Macro policies - trade liberalization - impacts may lead to more intensive practices Sector policies + well defined + Public sector reform + public sector + corporatization + privatization + privatization + sector + Reintegration of - impacts property rights from increases capacity to reform may lead to of utilities should should close down should close down restructuring IDPs will reduce privatization provide deal with oil wealth stronger regulation lead to reduced old polluters old polluters should increase pressure on better incentives +privatization losses - privatization - privatization energy efficiency ecosystems - re-intensification of should close down + phase out of without without - increased oil agriculture after old polluters water subsidies environmental environmental exploration likely reform increases - privatization w/o increases efficiency regulation regulation to increase GHG pressure environmental increases pollution increases pollution emissions regulation may from new firms from new firms increase pollution - oil exploration w/o controls increases pollution + Reintegration of IDPs may reduce pressure on fishstock Projects / Programs + reduced water loss Petroleum TA + Baku water - Highway project? - impacts from irrigation project supply project e Environment / +UEIP to increase + UEIP to + Ratification of Resource Institutional hatching capacity demonstrate CBD to provide issues +cooperation on clean-up access to GEF Caspian sea (GEF) funds 5) 13" Dominican Republic Natural Resource Mano ement Pollution nanagement Watersheds and deforestation Land use and tenure Mining Water Waste water and sewerage Solid waste Current issues Several areas, best suited for Conflicting interests Considerable volumes of acid Access to potable water is The water becomes Waste is left to rot in the - local forest, are being used for (urban, tourism, industrial, water is generated by the well below averages for polluted during distribution streets and dumped in the - regional agriculture and cattle ranching power plants, and exposure of sulfide rock to the the corresponding income Unregulated disposal of rivers and the sea; ri - global resulting in severe soil erosion agriculture) result in loss of atmosphere; group (74%for the DR in sanitary and industrial Uncollected waste causes rR and sedimentation (up to 50% productivity and Considerable contamination of 1993, compare to 83 for wastes is contaminating the serious drainage problems; o in some cases); environmental problems; underground and surface the inc. group); aquifers There are only 1-2 sanitary Soil erosion has many Potentially productive land waters; Squatters are using a lot of Most sewage is discharged landfills in the country; rn environmental and economic is lying fallow, despite its Mineral exports were about "free" water; untreated and spills directly Lack of environmental effects: scarcity; US$ 250 million/year in 96/97 into the ocean and indirectly awareness and understanding i) the life spans of the Subsistence farmers are and about US$ 150 million in through the lower reaches of the links to health, have reservoirs are reduced pushed to marginal lands; 1998; of the Isabel and Ozama contributed to the current ii) investments are needed in Urbanization is increasing In 2004 mineral exports could rivers problems; order to get the same amount due to the scarcity of beat US$ 10 million, if not Human excreta is of projected when productive land for the zero, if no action is taken on contaminating potable water constructing the reservoirs population; reform. In a reformed and drawing vectors (rats, iii) pumping of sedimentation is 40% of the land in the scenario the figure could be flies, etc) with increased costly Santo Domingo area is US$ 400-500 million per year; potential diseases; iv) sedimentation will result in illegally possessed due to According to the Ministry of Lack of environmental a reduced production the inadequate land tenure Mines, mining's share of GDP awareness and v) the water from the system; could be 2-6% of GDP and 25- understanding of the links to reservoirs needs to be treated 48% of foreign capital if the health, have contributed to vi) the demand for reforms are carried through in the current problems; groundwater will increase as a correct way; the availability of surface water There is a need for a legal, decreases, increasing the costs environmental, institutional, further; and enterprise and privatization reform Driving force, e.g.: An intensive use of marginal Deteriorating international Power outages; Power outages reduce Increased urbanization; - population growth lands have resulted in excess market conditions have Increased urbanization; pressure in the distribution Population growth - poverty deforestation; caused producer prices for Population growth; system permitting infiltration - inequality agricultural to fall, thus and contamination; depressing output; Increased urbanization; Settlements in fragile areas; Population growth Dominican Republic (continued) Natural Resource Management Pallution management Watersheds and deforestation Land use and tenure Mining Water Waste water and sewerage Solid waste Linkages to tourism The inadequate cadastral The incomes from tourism The increasing number of Growing tourism plan has resulted in an will decline if the water tourism exacerbates the exacerbates the solid waste explosive development of problem is not solved due sewage problem; problem; the tourism sector outside to a decrease in visitors: The incomes from tourism The incomes from tourism the regulated areas; The no. of British tourism will decline if the sewage will decline if the waste Examples of protected went down from 217,000 problem is not solved due to problem is not solved due to areas or national parks in '97 to 180,000 in '98 a decrease in visitors; a decrease in visitors; exploited by the tourism (almost 20%) due to an Informal dwellings that arise The solid waste works as a sector can be found incident where many outside the tourism areas, disincentive for new throughout the country; people