E N' V I R O N M E. N T D E ART M E N T DISSEMINATION NOTES TOWARD ENVIRONMENTALLY AND SOCIALLY SUSTAINABLE DEVELOPMENT W V Number 55 April 1997 The World Bank Group & the Global Environment Facility The World Bank the United Nations Development Program and the United Nations Environment Program, act as implementing agencies of the Global Environment Facility. The World Bank's role is to develop a high-quality, diverse portfolio of investment projects which maximize global environmental benefits while minimizing .the risks of global envirotnmental damage. These projects promote the conservation and sustainable use of biodiversity, mitigate the effects of global clmate change, protect international waters, and phase-out chloroflourocarbons and other substances that threaten the Earth's ozone layer. The Global Environment Facility (GEF) promotes however, a significant portion are received by NGOs international cooperation and fosters actions to and private enterprises. protect the global environment. Its creation in 1991 stemmed from the worldwide momentum gathered . Bank/GEF Projects by Focal Area in the preceding 4ecade for international (Financial commitmnts trough mid-April 1997) environmental action. The 1992 Uhited Nations Ozone Depletion Conference on Environment and Development $44 million (7 projects) Intemnational channeled that momentum when an international Water plan-Agenda 21-was forged for 'balancing $1( r c milions (6 projects)Bolvest economic growth with responsible management of \299omillion the world's natural resources. Since then, the GEF (35 projects) has emerged both as a facilitator and a funding mechanism for integrating global environmental Change concems into the development process. The World $227 million . a (22 proiects) Bank, United Nations Development Program (UNDP), and United Nations Environment Program (UNEP) serve as Implementing Agencies for the GEF. . - USs World Bank/GEF Portfolio Since its inception, the GEF has financed 70 Miffions Cumulave C0rnmmernts and Dsburserents World Bank-managed projects in over 57 countries. 700- The cumulative value of the Bank's GEF-financed 600 ----------------/ portfolio currently under implementation is USS674 5X--------------------------0__--- million. Forty-four percent of the Bank's GEF 4 -------------------------- portfolio promotes conservation and sustainable use 3 __-------------- of biodiversit. thirtv-four percent reduces emissions of greenhouse gases. fifteen percent protects in&emational waters from pollution, and 100 -- - seven percent phases-out ozone depleting substances 9 9 FY . . .Y.91 FY92 Y93 Y94 Y95 Y96 AFr. (ODS). GEF grants average $10 million in size. World Bank Fiscal Year 1997 These are primarily directed to Governments; * Disbursements OCommitments This note was written by John Kellenberg and Lars Vidaeus. For information, contact the Global Environment Division, Environment Department at The Worid Bank. 1818 H Street NW. Washington, D.C., 20433. USA. Fax: (202) 522-3256. Dissenunatino Notes represent the *izews of their authors and are not official publications of the World Bank Rationale for Bank Involvement promising investments in these sectors are' irn developing countries lacking well-established While the World Bank's GEF financial commitments capital markets infrastruc.ure. The World Bank are small relative to the-size of the problems facing andthe Inteti in ance C oratio are and the Intemnational Fimance Corporation are the global environment, they are critical in terms of helping to address market and sector constraints mobilizing funds, promoting (technology transfer, through the creation of venture capital funds. The catalyzing private sector resources, and strengthening y~~~~~ Biodiversity Enterprise Fund for Latin America partnerships. will provide financial capital for investments in Mobilizing Funds. The World Bank has sustainable agriculture, forestry, and tourism. The complemented GEF grant resources with US$669 Renewable Energy and Energy Efficiency Fund million in IBRD/IDA funds and, US$2,050 million will buy-down" development costs and risks for in co-financing from other donors, foundations and small, innovative projects in the energy sector. the private sector. A number of World Bank . Strengthening Pattnerships. The World Bank is investments would niot have taken place in the well positioned to foster partnerships of strategic absence of GEF resources. absence of*GEF resources~ importance for global- environmental management. A $35 million grant to arrest environmental degradation in Africa's Lake VictoriaL region demonstrates how GEF resources can be used to promote important partnerships. First, an agreement among the three riparian nations RDRDAI.X (Kenya, Tanzaniao and Uganda) was reached to $66S ffiSMW1Sion .A| 000 008 g X 1 address environmental problems fa,cing a transboundary resource of global