《The use of economics in EIAS- some lessons from international experience》

DFID International Development The use of economics in EIAS some lessons from international experience oct.272004 Renmin University, School of Environmental Sciences

The use of economics in EIAs – some lessons from international experience Oct. 27 2004 Renmin University, School of Environmental Sciences

DFID International Development Outline of talk I) DFID experience A) DFID's approach to EIA B)Aims C) Some lessons learnt II) Putting economic valuation in to context A) Understanding incentives as key to identifying and measuring impacts B) Pragmatism: economics as a tool rather than a straightjacket III) Strengthening the EIA process A) The role of consultation and public participation B) Shift to a more forward looking and positive approach C SEA and EIa Page 2

Page 2 Outline of talk I) DFID experience A) DFID’s approach to EIA B) Aims C) Some lessons learnt II) Putting economic valuation in to context A) Understanding incentives as key to identifying and measuring impacts B) Pragmatism: economics as a tool rather than a straightjacket III) Strengthening the EIA process A) The role of consultation and public participation B) Shift to a more forward looking and positive approach C) SEA and EIA

DFID International Development Page 3

Page 3

DFID International Development Aims of EIA/ SEA in DFID interventions To ensure that project design satisfies DFID goals To ensure that the action contributes to meeting national goals/ policies To help strengthen national capacity for sustainable development planning and management Page 4

Page 4 Aims of EIA/ SEA in DFID interventions • To ensure that project design satisfies DFID goals • To ensure that the action contributes to meeting national goals/ policies • To help strengthen national capacity for sustainable development planning and management

DFID International Development Some lessons learnt Policies, laws and institutional arrangements in place Human resources Financial resources Early initiation -Sufficient time for study, suitable planning Integrated with project design Environmental stds and guidelines Ensure independence and transparency Thorough and rigorous Comprehensive and systematic Stakeholder involvement Adaptive Page 5

Page 5 Some lessons learnt • Policies, laws and institutional arrangements in place • Human resources • Financial resources • Early initiation - Sufficient time for study, suitable planning • Integrated with project design • Environmental stds and guidelines • Ensure independence and transparency • Thorough and rigorous • Comprehensive and systematic • Stakeholder involvement • Adaptive

DFID International Development II) Putting economic analysis in to context Page 6

Page 6 II) Putting economic analysis in to context

DFID International Development Calculating environmental damages three important questions 2 WHAT ARE THE DAMAGING FACTORS? WHERE? Technological factors Global damages(e.g.. Geophyiscal factors(e.g CO2 emissions) topography) Regional damages (e. g Poverty-environment air pollution) ages Local damages(i.e 3. WHAT ARE THE noise, soll degradation DAMAGES? Health Production Ecosystems Page 7

Page 7 Calculating environmental damages – three important questions 1. WHERE? • Global damages (e.g. CO2 emissions) • Regional damages (e.g. air pollution) • Local damages (i.e. noise, soil degradation) 2. WHAT ARE THE DAMAGING FACTORS? • Technological factors • Geophyiscal factors (e.g. topography) • Poverty-environment linkages 3. WHAT ARE THE DAMAGES? • Health • Production • Ecosystems

DFID International Development Understanding incentives: a) Property rights and legal /regulatory regIme b) Micro-macro linkages c) Poverty-environment dynamics Page 8

Page 8 Understanding incentives: a) Property rights and legal /regulatory regime b) Micro-macro linkages c) Poverty-environment dynamics

DFID International Development Poverty-environment interactions Some hypotheses on poverty and environment (Ekbom and Bojo, 1998) Poor people are the main victims of environmental degradation Poor people are agents of environmental degradation Higher per capita income increases environmental pressure Incomplete property rights reinforce the vicious poverty-environment interaction Page 9

Page 9 Poverty-environment interactions Some hypotheses on poverty and environment (Ekbom and Bojo, 1998) • Poor people are the main victims of environmental degradation • Poor people are agents of environmental degradation • Higher per capita income increases environmental pressure • Incomplete property rights reinforce the vicious poverty-environment interaction

DFID International Development Economics as a tool not a straightjacket Matching methods to situation and means Balancing rigour and efficiency Relevance, credibility cost effectiveness inter-disciplinary Page 10

Page 10 Economics as a tool not a straightjacket • Matching methods to situation and means • Balancing rigour and efficiency • Relevance, credibility, cost￾effectiveness • Inter-disciplinary