Report No. 14070-AR
Argentina
Managing Environmental Pollution:
Issues and Options
(In Two Volumes) Volume l: Summary Report
October 16, 1995
Environment and Urban Development Division
Country Department I
Latin America and the Caribbean Region
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Currency Equivalents
Currency Unit - Argentine Peso (A$)
US$1 = A$1
Weights And Measures
The Metric System is used throughout this report.
Fiscal Year
January I to December 31



Acronyms
AA                  Gran Buenos Aires Water Utility (Aguas Argentinas)
AMBA                Area Metropolitana de Buenos Aires
CEAMSE              Metropolitan  Area of Buenos Aires  Solid  Waste  Disposal Company
(Coordtnacidn Ecoldgica Area Metropolitana)
COFAPYS             Federal Water and Sanitation Council (Consejo Federal de Agua Potable y
Saneamiento)
COFEMA              Federal Council for the Environment (Consejo Federal del Medio Ambiente)
ETOSS               Water Regulatory Entity for Gran Buenos Aires (Ente Tripartito de Obras y
Servicios Sanitarios)
EU                  European Union
GBA                 Gran Buenos Aires
IBRD                International Bank for Reconstruction and Development
IDB                 Inter-American Development Bank
INCYTH              National Institute for Science and Water Resources (Instituto Nacional de
Ciencia y Tlcnica Hidrica)
MERCOSUR            Southern Cone Common Market (Mercado Comgin del Sur)
NAFTA               North American Free Trade Agreement
OPS                 Pan-American Health Organization (Organtzaci6n Panamericana de Salud)
SERNAH              National Enviromnent Secretariat (Secretaria de Recursos Naturales y Ambiente
Humano)
VHO                 World Health Organization
Different sources use different definitions for terms that describe the agglomeration in and around Buenos
Aires. In this report, the term Gran Buenos Aires (GBA) refers to the following jurisdictions: Capital
Federal, Avellaneda, Laniis, Lomas de Zamora, Almirante Brown, Esteban Echeverria, La Matanza,
Mor6n, Tres de Febrero, San Martin, Vicente L6pez, San Isidro, San Fernando, Tigre. This area coincides
with the concession area of Aguas Argentinas. The term Area Metropolitana de Buenos Aires (AMBA)
refers to the above listed jurisdictions plus Quilmes, Berazategui, Florencio Varela, Merlo, Moreno, and
General Sanmento. The attached map shows the extent of GBA and AMBA.






Abbreviations
BOD                  Biochemical Oxygen Demand
CFC                  Chlorofluorocarbon
COD                  Chemical Oxygen Demand
EIA                  Environmental Impact Assessment
GDP                  Gross Domestic Product
GHG                  Greenhouse Gases
GNP                  Gross National Product
HC                   Hydrocarbon
NPV                  Net Present Value
ODS                  Ozone Depleting Substances
PM10                 Particulate Matter (less than 10 microns in diameter)
PPP                  Purchasing Power Parity
RAD                  Restricted Activity Days
SPM                  Suspended Particulate Matter
TSS                  Total Suspended Solids
VOC                  Volatile Organic Compounds
WTP                  Willingness to Pay
This report is based on the findings of a mission that visited Argentina in September, 1994. The mission
included Messrs/Mmes: Andres Liebenthal (Mission Leader and Principal Economist), Joachim von
Amsberg (Econornist), Antonio Estache (Senior Economist, Institutions), Sergio Margulis (Economist,
Benefit Valuation), Gordon Hughes (Economist, Industry and Trade), Bekir Onursal (Industrial Pollution
Specialist), Sabine Cornelius (Economist, Urban Transport), Alberto Ninio (Legal Specialist), Nora
Clichevsky (Architect, Consultant), Emanuel Idelovitch (Sanitary Engineer, Consultant), Claudio Joseph
(Industrial Specialist, Consultant) and James Listorti (Environmental Health Specialist, Consultant).
This report was produced under the supervision of Mr. Gobind Nankani, Director; Mr. Asif Faiz, Division
Chief, Environment and Urban Development; and Mr. Danny Leipziger, Lead Economist, Country
Department 1, Latin America and Caribbean Regional Office. The peer reviewers for the early drafts were
Jeffrey Hammer, Joseph Leitmann and John Redwood. The final draft of this report was discussed with the
Government in June, 1995.






Contents
Volume 1: Summary Report
Main Findings ...........                                                                 3
Managing Municipal Water Quality and Sewage                      .5
Managing Industrial Pollution .1
Managing Transport-Related Pollution .16
Managing Municipal Solid Wastes .21
Institutional Aspects of Environmental Management .22
Towards an Integrated Plan of Action .26
Figure 1: Comparison of Water and Sewerage Service Coverage             .6
Table 1: Selected Environmental Impact of Medium and Small Enterprises .13
Table 2: Selected Air Pollution Measurements                   .17
Volume II: Technical Report
Chapter 1. Pollution Problems and Their Cost                    .5
Chapter 2. Managing Municipal Water Pollution and Sewage .31
Chapter 3. Managing Industrial Pollution .51
Chapter 4. Managing Transport Sector Pollution .75
Chapter 5. Managing Solid Wastes .87
Chapter 6. Institutional Aspects of Environmental Management .93
Chapter 7. Towards an Integrated Plan of Action .112
Annex: References .121
Map: 26841 - Gran Buenos Aires and Gran La Plata
Map: 26842 - Argentina






Summary                                                                                    3
Main Findings
1.    In  general,  Argentina  has  more         particularly the Area Metropolitana de Buenos
environmental pollution than one would expect in  Aires (AMBA), for which the most data was
a country with an upper-middle income level of   available-with  full awareness  that, while
development. These problems result mainly from   problems appear to be similar in other urban
the gradual increase of the urban population and  areas and smaller cities, their relative importance
industrial development, combined  with  an       may be different.
inadequate regulatory framework and a long-
standing deficit in sanitary and waste treatment  4.    Given the above caveats, the main
infrastructure.  Fragmentation of institutional  findings are:
responsibilities and lack of coordination have led
to an uneven and confusing regulatory and        (a)    Groundwater contamination should be
institutional  framework  for  environmental            regarded as the most important pollution
management. Despite increasing efforts, the             problem in Argentina, mainly due to the
government does not yet have a well-developed           health-risk exposure for the large share
strategy to address environmental pollution.            of households-including a major share
of  the   poor-that  depends   on
2.     This report's objective is to assist the         groundwater for its daily needs, and the
government in developing such a strategy. The           irreversibility  of the  contamination.
proposed approach is to (i) review the health,          Because of the number of people affected
productivity, amenity and other costs associated        and the low infrastructure coverage in
with the different forms of pollution as a basis        the outer municipalities, the AMBA
for establishing relative priorities; (ii) review the   stands out as the most critical area, but
options for addressing the priority problems            the same problem  is likely to  be
based on the comparison of effectiveness and            important in other large and medium-
costs; and (iii) integrate the results into a           sized  cities with  high  reliance  on
recommended plan of action. The greatest                groundwater use and inadequate water
challenge in pursuing this approach has been the        supply and sewerage infrastructure. As
scarcity of environmental information, as there is      the main sources of contamination are
little monitoring of ambient water and air quality,     septic tanks and, to a much lesser extent,
and virtually no analysis of its health effects and     industrial effluents, the most effective
other economic costs. As a result, all the figures      solution is to promote the extension of
in this report are highly tentative and subject to      water supply and sanitation services to
revision whenever better information becomes            the low-income neighborhoods and peri-
available.                                              urban areas that are now unserved.
3.     Based on limited available information,   (b)    Air and noise pollution is an area-wide
the most severe problems appear to be in the            problem  in AMBA, especially in the
major urban  areas, especially  around  the             downtown area, along the main traffic
remaining  pockets  of poverty, the  major              arteries,   and    near   industrial
industrial concentrations and the central business      concentrations, where a large number of
districts. The relative importance of the different     people are likely to experience significant
pollution types varies widely from place to place.      health impacts. Although the potential
Rural pollution also exists, primarily from             health consequences are difficult to
agriculture and livestock activities, but the effects   determine until systematic air quality
are less severe than in urban areas. As a result,       monitoring  has  established  a  clear
the report focuses on the major urban areas-and         appreciation  of the  extent of the



