Country Environmental Country Environmental Analyses and Analyses and InfrastructureInfrastructure

Juan Carlos BelausteguigoitiaJuan Carlos Belausteguigoitia

Lead Environmental EconomistLead Environmental Economist

World BankWorld Bank

IADB; November 2007IADB; November 2007

ContentsContents

Need of up-stream analytical workNeed of up-stream analytical work ObjectiveObjective ComponentsComponents Scope and costScope and cost Infrastructure-related CEAs Infrastructure-related CEAs

FindingsFindings Impact on country dialogueImpact on country dialogue

ConclusionsConclusions

BackgroundBackground

The traditional investment project The traditional investment project approach has been supplemented by approach has been supplemented by new instruments that promote long-term new instruments that promote long-term programmatic and policy based lendingprogrammatic and policy based lending

In this context, analytical work plays an In this context, analytical work plays an increasingly critical role in the increasingly critical role in the development assistance kit development assistance kit

BackgroundBackground

Analytical work provides a foundation for the Analytical work provides a foundation for the Bank’s policy dialogue with client countries, the Bank’s policy dialogue with client countries, the development of country strategies, and the development of country strategies, and the formulation and implementation of effective formulation and implementation of effective lending programslending programs

It has the additional benefit of providing a It has the additional benefit of providing a framework for closer coordination of the efforts framework for closer coordination of the efforts of the development community, as well NGOs, of the development community, as well NGOs, and academic and other institutions.and academic and other institutions.

Changing Focus of Changing Focus of Development AssistanceDevelopment Assistance

FromFrom Emphasis on Emphasis on

economic growtheconomic growth Environment as Environment as

constraint, add onconstraint, add on Investment in ring Investment in ring

fenced projectsfenced projects

ToTo Support to sustainable Support to sustainable

developmentdevelopment Environment as part of Environment as part of

the development agendathe development agenda Support to broad Support to broad

programs and policies programs and policies

Shifting Focus of Shifting Focus of Environmental ToolsEnvironmental Tools

FromFrom

Impact AssessmentImpact Assessment Focus on technical Focus on technical

solutionssolutions Attention to projectsAttention to projects

ToTo

Upstream analysisUpstream analysis Focus on policies Focus on policies

and institutionsand institutions Attention to country Attention to country

capacitycapacity

ObjectivesObjectives

To facilitate mainstreamingTo facilitate mainstreaming by providing systematic by providing systematic guidance on integrating information on and analysis of guidance on integrating information on and analysis of key environment, development, and poverty links into key environment, development, and poverty links into the country policy dialogue (PRSPs, CASs and DPLs)the country policy dialogue (PRSPs, CASs and DPLs)

To guide environmental assistance and capacity To guide environmental assistance and capacity buildingbuilding supported by the Bank or other development supported by the Bank or other development partners through an assessment of capacity issues, partners through an assessment of capacity issues, especially in relation to environmental prioritiesespecially in relation to environmental priorities

To facilitate a strategic approach to safeguard To facilitate a strategic approach to safeguard issues issues by providing information and analysis about by providing information and analysis about environment-development links at the earliest stages of environment-development links at the earliest stages of decision-makingdecision-making

Key Building BlocksKey Building BlocksState of the Environment State of the Environment

and Priorities for and Priorities for DevelopmentDevelopment

Prioritization of Prioritization of environmental challengesenvironmental challengesEnvironmental trends in Environmental trends in priority areaspriority areasPoverty-environment Poverty-environment linkageslinkagesIndicatorsIndicatorsData gapsData gaps

Institutional Institutional Capacity Capacity

AssessmentAssessment

Assessment of Assessment of policy making, policy making, administrative administrative efficiency and efficiency and implementation implementation capacitycapacityMethodology and Methodology and process for priority process for priority setting and cross setting and cross sectoral coordinationsectoral coordinationEnvironmental Environmental expenditure reviewsexpenditure reviews

Sectoral AnalysisSectoral Analysis

Identification of key Identification of key macro-economic and macro-economic and sector policies with sector policies with environmental environmental implicationsimplicationsLessons from SEAs, Lessons from SEAs, relevant studies and relevant studies and analytical workanalytical work

Scope and CostScope and Cost

CEAs are a flexible tool that can take different forms CEAs are a flexible tool that can take different forms depending on country context, gaps in available work, depending on country context, gaps in available work, budget and so on. Broadly they can be of two types:budget and so on. Broadly they can be of two types: Full CEAs:Full CEAs: They cover and undertake deep analysis They cover and undertake deep analysis

of all three building blocks (US $300,000 – 500,000)of all three building blocks (US $300,000 – 500,000) Rapid CEAs: They can be based primarily on desk Rapid CEAs: They can be based primarily on desk

review and some field analysis. As needed, they can review and some field analysis. As needed, they can include a snapshot view of two or more building include a snapshot view of two or more building blocks (US $80,000 – 100,000)blocks (US $80,000 – 100,000)

Country Environmental Analyses in Country Environmental Analyses in Central AmericaCentral America

Main Objective:Main Objective: Analyze the efficiency and effectiveness Analyze the efficiency and effectiveness of a country's environmental policy and institutional of a country's environmental policy and institutional framework to address current and future environmental framework to address current and future environmental issues with special emphasis on those arising from trade issues with special emphasis on those arising from trade liberalization and infrastructure expansion (OP 8.6). liberalization and infrastructure expansion (OP 8.6).