significance. GEF Second, a unified response by the Wor:ld Bank, US$674 Million . UNDP and UNEP allowed for a more thorough approach to environmental management. In addition, the project catalyzed the allocation of considerable IDA resources in support of the Promoting Technology Transfer. GEF resources collaborative effort. help to accelerate the transfer of environmentally friendly technologies to developing countries. Innovations in the Bank's >GEF Portfolio India's Alternative Energy Project, -which promotes commercial investments in wind farms T t W a ts r -and solar hotovoltaics, has raised industry-wide bv the GEF Council in FY97 demonstrate the broad capacity from 30 MW to over 550 MW of- energy spectrum of global environmental issues that the in the past four years. An additional 200 MW are Bank's GEE program is addressing. Likewise, they in the pipeline. This World Bank/GEF project are proof of the innovative character of the program. complements policy dialogue with the Government An additional eleven projects will be submitted to of India regarding the removal of environmentally the GEF Council in April 1997. (Table 1) harmful energy subsidies. Brazil's Gasification / Biodiversity Conservation. The Honduras Gas -Turbine Project will demonstrate the Biodiversity Project, the Nicaragua Atlantic commercial viability qf advanced biomass Biodiversity Corridor Project, and the Panama gasification and co-generation technology. Biodiversity Conservation Program represent a new * Catalyzing Private Sector Resources. Many generation of projects which address -conservation professional and institutional investors are and sustainable use of biodiversity within a unfamiliar with environmental businesses landscape context. The projects will, inter alia, prbmoting the sustainable use of biodiversity or address root causes of resource degradation and renewable energy, and energy efficiency. Likewise, biodiversity loss; suppqrt local community efforts to biodiversity-rich forests outside of the existing park slow the advance of the agricultural frontier through and reserve system. stabilization of communities in buffer areas; and create incentives for protection of the resource base. Climate Change. The Photovoltaic Market The three projects are being carried out in Transformation Initiative (PVMTI), developed by collaboration with a regional UNDP/GEF initiative the International Finance Corporation-the private - . . . . ~~~~~~~~sector affiliate of the World Bank-will support focusing on the Meso-American Biological Corridor which stretches from Mexico to Colombia. private sector, competitively solicited solar Madagascar is considered the single highest photovoltaic market development projects in India, major biodiversity conservation priority in the world Kenya, and Morocco. The PVMTI will accelerate owing to its combination of high biological the commercialization, market penetration, and diversity, endemism, and degree of threat. The financial viability of PV technology in the World Bank/GEF- Maddagascar Eonvironment developing world, and provide a window for Program Support PoFect will address, inter atla promotipg large-scale use of PV as a long-term root causes 'pof biodiversity loss in the cuntry, strategy for a low carbon-emission energy future. root cauesofbidierit*lssintry, Latvia's Solid Waste Management and supp6rt sustainable soil and water management, as well as include a multiple-use forest ecosystem Landfill Gas Recovery Project demonstrates how management element where GEE resources will be municipal landfill gas can be captured and utilized for used to support community management of energy production. The- project may eventually be replicated in many of the municipalities of the Table 1: World Bank Projecs Submitted to GEF Council in FY97 Project GEF Grant Total Cost l (US$ millions) (US$ millions) Argentina Biodiversity Conservation 10.4 47.9 Costa Rica Biodiversity Resources Development 7.3 8.3 Guyana National Protected Areas System 6.3 8.4 Honduras Biodiversity Project 7.3 49.0 Latvia Solid Waste Management and Landfill Gas Recovery 5.1 25.0 Madagascar Environment Program Support 20.8 . 155.0 Nicaragua Atlantic Biodiversity Corridor 7.4 14.8 Photovoltaic Market Transformation Initiative 30.1 120.1 (Kenya, India, Morocco) Small and Medium Scale Enterprise Program (replenishment) 15.5 51.5 Ukraine Phase-out of Ozone Depleting Substances 23.2 55.3 World Bank/GEF Projects Approved FY97 to date 133.4 535.3 Brazil Biomass Power Commercial Demonstration 50.0 122.0 Central Africa RegionarEnvironment Informnation Mgt. Project 4.5 15.8 China Energy Conservation 22.7 202.7 Czech Republic Kyjov Waste Heat Utilization 5.1 19.1 Indonesia Coral Reef Rehabilitation and Management Project 12.3 66.8 Lake Ohrid Management (Albania & Macedonia), 4.3 4.6 Panama Biodiversity Conservation Program 8.6 39.5 Romania Integrated Biodiversity Conservation and Protected Area Mgt. 5.3 6.9 Sri Lanka Conservation and Sustainable Use of Medicinal Plants . 