4                                                                                  Swnmary
problems,  air  pollution  should  be            of waste, will provide  appropriate
regarded as an important issue. A similar        incentives for waste minimization. They
problem occurs in other cities, such as          will also  encourage  investment in
Rosario and San Nicolas, with a high             adequate hazardous waste treatment and
concentration of traffic and industry. In        disposal facilities and modern sanitary
a few  cities, such as Mendoza and               landfills for municipal waste.
C6rdoba, topography and the wind
regime   can  lead  to  occasional        (d)    Surface  water  contamination  from
atmospheric inversions, and the attendant        industrial effluent and untreated sewage
accumulation of air pollutants may rise          is a major cause of property damage (in
to dangerous levels. Here, air pollution         combination with flooding), amenity loss
may deserve the highest priority among           and ecological damage in and around the
pollution problems. To reduce health             major urban areas and several inland
risks in the inner cities where traffic          lakes. This problem can only be given a
emissions  accumulate  to  unhealthy             moderate priority in AMBA, as there are
levels, the lower pollution of cleaner           no indications of major impacts on health
fuels (unleaded gasoline, compressed             or productivity. However, in several
natural gas) should be signaled through          inland locations, such as Rosario and
appropriate  pricing.    In  addition,           C6rdoba, the local water bodies are
compliance  with  emission  standards            polluted enough to affect the workings of
needs to be stepped up, and the use of           the water treatment plants. In these
public transport should be promoted.             areas, the protection of public health
Global concerns, such as emissions of            requires that surface water pollution be
greenhouse gases and ozone depleting             given a higher priority. To address the
substances, will also  need  to  be              problem, industries should be motivated
addressed  as  part of international             to reduce the genieration of discharges,
cooperative efforts.                             through the levying of effluent fees and
cooperative      govemrnment-industry
(c)    Uncontrolled solid waste dumps are the           environmental action  plans, Sewage
next highest priority, because they have         treatment capacity needs to be expanded
become  receptacles  for  hazardous              and better use should be made of the
wastes. In the absence of facilities for         rivers'  natural  dilution  and  self-
the treatment and disposal of hazardous          purification capacity.
wastes, a large proportion is believed to
be improperly and illegally unloaded in   (e)    Institutional authority and capacity for
open  air dumps, septic tanks, and               environmental    management    are
leaching pits, from where they leach into        fragmented among many agencies at the
the groundwater and local streams. In            federal, provincial and municipal levels,
many cases, the open air dumps are               leading  to  overlapping  jurisdictions,
adjacent to irregular settlements where          weak monitoring and enforcement of
most households depend on groundwater.           standards and some confusion about
The preferred solution is to minimize the        policies and objectives. To address this
amount of waste generated at the source          issue, it is recommended that (i) the
through recovery and recycling. Stronger         Government set agreed national targets
monitoring and enforcement, combined             for ambient quality, taking the uses of
with the introduction of discharge fees          water and air bodies into account, and
that fully reflect the cost of removal,          determine    appropriate    emnission
treatment and safe disposal of each type         standards for achieving them; (ii) the



Summary                                                                                  5
institutional  arrangements    for       vehicle emissions), combined with industrial
environmental management be clarified    discharges, will increase the threat to public
by  the  designation  of an  agency      health, erode the cities' attractiveness as a locus
responsible for environmental policy-    of  investment  and  possibly  affect  the
making, monitoring and enforcement in    marketability of Argentina's exports abroad, as a
each province and municipality, with the  result of requirements imposed by its trading
federal role focused on establishing     partners.
standards, collecting and disseminating
information,  and   supporting   the     6.    Organization of the report. The sections
development of the weaker provincial     that follow  summarize the discussions and
agencies; (iii) effluent fees and other  recommendations contained in the technical
economic instruments be used to provide  report (Volume II). They start with a discussion
incentives for waste minimization, and to  of the major sources of pollution and the options
adequately    fund    environmental      available to addressing them, beginning with the
management and  the  provision  of       management of municipal water quality and
environmental services.                  sewage, the mitigation of industrial pollution,
issues associated with transport-related pollution,
(f)    Environmental monitoring information     and the management of municipal solid waste.
and analysis are virtually nonexistent for  The final sections will discuss institutional
most pollutants in most parts of the     aspects of environmental management, and
country. As a result, there is no adequate  propose an  integrated  plan  of action  for
basis upon which to make informed        managing environmental pollution. It should be
decisions about managing environmental   noted that, given the lack of information and the
pollution.  The  establishment of a      attendant difficulty in presenting fuller coverage,
comprehensive, ambient environmental     this report is focused on urban pollution, and
monitoring program would fill a critical  does not assess non-urban sources of pollution,
need. More interdisciplinary surveys and  such as those associated with agricultural,
studies are required to establish the    livestock and forestry-related activities, mining
population at risk from the various forms  and hydropower generation.
of ambient pollution and their actual
degree of threat to public health and    Managing Municipal Water Quality and
safety. In-depth evaluations of economic  Sewage
losses arising from pollution are needed
to guide future policy choices.          7.    Environmental impacts of inadequate
water supply and sewerage. Argentina has by far
5.    Overall, Argentina's urban and industrial  the highest GNP per capita in Latin America, but
pollution problems are not insurmountable.       one of the lowest water and sewerage coverage
Because of the long neglect of the environment,  ratios. The urban population not connected to
many of the low-cost options for reducing       public sewerage systems has increased by more
pollution have not yet been implemented, and the  than one million in the last decade. The lack of
financial  resources   required   for  the      adequate  sewage  collection, treatment and
implementation of a sound pollution control     disposal facilities has created a highly vulnerable
strategy are well witiin the capacity of the    environmental situation, particularly  at the
country. However, unless corrective measures    fringes  of large  urban  areas.  Figure  I
are taken, pollution problems are likely to     summarizes  the  coverage  information  of
become much worse. As urbanization  and         Argentina, and highlights the particularly low
industrialization  continue, growing  pollution  service coverage in the outer municipalities of the
from urban households (sewage, garbage and      AMBA.



6                                                                                 Summary
Figure 1: Comparison of Water and Sewerage Service Coverage
Water and Sewerage Service Coverage
Percent
100
80
60
40
20 -
0
Capital Federal First Belt  Second Belt             Argentina
* Water E Sewerage
the sewerage network. A second major source is
8.    The groundwater contamination issue is   industrial effluent, which is also frequently
primarily  associated  with  inadequate water   disposed of in leaching pits and septic tanks. For
supply and sewerage infrastructure.  A 1988     exanple, in Buenos Aires, both residential and
study  found  excessive  levels  of  nitrate    industrial septic tanks are designed to drain into
contamination in about half of the groundwater  the freatic Epipuelche aquifer (10-30m deep),
sarnples in Gran Buenos Aires (GBA), and        which is the only one that can be reached by
evidence of bacterial contamination in about a  handpumps. Some contamination of the deeper
third of the samples. Similar groundwater nitrate  Puelche aquifer (25-60m deep) occurs through
contamination, as well as salinization, are     inadequately insulated waterwells.
reported in other cities of the Province of Buenos
Aires and in other provinces. In some cases,    10.   The extent of groundwater contamination
contamination was also found in samples drawn   should be regarded as the most important
from  the public network.   Mercury  and        pollution problem in Argentina, because a large
chromium pollution, most likely from solid waste  share of households (28 percent in the country,
dumps,  have  also  been  documented  in        but 65 percent in the outer ring of AMBA'), not
groundwater sources in the Buenos Aires area.   connected  to  the  water  network,  uses
groundwater to meet its daily needs. Overall, the
9.    The main source of contamination is       scarce available data indicate that a substantial
believed to  be the septic tanks used by
households (71 percent in GBA and 62 percent in  1. The aahd map howw the extent of the Area Mebopolitan de
the country as a whole) that are not connected to  Buenos Aires (AMBA) and Gran Buenos Aires (GBA).



Summary                                                                                    7
share of the population in Argentina's largest city  in rural areas. Given a typical willingness to pay
uses contaminated drinking water. Although       of at least 5 percent of income, based on
detailed information is not available, a similar  international experience, it can be concluded that
situation is believed to exist in other cities,  the entire population above the poverty line (of
especially in areas that concentrate the poor in  S1224/cap/year), or at least 82 percent of the
dense, irregular settlements where handpumps     urban population, is in a position to afford water
are widely used.                                 supply and sanitation, at least for simnplified
services.
11.   The surface water contamination issue
also appears to be largely a reflection of       13.   Given the basic feasibility of water
inadequacies in sewage collection and treatment  supply and sewerage development, the key issues
infrastructure. Obras Sanitarias de la Naci6n    that need to be addressed revolve around (i)
(OSN) has estimated that 2.2 million m3/day of   incentives for the expansion of infrastructure, (ii)
raw sewage and 1.9 million M3/day of industrial  reducing the costs of service in conventional
effluent flow from the AMBA into the Rio de la   systems, (iii) promoting the adoption of low cost
Plata. In terms of the major pollutants, it is   systems where appropriate, (iv) improving the
estimated that household sewage accounts for     quality of water supply, and (v) improving
about half of basic oxygen demand (BOD) and      sewage treatment and disposal.
two thirds of total suspended substances (TSS).
The main impact is that ambient water quality    14.   Regulatory  incentives  for  service
guidelines are consistently exceeded in the 300 m  expansion.   A  tariff problem  is the main
wide strip of the Rio de la Plata nearest to the  constraint to the expansion of sanitation services
shore, rendering the local beaches unusable,     to the unserved part of the population with
while guidelines are regularly met in waters     sufficiently high willingness to pay.  Many
farther than 3000 m  from  the shore. This       provincial water companies have negative cash
indicates the enormous waste dilution and self-  flows. In GBA, Aguas Argentina's (AA's)
purification capacity of the Rio de la Plata, with  revenue from incremental customers is less than
its flow of 30,000 m3/sec. Pollution from sewage  the cost of services provided to them. Therefore,
is also reported in other parts of the country. The  AA has no incentive to accelerate the expansion
Lago San Roque in C6rdoba, Lago Lacar in         of service coverage beyond the expansion targets
Neuquen, and Lago Nahuel Huapi in Rio Negro,     agreed upon in the concession contract.  A
are all contaminated by untreated sewage from    second issue arises from the finite duration of the
lakeshore towns, some of them to the extent of   concessions in the absence of an agreement for
affecting the performance of the drinking-water  repurchase of new investments by the regulator.
treatment plants.                                This creates an incentive for the concessionaire to
minimize investing toward the end of the period.
12.   Feasibility of service expansion.  The     Other constraints relate to the need to provide
available evidence indicates a solid economic    incentives for the installation of meters, and the
justification for addressing the major part of the  lack of finance for the new water and sewerage
groundwater and surface water pollution problem  customer connection  fee, which  is  about
through the expansion of water supply and        $1660/customer.
sanitation infrastructure to a large share of the
currently unserved population. In the absence of  15.   The following steps are recommended to
precise estimates, indicative figures suggest that  address these constraints to service expansion:
the annual cost of water supply and sewerage
services ranges from  about S301capita  for      (a)    Renegotiate the concession contract to
simplified  services  and   $90/capita  for             include a new tariff formula that raises
conventional services in urban areas to $130/cap        tariffs for new customers to long-run



