H- 21289 December 1999 Environment Sector Strategy Note Thailand Building Partnerships for Environmental and Natural Resources Management Ministry of Science, Technology and Environment The World Bank (c) 1999 The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W., Washington, D.C. 20433, U.S.A. The World Bank Office, Bangkok 14th Floor, Tower A Diethelm Towers 93/1 Wireless Road Bangkok 10330, Thailand Telephone: (66 2) 256-7792 Facsimile: (66 2) 256-7794/5 Printed in Bangkok, Thailand First Printing November 1999 The findings, interpretations, and conclusions expressed in this study are entirely those of the authors and should not be attributed in any manner to the World Bank, to its affiliated organizations or to members of its Board of Executive Directors or the countries they represent. The maps that accompany the text have been prepared solely for the convenience of the reader; the designations and presentation of material in them do not imply the expression of any opinion whatsoever on the part of the World Bank, its affiliates, or its Board or member countries concerning the legal status of any country, territory, city, or area, or of the authorities thereof, or concerning the delimitation of its bound- aries or its national affiliation. This document was prepared by a World Bank Team comprised of Patchamuthu Illangovan, Manish Bapna, Giovanna Dore, Benoit Laplante, Jitu Shah, Louise Scura and Manida Unkulvasapaul. in collaboration with Khun Sunthad Somchevita, Per- manent Secretary, and Khun Sirithan Parirojboriboon, Deputy Permanent Secretary, Ministry of Science, Technology and Environment of Thailand. Chittrakarn Bunchandranon and Kanchalika Klad-angkul co-ordinated preparation and produc- tion. Katherin G. Golitzen provided editorial assistance. Cover design and layout: Ratchubol Chavutkul Foreword 6 Introduction 71 Environment Over the Last Twenty Years 8 Trends and Responses 10X Challenges for the Millenium 12 Setting Priorities 14 Strategy 15 Strategic Theme 1. Governance 1 Strategic Theme 2. Financing 18 Strategic Theme 3. Community Empowerment 20 Strategic Theme 4. Bangkok 22 Strategic Theme 5. Chao Phraya 241 6 Thailand's abundant and diverse natural resources have sustained its people for many centuries and formed the backbone of its prosperity over the last thirty years. However, economic expansion was accompanied by serious environmental costs. As the country moves forward into the new millennium, it faces three ma- jor environmental challenges. First, to maintain and enhance investments that will improve the environment of Bangkok and other urban areas through reduc- tions in air, water, and solid waste pollution. Second, to achieve a sustainable level of natural resource use and reverse the present degradation of its forests, marine ecosystems and watersheds. Third, to harness the impetus for change that has emerged from both the new constitution and the recent crisis, and to promote opportunities for local community involvement and participation in environmen- tal protection. This document lays out a strategic framework to translate into action Govern- ment policy on protection and management of Thailand's environment and natu- ral resources and to identify priority areas for possible World Bank assistance. It is a result of the ongoing dialogue between the Ministry of Science, Technology, and Environment and the World Bank in consultation with other key stakeholders in Thailand-elected representatives, government officials, local communities, and donor agencies. The strategy outlined herein is intended to be dynamic, and one that will evolve with every passing year, as Thailand recovers from the crisis and addresses the relationship between economic growth and protection of its natu- ral resources and environment. We commend the spirit of participation and collaborative efforts that resulted in the swift yet comprehensive development of a strategy to promote environmen- to tal protection and sustainable resource use in Thailand. 0 His Excellency Arthit Ourairat Jayasankar Shivakumar Minister of Science, Technology and Environment Country Director - The World Bank Office, Royal Thai Government Bangkok 0 Sunthad Somchevita Kristalina Georgieva Permanent Secretary Sector Director, Environment and Social Ministrv of Science, Technology and Environment Development. The World Bank This document outlines a partnership strategy forged by the Royal Thai Govern- ment and the World Bank for the protection and management of natural resources and the environment. The Ministry of Science, Technology and Environment (MoSTE), representing the Royal Thai Government, and the World Bank engaged in close dialogue and consultation with Government ministries and agencies, civil society, academia, the private sector and donor institutions to draft this strategy. The Ministry of Agriculture and Cooperatives (MoAC) and the Department of In- dustrial Works (DIW) are the other key government agencies who will play an important role in implementing the strategy. The strategy elaborates upon and reinforces the environmental objectives