were sickened by result in more, untreated, investors; drinking unsanitary water; sewage; Informal dwellings that arise outside the tourism areas, result in more, unmanaged, waste; Impacts of macro policies Impacts of sectoral The Ministry of Agriculture in Large government holdings Lack of governmental support Inadequate system Emphasis on expensive Lack of sanitary landfills and policies the DR has started a have kept large areas of results in problems for the maintenance; sewerage systems in Santo transportation; reforestation program. So far land out of production; current management to deal Domingo has aggravated the Poor cost recovery (7% of 9-10,000 hectares of land are Large public holdings of with the problems in the sanitation problem; operational costs were planted and managed; land and few private sector; recovered in 1992) The program mentioned owners have lead to Uncertainties concerning Inadequate maintenance of above can be seen as a tree- increased urbanization and environmental regulations act infrastructure; growing subsidy for private rural landless workers as a disincentive to mining landowners; being pushed to marginal investors; lands; The country is not currently Inconsistent policies; competitive internationally due Lack of planning, to the existing mining taxation information and satellite scheme; images; Impacts of projects Two LILs and a forthcoming SIL exist or are planned for both and programs these areas. Poverty impacts Increased deforestation makes Links to: The poor lack potable The problems are worse in The poor lack disposal the poor communities more Settlements and other land water to a greater extent those areas where a lot of services to a greater extent vulnerable to floods and other use issues; than other groups; poor people are gathering than other groups; natural disasters; Deforestation (charcoal Poor groups lack resources (e.g. in squatter areas); and firewood are major to seek our medical The poor lack sanitation sources of energy for poor expertise in case of services to a greater extent households); sickness; than other groups; Poor groups lack resources to seek our medical ____________.____e expertise in case of sickness; Environment / Agencies in charge of national Inadequate land tenure Lack of environmental norms The treatment of sewage Weak and overly centralized Resource parks and protected areas system; and controls; outside the tourism areas is institutions which have made Institutional issuesis have been ineffective and The existing system is from Lack of transparency; unregulated unwise decisions on weak; the beginning of the Non-existing mining rights; investment priorities and Unclear property rights and century and is not designed Lack of an institution to choice of technology; inadequate land use planning to handle the 32,000 enforce mining policies and The disposal of waste outside has led to excessive transactions per year regulations; the tourism areas is deforestation; currently being carried out; Inadequate information system unregulated; for mineral resources; The municipalities, which are Lack of law that provides responsible for the solid security of tenure to the mining waste disposal, do not have rights; resources or well-functioning .___ _ __ _ __ __ _ __ _ __ _ __ __ _ __ _ _ __ _ __ _ __ _ __ __ __ _ __ __ _ __ _ __ _ _ __ _ __ _ __ __ _ __ __ _ __ __ _ __ _ __ _ m anagem ent; Pakistan Natural resource ma nagement Pollution management Long-term energy management Forests, rangelands and ______________ Sustainable agriculture biodiversity Water pollution Air pollution tri Key Issue Productivity losses from mis- Local and Global effects, Arguably the most important Indoor air pollution likely to be more Energy efficiency improvements and r, management of water resources with implications for the poor environmental problem in Pakistan important than outdoor air pollution fuel mix have significant long term I implications Current Water logging, salinization and 80% of rangeland degraded Pakistan (& Bhutan) rank second Traditional fuels make up 85% of Continued increase in use of issues groundwater reductions are a major Deforestation rate of 3.2% among 31 Asian countries in annual fuels consumed by HHs, 35% of petroleum products -share of - local source of concern in irrigated areas. p.a. - 6% of original forests diarrheal episodes among children total energy supply and 92% of PM petroleum products in energy supply . - regional Land degradation costs estimated at remain. under 5. emissions. to rise to 40% by 20 10. - global 1% of GDP Of 20 new IPPs, 13 (65%) Biodiversity loss a key Currently 77% of rural and 52% of 46% of fuelwood using HHs cook dependent on fuel oil. 38% of gross command area water concern --ten fragile rural households have access to indoors; 83% of HHs use stoves Currently 4 1% of energy supply logged and 6% severely saline ecosystems critically need clean water. without chimneys. imported - major implications for As of 1997, on-going drainage schemes protection foreign exchange reserves. covered I I %of area requiring drainage. Lack of access to sanitation is a major Indoor air pollution a major health GDP per unit of energy use has problem leading to contamination of risk for poor women and children. declined by 16% in real terms Pakistan among 17 countries in the clean water - 40% of population has Exposed children's ARI risk increases between 1980-97. world expected to face most severe access by 2-3 times. Inefficiencies in power sector a water shortages in 2025. Solid waste collection is viewed a concern -T&D losses at 23% Soil degradation a concern in rainfed necessary complement to water and Outdoor air pollution an emerging (higher than average in S. Asia) areas (20% of cultivated area). san services. SW collection by GoP concern - health costs of outdoor air C02 emissions increased at 10% at 50% of waste generated. pollution estimated at $301 million p.a. in 80s and early 90s. - energy Pesticide use per ha has doubled in 90s Approximately 50% of collected pa. sector biggest contributor to C02 --over-use makes cotton crop waste is disposed. emissions. vulnerable (70% of all pesticides used Type of fuel use key contributor to on cotton) . Pesticide use increases Industrial pollution from cotton outdoor air quality. 