8                                                                                   Summary
marginal costs. AA would pay a charge     conservation measures, such as the use of water-
for the use of existing infrastructure that  saving  plumbing  fixtures,  combined  with
would leave its current financial position  wastewater recycling and reuse for industrial
unchanged.                                purposes as well as for landscape irrigation, may
bring important savings and environmental
(b)    Allow AA to be compensated for the        benefits.
value of its investments at the expiration
of the concession.                        17.   Overall, water and sanitation services
can be made more affordable to a larger share of
(c)    Perform a comprehensive review of the     the population by lowering costs through the
present tariff system, with the objective  following measures:
of simplifying the intricate formula for
unmetered consumption and, at the same    (a)    Undertake  a  comprehensive  demand
time, creating the necessary incentives          management plan in order to reduce
for the installation of meters and the           water consumption, water demand and
application of rates based on metered            sewage volumes produced. Optimization
consumption. The feasibility of covert,          of the use of water in the existing system
direct subsidies to the poor, instead of         will allow expansion of service to be
the present covert system  of cross              carried out at a lower cost.
subsidies among consumers, should be
included in this study.                   (b)    Privatize services following the example
of GBA and Corrientes.
(d)    Improve the financial position of utilities
outside of GBA and let them  charge       (c)    Introduce metering of all consumers to
tariffs sufficient for financial viability.      reduce unbilled consumption.
(e)    Let utilities offer wider financing options  (d)    Regularize    existing  clandestine
for connection charges.                          connections  to  water  and  sewage
networks.
16.   Service Cost Reductions. The share of
the population that can afford and would be      (e)    Promote the use of water conservation
willing to pay the full cost of water and sewage        technologies for residential and industrial
services can be increased by improving efficiency       uses.
and demand management. Competitive bidding
for concession contracts, which occurred in GBA  18.   Improving access to the poor. About
and Corrientes, is an important step toward this  one-third of the population not served with public
objective and should be extended to the rest of  water and sewerage services in AMBA is defined
the country. The current lack of metering creates  as "poor" in accordance with socioeconomic
an important opportunity for cost savings. For   criteria. This segment of the population, which
example, AA expects water consumption per        cannot afford to pay for conventional services
capita to decline from  the current level of     even if they were offered, is the highest-risk
somewhat less than 600 liter per capita per day  population from a public health point of view.
to about 400 liter, solely as a result of metering.  For the poorest of them, there could be good
There are also major opporunities for efficiency  social reasons for subsidizing their access to
improvement through reduction of the high        water supply and sanitation. However, if tariffs
percentage of water (over 50 percent) which      charged to the poor did not cover the full costs of
cannot be accounted for due to leakage as well as  services, water companies would  have no
illegal  consumers.    In  addition,  water      incentive  to  expand  services  into  poor



Summary                                                                                  9
neighborhoods. Explicit lump-sum subsidies to   (b)    Let utilities bill a block-rate charge for
support low-income consumers are preferable to         low-income   consumers   to   the
tariff cross-subsidization. Water companies            government. In the case of GBA, this
could charge a fixed block rate to the government      subsidy could be paid from the new
for every poor consumer, but charge the full cost      charge for the existing infrastructure [see
of any additional consumption directly to the          15 (a)].
consumer. In the case of GBA, this subsidy could
be paid out of the returns to the existing      (c)   Investigate ways of stimulating and
sanitation infrastructure.                             supporting,  both  technically  and
institutionally, the adoption of low-cost
19.   For a large segment of the population            water supply technologies.
that cannot afford conventional services, the
recommended approach involves the development   (d)   Investigate the technical and economic
of non-conventional, low-cost technologies that        feasibility of "simplified", small bore and
provide lower-quality service at an affordable         condominial sewerage systems in low-
cost. The factors that can reduce costs of water       income communities.
supply are changes in the location of water
connections and reduction in water pressure and  21.   Improving water quality. The advancing
water quantity.   Small scale neighborhood      deterioration of groundwater quality through
development projects with a high degree of      contamination with nitrites and other pollutants is
participation by the beneficiaries have also    a major concern not only for the 28 percent of the
shown that water and sewerage services can be   population relying on their own wells but also for
supplied at a significantly lower cost than the  local water companies and cooperatives whose
conventional approach. As for sewage collection  water treatment and quality is barely monitored.
and disposal, there are low-cost intermediate   It poses a hazard even for major systems like AA
solutions that provide  similar benefits to     which relies on groundwater for about 10 percent
commercial sewage collection systems, such as   of its total production. To address this growing
"simplified" sewerage, small-bore systems, and  problem, the following steps are recommended:
condominial sewerage. However, as the
concessionaire AA has a veto right over water   (a)    Modify the current policy of giving lower
and sewage projects in yet unserved areas within       priority to sewerage than to water supply
the concession, there is a need to assess if          to avoid further deterioration of the
contract modifications would be necessary to           groundwater quality.
generate incentives for AA to provide low cost
services where these are the economically best  (b)   In view of the difficulty foreseen in
solution. These efforts should build on the            complying with the future turbidity
positive role that cooperative organizations can       standard of 1 NTU, plans should be
play  in  mobilizing  participation  of  the           prepared for upgrading the two existing
beneficiaries.                                         surface  water treatment plants. A
comprehensive water quality monitoring
20.   The    following    measures    are              program should be undertaken for the
recommended to improve access of the poor to           public wells that will continue to supply
water supply and sanitation:                           potable water for many years.
(a)    Clarify the implications of the AA       (c)    A comprehensive groundwater study of
concession  contract for  low-income            the AMBA should be undertaken, by
consumers which are not yet served.             means of observation wells, combined
with geophysical investigation, and



10                                                                               Summary
systematic monitoring of the numerous    the removal of large solids. The request is based
individual and public wells operating in  on: (i) water quality analysis carried out during
the area.                                1994 which shows that the environmental impact
of raw sewage disposal into the Rio de la Plata is
(d)    Conservation and rehabilitation of the   very moderate, due to the self-purification
Puelche groundwater aquifer should be    capacity of the river, and (ii) Argentina's
maximzed, to allow for its continuing    participation in the Basel Convention, since
use as an important source of drinking   1992, which bans the disposal of hazardous
water, in conjunction with the surface   wastes into the sea and seems to preclude the
water abundantly available in the area,  option of disposing sewage sludge from  the
whose supply involves higher investment  treatment plant in the sea, as had been envisaged.
costs.
24.   Given these factors, careful analysis will
22.   Sewage  treatment and  disposal.          be  required  to  determine  whether  the
Currently, only a few major cities (Mendoza,    requirements of the concession contract are
C6rdoba) have sewage treatment plants; while    desirable or should be renegotiated. To provide a
others (Buenos Aires, Rosario, La Plata) release  basis for the development of a long-term solution
their raw sewage into the local waterbodies. Most  to the environmental degradation of the Rio de la
of the sewage produced in GBA is discharged,    Plata near the coastal area of the AMBA, a
without any prior treatment, directly into the Rio  thorough environmental assessment is needed to
de la Plata through a 2.5 km  outfall at        determine the impact of the discharge of raw
Berazategui, or indirectly, via its tributaries,  sewage into the river. The assessment should take
mostly the Reconquista and Riachuelo rivers. In  into account both bacteriological and aesthetic
general, the desirability of wastewater treatment  considerations, as they affect the multiple uses of
depends on the receiving water body and         the river as a source of water for the city's water
downstream usage of the water. In most inland   system intakes, a locus of recreation and an
locations, the release of untreated sewage leads to  ecological resource. The study should also serve
unacceptable costs leaving no doubt about the   to establish the environmental norms to be met in
need for sewage treatment. However, the large   different sections of the river.
dilution and purification capacity of the Rio de la
Plata represents an importance resource that    25.   The proposed assessment would require
offers the opportunity for cheap disposal of    the following inputs:
sewage from AMBA.
(a)    A database on all contaminants in the
23.   The AA concession contract stipulates            Rio de la Plata, in sufficient spatial detail
the construction within five years (by 1998) of a      to  identify  the  discharges  of the
large primary treatment plant prior to discharge       Reconquista and Riachuelo rivers and
into the Rio de la Plata, as well as several small     other creeks and canals in the area. The
secondary treatment plants prior to discharge into     study should establish a permanent
the Reconquista and Riachuelo. The primary             monitoring system to provide immediate
treatment plant would be upgraded to secondary-        information on environmental changes in
level treatment 10 years later (by 2008).              specific locations in the river.
However, AA has recently presented to ETOSS
(the water regulatory authority) a request to   (b)    A mathematical model to simulate the
modify these contractual requirements. Instead         assimilative capacity of the river under
of primary treatment by the end of the fifth year,     actual conditions and under alternative
AA is proposing to discharge the raw sewage            scenarios. In addition to enabling the
through an extended outfall into the river after       selection of the best combination of