speci- fied in three existing planning documents: Thailand's Eighth National Economic and Social Development Plan; the 20-year Policy and Perspective Plan for Enhance- ment and Conservation of National Environmental Quality; and the World Bank's Country Assistance Strategy for Thailand, 1998-2001. This document is a concise presentation of the publication, "Thailand: Build- ing Partnerships for Environmental and Natural Resources Manage- ment," This abridged version provides an introduction to the state of the envi- ronment in Thailand, highlights current trends and responses, and sets forth the major challenges that Thailand faces in its efforts to reverse the environmental decline of the last few decades. In addition to this, key areas for environmental improvements are identified through five strategic themes. The document is in- tended for the use of policymakers, Government agencies, nongovernmental or- ganizations, civil society, and academic institutions. 7 8 Thailand's rapid economic growth over the last three Q _ decades has produced impressive achievements in people's welfare-higher incomes, lower infant mor- tality rates, improved life expectancy at birth, greater literacy, and expanded employment opportunities. However, this economic expansion has been accom- panied by substantial environmental costs. Nearly half the forest cover was lost, more than a third of sur- face water is considered unsuitable for human con- sumption or agricultural use, atmospheric particu- late matter in Bangkok consistently exceeds ambient standards and over-harvesting of marine fisheries has reduced fishing yield by tenfold. Recent health care cost estimates by the World Bank indicate that the citizens of Bangkok are suffering the consequences of environmental decline both in terms * of higher incidence of illness and percentage of in- . come spent on medical care. Increased exposure to * air pollution costs city residents about 8-10 percent of their annual income, and this is expected to rise to 20 percent in the next two decades. Simi- larly, urban households spend more than 10 percent of their income on access to safe m-1 Investments water. Air by 2020 QuaI4 O Benefit By 2020, Thailand will need to invest ap- by 2020 proximately US$1.5 to 2 billion to attain uni- Safe versal coverage for safe water and sanita- Water tion. The corresponding economic benefits 0 2 4 1 8 lo 12 14 16 usshons of such investments will be around US$9 billion. Investments required for improv- ing air quality are estimated at US$660 million to 1.5 billion over a twenty year period, with resultant economic benefits expected to be ten times that amount. To address these and other mounting environmental challenges, the Government and local communities have undertaken several initiatives. They have established legal and institutional frameworks for environmental governance, prepared a 20-year Policy and Perspective Plan for Enhancement and Conservation of National Environmental Quality, phased out leaded gasoline, improved energy efficiency, invested in water pollution abate- ment and declared a large number of sensitive habitats as protected areas. Key Environmental Thailand's environmental protection laws are built around the and Natural Resources amended 1992 National Environmental Quality Act. Numerous agencies are responsible for environmental protection, with the tions in 7hailand ~~National Environment Board having ultimate authority for policy r [ions in TNhailand making (see sidebar on environmental institutions in Thailand). Ministry of Science, Technology Through development of their Provincial Environmental Action and Environment (MoSTE): Plans, local governments are also becoming more involved in en- Pollution Control Department vironmental management, The 20-year Plan is intended to serve (PCD), Office of Environmental Policy and Planning (OEPP), as a "blueprint" for integrating development priorities with the Department of Environmental broader environmental goals set out in the new Constitution and Quality and Promotion (DEQP) the Eighth National Plan. Ministrv of Agriculture and Cooperatives (MoAC): The economic crisis threatens to cut short efforts to improve Royal Forestry Department, Royal Irrigation Department environmental conditions and may even cause Thailand to ne- and Natural Resources and gate some of its earlier gains. The impacts of the financial crisis Biodiversity Institute on the environment are complex. On the positive side, the in- Ministry of Industry (MoInd): dustrial downturn and reduction in consumption levels lead to Department of Industrial Works less air pollution and a decrease in wastewater discharge and waste (DIW) disposal. On the negative side, the financial constraints of pri- Ministry of Interior (Molnt): vate and public sector companies has forced industrial and mu- Department of Local Adminis- nicipal treatment facilities to cut back operations, including in- tration (DOIA) and the Bangkok Metropolitan Administration vestments in cleaner production. The Government has reduced (BMA) budgetary allocations for environmental protection