69% of fuel with farm size, indicating that pesticide textiles, chemicals, leather and demand is met by diesel, with health pollution is linked to large farms. electroplating a concern. impacts. Lead and sulfur content of gas high at .39 gms/I and 3.5 wt%. . Driving Feudal system with unequal access to Livestock population has Subsidized water and inadequate Growth of vehicles an underlying Economic growth forces: land and water makes reforms to grown at 2% p.a, O&M key. factor of outdoor air pollution- - population increase decentralized and more contributing to rangeland growth rate at 6-8% pa.; use of Domestic vested interests blocking - poverty accountable water use vulnerable. over-use. Urban poor are particularly public transportation is limited. development of indigenous natural - inequality Inequality of irrigated land greater than Causes of deforestation a key vulnerable to water pollution gas inequality of all land; irrigation policies knowledge gap - attributed because of lack of facilities and Fuel wood inexpensive; cost of seem to drive environmental problems to timber exploitation and maintenance. However, data on supplying alternative indoor fuels to as well as greater inequality. fuelwood use - evidence diarrheal episodes does not confirm households high. ambiguous increased vulnerability among rural Poverty does not appear to poor. be a major contributing factor (in case of fuelwood deforestation). __.. '0 Pakistan (continued) Natural resource m nagement Pollution nagement Long-term energy management Macro Minimal taxation of agriculture relative Banking reforms and Current macro environment tepid Increased trade can have +/- impact Fuel switching from fuel oil to policies to other sectors results in fallow lands, liberalization of financial for private sector participation in on industrial pollution - will natural gas has huge foreign - impacts contributing to water logging. New sector will impact natural water and waste water sectors improve efficiency and possibly use exchange benefits. structural adjustment lending focuses resource use through interest Pollution charges stalled on of clean technology; could also Energy sector reforms one of the on bringing agriculture into tax base. rates-if real rates decrease, disbursement of tax revenues. increase scale of pollution if NEQs most important "problem issues" at deforestation less likely. Increased trade can have +/- impact not enforced. the macro level in Pakistan Cotton most important commercial on industrial water pollution - will and export crop. Over-dependence on improve efficiency and possibly use Pollution charges stalled because of cotton a serious concern, further of clean technology: could also disagreement over disbursement of aggravated by excessive use of increase scale of pollution . tax revenues pesticides. Removal of ban on textile imports could lead to cleaner technology Sector Government interventions in Transit taxes on timber Water pollution is dependent on LPG and natural gas are potential Distortions in petroleum sectors not policies agriculture huge. cumbersome and can deter water quantity & quality - focus on alternatives for fuelwood use - conducive to growth of natural gas. - impacts timber production. integrated water management however, substitution likely to be Water subsidies and electricity However, with lax monitoring needed. Water use for domestic un-economical. ESW required to New SAL agreements include subsidies contribute to water logging of smuggled timber, taxes purposes severely constrained by understand health effects and petroleum price adjustments in line State user rates do not cover O&M and may act as a deterrent to dominant irrigation use. identify market demand with international prices, natural gas drainage (a more than doubling of user smuggling. sector reforms to increase efficiency, charges required). $4 billion investments required over Petroleum sector reforms required and initiatives to reduce relative Seedling subsidies may be un- next 15 years in water and to remove subsidies to inefficient price distortions in petroleum Sugarcane support prices lead to necessary given strong private wastewater refineries - recently initiated under sector. excessive cultivation increasing plantation of trees. new SAL. waterlogging. Possibilities to increase private sector participation in solid waste Diesel lightly taxed relative to Subsidized tractors and history of management high. Need to support gasoline. Tax element in gasoline is fertilizer subsidies have lead to increased NGO participation. 55-60% and for diesel is I 5-20%. increased soil compaction and SAL attempting to reduce relative degradation. price distortions in petroleum sector. New SAL introduces norms for rs.1 ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~cleaner petroleum products. Projects / Several Bank supported drainage and Three natural resource Several Bank projects including Market analyses of LPG distribution Energy sector reforms key to Programs on farm water management programs management in place in support for Karachi water supply. in rural areas proposed as part of conditionalities in ESAF, SALs and - impacts over the last 40 years. Several SCARP recent years - Punjab ESW on options for increasing ESMAP study. SECALs. or saline reclamation programs -- Forestry, Balochistan Natural private sector participation identifies projects Severely constrained by lack Resource Management and opportunities. IFC-GoP Clean Fuels Study focusing ESMAP study proposed to identify of O&M and accountability. the Environmental Protection on fuel specification and petroleum opportunities and markets for Current National Drainage program and Conservation Project sector distortions on-going indigenous natural gas seeks major reforms in irrigation and (EPRC). drainage institutions. Agriculture Sector Investment Program