Summary                                                                                 11
treatment level and outfall length, such a  mining industries are reported to be major
model would also enable selection of the  sources of hazardous wastes, but no systematic
best location of the water intakes so as to  survey of the extent of the problem has been
minimize the danger of contamination     carried out.
from sewage discharges.
28.   On the other hand, air pollution from
Managing Industrial Pollution                   industrial sources is not considered a major
concern. Mainly driven by the low cost of
26.   Industrial pollution and its impacts.     natural gas, this relatively clean fuel provides the
Industrial discharges are a major source of air,  fuel requirements for about 46 percent of the
water and solid waste pollution in Argentina.   industrial sector fuel requirements and 78 percent
Industrial sources account for nearly half of   of the power sector. The use of coal, which is
wastewater discharges which are responsible for  more environmentally problematic, is limited to 3
the poor quality of rivers and groundwater in the  percent of industry's requirements (in the cement
AMBA. In a few areas, industrial effluent are   sector) and 3 percent of the power sector's
reported to be the dominant source of pollution.  requirements (with only one remaining coal-fired
The Rio Santiago in La Plata, Rio Sali in       plant, in San Nicolas, Prov. of Buenos Aires).
Tucumain and some irrigation  channels in       Fuel oil is mainly used where gas is not available,
Mendoza  are  seriously  contaminated  with     and by the power sector in the winter season,
industrial effluent. In Rosario, industrial effluent  when gas is in short supply (in Buenos Aires
from the upstream suburbs on the Parana river   city). Air pollution from industry appears to be a
have adversely affected the operation of the main  major concern only around a few specific plants,
water treatment plant.                          mostly in the petroleum, petrochemicals, cement,
and metals refining sectors.
27.   The hazardous wastes problem is also
largely an  industrial one. A  recent study     29.   Overall, while the pollution management
estimates that about 47,000  tons/year of       perfonnance of the industrial sector is far from
hazardous wastes are produced in the Province of  satisfactory, a substantial part of the problem can
Buenos Aires alone, mostly by the metallurgical-  be expected to be resolved in the long-term as a
electronic  (46   percent)  and   chemical-     by-product of the opening up of the Argentine
petrochemical (44 percent) industries. These    economy.  Liberalization of trade and capital
wastes cannot legally be disposed of in the     flows has opened up new horizons for many
sewers or sanitary landfills. Since no specialized  businesses, which are beginning to recognize that
facilities for the offsite treatment or safe disposal  they will have to improve both their economic
of hazardous wastes exist, there is great       and their environmental performance.  Strong
uncertainty about what is being done with these  grounds exist for believing that the opening up of
wastes. It is highly likely that a large part of  the economy will bring environmental benefits
these wastes is going into uncontrolled open air  through (i) accelerating the adoption of newer,
dumps and leaching pits that leach into the     cleaner technologies; (ii) the influence of foreign
aquifers, as the analysis of groundwater at     investors who expect their local operations to
various locations in the Province has detected the  achieve higher levels of environmental and
presence of heavy metals, hydrocarbons, and     operating  efficiency;  and  (iii)  customer
other hazardous substances. Another part is also  preference in some foreign markets that suppliers
dumped into local rivers, such as the Matanza-  should, where possible, conform  to "green"
Riachuelo, the Reconquista and the Santiago,    certification requirements (such as ISO 14,000)
where they accumulate in the muddy bottoms or   or  use  environmentally  sound  production
flow into the Rio de la Plata. In other parts of the  methods. By and large, economic growth and a
country, the petroleum, petrochemicals and      resurgence of investment in new plants should



12                                                                                 Summary
ensure a steady reduction in emissions as        (ii) the reintroduction of effluent fees to provide
improved   environmental  technologies  are      incentives for the reduction of wastes, or their
embodied in new capital equipment.               collection and treatment; (iii) the provision of
financial incentives to assist SMEs with the
30.    For the most part, these pressures are    implementation of pollution control measures;
already leading the larger enterprises to recognize  (iv) the resolution of the hazardous waste
the  need  to  improve  their  environmental     problem by helping private investors to establish
performance and the general economic benefits    adequate treatment and disposal facilities; and (v)
that this will bring. They have access to the    the need to determine and implement a least-cost
necessary management, technical and financial    strategy  for  reducing  water  pollution  in
resources.    The  primary  issue  is  the       metropolitan areas.
establishment of clear priorities and guidelines so
that they can embark upon a program  of          32.    Government-industry cooperation. The
upgrading  their facilities and  performance.    confusion and uncertainty created by the current
However, these considerations carry little weight  patchwork of legislation, regulations, and judicial
with small and medium  enterprises (SMEs),       intervention in regard to environmental matters,
which are struggling to adapt to a transformed   combined with highly inadequate and uneven
business   environment.   Import-competing       enforcement constrain industry's implementation
industries have lost much of their protection.   of pollution reduction measures.  As will be
Export-oriented  industries  have  faced  an     discussed below (paras. 60ff), the confusion is
appreciating real exchange rate. All have had to  due to inadequacies in the legal and institutional
cope  with  more  competition  from  larger      framework and will take some time to sort out. In
multinational enterprises, high real interest rates  the meantime, some of the confusion can be
and a Government with a new view of the          reduced by  addressing the most important
relationship between the state and business. In  sources  of  pollution  through   voluntary
these circumstances SMEs are inclined to resist  negotiation and agreement of sector-specific
any suggestion that they should be required to   action plans between the national and provincial
meet stricter environmental standards, even      levels of government, industrial associations and
where these may be a catalyst for the adoption of  other interested parties.
more  efficient  operating   practices   and
technologies.                                    33.   The main objective of the recommended
sectoral environmental action plans would be to
31.    Taking  into  account  the  different     define clear 'rules of the garne' that will allow
situations of large, as compared to small and    industry to undertake investments in pollution
medium enterprises, there are many areas where   control  and  treatment with  a  reasonable
the Government has a major role in providing     assurance that they will recover the costs before
appropriate incentives and assistance for the    the rules are changed. These agreements should
acceleration  and  optimization  of industrial   cover:
environmental management. In fact, a recent
survey of industrial managers identified the lack  (a)    The  relevant  standards  for  air,
of a clear and adequate regulatory framework            wastewater and solid waste emissions
and the lack of adequate waste treatment                that will apply to the industry.
infrastructure as the most important obstacles to
the implementation of environmental management   (b)    A timetable for bringing industry into
measures. Five areas deserve special attention:         compliance with the standards, with
(i) the need to define practical and implementable      identification of priority investments and
priorities and timetables for pollution control         other actions.
through cooperative agreements with industry;



Summary                                                                                   13
Table 1: Selected Environmental Impacts of Medium and Small Enterprises
Nature of     Source of impact            Technical alternatives
impact
Liquid effluent - Slaughterhouses, cold   - Good housekeeping
storage, and meat processing - Enhanced industrial efficiency
- Tanning and leather       - Waste minimization
- Metal finishing and       - Recycling and reuse of waste as a byproduct
electroplating            - On-site waste treatment - coagulation,
- Light chemicals             precipitation, sedimentation, filtration,
- Dairy products              biological treatment
- Collective treatment facilities
Solid, toxic    - Metal finishing and     - Waste minimization and recovery
and hazardous   electroplating            - Solid waste disposal in special land fills after
wastes        - Automotive parts            neutralization
- Light chemicals           - Hazardous and toxic waste incineration
(c)    Arrangements for monitoring of the        enterprises tend to resist the pressure to improve
environmental  performance  of  the       their environmental performance, fearing that this
industry, based  on  voluntary  self-     will increase  their costs  and  erode  their
reporting, backed up by auditing or spot  competitive  position-either  vis-a-vis  other
checks by the government                  domestic finns or against (often larger) foreign
firms in both domestic and international markets.
(d)    Any incentives which the government       This strong preference for continuing to benefit
may wish to provide, such as the          from  an environmental 'free ride' has to be
provision of technical assistance grants  overcome by the environmental authorities, using
and credit for pollution control projects  a combination of education and information,
that are consistent with the priorities   incentives and political will.
established in the action plan
35.   To address concerns associated with the
34.   Financial incentives for small and         feasibility of enforcing strict pollution-control
medium enterprises.  A major concern about       regulations, the Government should consider the
industrial pollution in Buenos Aires, C6rdoba,   provision of financial incentives for SMEs
Rosario and other metropolitan areas focuses on  medium enterprises. Since the Government is
the liquid and solid wastes from a limited number  committed to phasing out all subsidies to the
of industries dominated by medium and small      private sector, its access to multilateral financing
enterprises. The main offenders are listed in    could provide financial and technical assistance
Table 1.  These enterprises, like their larger   at no direct cost to the budget. To maximize the
brethren, face major challenges as a consequence  effectiveness of this instrument and minimize
of the economic changes underway. However,       market distortions, the following conditions are
they are less likely to regard such changes as   recommended:
positive and are less well-placed in terms of
access to capital, technology and markets to take  (a)    The  government could  (i) arrange
advantage of the new  opportunities.  Some,             financing    from    a    multilateral
perhaps even many, are likely to fail or contract       development bank; (ii) auction off the
drastically while a few will grow and thrive. In        funds to all eligible banks; and (iii) use
these  circumstances,  medium   and  small              the difference between the cost of funds