by about 20 Ministry of Transport and per cent from 1996 levels, thus affecting pollution control and Communications (MoTC): natural resources conservation programs. Land Transport Department Major Donor Agencies in the Environment Sector ADB Asian Development Bank AusAID Australian Agency for International Development CIDA Canadian International Development Agency DANCED Danish Cooperation for Environment and Development EU European Union GTZ German Technical Cooperation Agency JICA Japan International Cooperation Agency JBIC Japan Bank for International Corporation USAID United States Agency for International Development 9 10 Issue Overall Trend Severity Declining water High * 37% of surface water bodies in Chao Phraya classified as low quality, including Chao Phraya and Thachine Increasing water High * Per capita consumption doubled scarcity * Water scarcity increasing, worse in dry periods Declining air quality High * Ambient levels of lead, Sox, Nox and in BMR reduced significantly * PM10, TSP, ozone and HC exceed standards Loss of critical High * Significant losses reported habitats * About 100 species of plants classified as endangered; 900 considered rare and vulnerable Watershed degradation Medium * Increase in soil erosion and down stream sedimentation Declining marine and Medium * Significant reduction in catch per unit freshwater resources effort over 20 yrs. * 50% reduction in mangroves between 1961-1993 Land degradation Medium * Increasing soil erosion in upland areas * Salinization on southern coast Increasing solid and Medium * Per capita urban household waste hazardous waste generation 0.5-1 kg/day * Industrial units in BMR generated 2 million tons of hazardous waste in 1997 Declining forest cover Low * Total forest cover declined from 53% of total land area in 1961 to 25% in 1998. * Rate of deforestation slowed from 0.9%/year, pre-1989, to 0.2%/yr between 1995-1998. Causes and Relative Response Donor Activities Contribution * Domestic sewage (H) * US$550M committed for ADB; AusAid; * Industrial effluent (H) waste water collection / DANCED; JBIC treatment in BMA in 1998 * Pollution discharge standards * Irrigation (H) * Policy, institutional and ADB; CIM; * Domestic (M) regulatory framework for DANCED; JBIC * Industrial (M) integrated water resources * Drought (L) management completed * Transport (H) * Unleaded gasoline introduced DANCED; GTZ; * Industry (M) * Improvements in traffic management NEDO;SIDA; * Power (M) * Mass transit World Bank; JBIC * Indoor air pollutants (L) * Dust control measures * Garbage burning (L) * Revisions to regulatory enforcement * Deforestation (H) * Extended and representative AusAid; BDW; BGR; * Pollution (H) protected area system CIDA * Fishing practices (H) established (50 M rai), * Economic incentives (M) covering 16% of total land area * Poaching (M) * Land use planning/ * Watersheds have been BDW; BGR; CIDA; management (H) classified and mapped DANCED JICA; * Land conversion for * Intended land use NIDO;World Bank; agriculture (H) specified and regulated JBIC * Encroachment in uplands (M) * Effluents and * Programs developed for CIDA; DANCED; UK agricultural runoff (H) sustainable aquaculture and marine * Fishing practices (H) fisheries management * Targets established for mangrove reforestation and conservation * Land conversion * Improvements in land use AusAid; CIM; JICA for agriculture (H) management /planning * Soil erosion (H) * Forest encroachment reduced by areas * Land tenure (H) designating appropriate for agriculture * Salinization (M) * Pilot soil conservation projects * Industry (H) * Improvements in garbage collection ADB; BGR; CIM; * Households (H) * Pollution prevention techniques DANCED; EU; introduced for hazardous waste GTZ; JICA; USAID * Sanitary landfills and treatment facilities * Logging (H) * Established forest dassification AusAid; DANCED; * Protected areas * Reforestation targest set at 40% JICA; World Bank management policies (H) of land area * Encroachment (L) * Investments in 1996 - as a % of GDP * Inundation (L) 11 H = High; M = Medium; L = Low 121 Restructuring Institutions: The protection and management of natural resources and other environmental functions are spread across many ministries. Public institutions are highly seg- mented with limited coordination among them. This results in overlapping functions and respon- sibilities. A broad consensus is emerging to re- view and streamline these institutional arrange- ments. Enforcing Environmental Regulations: The implementation of regulatory measures has suffered from weak monitoring and enforcement. Existing com- mand-and-control measures have not been particularly effective, and efforts are underway to introduce market-based instruments (MBIs). In addition to provid- ing incentives, such instruments will also improve firms' compliance with envi- ronmental standards. Rising community pressure to ensure compliance in the private sector and the introduction of public disclosure tools can also play an important role. * Managing Water Resources and Improving Water Quality: Water scarcity is becoming a