Community participation in proposes sectoral reforms and support EPRC has contributed to for land registration and titling. success. Environment Water schedules do not respond to Market demand for beef with Implementation and monitoring of Implementation and monitoring of Vested interests in oil and gas sector / Resource crop patterns because of lack of co- slow deterioration of National Environmental Quality National Environmental Quality may make indigenous gas Institutional ordination between agriculture and traditional institutions Standards important. Standards important. development difficult. issues irrigation ministries. responsible for rangeland Weak legislation and monitoring of degradation Privatization and increased use of Major on -going effort to bring about open-access ground water. Mechanisms required to NGO sector is solid waste institutional changes in WAPDA f!1- Weak extension services result in low increase local participation in management possible. Strengthening of DG for Renewable priority for IPM and INM. forest management. Energy required. (.1 Tunisia Coastal Zone Natural Resourc Management Management Pollution Monagement Energy Water Resources PoDution Solid Waste Current issues Total energy use estimated at 7.6 GOT has made a huge effort to Touris m is an important economic Industrial pollution is an important Municipal solid waste generated in - local million tons of oil equivalent (13% provide water to the population. activity, with the coast being the issue. Industrial solid waste include Tunisia is estimated at 2 million t/y, - regional traditional fuel and 87% 97% of the urban population is major tourist attraction. More than about 7,000t/y of heavy metals, i.e. 1/2 kg of waste per day per - global commercial energy). connected to the water supply. 9/10 of tourism activities are located 3,000t/y of infectious waste (mainly inhabitant. CO2 emissions estimated at 16 In rural areas access to safe along the coast, from hospitals), and 8.7 million t/y of The collection and transport of million metric tons per year. water is to reach 78% by 2001. non-hazardous waste (mainly municipal waste are well developed An indicator of energy efficiency is The coast suffered from important phospho-gypsum and sludge). with a substantial participation by the dollar amount of GDP Limited water supply is a major degradation and beach erosion. the private sector (in 1997 more generated per kg of energy used. issue. GOT is improving water Beach erosion problems are Air pollution problems could be than 43 communities had their waste This indicator is equal to $2.9/kg use efficiency. especially acute in the Jerba Island acute in certain regions. The region collected by private contractors). of oil equivalent (compared to an and the Gulf of Tunis. of Greater Tunis suffers from high Treatment and proper disposal of average of $6.3/kg in the EU). 80% of water resources are concentration of lead from the hazardous waste is lacking. Fuel prices are low relative to EU used in agriculture (wastage is at transport sector. Dust PM 10 Waste transfer and disposal still averages, and the relative price of 30%-40%). Effort required to emissions are particularly high in require major improvement. There diesel fuel is particularly low. move to most productive uses Gabes. And Sulfur emissions are very is a growing need for sanitary of water, high in Sfax. landfills. To reconcile an increase in energy use and quality of life, Tunisia Water quality is at risk from needs to use its energy more industrial pollution; over- efficiently and to encourage the exploitation of water also leads use of renewable energies. to saltwater intrusion. Free access to private wells increases risks of contamination. Driving force, Energy demand expected to rise Low endowment of water Rapid and intense industrial, Lack of strict industrial waste Population growth and rapid e.g.: driven by population growth and resources. 80% of water used in residential and tourism development management programs in the past. urbanization. - population increased economic activities agriculture. along the coast. Building Important industrial activity. Old growth infrastructures too close to the vehicle fleet and consumption of - poverty seashore. polluting fuels. - inequality Impacts of Increasing energy prices has Free access to private wells for Policies to limit and control sectoral policies provided an incentive for more irrigation pauses high risk of development used to be lacking in efficient energy use. contamination (problem Tunisia. Since the creation of APAL especially acute in coastal areas). in 1995 development along the coast is becoming very strict and tightly High water subsidy in the past controlled. contributed to a lack of efficient water use (water subsidy estimated at $94 million in 1994). The GOT is committed to gradually decrease subsidies and _________________________________ revise water tariffs. Impacts of GEF project on Solar Water "Program d'economie d'eau" "Blue Hand" Program for the A WB "Transport Reform and PRONAGDES program deals with all projects and Heating System will install 50,000 whereby the government protection of the sea and coastal Investment Program" is being issues related to waste management. o programs m2 of solar collector areas, reduce subsidizes 60% of investment in resources. prepared. The targets of the energy use by 6,000 toe, and irrigation systems that minimize program are to increase the market I8 landfills and a composting plants reduce CO2 emissions by 18,000 water use. APAL is putting in place a Coastal share of unleaded gasoline, decrease are under preparation. tons by 2003. Observatory to collect and analyze the sulfur content of diesel, and The results of the "Water Sector information on the status of the decrease the lead content of ANER undertakes awareness Study" were presented in a coast. This will facilitate the gasoline. The project also includes campaign with regard to energy Round Table in April 99, and surveillance, control and planning of the creation of air pollution 0 efficiency. It