14                                                                                        Summary
and the auction yield to fund technical      destinations, to discourage substitution among
assistance for the preparation of eligible   discharge destinations.
projects,  environmental  audits  and
environmental   impact   assessments         37.    Specifically,   the    following    is
(EIAs) on a grant basis.                     recommended:
(b)    The participating banks would onlend the      (a)    Reintroduction of effluent fees for liquid,
funds for eligible projects at commercial            gaseous and solid wastes. As a general
rates.                                               principle, the charges should reflect the
costs of waste removal, treatmnent and
(c)    To guard against financing insolvent                 disposal, or the marginal social cost of
SMEs, the intermediary banks need to be              environmental damages, whichever is
given   full   autonomy   in  their                  higher. The  use  of such  economic
creditworthiness evaluation, and accept              instruments    provides    appropriate
the full credit risk for the loans they              incentives for mininmizing the generation
make.                                                of pollution, and for the development of
enterprises specialized in the removal,
(d)    To ensure the eligibility of the project,            treatment and disposal of all types of
financing   would   be   limited   to                waste materials.
investments that fall within the scope of
an agreed government-industry action         (b)    Effluent fees should be paid by the
plan for pollution reduction (see para.              polluters regardless of where the waste is
32).                                                 discharged (e.g., into sewers, streams,
landfills, the atmosphere) and should be
36.    Effluent fees. As a complement to the                transferred to the enterprises providing
sectoral action plans and financial incentives,             the removal, treatment and  disposal
enterprises need to be motivated to operate their           services and to environmental agencies to
existing treatment facilities more effectively, as           cover the  cost of monitoring  and
well as to install new treatrnent plants, or to work        enforcement. The earmarking of effluent
together  to  develop   communal  treatment                  fees for environmental services should
arrangements  through  the  reintroduction  of              minimize resistance from  polluters and
industrial effluent fees. Such effluent fees were            avoid the legal issue of being regarded as
used in the early 1980s, but their effectiveness            taxes.
was undermined by high inflation rates and lack
of justification as payment for a water treatment    (c)    Introduction of effluent fees should be
service. As a result, their implementation was              phased in over a period sufficient to
discontinued on legal grounds, and this legal                allow  enterprises time to assess and
uncertainty needs to be resolved before effluent             implement the most cost-effective way of
fees can be reinstituted. To address this issue,             reducing  their  emissions,  through
the proposed Framework Environmental Law                     improved  environmental  management
could be used as the basis for establishing the              (e.g., good  housekeeping,  recycling,
general principle that the state has the right to            proper  use  of  existing  treatment
charge those who use the country's environmental            facilities) and appropriate investments
resources for the disposal of their wastes. For             (e.g., for cleaner process technologies,
this instrument to be effective, the fee should not          waste treatment facilities).
be limited to sewer discharges, but should also be
levied on all discharges out of the boundaries of    (d)    To minimize the risk of legal challenges,
the plant, e.g., into rivers, storm drains and other         introduction of effluent fees should be
n -  _ _       I  A      t    ^T/RTM rl K    I.........  



Summary                                                                                   15
supported   by   appropriate  legal       40.    To address such concerns, which are also
instruments  (e.g.,  the   proposed       likely  to  arise  with  other environmentally
Framework  Environmental Law) to          controversial projects, the Government needs to
establish the general principle that the  clarify  the  ground  rules  and  establish
state has the right to charge those who   arrangements for compensation of the affected
use any of the country's natural and      population for any environmental risks. More
environmental resources.                  broadly, it is recommended that:
38.   Hazardous waste.  The treatment and        (a)    Site selection for projects with a major
disposal of hazardous wastes represent a special        environmental impact (e.g., a hazardous
problem because of their toxic, flammable and           waste plant) should be based on clear
corrosive nature. As with other wastes, the             ground  rules in  regard  to  (i) the
preferred solution is to minimize the amount of         applicable environmental standards that
waste generated at the source. An appropriate           must be met; (ii) arrangements for
incentive for waste minimization is to charge           monitoring and enforcement of these
effluent fees that fully reflect the cost of            standards; (iii) arrangements for a public
transportation,  treatment  and   appropriate           review process to back up compliance
disposal for each type of waste. Such effluent          and enforcement of applicable standards.
fees will encourage the firms to examine their
operations and find ways by which they can       (b)    Provisions regarding compensation and
recover, recycle  or otherwise  reduce  the             resettlement of populations affected by a
production of hazardous wastes. After such              project's environmental imnpact needs to
operational changes have been implemented, they         be discussed  and  agreed  with  the
will find that they have a much lower volume of         community in a transparent manner. For
waste materials to dispose of and, as a result, less    example, site selection for a hazardous
difficulty in paying the necessary effluent fees.       waste plant may be made by means of a
The introduction of effluent fees will also provide     "compensation  auction",  in  which
the needed incentive for private firms to invest in     communities would be asked to state the
the provision of adequate waste collection,             compensation level required to accept the
treatment and disposal services.                        facility. The facility would then be
located in the lowest cost site, taking
39.    While  SERNAH  has  attempted  to                commnunity compensation into account.
implement the above approach in the AMBA, the
difficulty of finding a suitable site for treatment  (c)    The economic viability of the facility
and disposal has constrained their efforts. Several     needs to be protected by strengthening
sitting proposals to date have encountered strong       the monitoring  and  enforcement of
opposition  from  the  local population  and            hazardous   waste  regulations   to
municipal authorities. At the root of the problem       discourage polluting enterprises from
is a question of trust:  SERNAH and other               disposing of their hazardous wastes in
technical specialists insist that such a facility-if    unlicensed open air dumps, improperly
it is properly operated-should create no danger         designed leaching pits and other illegal
or  nuisance  for those  living  in  nearby             but low cost alternatives.
communities. The residents do not believe that it
will be properly operated, and they do not see   41.   Least cost strategy for water pollution
why they should bear the costs of a facility which  control.  In the AMBA, industrial effluent
will benefit industries or people elsewhere in the  account for about half of all discharges of
metropolitan area.                               biological oxygen demand (BOD) and one third
of suspended substances (TSS) into the aquatic



16                                                                                 Summary
environment. While most plants are reported to          Matanza-Riachuelo).  In   particular,
have some treatment facilities, conditions indicate     evaluate the trade-offs  in  pollution
that many of them  are not being operated               reduction between sewage treatment and
properly. Based on a 1994 sample survey, only           industrial pollution control.
15 percent of industrial establishments in GBA
meet all effluent regulations. Therefore, simple  (c)    Compare the costs of environmental
changes in the management and operation of              cleanup for specific water bodies, as
existing industrial wastewater treatment facilities     described in (b), with estimates of the
may permit significant or even large reductions in      benefits of cleanup (i.e., the costs of
the overall levels of water pollution caused by         pollution related damages), to determine
industrial emissions.  In addition to operating         the relative value and priority of cleanup
existing facilities, preliminary estimates carried      efforts by location and by level of
out by the mission suggest that the capital costs       environmental attainment.
of providing primary treatment for all industrial
establishments in the GBA would be about $190    (d)    On the basis of the above, evaluate the
rmillion, and secondary treatment, about $400           appropriate phasing and sequencing of
million.  While the required investments are            investments for the cleanup of the Rio
large, they signal that the reduction of industrial     Reconquista, Rio  Matanza-Riachuelo
pollution at the source may be a lower cost             and sewage treatment projects in the
alternative to reducing water pollution in AMBA         AMBA, taking economic and financial
han the current strategy of requiring secondary         resource constraints into account.
treatment for all household sewage in GBA.
Managing Transport-Related Pollution
42.   In view of the magnitude of the required
investments,  it is  recommended  that the       43.   Transport-related  externalities in the
government undertake the detailed studies needed  form of air and noise pollution and congestion
to establish the least-cost strategy of reducing  constitute an important cost of urbanization.
water pollution in Buenos Aires and other major  Pollutants such as lead, carbon monoxide (CO),
industrial agglomerations as soon as possible.   and particulate matter (PM1o) primarily affect the
The most important steps are as follows:         local environment, while other pollutants such as
nitrogen oxides (NO,) and carbon dioxide (CO2)
(a)    Carry  out a  detailed  inventory  of     also  contribute  to  regional  and  global
industrial pollution sources in each major  environmental  problems  (acid  rain  and
industrial area of the country, by type of  greenhouse effect).  Most of the pollution in
industry and pollutant, location and      downtown areas can be attributed to vehicles;
availability of waste treatment facilities.  most of that in the suburbs to industrial
emissions and, in a few areas, the burning of
(b)    Use data on pollution removal rates and   garbage. Over time, the relative importance of
costs for standard  waste  treatmnent     transport-related externalities will increase since
technologies, the inventory of industrial  motorization and the demand for environmental
pollution sources described in (a), and   quality will rise with higher income.
estimates of the cost and pollution
removal performance of different levels   44.    Motor vehicles are the main source of air
of sewage treatment, develop a least cost  pollution in downtown areas and major traffic
programn for achieving alternative levels  corridors elsewhere. Nevertheless, based on
of environmental cleanup for each of the  preliminary findings, the social costs of transport
water bodies of interest (e.g., the Rio de  sector pollution are not believed to be as serious
la Plata, the Rio Reconquista, the Rio    as those associated with other transport-related



