IDA and the Environment WORLD Awareness of the links between poverty reduction and environmental BANK protection has grown rapidly in recent years. The issue is especially important for the International Development Association (IDA), the INFORMATION World Bank affiliate whose purpose is to support the long-term development of the world's poorest people. Poor people are often BRIEFS most vulnerable to environmental degradation, and in tum poverty is often a main cause of environmental damage. E nvironmental damage has real -- sometimes • To assist borrower governments in building on crippling -- economic costs that threaten economic the complementary aspects of economic devel- growth and poverty reduction. The health of hundreds opment and sound environmental management of millions of people is endangered by contaminated • To address global environmental problems, drinking water and polluted air. The productivity of such as pollution of the atmosphere and oceans natural resources is being lost in many places because and the loss of biological diversity, through of the overuse and pollution of renewable resources participation in the Global Environment such as soils, water, forests, and the atmosphere. Facility (GEF). The poorest people, and the poorest countries, are most often affected by environmental degradation, Environmental Action Plans particularly unsafe water and inadequate sanitation, soil depletion, and outdoor and indoor air pollution. IDA borrowers are preparing Environmental Unlike the rich, the poor cannot afford to protect Action Plans (EAPs) to set environmental priorities themselves from contaminated water, in cities they are and map investment and other strategies for achieving more likely to spend much of their time on the streets, them. EAPs also allow IDA and other lending institu- breathing polluted air; in rural areas they are more tions and donors to focus support for investments on likely to cook on open fires of wood or dung, inhaling agreed priority areas. As of March 1993, some 10 dangerous fumes; and their lands are more likely to IDA borrowers had completed EAPs. Another 20 were suffer from soil erosion. expected to have completed EAPs by the end of June Good environmental practices not only improve the 1993. The bulk of the remainder, most of which are in quality of people's lives -- they also can have high Africa, are scheduled for completion in the fiscal year economic returns, if valuable natural resources are ending June 30, 1994. managed to produce permanent benefits. The EAP process is indigenous to the borrower IDA helps its borrowers ensure that environmental and is expected to be participatory and driven by the concerns are integrated into project planning and country's needs. This is essential for the country's implementation and into national economic policies. environmental concerns to be integrated fully into its IDA's environmental activities include formulating development strategy. In many countries a wide variety sustainable environmental policies with borrowing of civic groups and private sector bodies participate in governments, financing environmentally sustainable preparing EAPs. programs and projects, funding training and research, IDA's role in the preparation and implementation and coordinating development assistance with other of an EAP is primarily to provide advice and help bodies. These activities have four objectives: arrange technical assistance, if the government requests • To assist member countries in setting priori- it. Each action plan is tailored to the problems and ties, building institutions, and implementing needs of the individual country. But all share the programs for sound environmental stewardship common goals of setting priorities, developing or • To ensure that potential adverse environmental strengthening environmental policy and the institutions impacts from IDA-financed projects are ad- and laws to deal with these environmental priorities, dressed and building up human resources for implementing the resulting programs. As a process, rather than a single arise in some projects. These include the longstanding product, EAPs are expected to change as priorities Wild/ands Policy aimed at ensuring that wildlands of shift and problems are tackled. special concern are not converted with Bank or IDA funding and that environmental impacts on other Research and Analysis wildlands are minimized. It calls for project compo- nents to be specifically designed to conserve wildlands Underpinning EAPs and IDA's support for devel- as much as possible. There are similar directives and oping countries are IDA's studies and policy analyses related requirements to ensure that borrowers protect that help to inform IDA's policy discussions with the rights and livelihoods of indigenous peoples, governments and guide the borrower's investment protect and compensate people displaced by projects, planning. A growing number of studies concern and conserve cultural property, as well as a host of environmentally sustainable development. others. The 1992 World Development Report, Develop- Public access to environmental information is also ment and the Environment, explores the conditions crucial to the formulation and success of policies for under which policies for economic growth can comple- environmentally sustainable development. EAs are to ment those for environmental protection as well as the be made locally available and there is to be consulta- cases where there are trade-offs and choices to be tion with local affected groups and local NGOs. In made. The Bank conducts a wide range of sector addition, the Bank is working to make environmental studies and applied research as well. One example is reports more publicly available on Bank premises. The the Forest Sector Policy Paper (1991), which estab- Bank also publishes an annual report on its environ- lished policy for a sustainable and conservation- mental work. oriented forestry lending program. The policy includes the principle that the Bank does not finance commer- IDA's Support is Vital cial logging or the purchase of logging equipment for use in tropical moist forests. These environmentally sound policies and pro- grams are essential for sustainable development. But Environmental Considerations in Project Design in the short term they often add to investment and operating costs. Most low-income countries cannot The Bank continues to strengthen its capacity to finance these costs from their own resources. IDA's assess potential environmental impacts from projects it concessional finance provides critically needed support supports. Environmental Assessments (EAs) identify for comprehensive environmental initiatives that are ways of making projects more environmentally sustain- essential to ensuring sustainable economic growth in able by preventing, minimizing or compensating for poor countries. adverse impacts. During the three fiscal years 1991-93 (July 1, An Operational Directive on Environmental 1990 to June 30, 1993), IDA approved about 60 Assessment requires Bank staff to classify investment projects that were primarily environmental, with projects into three categories depending on their financing of over $2.5 billion. potential environmental impact. For "category A" Lending increased notably for strengthening projects, the borrower must conduct a full environmen- borrowers' own environmental institutions and for tal assessment. Examples include darns and reservoirs, management of critical natural resources such as industrial estates, large-scale irrigation and flood forests, fresh water, wildlife, and soils. control, and land clearance. Projects placed in cat- Reflecting the special importance the World Bank egory B undergo environmental analysis but do not attaches to the environment, a new Vice Presidency for require full environmental assessment. Examples Environmentally Sustainable Development came into include small-scale agroindustry, aquaculture, rural existence at the beginning of 1993. It incorporates the electrification, watershed management, and rural water Environment Department, the Agriculture and Natural supply and sanitation. No environmental assessment Resources Department, and a third department which or analysis is required for category C projects -- such is responsible for Transport and Urban Development. as family planning, education, health, and nutrition -- This new structure will strengthen the integration of because these have no environmental impact. environmental concerns into IDA's analysis and This comprehensive procedure is supplemented by lending. (Apr.1993) guidelines and policies on certain complex issues that World Bank Information Brief# B.07.4-93 The World Bank• 1818 H Street, N.W. •Washington, D.C. 20433 • (202) 473-1793 • Fax (202) 676-0578