has also initiated should be finalized in May 99. coastal areas. monitoring capacities in large cities. multiple studies and pilot project This will set the basis for a long U) to test renewable energy systems term strategy for water WB project "Management and in Tunisia. management. Promotion of Cultural Heritage". GEF project "Protection of marine Resources in the Gulf of Gabes" Environment Better regulation and coordination of Resource landfills is required. Institutional issues Zambia Natural Resource Management Pollution Management Global Concerns Rural land Use Wood fuel Availability Mining Pollution Wildlife and Biodiversity Loss Current Fourth most land abundant country in Largest source of energy (71 %); Copper contributes 90% of 64% of urban population and 27% of Wildlife and big game species issues Africa; 8.6% of land under protected provides employment for rural foreign exchange; about 10% of rural population has access to safe have declined dramatically over - local areas; almost 90% of land under poor (50,000); cheap fuel for GDP water and sanitation. the last 20 years; elephant - regional customary tenure; about 45% of land is urban poor; charcoal industry was populations declined by 9% per - global covered by dry ever green forests. worth 5 billion kwacha or 2.3% ZCCM has been running major Industrial urban pollution (water, air year between 1985 and 93. Deforestation (0.8% per year in 80s) of GDP in 1991. losses (recently $1 million/day) and solid waste) is increasing Food, mainly from shifting agriculture as and production has declined over textiles and paper and pulp are major Tourism is steadily growing and population pressure increases. Deforestation in urban fringe time. contributors to water pollution. contributed 5% of all export areas is increasing. Problem receipts in 1996. Common lands are disappearing in certain particularly in the Copper Belt, Privatization is close to complete. Mining pollutants have decreased (along provinces. Central and Lusaka provinces. Diversification will expand non- with production). Between 1961-96, fuelwood and traditional mining In urban areas, domestic waste has Predominant soils have low nutrient charcoal production grew at 8% increased and is affecting ground water reserves and retention capacity; are acid p.a.; Sustainable with proper sources in some cases. to strongly acid; fertile soils are in the management. Very little data is available on industrial Southern Province. air, water and solid waste pollution and Soil degradation from over grazing, even less on hazardous waste. monoculture cropping, fertilizer use (10- 11 % pa increase between 1961-95 but substantial decline in the last decade). Driving Bush fallow form of agriculture; Urbanization. Economic and foreign exchange Urbanization and industrialization. Trophy hunting main cause of force, e.g.: population pressure in certain areas is Under priced resource (stumpage dependence on mining. Difficulty in cost recovery of municipal wildlife loss; - population decreasing fallow periods. 90% of and removal fee were < 5% of Government control has lead to services. growth; deforestation is attributed to agricultural sale price in 1990). major losses and little investment. Water is not treated as an economic Agricultural extensification will - poverty; conversion. International copper prices have good. impact forests and so will wood - inequality Limited access to credit and other non- declined over time. fuel demand, but to a much labor inputs. lesser extent; Some illegal timber logging (Sawn wood production has increased on average by 90% pa between 1991-96) - however, impact on forests not clear. Macro Trade policies promoting agricultural Foreign exchange too scarce to Structural adjustment and Removal of foreign exchange i- policies export with possible extensification. use for other energy imports. exchange rate policies will restrictions has decreased ivory impacts Devaluation/ removal of input subsidies encourage resource exploration. smuggling to obtain foreign will result in extensification?? Structural adjustment policies that exchange fuel growth will increase demand for energy, electricity may substitute charcoal in the long run. Not expected in the short- ___________ term. . Sector Removal of input subsidies should Hydroelectricity available but Privatization policies will result in Mining incrcascs can deteriorate Any extensification of agriculture Policies reduce use of fertilizers. exported to Zimbabwe. rc-investment in the mining air/water quality because of increased will negatively affect biodiversity impacts sector, incenase in exploration and activity; but growth may improve Improvement in training and extension Where electricity is available, will fuel growth in the long run. air/water quality if technology (T & E) will increase use of fertilizers. woodfuel is still predominantly improves. Govemment bears liability used for cooking. Privatization will free up aid for previous pollution; New forestry poliey focuses on broader monies and other sources of Pollution from non-traditional mining trt environiental issues. New forestry policy should income for development may increase. encourage community management activities. Privatization will increase burden on of woodfuel. government to provide municipal scrvices; 31 °% of charcoal users have carbon nmonoxide exposure at levcls higher iD'__________ than recommended by WHO. ________________________tar m n bW Proj/Program ASIP; ESP ERIPC URWSP ESP. ADMADF program has cut Impacts down poaching Poverty NTFPs act as a safety net for rural poor Only affordable fuel for urban poor Privatization will increase short- 40% of urban population that is poor Rural population rely heavily on Impacts - espccially during drought; Free (spend 1/5" of income on tern unemployment (about 7000 bears disproportionate costs of water bush meat for protein source of fuel; charcoal). people) but will fuel long tcrm and sanitation and pollution problems. consumption. Deforestation increases time spentby Deforestation will increase tine