Summary                                                                                17
Table 2: Selected Air Pollution Measurements
Location/Pollutant        SPM        S02        NOx        CO          Pb
(Tg/m3)    (Tg/m3)    (Tg/m3)    (ppm)      (Tg/m3)
Capital Federal           70-90      3-18       38-240     day: 7-14   0.3-3.9
(selected measurements in                                  even: 5-9  (see Errorl
July 1993 and May 1994)                                    night:<1    Bookmark
not
defined.)
Mendoza (selected         30-250     0.2-5.4    0.6-5.3
measurements in July 1993)
Cordoba (annual averages    80-192   32         41-50
based on regular
measurements 1988-1991)
Palpala, Jujuy (average of 82  209   46.3                              22.9
24 hr measurements in 1990)
US EPA Primary Standards   75 (Annual 80 (Annual 100       9 (8-hour   1.5
Geometric  Arithmetic  (Annual   Average)  (Quarterly
Mean)      Mean)      Arithmetic            Average)
Mean)
externalities such as accidents, congestion, the  46.   The pattern that emerges indicates that
degradation of urban space and noise. However,  the seriousness of air pollution varies depending
while consideration of non pollution externalities  on topography and the winds. In Buenos Aires,
of transport is important for evaluating policy  despite a high level of urban concentration and
options, a complete evaluation of transport    vehicle use, the potential impact of air pollution
policies, taking congestion effects in particular  has been mitigated by a favorable wind regime.
into account, is beyond the scope of this report.  Nonetheless, the winds are not sufficient to
disperse the pollution collecting in narrow,
45.   There  is  very  little  systematic      heavily traveled streets during working hours.
information about air pollution levels and     when traffic fumes accumulate to unhealthy
compositions. Some available measurements are  levels. Thus, air pollution is primarily an inner
shown in Table 2. These suggest that, at least  city problem for drivers, pedestrians, workers,
some of the time, lead, NO, and CO levels      shoppers and residents who are subject to vehicle
exceed the recommended targets in some areas of  pollution. The situation is reported to be similar
downtown   Buenos Aires, and particulate       in most cities in the Pampas, such as Rosario and
concentrations exceed the recommended targets  San Nicolas. For cities in more mountainous
in  Mendoza  and  C6rdoba.    The  lead        areas, such as Mendoza, C6rdoba and Salta,
measurements in Palpali (Jujuy) point to a     topography and wind conditions can occasionally
special problem  associated with local lead    lead  to  atmospheric  inversions  that trap
smelters. Overall, while the information is too  pollutants and allow their accumulation to reach
sparse to determine the dimensions of the severity  dangerous levels throughout the entire urban
of the problems, the potential long-term, low-  area.
dose consequences are serious enough to merit
further study and systematic monitoring.



18                                                                               Summary
47.   Given the size of the exposed population  assumptions, it can shown that the reduction of
in Buenos Aires, and the fact that the health   atmospheric lead pollution in AMBA by I 4g/m3
consequences of low-level lead pollution tend to  (obtained by the replacement of leaded by
be more severe than those associated with low-  unleaded gasoline) would reduce annual health
level NO. and CO pollution, it would appear that  damages by about $53.6-123.1 million. If this
lead pollution is the most serious of the transport-  estimate is accepted, the benefit of unleaded fuel
related air pollution issues that needs to be   use in AMBA can be estimated at about $0.02-
addressed. Reducing the lead content in gasoline  0.04/liter of gasoline, compared to additional
and switching to other, less polluting fuels should  gasoline production costs of $0.01-0.02/liter.
thus be a high priority. In regard to the control
of particulate, NO,, CO and other transport-    50.   On this basis, the government should
related pollution, different policy options address  consider adjusting the existing structure of fuel
the problem at different stages. Policies aiming at  taxes to reflect the pollution damage externalities
improved engine maintenance and efficiency      associated with the use of a given fuel. While the
attempt to reduce emissions per distance of a   accurate determination of the social damage costs
given mode of transport (i.e. train, bus, or car).  associated with each type of fuel will require
Other policies aim  at influencing the modal    much more data collection and analysis, it would
choice toward  less polluting  transportation   be useful to introduce the "polluter pays"
systems (i.e. trains or non-motorized transport).  principle through a couple of initial measures
Finally, urban spatial management can be used to  that can already be justified, at least for the
reduce the demand for polluting transport       major urban areas:
services in the long run.
(a)    A  fuel tax adjustment to create a
48.   Fuel choice.   Argentina is already              $0.04/liter differential between leaded
implementing two  important fuel switching             and unleaded gasoline to reflect the
options that should lead to reduced lead pollution     social damage cost of lead emissions.
in the air: compressed natural gas (CNG) and           This would be consistent with the
unleaded gasoline. CNG-fueled vehicles also            practice in OECD countries, most of
produce less NOx, CO, hydrocarbons, particulate        which have tax differentials between
and lead matter than gasoline-fueled vehicles, and     US$0.03 and USS0.09. The objective is
less particulate (but more NOx, CO  and                to make unleaded cheaper than leaded
hydrocarbons) than diesel-fueled vehicles. Since       gasoline.
1985, Argentina has had a policy to promote the
use of CNG by exempting it from the vehicle fuel  (b)    A fuel tax adjustment to increase the cost
tax, which represents about 44 percent of the          of diesel fuel in relation to that of CNG,
price of gasoline. As a result, CNG was quickly       to reflect the social damage cost of
adopted by mid-sized trucks and taxis, but had         particulate emissions. The differential
little success with buses (where CNG only has a        should be great enough to provide an
2 percent share of the market in AMBA). The            incentive for the greater use of CNG in
explanation may be that diesel fuel is also            city buses.
exempted from the fuel tax and CNG-equipped
buses are somewhat more expensive and less      (c)    The establishment of an air quality
efficient.                                             monitoring program  to determine the
existing levels of air pollution in urban
49.   Unleaded gasoline was introduced in              areas, the population at risk and the
Argentina only about 1 1/2 years ago and, to           degree of health hazard. The objective is
date, less than 5 percent of all cars run on           to provide a solid basis for decision
unleaded gas. Based on hypothetical "best-guess"       making in regard to pollution-based fuel



Summary                                                                                   19
taxes based on the "polluter pays"        largely as a function of fuel use per person-
principle.                                kilometer.    Non-motorized  transport (e.g.,
bicycles) causes no pollution, followed by trains,
51.   Emission   standards   and   vehicle       buses, and cars in ascending order, with cars
maintenance. Vehicle technology and the quality  being about ten times as emission intensive as
of vehicle maintenance greatly influence vehicle  buses, on a per passenger-km basis. Experience
emissions. In Argentina, the car park is old and,  in other countries suggests rapidly increasing car
due to economic circumstances, maintenance is    ownership rates with rising income levels. In
widely  neglected. While  a  recent decree       1992, there were 6.9 inhabitants per car in
establishes national emission and noise standards  Argentina, compared to 1.8 in the United States.
for new and used motor vehicles, compliance      This trend focuses attention on strategies to avoid
appears to be uneven. While Mendoza and          or even reverse the expected increase in private
C6rdoba are reported to have significantly       car usage.
improved their air quality by enforcing
compliance with emission standards, a recent     53.    A variety of options exists to induce
survey in Buenos Aires suggests that only about  commuters to  switch  from  private  public
10 percent of trucks and 8 percent of passenger  transport modes, which are less congesting and
transport  vehicles  show   up  for  annual      polluting.    Measures  to  increase  the
inspections.    Overall experience  in  other    attractiveness of public transport are crucial.
countries shows that the following policies are  They include changing the relative speed of
effective in reducing pollution. (Some of these  different modes, for example through the use of
are already being pursued in Argentina.)         well-enforced bus lanes. Introducing bus lanes
as part of a more comprehensive traffic
(a)    Update new vehicle emission standards     restructuring program would reduce travel time
to put them in line with international    for buses and, thus, render bus transportation
practices, both to protect the local      more attractive.  Underground and suburban
environment and enhance the export        railways (AMBA  already has an extensive
competitiveness of locally manufactured   network of over 900 km) have a great potential
cars.                                     for absorbing a substantial part of work-related
commuting trips. Rehabilitating parts of the
(b)    Introduce mandatory  inspections for      subway and suburban railway network will get
private  cars  (as  in  Mendoza  and      more commuters off the roads, especially if bus
C6rdoba), and strengthening inspections   and rail tariffs were to be integrated. Several
for commercial vehicles in all major      measures can already be recommended based on
urban areas to encourage compliance       the  assessment of current  problems  and
with applicable emission standards.       experiences elsewhere:
(c)   Retrofit vapor recovery devices at fuel   (a)    The   implementation    of   traffic
storage tanks, delivery trucks and service       engineering  measures  to  eliminate
stations in all major urban areas.               bottlenecks, improve signalization, and
Experience in other countries, shows that        improve operating  speeds of public
retrofit costs are small and, based on the       transport, with the general objective of
benefit of fuel savings alone, the payback       reducing congestion and vehicle idling
periods should be about 2-3 years.
(b)    The implementation of well-enforced bus
52.    Congestion  management and  modal                lanes in all major traffic arteries in the
choice.  The pollution intensity of alternative         metropolitan area, with traffic signal
passenger transport modes varies significantly,