critical problem in major river basins. One third of surface water bodies is of low quality, including the lower reaches of the Chao Phraya and Thachine rivers. Increased volumes of municipal and industrial waste are the main culprits. Public and private sector investments in wastewater management are impeded by the separation of wastewater management from water supply as a municipal service function in the Bangkok Metropolitan Region, and by lack of cost-recovery in water supply and quality improvements. Watershed management remains a planning principle that has not been effectively translated into action. Improving Air Quality in Bangkok: While progress has been made in reduc- ing atmospheric lead, rising concentrations of ozone, hydrocarbons and particu- late matter continue to be problematic. Poor air quality could undermine the com- petitiveness of Bangkok as an attractive regional investment center. Thus, sus- tained and increased investments need to be made in fuel-quality improvements, inspection and maintenance of vehicles, transport planning, and the enforcement of tighter vehicle emissions standards. Improving the Management of Protected Areas and Accelerating Reforestation Efforts: Although deforestation has slowed down significantly in recent years, reforestation remains well below target levels. Large losses of dryland forests, coastal mangroves and wetlands have contrib- uted declines in biodiversity. While significant additions to the protected area system are pro- posed, existing areas suffer from a lack of management. Arresting Soil Erosion: Land degradation, in particular soil erosion, impacts close to half the country's land, and is especially problematic in the country's upland areas. Salinization is also a severe problem in the northeast and in the south along the coast. Improving Coastal Zone Management: Marine fisheries have become heavily de- pleted over the past twenty years as observed . __ , from a significant reduction in fishing yield. Reliance on coastal aquaculture and freshwa- ^ - < ter fish culture has increased dramatically >=t - + during this time. As a result of rapid coastal development, almost half the mangrove for- * - v - - ' > -.N11!!; est area has been lost. Managing Solid and Hazardous Waste: A comprehensive national program is needed to address the worsening problems of solid and hazardous waste production and disposal in cit- ies, towns and industrial locations in an environ- mentally sound and cost-effective manner. Planning the Development of Secondary Cities: Phuket and Chiangmai are beginning to . experience major environmental problems be- cause inadequate consideration was given to en- vironmental aspects in physical planning and provision of infrastructure. The growth of these and other cities should be guided by sound en- vironmental planning principles. 113 14 XReview: / // A review of current environ mental trends identified the / . / 1 most critical and visible environmental problems / / and challenges in the / / ~~~~~~~~~~~~~~~~country. / Analyzing the Causes: conry Through an iterative exercise, the underlying causes of these problems were established. The corresponding policy and institutional changes and / investment needs were / / then determined. / \ Framing the Strategy for Partnership: 5t g z The final step in the priority-setting exercise was to outline the strategy. The resulting environmental strategy has two mutually complementary tracks, with Track 1 focusing on functional improvements and Track 2 on priority investments. / /Defining the Partnership: The following guiding principles were used to define the objectives and scope of the partnership: (i) ensuring that environment remains a priority during the recovery period; and (ii) laying the foundation for an / / integrated approach to . / environmental | \<. ~management. X- 7/ 'Targeting World Bank Assistance: Three criteria were used to determine the priorities for World Bank assistance. l 7/ * Consistency with policy objectives /; and opportunities for reform. / / * On-the-ground-impact (high cost of inaction) * Comparative advantage of World Bank involvemrent (j)~~~~~~~~ Restructuring Environment FuLd *Awareness Ct Decentralization * Cost recovery * Participation * Compliance Market-based * Disclosure f Instrunment 01 /Z. ,A' ' ' A -ta / ~~~~ A / /~~~~~~~~~~~~~~OA Track 2 Priority Bangkok Chao Phraya Investments *Air Quality * Water Management Wastewater * Dar-n Safety *Solid Waste *Ground Water *Decentralization * Basin Organization - ~ ~ ~ ~ ~ ~ ~ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ -_ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ . 161 Environmental Governance. Weak public administration has Institutional refocus, long been recognized as a key obstacle to achievement of decentralization of Thailand's development objectives. Public institutions responsible for environmental and natural resources management are highly environment functions segmented with little coordination among them. Compliance and and strengthened enforcement functions are split among the Departments of In- compliance are criti- dustrial Works, Pollution Control and Land Transport. This has cal for the Govern- led to poor implementation of the National Environmental Qual- ity Act (NEQA). Non-compliance by polluters is widespread and current enforcement mechanisms suffer from inadequate proce- ability to formulate dures, institutional overlap, insufficient staff capacity, a lack of and implement poli- 1014 incentives and weak monitoring and reporting capability. cies and projects in a more responsive In recognition of these problems, the Government recently an- nounced an ambitious public sector reform program to improve and cost-effective the function of public agencies. Environment and natural re- manner. sources functions spread across different minis- tries will also be a part of the program. Further- Xi M more, the new Constitution and NEQA state that environmental and natural resources manage- ment functions would be decentralized to pro- vincial and local governments. Simultaneously, there is a greater awareness among communi- ties, which are seeking to be more actively in- volved in protecting the environment. Decentralization is relativl nwtThiland, howver, and smimeitcoersmust be addressed in oetenviro nmen- tal functions to the local lill de e xpected benefits. These include improvements to ll-level planning in the con- >txt of Provincial Environmental Action Plans; building human resources capability in the provinces; and granting enforcement powers to provincial administrations. STRATEGY: Institutional restructuring, compliance and decentralization are core elements of 0 the proposed strategy. Institutional Restructuring. Individual agencies in MoSTE, MoAC and Ministry of Industry will benefit from restructuring, reengineering, and capacity-building. This restructuring will harmo- nize functions across agencies, clarify enforcement responsibilities, separate regulatory functions from those of promotion and development, strengthen monitoring and public disclosure, pro- mote customer orientation in service delivery, promulgate required legal changes, and enhance staff skills. Compliance. Governments throughout the world are adding new tools to their management portfolios to complement command-and-control measures. These include: MBIs and public dis- closure tools (see strategic themes 2 and 3). The strategy will assist the Thai government to mod- ernize its monitoring, enforcement and compliance mechanism by initiating regulatory reforms. Decentralization. Article 290 of the new Constitution states that environmental and natural resources protection should be decentralized to local governments, and it recognizes a more cen- tral role for communities in decision-making. World Bank assistance will support these objectives. As a first step, the World Bank will assist the Government in strengthening the Provincial Environ- mental Action Plan process. PROPOSED WORLD BANK INVOLVEMENT Public Sector Reform Loan - PSRL In support of Government's recently announced reform program, PSRL will provide assistance for organizational development and restructuring to selected Ministies - including MoSTE, MOAC, MOInd. A high-level Experts Committee appointed by National Environment Board is overseeing the preparation of the reform plans. Environmental Institutions Development Project - EIDP The proposed project will supplement the Public Sector Reform Loan, and support MoSTE's capacity building needs as they emerge from the reengineering exercise. This project would be a multi-donor effort led by the World Bank. Components may include: (a) priority human resources development needs for reform efforts; (b) piloting decentralization models in selected provinces and strengthening the PEAP process; (c) regulatory reforms to improve compliance through the introduction of public disclosure tools; and (d) restructuring of the Environment Fund. Sustainable Financing Mechanism. The implementation of The introduction and the Polluter Pays Principle, although required by law, has yet to application of MiBIs take effect. The DIWis working towards introducing market-based and cost-recovery of instruments (MBIs), primarily pollution charges on industrial services should be emissions. Other agencies also are contemplating introduction integrated into the of MBIs. It is important that efforts be coordinated to ensure over- functioning of the all effectiveness of these instruments. Careful attention should Environment Fund, thus creating a also be given to management of the revenues that they generate. sustainable financing 51 ~~~~~~~~~~~~~~~mechanism for N fl To date, cost-recovery of public investments in wastewater treat- eniomenta en viromnme-ntal ment plants and solid waste schemes has been seriously lacking. investments. Operation and maintenance costs are often not covered by tariff structures. The problem is further compounded by the separa- S tion of water supply and wastewater. This denies opportunities for cross-subsidization as practiced elsewhere in the world. Though established as a revolving mechanism, most of the assis- tance provided by the Environment Fund is in the