growth. women on fuclwood and water spent on collection activities. Govcrnment subsidies to the collection (estimated 2 days/month); mining sector will decrease. Insecure tenure may affect women freeing up income for other uses. disproportionately. Sn V1 Appendix B - Environmental hidicators16 Environmental Economics Series 57 Country Assistance Strategies and the Environment AZERBAIJAN Europe and Central Asia Low income Region Income group Population (millions) 8 475 3,536 Urban population (% of total) 56.7 66.2 30.5 GDP ($ billions) 4 1,003 1.881 GNP per capita, Atlas method ($) 480 2,200 520 Environmental strategy or action plan (year prepared) Agriculture Land area (,000 sq. km) 87 23,844 41,383 Land use, permanent cropland (% of land area) 3.0 0.4 1.4 Irrigated land (% of crop land) 75.2 10.3 30.3 Fertilizer consumption (100 grams/ ha of arable land) 136 349 1,210 Food production index (1989-91 = I00) 59.0 .. 140.8 Population density, rural (people per sq km) 205 123 573 Forests Forest area (,000 sq. km) 10 8,561 7,379 Forest area (% of total land area) 11.4 36.1 17.8 Annual deforestation (% change, 1990-95) 0.0 -0.1 0.7 Biodiversity Mammal species, threatened I1 Bird species, total known 0 Bird species, threatened 8 Nationally protected area (% of land area) 5.5 3.2 5.9 Energy GDP per unit of energy use (PPP $ per kg of oil equivalent) 1.3 2.2 - Commercial energy use per capita (kg of oil equivalent) 1,529 2,689 646 Energy imports, net (% of commercial energy use) -17 Electric power consumption per capita (kWh) 1,631 2,692 448 Share of electricity generated by coal (%) .. 29.6 63.8 Share of electricity generated by oil (%) 72.8 6.2 8.8 Emissions and pollution C02 emissions per unit of GDP (kg per PPP $ of GDP) 2.0 1.3 0.7 Total CO 2 emissions, industrial (,000 kt) 30.0 3,412.7 5,306.2 CO2 emissions per capita (mt) 3.9 7.4 1.6 Passenger cars (per 000 people) 36 138 5 Water & Sanitation Access to safe water (% of total population) Freshwater resources per capita (cubic meters) 3,831 14,339 4,330 Total freshwater withdrawal (% of total water resources) 54.6 Withdrawal for agriculture (% of total freshwater 70 63 87 withdrawal) Access to sanitation in urban areas (% of urban population) 67 .. 56 Access to sanitation in rural areas (% of rural population) .. .. 10 Infant mortality rate (per ,000 live births) 17 22 68 National accounting aggregates (% of GDP) Gross domestic Savings 4.8 20.3 31.1 Consumption of fixed capital 14.1 9.0 8.1 Net domestic savings -9.2 11.3 23.0 Education expenditure 3.0 4.3 2.3 Energy depletion 17.8 5.5 2.2 Mineral depletion 0.0 0.1 0.4 Net forest depletion 0.0 .. 1.1 CO2 Damage 5.5 1.9 1.8 Genuine domestic savings -29.5 8.3 20.0 58 Envirorunent Department Papers Appendix B -Environmental Indicators DOMINICAN REPUBLIC Latin America and Caribbean Lower middle income Income Region group Popuiation (millions) 8 502 886 Urban population (% of total) 63.7 74.5 57.7 GDP ($ billions) 16 2,028 1,477 GNP per capita, Atlas method ($) 1,770 3,860 1,740 Environmental strategy or action plan (year prepared) Agriculture Land area (,000 sq. km) 48 20,064 36,096 Land use, permanent cropland (% of land area) 9.9 1.3 0.8 Irrigated land (% of crop land) 17.3 13.7 1 5.0 Fertilizer consumption (100 grams/ ha of arable land) 956 812 405 Food production index (1989-91 = 100) 104.3 126.6 128.7 Population density, rural (people per sq km) 293 253 449 Forests Forest area (,000 sq. km) 16 9,064 11,083 Forest area (% of total land area) 32.7 45.2 30.8 Annual deforestation (% change, 1990-95) 1.6 0.6 0.2 Biodiversity Mammal species, total known 20 Mammal species, threatened 4 Bird species, total known 136 Bird species, threatened I1 Nationally protected area (% of land area) 25.2 7.3 4.3 Energy GDP per unit of energy use (PPP $ per kg of oil equivalent) 6.6 Commercial energy use per capita (kg of oil equivalent) 673 1,181 1.765 Energy imports, net (% of commercial energy use) 74 Electric power consumption per capita (kWh) 620 1,402 1,737 Share of electricity generated by coal (Yo) 4.4 4.6 24.3 Share of electricity generated by oil (%) 77.0 17.5 12.3 Emissions and pollution C02 emissions per unit of GDP (kg per PPP $ of GDP) 0.4 0.4 0.9 Total CO 2 emissions, industrial (,000 kt) 12.9 1,209.1 3,940.6 C02 emissions per capita (mt) 1.6 2.5 4.6 Suspended particulate in capital city (microgr/m3) Passenger cars (per .000 people) 27 67 55 Water & Sanitation Access to safe water (% of total population) 71 Access to safe water in rural areas (% of rural population) 67 Access to safe water in urban areas (% of urban population) 74 Freshwater resources per capita (cubic meters) 2,467 27,393 11,805 Total freshwater withdrawal (% of total water resources) 14.9 Withdrawal for agriculture (% of total freshwater 89 74 75 withdrawal) Access to sanitation in urban areas (% of urban population) 76 Access to sanitation in rural areas (% of rural population) 83 Infant mortality rate (per ,000 live births) 40 31 35 National accounting aggregates (% of GDP) Gross domestic savings 16.9 19.0 19.1 Consumption of fixed capital 5.9 10.1 9.3 Net domestic savings 11.0 8.9 9.8 Education expenditure 1.7 4.2 4.1 Energy depletion 0.0 2.4 6.0 CO2 Damage 0.5 0.4 1.5 Genuine domestic savings 11.9 9.8 5.9 Environmental Economics Series 59 Country Assistance Strategies and the Environment PAKISTAN South Asia Low income Income Region group Population (millions) 132 1,305 3,536 Urban population (% of total) 35.9 27.7 30.5 GDP ($ billions) 63 565 1,881 GNP per capita, Atlas method ($) 470 430 520 Environmental strategy or action plan (year prepared) 1994 Agriculture Land area (,000 sq. km) 771 4,781 41,383 Land use, permanent cropland (% of land area) 0.7 2.1 1.4 Irrigated land (% of crop land) 81.4 40.9 30.3 Fertilizer consumption (100 grams/ ha of arable land) 1,264 999 1,210 Food production index (1989-91 = 100) 141.9 122.7 140.8 Population density, rural (people per sq km) 395 531 573 Forests Forest area (,000 sq. km) 17 744 7,379 Forest area (% of total land area) 2.3 15.6 17.8 Annual deforestation (% change, 1990-95) 2.9 0.2 0.7 Biodiversity