20                                                                                 Summary
priority, grade-separated  interchanges   exclusive reliance on markets will not bring
and off-street stops                      about efficient urban land use, and there is a case
for regulatory intervention.   Urban  spatial
(c)    In tandem with (a), expansion of access   management can move the development of a city
controls for private cars in the congested  toward less transportation needs or transportation
central business district to limit traffic in  needs that can be met by a transport system with
the narrow streets to taxis and buses and  less congestion and pollution.
facilitate the circulation of pedestrians
and cyclists                              55.   In Argentina, urban spatial management
activities came to a halt in the seventies due to
(d)    Rehabilitation  and expansion of the      the country's economic problems. Now that the
existing subways and suburban rail lines  economic  problems  are  being  successfully
addressed, there is an opportunity to prepare
(e)    Improvement of passenger access to        again for the integration of urban land use and
public transport (better crossings and    infrastructure development. While a lot of study
safety improvements), and rerouting of    will be required to develop an optimal approach
suburban buses into improved intennodal   for the long term, a few recommendations are
exchanges linked to the subway and        worth pursuing now:
suburban  rail  lines,  rather  than
downtown destinations.                    (a)    Fragmentation  of  the  metropolitan
transport sector among the Capital
(f)    Encouragement  of  pedestrians  and              Federal, the Province of Buenos Aires,
cyclists through creation of separate            and the 19 municipalities in the AMBA
circulation networks with bridges over           appears to  be the most important
primary roads and railways, at grade             constraint to the implementation of a
signal-controlled crossings, feeder routes       comprehensive  and  coherent  urban
to public transport, and the provision of        transport policy.   The  creation  a
adequate  storage  facilities  at train          coordination mechanism for metropolitan
stations and bus terminals.                      transport and air pollution control such
as  the   proposed   Autoridad   de
(g)    Creation of a long-term comprehensive            Transporte    Area    Metropolitana
plan for public transport development,           (ATAM), would constitute a necessary
with coordinated networks of rail-based          first step towards addressing transport
mass transit for the highest density inner       related pollution issues on an area-wide
city and city-suburban lines, and buses          basis.
for lower density intra-city and suburban
routes.                                   (b)    For the long term, land use planning
should   concentrate   high   density
54.    Urban spatial management. Urban land             settlements along major transportation
use management and demand for transport                 corridors in a manner that integrates
services are closely interlinked. Demand for            them   with  other  urban  functions
urban transport is generated by the spatial             (workplace, services, shopping). Such a
separation of different urban functions such as         pattem   allows  for  more  efficient
housing, working and shopping. Housing density          provision of urban services, including
detemines the feasibility of different transport        local and long distance transport, and
systems. Due to the complementarity between             reduced environmental extemalities, in
infrastructure and individual investments (i.e.,        comparison with the existing pattem of
roads and cars, public transport and houses),



Summary                                                                                   21
sprawling   suburbs   and  irregular      from the customers through the use of volume-
settlements.                              based  solid  waste  fees, or franchise  the
operations to the private sector.   Another
Managing Municipal Solid Wastes                  constraint to the elimination of basurales could
be the significant income that illegal dumps
56.    The collection and disposal of solid      provide for the poorest segments of the urban
wastes  are  important components  of the        population. Where this occurs, a solution to the
environmental infrastructure. In the absence of  pollution problem emanating from illegal garbage
collection, garbage piles up in empty lots and   dumps needs to incorporate consideration of
local streams where it constitutes a health risk  living conditions and employment opportunities
and a source of contamination. Some open air     in these settlements.
dumps (basurales) raise concerns due to their
inadequate  location, design  and  operation.    59.    Based on this discussion, the most
Problems arise from their inadequate buffering   important priority is the promotion of adequate
from   inhabited   areas  (mostly  irregular     collection and disposal of solid waste in sanitary
settlements-villas miserias), their accessibility  landfills to replace the continued use of open air
to scavengers and children, their location in low  dumps in most parts of Argentina.  This will
areas subject to flooding and their contamination  require an integrated strategy involving:
of groundwater. Open air dumps are often
located at or near streams and contribute to     (a)    Mobilization of the financial resources
surface water pollution. The practice of burning        needed to improve collection and cover
solid waste in open air dumps contributes to            the costs of sanitary landfills.  The
particulate pollution in the air.                       recommended approach is recovery of
the costs from customers through the use
57.    Even in the AMBA, where the Capital              of volume-based solid waste fees.  A
Federal and 19 municipalities have been legally         minimum  fee, covering basic needs,
required to deliver their solid wvastes to sanitary     would have to be levied from  each
landfills operated by CEAMSE  since 1978,               household to reduce the incentive for
basurales continue to exist (about 74, as of            illegal disposal.
1992). By its own estimate, CEAMSE only
receives about 4 million tons per year of solid  (b)    Providing  an  incentive  for  local
waste of the 5.6 million tons produced in its           govermments to adopt modern sanitary
service area. A particular concern is that, since       standards and increase cost recovery for
CEAMSE's landfills control the quality of the           their solid  waste  activities.    The
wastes they accept for deposit, and reject the          government should consider financial
more hazardous and toxic wastes, it is likely that      assistance for municipalities to build and
those are dumped illegally under uncontrolled           equip    sanitary    landfills    and
conditions. In the case of a basural in Florencio       commercialize their operation.
Varela, industrial contaminants have already
been detected in the Puelche aquifer, which is an  (c)    Improving solid waste collection in low-
important source of drinking water.                     income areas and irregular settlements at
minimum  cost.   The  municipalities
should consider contracting such services
to neighborhood associations or NGOs
58.    A main constraint to the replacement of          that may be able to provide collection
basurales by sanitary landfills may be their            services  at  lower  costs  through
higher cost (CEAMSE charges $10/ton).  To               involvement with the informal sector.
address this issue, municipalities could recover
the costs of solid waste collection and disposal



22                                                                                Summary
(d)    Reduction of incentives for the illegal  responsibility for success, but failures tend to be
disposal of industrial and other wastes  blamed on SERNAH, as the center of the system,
that cannot be accepted by the sanitary  even though responsibilities may be shared, as
landfills.    The  governnent should     seen in the recent debate on the placement of a
promote investments in the development   proposed hazardous waste treatment facility in
of specialized  waste treatment and      Buenos Aires. The multiplicity of the agencies
disposal facilities that would comply    involved creates coordination problems and
with    appropriate    environmental     inconsistencies in injunctions to polluters. For
standards (see paras 38 ff).             example, tanneries in Avellaneda (GBA) report
that they are subject to environmental inspections
Institutional Aspects of Environmental          by  six  separate  agencies  using  different
Management                                      standards.
60.   As  may  already  be  inferred, the       62.   The  regulation  of water pollution
fragmentation of institutional responsibilities for  involves the greatest degree of institutional
environmental management among numerous         complexity. At the federal level, for instance, if a
agencies at the federal, provincial and municipal  firm in GBA discharges polluted water into the
levels has led to overlapping jurisdictions, weak  sewer, AA has to monitor the pollution, as AA is
monitoring and uneven enforcement of standards,  tightly controlled by ETOSS  in regard to
and a high degree of confusion about policies and  discharges from the sewerage network. However,
objectives. At the federal level, where SERNAH  when AA finds violators of emission standards, it
is nominally  responsible  for environmental    has to rely on SERNAH to enforce the standards.
policy, at least seven other ministries have    The original polluters can negotiate an extended
important roles to play in environment related  time table with SERNAH to fix these problems,
policy making, management and enforcement. A    yet AA is still expected by ETOSS to meet its
similar pattem is repeated at the provincial level  emission standards at any time. This discrepancy
and municipal level, where responsibility for   between the timetable faced by the polluter and
environment related matters is spread over many  AA  stems from  the fact that the first is
agencies and offices. This fragmentation is more  accountable to SERNAH only, while the second
than usually confusing in Argentina because of  is also accountable to ETOSS through its
the complexity of relationships among the federal  concession contract.
and provincial govemrnents. (The Constitution
reserves for the provinces any functions that have  63.   At the provincial level, the matrix of
not been expressly delegated to the federal     institutional responsibilities is similarly complex.
government.) Frequent changes in institutional  The Province of Buenos Aires has recently
structure are another complicating factor.      created the Insfituto  Provincial de Medio
Ambiente to coordinate all environment-related
61.   The general picture, considering the      matters. However, the other agencies that have
overlapping roles of the national, provincial, and  environment-related powers continue to operate.
municipal governments is one of confusion and   For instance, the Secretarta Provincial de Salud
duplication. The legal requirements differ among  Publica continues to carry out environmental
jurisdictions and the several authorities compete  inspections through its Direccidn de Medio
in the application of the law. Enforcement ends  Ambiente, in parallel with the Provincial Police's
up being arbitrary since it is often based on crisis  Division  Ecol6gica  and  AGOSBA,  the
response, but  seldom  leads  to  dramatic      provincial water and sewerage utility.
improvements in the overall management of the
environment.  Many firms are not sure with      64.   The Comit0s de Cuenca for each river
which law they are supposed to comply. On the   system are an additional layer which is emerging,
government side, no one really has the ultimate  but to date, almost none has been fully