4.9 25.6 Uganda Protected Areas Management and Sustainable Use 10.3 107.1 Water and Environmental Management in the Aral Sea Basin (Kazakstan, 12.0 71.5 Kyrgyzstan, Tajikistan, Turkmenistan, Uzbekistan) World Bank/GEF Projects to be reviewed 140.0 681.6 at the April 1997 GEF Council Meeting Total World BanklGEF Project Submissions in FY97 273.4 1216.9 Baltic region, which are all facing serious problems Enabling developing'countries through policy with solid waste management.- The project is dialogue and strategic development planning to expected to -generate operational costs, creating a internalize global environmental externalities into technically feasible, environmentally sound and national environmental planning and the Bank to financially, acceptable solution for municipalities. better reflect global environmental objectives in From the global perspective, the project should result sector work, operations, and dialogue with in abating greenhouse gases at a cost of $3.40 per ton governments and partners therefore becomes a carbon equivalent by converting methane, one of the priority. The Global Overlays. Program, launched most potent greenhouse gases, into an indigenous by the World Bank and' bilateral-donors, has been energy source. designed to address this priority. Global overlays serve to complement traditional economic and sector International Waters. The Aral Sea has become work: - first, an overlay analyzes the causes, nature synonyrn,ous with environmental disaster. Following and magnitude of the effects of sectoral activities on years of short-sighted agricultural and water policies, global environmental objectives (loss of biodiversity the Aral Sea had, in 1991, lost half of its area, and the or emission of greenhouse gases); and second, it limited water flowing into the Sea was salt-laden. examines and costs sectoral policy and investment The Aral Sea Basin Project, requested by the Heads options for mitigating negative effects. Such of State of the five riparian states in the region options involve actions that countries have an (Kazakstan, Kyrgyz- Republic, Tajikistan, incentive to undertake on their own (that is, "win- Turkmenistan, and Uzbekistan) will assist the Basin win" policies). However, going beyond these states in formalizing and implementing.the first stage options frequently implies incurring "incremental" of a regional Strategic Action Plan. `Specifically, this costs for gaining global benefits, thereby justifying involves reaching agreement. on water use and concessional international' funding from sources strategies for managing transboundary waters. The such as GEF. GEF-supported project will complement Bank efforts The Global Overlays Program combines in policy dialogue and inyestment programs at the conceptualization studies, review and development national level in addressing the root causes of of methodology for measuring and mitigating global environmental degradation in the Basin. externalities, and testing of concepts ancd tools through country studies; all with the view to define Ozone Depletion. The most recent in a series of good practice. Thus far, good progress is being GEF-supportecf ODS phase-out projects, -: the made in the energy sector, where tools for assessing Ukraine' Ozone Depleting Substance Phase-Out greenhouse gas emissions and guidelines for climate Project follows similar ODS operations in Russia, change overlays to sector studies have been issued. Poland, Hungary, Bulgaria, Belarus, and the Czech Three climate change country studies have- been and Slovak Republics. The project will assist completed (Ukraine, Argentina, and Mexico& while nineteen state-run enterprises to phase-out chloro- additional country studies are being prepared. flourocarbons used in aerosols, domestic and The next steps of the Global Overlays Program commercial refrigeration, foams and solvents. is to extend such analysis to incorporate biodiversity conservatiorn into economic and sector work. In Mainstreaming the Global Environmen t FY96, a theme paper on Mainstreaming Biodiversity in Agricultural Development was published,'while In order to fully develop as a GEF partner, it is in FY97, theme papers on Incorporating Global essential that the Bank incorporates the global Externalities in Forest Conservation & Management environmental dimension into country dialogue with and Global Dimensions of Land Degradation will be client governments. This is, of course, equally completed. In addition, biodiversity couhtry studies important from the standpoint of making IBRD and in Vietnam, Nepal, the Congo Basin region, and IDA supported investments as globally Turkey will be initiated. environmentally friendly as possible. ® Printed on 1 00% post-consumer recycled paper