form of grants. The Government intends to overhaul its operations as a priority, and should address two issues in particular: (i) the multiplicity of sources of funding, usually uncoordinated, for local government environmental investments; and (ii) poor cost-recovery. Both seriously limit the willingness of local administrators to borrow money for the provision of environmental services. STRATEGY: As depicted in ReCovery the figure, cost-recovery, moni- toring and enforcement of h Polluter Pays Fines and regulations, pollution charges CreatilgPPrincipl Penalties and a revolving Environment Incentive MBIs Fund need to be integrated in developing and implementing | Financing a sustainable financing mecha- ^ Mechanisms nism. This is the main thrust of the strategy. Market-Based Instruments. The strategy supports the introduction of MBIs in a phased man- ner, beginning with the pollution charge scheme of DIW. This should be a simple and transparent scheme with a clear and credible implementation program whereby at first, a small number of polluters and pollutants are targeted. DIW expects to be in a position to implement the scheme in early 2001. Cost-Recovery. The acceptance and endorsement of a cost-recovery strategy is an important stepping stone for improving the quality of environmental services. The strategy recommends that the Government urgently introduce cost-recovery measures. This should include (i) restructuring existing tariff charges that fail to reflect costs and actual use; (ii) merging water supply and waste- water into a single function; and (iii) encouraging private sector participation. As part of the decen- tralization efforts, provincial and local administrations should be assisted in developing sound financial management systems and staff with accounting skills. Restructuring the Environment Fund. The strategy supports Government efforts to restruc- ture the Environment Fund into a revolving mechanism. To do so, the following will need to be resolved: (i) administration of the Environment Fund; (ii) current financing mechanisms of pro- vincial and local government investments; (iii) multiplicity of funds; and (iv) utilization of rev- enues generated through the application of MBIs. PROPOSED WORLD BANK INVOLVEMENT Environmental Institutions Development Project - EIDP (i) assistance will be provided for the restructuring and recapi- talization of the Environment Fund, (ii) support for the implementation of the pollution charge scheme by assisting in the capacity building of DIW, PCD and private industry. 19 20 ?°~~fP Active paIticipation ofl urban alnd 17ural com lamuities in the Community Empowerment. Local communities have had lim- tin, and m nitoring tion, alid monitorhigl ited involvement in state-financed environmental protection ac- oTpolicies and tivities. In the aftermath of the recent economic crisis, the Gov- programs Till leadl to ernment signaled its interest in supporting community-based ini- ,, increased environmen- tiatives that would generate income for community members while simultaneously protecting and improving the environment. This policy shift reinforces Article 290 of the new Constitution, protection. which advocates stronger public participation in environmental and natural resources manage- ment. Nevertheless, there is strong criticism, especially from NGOs, that decision-making on tnmajor development initiatives is not transparent and does not fullv solicit public inputs and opin- ions. Moreover, local initiatives to improve the environment (such as solid waste collection) are constrained by limited access to finance and a lack of technical and management skills. These criticisms and observations are widely recog- nized and accepted, and have helped to create the momentum for enacting policies that actively encourage broader and deeper participation by local communities in managing their environ- ment. STRATEGY: Community participation and decentralization are two conjunctive elements .A. Yt. y of the Government's participatory strategy for - 4.^ A - environmental management. A ft] Local Solutions for Local Problems. Com- munity involvement is essential to improving en- vironmental conditions. Most environmental - problems that directly impact people-inadequate solid waste management, water treatment and disposal, watershed management and water scarcity are local in nature. Experience from environ- mental initiatives has shown that locally devised solutions to commonly recognized problems are likely to be more sustainable. Partnerships with Local Governments. The new Constitution clearly outlines the devolution of policy and financial responsibilities to provincial governments. Communities have always turned to their local officials for assistance and the restructuring will provide opportunities to strengthen local governments so that they may fulfill their new roles in environmental management. Collaboration with NGOs and Bilaterals: NGOs and bilateral donors possess a comparative advantage in working with local communities given their in-field presence and ability to provide grant money