Mammal species, total known IS I Mammal species, threatened 1 3 Bird species, total known 375 Bird species, threatened 25 Nationally protected area (% of land area) 4.8 4.5 5.9 Energy GDP per unit of energy use (PPP $ per kg of oil equivalent) 3.9 Commercial energy use per capita (kg of oil equivalent) 442 443 646 Energy imports, net (% of commercial energy use) 26 Electric power consumption per capita (kWh) 333 324 448 Share of electricity generated by coal (%) 0.6 62.7 63.8 Share of electricity generated by oil (%) 38.5 7.0 8.8 Emissions and pollution CO, emissions per unit of GDP (kg per PPP $ of GDP) 0.4 0.5 0.7 Total CO 2 emissions, industrial (,000 kt) 94.3 1,125.1 5,306.2 CO2 emissions per capita (mt) 0.8 0.9 1.6 Suspended particulate in capital city (microgr/m3) Passenger cars (per 000 people) 5 4 5 Water & Sanitation Access to safe water (% of total population) 60 77 Access to safe water in rural areas (% of rural population) 52 75 Access to safe water in urban areas (% of urban population) 77 83 Freshwater resources per capita (cubic meters) 1,938 4,088 4,330 Total freshwater withdrawal (% of total water resources) 61.0 Withdrawal for agriculture (% of total freshwater 97 93 87 withdrawal) Access to sanitation in urban areas (% of urban population) 53 46 56 Access to sanitation in rural areas (% of rural population) 19 2 10 Infant mortality rate (per .000 live births) 91 75 68 National accounting aggregates (% of GDP) Gross domestic savings 12.7 19.5 31.1 Consumption of fixed capital 7.4 8.5 8.1 Net domestic savings 5.3 11.0 23.0 Education expenditure 2.3 3.1 2.3 Energy depletion 1.5 1.3 2.2 Mineral depletion 0.0 0.3 0.4 Net forest depletion 1.3 1.7 1.1 CO2 Damage 0.8 1.2 1.8 Genuine domestic savings 4.0 9.6 20.0 60 EnvironIment Department Papers Appendix B -Environmental Indicators ZAMBIA Sub-Saharan Africa Low income Income Region group Population (millions) 10 627 3.536 Urban population (% of total) 39.4 33.3 30.5 GDP ($ billions) 3 334 1,88 I GNP per capita, Atlas method($) 330 510 520 Environmental strategy or action plan (year prepared) 1994 Agriculture Land area (,000 sq. km) 743 23,605 41,383 Land use, permanent cropland (% of land area) 0.0 0.9 1.4 Irrigated land (% of crop land) 0.9 4.2 30.3 Fertilizer consumption (100 grams/ ha of arable land) III 136 1,210 Food production index (1989-91 = 100) 94.4 126.7 140.8 Population density, rural (people per sq km) 109 378 573 Forests Forest area (,000 sq. km) 314 3,969 7,379 Forest area (% of total land area) 42.2 16.8 17.8 Annual deforestation (% change, 1990-95) 0.8 0.7 0.7 Biodiversity Mammal species, total known 229 Mammal species, threatened I I Bird species, total known 605 Bird species, threatened 10 Nationally protected area (% of land area) 8.6 6.2 5.9 Energy GDP per unit of energy use (PPP $ per kg of oil equivalent) 1.2 Commercial energy use per capita (kg of oil equivalent) 634 695 646 Energy imports, net (% of commercial energy use) 7 Electric power consumption per capita (kWh) 563 446 448 Share of electricity generated by coal (%) 0.5 73.3 63.8 Share of electricity generated by oil (%) 0.0 3.3 8.8 Emissions and polltution CO2 emissions per unit of GDP (kg per PPP $ of GDP) 0.3 0.5 0.7 Total CO 2 emissions, industrial (,000 kt) 2.4 471.7 5,306.2 C02 emissions per capita (mt) 0.3 0.8 1.6 Suspended particulate in capital city (microgr/m3) Passenger cars (per 000 people) 1 5 1 3 5 Water & Sanitation Access to safe water (% of total population) 43 Access to safe water in rural areas (% of rural population) 27 Access to safe water in urban areas (% of urban population) 64 Freshwater resources per capita (cubic meters) 12,001 8,441 4,330 Total freshwater withdrawal (% of total water resources) 1.5 Withdrawal for agriculture (% of total freshwater 77 87 87 withdrawal) Access to sanitation in urban areas (% of urban population) 40 .. 56 Access to sanitation in rural areas (% of rural population) 10 .. 10 Infant mortality rate (per ,000 live births) 114 92 68 National accounting aggregates (% of GDP) Gross domestic savings 5.3 14.9 31.1 Consumption of fixed capital 7.3 9.5 8.1 Net domestic savings -2.0 5.3 23.0 Education expenditure 1.9 4.5 2.3 Energy depletion 0.0 3.1 2.2 Mineral depletion 3.0 0.6 0.4 Net forest depletion 0.0 1.3 1.1 CO2 damage 0.4 0.9 1.8 Genuine domestic savings -3.6 3.7 20.0 Environmental Economics Series 61 Notes 1. We would like to thank the Governments of 8. It is possible that while there were Switzerland and Norway for their generous interventions that helped the poor and tried support for this work. We would also like to to stem environmental degradation, the acknowledge the excellent comments given CAS document did not identify the nature by reviewers Zoubida Allaoua, Jan Bojo, of these links adequately - this is likely to Anders Ekbom and Konrad Von Ritter. Any be true of several of the African CASs. mistakes found are the responsibility of the 9. A direct comparison of 'poverty links' with authors alone. The conclusions and results the other variables is not absolutely of this report do not necessarily reflect the accurate since different issues are being views of the World Bank. compared. However, it clearly tells us that 2. BP 2.11 refers to a Bank Procedure on compred.iHowev t ceare us t Counry Asistnce traegie in he Wrldthe poverty-environment message has not Country Assistance Strategies in the World be dqaeyadesdi h A Bak' Oertina Mnul.Ths been adequately addressed in the CAS Bak' Oprtoa Maullhs relative to other ways in which environment procedures are meant to inform and guide r World Bank staff on a variety of policy is linked to economic outcomes. issues. 10. Political upheaval in Pakistan has resulted 3. The project team included S. Fankhauser, K. in major delays in launching a new CAS. Hamilton, M. Sarraf, L.Segnestam, and P. The recommendations presented here will Shyamsundar. become part of an Environment Strategy 4. To keep the decision tree simple, the direct being prepared for Pakistan, and will links between growth and poverty are not eventually be used for the CAS. shown. 