Other Objectives: Other Objectives: Provide a foundation for the Bank’s Provide a foundation for the Bank’s policy dialogue with client countries, and facilitate the policy dialogue with client countries, and facilitate the coordination among development partners.coordination among development partners.

CEAs in CA:CEAs in CA: El Salvador and Guatemala El Salvador and Guatemala In process:In process: Honduras and Panama Honduras and Panama ProgrammedProgrammed: Nicaragua: Nicaragua

Economic Growth & InfrastructureEconomic Growth & Infrastructure

Main FindingsMain Findings

Environmental Impact Assessment (EIA) Environmental Impact Assessment (EIA) is the management tool used to address is the management tool used to address the environmental impacts of the environmental impacts of infrastructure works in CA.infrastructure works in CA.

The systems are over-burdened and backlogs The systems are over-burdened and backlogs are common. are common.

Two lines of action Two lines of action Improve the EIA process (re-categorization; Improve the EIA process (re-categorization;

decentralization; on-line filing and follow-up; decentralization; on-line filing and follow-up; guidelines) guidelines)

Complement the EIA process with other Complement the EIA process with other management instruments (standards; management instruments (standards; strategic assessments; and zoning)strategic assessments; and zoning)

Main findingsMain findings

1.1. Disconnect between environmental Disconnect between environmental priorities and policiespriorities and policies

2.2. Lack of policy coordination Lack of policy coordination

3.3. Non-credible enforcement Non-credible enforcement

Impact on Country Dialogue (El Impact on Country Dialogue (El Salvador)Salvador)

Enrich existing DPLEnrich existing DPL Introduction of new policy instruments Introduction of new policy instruments

(regional development SEA)(regional development SEA) MainstreamingMainstreaming Improvement of licensing and other Improvement of licensing and other

management instrumentsmanagement instruments

EIA for RoadsEIA for Roads

Contract of Mitigation MeasuresContract of Mitigation Measures (CMM)(CMM) between SOPTRAVI between SOPTRAVI and SERNA for cat. 3 projects – too general, not project specific & and SERNA for cat. 3 projects – too general, not project specific & with many ways to avoid compliancewith many ways to avoid compliance

Recommendations:Recommendations: Include technical environmental specifications in CMMInclude technical environmental specifications in CMM Improve enforcement & implementation capacityImprove enforcement & implementation capacity

Strengthen environmental supervision teams; include an environmental Strengthen environmental supervision teams; include an environmental controller (controller (Fiscal MedioambientalFiscal Medioambiental))

Improve staff continuity in Environmental Management Units (EMUs) –Improve staff continuity in Environmental Management Units (EMUs) –increase staffing, knowledge sharing (e.g., library of good practices, increase staffing, knowledge sharing (e.g., library of good practices, lessons learnt, thematic maps)lessons learnt, thematic maps)

Include sanctions for partial or total noncompliance in CMMInclude sanctions for partial or total noncompliance in CMM Need for Strategic Environmental Assessment to consider alternative Need for Strategic Environmental Assessment to consider alternative

investment options & cumulative impactsinvestment options & cumulative impacts

SEA & Hydropower InfrastructureSEA & Hydropower Infrastructure

Need strategic planning to optimize hydropower investments and Need strategic planning to optimize hydropower investments and minimize negative social and environmental impacts (also consider dams’ minimize negative social and environmental impacts (also consider dams’ potential for leisure, water supply…)potential for leisure, water supply…)

Set up an inventory with detailed environmental data for hydropower Set up an inventory with detailed environmental data for hydropower projectsprojects

Create a methodology to rank alternative projects taking long term social Create a methodology to rank alternative projects taking long term social & environmental impacts into account& environmental impacts into account Kendung Ombo project (Indonesia): displaced 29,000 people; generated only Kendung Ombo project (Indonesia): displaced 29,000 people; generated only

30Mw30Mw Brokopondo Dam (Suriname): flooded 16,000 ha of tropical rainforest & Brokopondo Dam (Suriname): flooded 16,000 ha of tropical rainforest &

created serious water quality problems; generated 30Mwcreated serious water quality problems; generated 30Mw Churchill Falls (Canada): 665,000 ha to create a reservoir; generated 5,225; Churchill Falls (Canada): 665,000 ha to create a reservoir; generated 5,225;

no population displacementno population displacement Stakeholder involvement through (i) Monitoring & Evaluation Plans; (ii) Stakeholder involvement through (i) Monitoring & Evaluation Plans; (ii)

Adaptation Plans; (iii) Indigenous Peoples’ Development PlansAdaptation Plans; (iii) Indigenous Peoples’ Development Plans

Conclusions Infrastructure deficitInfrastructure deficit Inadequateness of current environmental Inadequateness of current environmental

management tools (EIA)management tools (EIA) Need to improve EIA process and to use Need to improve EIA process and to use

other management toolsother management tools Strategic assessments (regional or Strategic assessments (regional or

sectoral) offer good way to balance sectoral) offer good way to balance infrastructure needs and environmental infrastructure needs and environmental quality quality