directly to communities. PROPOSED WORLD BANK INVOLVEMENT Technical Assistance. The PCD is receiving a technical assistance grant from the World Bank to implement a pilot program on empowering urban communities. This grant, supported by the Metropolitan Environmental Improvement Program, is financing (i) a rapid assessment of environmental issues in four secondary urban centers; (ii) small-scale pilot activities to support community environmental services; and (iii) community workshops to share skills and lessons learned. A multi- agency steering committee is overseeing implementation of the program. Social Investment Fund. The World Bank and Government have recently established a Social Investment Fund that is designed to facilitate financing for community-based initiatives, including local environmental projects. The World Bank proposes to assist communities in accessing grants from the Social Investment Fund. Specific components of this assistance are to be determined in the upcoming months. EIDP. The EIDP will also enhance information disclosure on the impacts of existing and planned industrial plants, and involve local communities in environmental monitoring of the plants. Experience from Indonesia (PROPER), and Philippines (ECOWATCH), is likely to prove useful for this. 21 221 Air Quality and Waste Management in Bangkok. Bangkok Veiy large physical has a third of the country's manufacturing enterprises and mo- investment supported tor vehicle population. It is no surprise that this megacity is fac- by policy corrections ing serious air and water pollution problems. Ozone and hydro- and institutional carbon concentrations, and suspended particulates including PM10 continue to exceed standards. The lower reaches of the strengthe of the Chao Phraya and Thachine rivers have reduced levels of biologi- BIA are required to cal activity caused by untreated municipal and industrial waste. reverse the growing It is reported that reductions in economic activity in the after- decline of envro-n- math of the economic crisis have led to temporary improvements mental quality in in environmental quality. Ambient levels of lead (see figure), SOx, Bangkok NOx and carbon monoxide levels have declined significantly. Nevertheless, the challenge for the Government is to sustain human welfare while simultaneously protecting the environment. Since the early 1990s, the Gov- ernment has enacted and Reducing Lead Level in Bangkok (1988-1997) implemented several key envi- 2.5 ronmental protection mea- 2 sures. These include the phase- out of leaded gasoline, traffic 1.5 management along important w . arteries, and commitments of nearly US$500 million for sew- erage schemes. Critical as they are, however, these responses 88 89 90 91 92 93 94 95 96 97 have sometimes been charac- Year terized as "fire fighting" mea- sures. Comprehensive air pol- lution prevention planning or sanitation and sewerage invest- ments have been lacking. The institutional capacity of the Bangkok Metropolitan Administration for planning, monitoring, and en- forcement needs significant strengthening. STRATEGY: Bangkok will continue to lead the country's eco- nomic recovery in the foreseeable future. It is imperative that this growth not come at the cost of further environmental decay, which could be an impediment to the city's long-term competi- l.. -_ tiveness in Asia. This strategy recognizes the need for immediate F i, 83 ~~~~interventions while supporting long-term solutions. Comprehensive Planning. Support should be provided to 0 _ BMA and PCD in introducing more comprehensive approaches to planning, enforcement, and monitoring. This should build on the lessons learned from previous work of the World Bank and .~ other donors. Opportunities for collaboration should be explored. - Selective and Phased Investments. Investments should have spatial significance and contribute to im- > mediate health gains. World Bank support should be phased over a longer period of time through a mix of investment projects and non-lending advisory ser- vices, which target further reduction in transport re- lated air pollution and improvements in wastewater treatment and disposal. -L s Polluter Pays Principle. Gradual introduction of the Polluter Pays Principle should be supported, to- gether with eventual application of user charges for cost-recoveryof operations and maintenance of waste management facilities. PROPOSED WORLD BANK INVOLVEMENT In support of the strategy outlined above, the BMAs Bangkok Urban Environment Program will have two World Bank financed investment projects and several analytical and advisory services. The two investment operations will be co-financed with the JBIC. The lending operations are the Bangkok Air Quality Management Project and the Bangkok Waste Management Project. Bangkok Air Quality Management Project (US$60-80 million). The proposed project will finance emission reductions from transport sources, road dust control, capacity building of BMA, traffic management, strengthened air quality monitoring network, and increased public awareness. Bangkok Waste Management Project (US$350-400 million). The proposed project will finance the planning and con- struction of a viable wastewater scheme for either Klong Toey or Thonburi, capacity building of BMA in waste management, and improvements in solid waste management, especially disposal. Other Assistance. Analytical and advisory service activities will be undertaken with other donors and participation of the World Bank Institute. 