11. Source: "Controle de la Pollution 5. This chapter is based on a more detailed Industrielle en Tunisie" Tebodin report by Shyamsundar and Hamilton Consultants for the World Bank, June 1998 (2000). 12. IEA; World Bank estimates. Avg. Europe is 6. Mainstreaming refers to actions taken in for France, Germany and Italy. macro and non-environmental sectors to 13. METAP (Mediterranean Environmental understand the environmental implications Technical Assistance Program )is a program, of their strategies and to incorporate sponsored by the World Bank, the UNDP, environmental concerns into their activities. the EIB, and the EU, designed to provide This can be either at the policy or project technical assistance for the developing level. 7. The CAS program matrix is an important countries of the Mediterranean region. Appendix in the CAS document and 14. The MEDPOLICIES initiative was launched outlines items such as key issues, Bank by METAP and is being implemented by the interventions, programs, and outcome Harvard Institute for International indicators. Development. Environmnental Economics Series 63 Country Assistance Strategies and the Environment 15. A LIL for an environmental policy reform Indicators (World Bank 2000). The actual exists already. CAS input indicators included local data as 16. For uniformity purposes, data presented well as data from the World Development here is from the World Development Indicators. 64 Environment Department Papers References Ahmad M. and R. K. Sampath. 1994. Irrigation Faruqee R. and K. Carey. 1996. Agricultural Inequalities in Pakistan, 1960-1980: A Growth and Poverty in Pakistan. Human District Level Analysis. Pakistani Capital Development Working Paper No. Development Review 33 (Spring): 53-74. 71. World Bank, Washington, DC. Aziz, R. 1999. Environimental Issues in the Filmer D. and Pritchett. 1996. Environmental Energy Sector. Pakistan. Draft paper. World Degradation and the Demand for Children. Bank, Islamabad. ~~~~~Searching for the Vicious Cycle. World Bank, Islamabad. Bank Policy Research Working Paper No. 1623. Poverty and Human Resources Bucknall, J., C. Kraus, and P. Pillai. 2000. Division, World Bank, Washington DC. Poverty and Environment. Environment Strategy Background Paper. World Bank, Filmer, D., E.M. King and L. Pritchett. 1998. Washington, DC. Gender Disparity in South Asia. Comparisons Between and Within Banuri, T. and S.R. Khan. 2000. Background Countries. Policy Research Working Paper Report - Environmental Strategy for N. 1867. World Bank, Washington, DC. Pakistan (draft). Sustainable Development Government of Pakistan. 1998. Biodiversity Policy Institute, Islamabad. Action Plan. With support from IUCN/ WWF, Islamabad. Byerlee, D. 1987. Maintaining the Momentum in Post Green Revolution Agriculture: A Government of Pakistan. 1999. Pakistan Micro Level Perspective from Asia, Integrated Household Survey 1996-97. International Development Paper No. 10. Federal Bureau of Statistics, Statistics Michigan State University. Division, Islamabad, Pakistan. Ekbom, A. and J. Bojo. 1997. Mainstreaming Hamilton,K. 2000. Sustaining Economic Environment in Country Assistance Welfare: Estimating Changes in Wealth Per Strategies. Discussion Paper No. 1. Capita. World Bank. Environmnent Group, Africa Region, World Hosier, R. 1993. Forest Energy in Pakistan: The Bank, Washington, DC. Evidence for Sustainability. Pakistan Household Energy Strategy Study. ESD, 1995. The ESD Review of Country Prepared for the Government of Pakistan Assistance Strategies: Vision, Organization under United Nations Development Arrangments and Procedures. A Discussion Programme (PAK/88/036) by the Energy Report (processed). World Bank, Sector Management Assistance Programme Washington, DC. in association with the Energy Wing. Environnental Economics Series 65 Country Assistance Strategies and the Enviromnent Managing Director of Operations. 1998. .1994. Zambia - Poverty assessment. Country Assistance Strategies: Sector Report 12985. Africa Regional Retrospective and Outlook. Operations Office, World Bank, Washington, DC. Policy and Strategy, World Bank, Washington, DC. .1996. Argentina Flood Protection Project. Staff Appraisal Report. Latin Mupimpila, C., V. Seshamani, A. Mwanza, E. America and the Caribbean Region, the Chidumayo, I. Mwanawina, and E. World Bank: Washington, DC. Cromwell. 1996. Case Study of Zambia. In D. Reed, ed, Structural Adjustment, the . 1997a. National Drainage Program Environment and Sustainable Development. Project. Staff Appraisal Report. Report No. World Wide Fund for Nature, Earthscan, 15310-PAK. Rural Development Sector London. Management Unit. South Asia Region, World Bank, Washington, DC. Sarraf, M. 2000. Macroeconomic Management of Natural Resource Revenues in . 1997b. Pakistan. Private Sector Botswana. Environment Department, Participation in Urban Environmental World Bank. Processed. Services. Water and Wastewater Services and Solid Waste Management. A Sector Shyamsundar, P. and K. Hamilton. 2000. An Study. Report No.16182-PAK. Environmental Review of 1999 Country Assistance Strategies - Best Practice and . 2000. The Little Green Data Book Lessons Learned. Environment 2000, from the World Development Department Working Paper. World Bank, Indicators. World Bank, Washington, DC. Washington, DC. . 2001a. Making Sustainable Tinker, A.G. 1998. Improving Women's Health Commitments. An Environment Strategy in Pakistan. Health, Nutrition and for the World Bank, Draft. World Bank, Population Series, Report No, 17927. World Washington, DC. Bank, Washington, DC. . 2001b. Annex B. Natural Resource World Bank. 1992. Environmental Protection Management: Issues and Options in and Resource Conservation Project. Staff 'Making Sustainable Commitments. An Appraisal Report No. 9946-Pak, World Environment Strategy for the World Bank, Bank, Washington, DC. Draft.' World Bank, Washington, DC. World Bank. 1993. Argentina Forestry Sector World Development Indicators (WDI). 1999. Review. Latin America and the Caribbean World Bank, Washington, DC. 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