2L3~ 241 Water Management of the Chao Phraya River Basin. Cur- Integrated and con- rent problems of water availability and quality (see figure) can be junctive management traced to poor management of water resources. An integrated of surface and spatial and ecological approach is needed to better manage river basins. Losses of forest cover and inappropriate land use prac- tices have affected hydrology. This in turn has exacerbated top- Ri soil erosion and sedimentation of waterways and storage struc- Basin would have tures. Increased wet season run-off and consequent downstream major economic, flooding and reduced dry season stream flows are also thought environmental, and to be directly related to poor land management. Key watersheds social benefits. 1f\ are under pressure from illegal logging and encroachment by farmers in upland areas. The Chao Phraya River Basin is Quality of Surface Water in Thailand '@ The Chao Phraya River Basin is Pollution Control Department Survey in 1997 a key watershed in the country because of its size, strategic lo- cation and economic impor- 37 * high quality tance. The basin covers almost average gualty one-third of the country and FEl low quality accounts for two-thirds of em- ployment and GDP. The eco- nomic and social costs of wa- ter competition and inefficient allocation are greater here than elsewhere in Thailand as about 3 million hectares of the basin are used for agri- culture, and competition from industrial and domestic uses is on the rise. While deforesta- tion and illegal logging affect the upper reaches of the Chao Phraya, its lower reaches suffer the consequences of urban and industrial pollution from the Bangkok Metropolis. STRATEGY: Conjunctive management of sur- face and groundwater resources is critical to the long-term sustainability of the Chao Phraya water- shed. The strategy proposes to take a fresh look at & .ta the institutional framework and instruments re- - P . quired for promoting and regulating more efficient w ;_|_ water use. Institutional Framework for Watershed Man- agement. Institutional mechanisms at different lev- els should be developed, ranging from water-user associations at the local level to river basin orga- nizations at the basin level. Such a framework would ensure that the competing demands of water users are given adequate consideration in Government decision-making. The framework should recognize that the management of water resources is critically affected by land use decisions. Rethinking the Role of the State. The Government should divest itself of its function as a service provider, developing instead its capacities to play the vital and demanding role of creating a legal and regulatory framework and institutions that are central to effective water management. New Instruments and Incentives. Instruments should be developed, including licensing, trad- able rights and service provision charges, which induce voluntary cooperation of users to ensure that water can be moved voluntarily from low-value to high-value uses and used efficiently, and that services can be operated and maintained without large Government subsidies. PROPOSED WORLD BANK INVOLVEMENT Natural Resources Management Project (US$200 million). The proposed project is intended to assist with key as- pects of the long-term process of water resources management reform in Thailand, focusing on the Chao Phraya River Basin. It will take a basin-wide approach, and focus on issues of watershed protection and dam safety in the upper basin, modernization of irrigation management and associated infrastructure investments, improved groundwater management, and better allocation and conflict resolution mechanisms basin-wide. Chao Phraya Basin Organization. A fundamental focus would be on the development of a new institutional structure- the Chao Phraya Basin Organization (CPBO)-in a manner consistent with the draft water law. The CPBO would be respon- sible for overall management of water in the basin, including drought and flood forecasting and planning; supply and demand management of surface and groundwater; and development of appropriate technical, administrative and eco- nomic measures for improved water allocation. 125 The World Bank Ministry of Science, Technology and 1818 H Street, NW. Environment Washinlgtol, D.C. 20433 U.S.A. Telephone: 202-41 1234 Rama Vl Roadt Rajthei Facsimile: 202-4-7-6391 Phaxarhai, Bangkok 10400 Telex: MCI 64145 WORLDBANK Thailand( MCI 248423 WORIDBANK Telephone: (( 6 2) 246-0064 Internllet: hlttp:,//WwwX.w0or1dha0k.0rg Facsimile: /66 2) 246-8106 14 th Floor, Towxer A Dietlelim lowers 93/1 NWir-eless Road Bangkok 10330, Thailandt Telephone: (66 2) 256-792 Facsimile: (66 2) 256--94/5