Summary                                                                                 23
operational.  The administrative obstacles to   67.   Decentralization of policy-making. The
overcome in the Rio Matanza-Riachuelo, basin    provinces are often much more aware of the local
are typical of environmental policy-making: At  environmental issues and of the local capacities
least 22 institutions of all levels have authority  to deal with these issues. This suggests that the
over the basin.  In the Rio Reconquista the     identification and selection of environmental
scenario is not much different: 13 municipalities  goals and policy instruments should best be done
plus the provincial and national governments    at the provincial level.  On this basis, it is
exercise jurisdiction over the basin.           recommended that:
65.   SERNAH  is aware of many of the           (a)    Each province designates a single agency
problems and of the necessity to streamline the        to take responsibility for environmental
design of environmental policy in Argentina. It is     policy.   There   would  still  be
very  actively  working  to  reorganize  its           environmental  units  in  different
institutions to establish a more transparent and       ministries  and  coordination  across
ultimately more effective national environmental       ministries would remai  an important
system. This effort includes the work on a             determinant  of  the   success  of
National Environmental Policy, a National              environmental policies.  However to
Action Plan, a National Framework Law for the          ensure accountability, clear identification
Environment, and a National Enviromnental              of an ultimate authority in environmental
Infonnation System. However, progress has been         matters must be allowed.
extremely slow. The expected transformation of
SERNAH  into a ministry could provide an        (b)    The  federal  government  establish
opportunity for a more thorough reorganization         minimum  environmental standards to
of functions and a concentration of responsibility     reduce the risks of competition for
for policy-setting in one agency.                     investment  among   provinces   or
municipalities, based on the minimization
66.   Based on a comparison of the situation in        of environmental requirements. This is
Argentina with lessons from the international          already  contemplated  in  the  1994
experience, the development of a simpler and           Constitution.
more effective institutional framework for
environmental management will require: (i) the  68.   Decentralization  of monitoring  and
decentralization of policy making to provincial  enforcement. The rationale for decentralization
and  municipal levels, combined  with  its      of monitoring lies in the efficiency gains from
concentration  within  any  level;  (ii)  the   reducing the distance among the collection of
decentralization of monitoring and enforcement;  information and the local agencies where the
(iii) the use  of effluent fees and  other      information is most likely to be needed. Thus, a
environmental charges to provide incentives for  clearer and more systematic allocation of these
the implementation of the least-cost solution in  responsibilities among the provinces and the
terms of behavioral changes and investments to  municipalities will depend on the nature of the
minimize wastes and mobilize resources for      problem. For provincial water bodies, provincial
environmental monitoring, enforcement and       monitoring is likely to be cheaper and more
services; (iv) a stronger role for the legal system;  effective.  For  air  pollution,  municipal
(v) increasing the participation of the public in  responsibility may be most effective (unless there
environmental decision making; and (vi) the     are spillovers) if there are no institutional or
improvement of environmental monitoring and     technical limitations.
analysis to provide a better basis for decision
making on environmental policies.               69.   In  regard  to  enforcement,  most
municipalities in Argentina already have the
authority to monitor and enforce environmental



24                                                                                Summary
regulations, but the general lack of enforcement  implementation of environmental policies is far
is a major issue. To improve the effectiveness of  below desirable levels.
decentralized monitoring and enforcement, it is
recommended that:                               71.   Alternatively,          environmental
management can be recognized as a service with
(a)    The federal government provide technical  well defined customers: the polluters and the
assistance to the weaker provincial      beneficiaries of reductions in pollution levels.
agencies  to  bring  their  technical    This provides potential sources of autonomous
capabilities up to minimum standards,    financing through the implementation of pollution
and verify the consistency of monitoring  charges and user fees. This approach, based on
and  enforcement through  occasional    the "polluter pays" principle, will in general
random checks.                           provide appropriate incentives for pollution
abatement, lead to the full recovery of the costs
(b)    The  responsible  agencies  explore      of waste removal, treatment and disposal,
opportunities for reducing the costs of  discourage the use of environmentally damaging
monitoring  and enforcement through      products, and encourage the recycling and reuse
such approaches such as use of private   of materials. In addition, the implemnentation of
contractors, reliance on self-reporting by  user fees will mobilize financial resources to
firms  (within  the  framework  of       support the monitoring and enforcement of
government-industry        sectoral      environmental   policies.   The    relevant
environmental action plans) and reliance  considerations have already been discussed in
on monitoring and enforcement by the     para. 36 ff.
population (e.g., through the use of a
green hot line or, as is in C6rdoba, the  72.   Strengthening the role of the legal
use of voluntary "green" police.)        system. The absence of a general law on the
environment that would define the national
(c)    The  governments  provide  a  fiscal     environmental systems-i.e., the  roles and
incentive to the agencies charged with   responsibilities of the federal and provincial
enforcement by allowing them to keep a   governments in regards to environmental policies
share of the fines they collect.         and management-is an important contributing
factor to the jurisdictional issues that have
70.   Funding  environmental management.        constrained effective environmental management
The govemment's capacity to intervene through   in Argentina.  This law would have to be
enforcement  of regulations,  effluent  fees,   consistent  with  the   1994  Constitution's
financial incentives, investments or other types of  requirement that the federal government set
policy instruments depends on the resources     "minimum  requirements" but "respect local
available to the government for administrative  jurisdictions".
and monitoring capacity. There are several
options available to mobilize these resources. For  73.   An associated issue relates to the court
most environmental agencies in Argentina, the   system that, until recently, has not been very
current practice is to rely on general revenue and  sensitive to environmental claims. This stemmed
to  allocate  resources through  the  regular   from:   (i) the weakness of environmental
budgetary    process,    with    occasional     education and awareness in the judiciary power;
supplementary  allocations.  In  most cases     (ii) the narrowness of the legal coverage of the
however, there is a perception that the revenue  field; and (iii) the modest reliance on the
allocated  does not cover the  expenditure     judiciary by the civil society. More recently,
requirements,  with  the  result  that  the     some courts have taken a more active role.
However, there is a perception that the legal



Sumnmary                                                                                25
process is excessively formal and, hence, slow,  in three separate areas of research and analysis
and that the legal system has an inadequate     would be extremnely helpful for improving the
understanding of environmental law. Finally, an  information base on which future environmental
overwhelming case load, with the attendant      priority setting would be based:
delays and other costs, points to the desirability
of developing a sound legal framework for       (a)    Ambient environmental monitoring. In
mediation and arbitration services.                    most parts of the country there is no
basis upon which to make informed
74.   In view of the importance of having an           decisions about arnbient environmental
efficient legal framework and court system to          conditions. Critical gaps exist in the
support the  enforcement of environmental              monitoring of water quality, both surface
policies, the following steps are recommended:         and underground, and there is virtully
no systematic air quality monitoring in
(a)    There is a great need for a Framework           major cities. Filling these gaps is a
Environmental Law that would define             precondition  for an  assessment of
minimum  nationwide  standards  and             pollution costs in these areas.
clarify the respective responsibilities of
the national and provincial levels for   (b)    Healthl environment linkages. While a
environmental management. In addition,          significant amount of health data and
the law should provide a sound legal            studies are available, very little has been
basis for the introduction of effluent fees,    done to compile, correlate and analyze
and other instruments for environmental        the data in a manner that would allow
management, by establishing the general         understanding of trends and health-
principle that the state has the right to       enviromnent  interactions.    More
charge those that use the country's            interdisciplinary surveys and studies are
natural and environmental resources, i.e.,      required to establish the population at
the "polluter pays" principle.                  risk from the various forns of ambient
pollution and the actual degree of thurat
(b)    The overload of the court system should        to public health and safety arising
be  alleviated  through  the  official         therefrom.
promotion of alternative mechanisms for
the settlement of environmental disputes,  (c)    Economic evaluation of environmental
such as mediation and arbitration.              damages.   This report has merely
illustrated the use of economic evaluation
(c)    The court system's contribution to the          methods for environmental problems. In-
resolution of environmental issues should       depth studies of the economic losses
be improved through the expansion of            from  surface  water  pollution,  air
environmental training for judges and           pollution and the deterioration of urban
other legal professionals. This training        spaces would be invaluable to guide
should  include  the  techniques  for           future policy choices.
obtaining and preserving evidence of
environmental damage.                    (d)    A national environmental in?formation
enviromnental damage.             ~~~system should be established to integrate
75.   Improved environmental monitoring and            the environmental data collected at the
analysis. The discussions in this report amply         national and provincial levels, and make
demonstrate the weak analytical basis for              it accessible to the public.
detennining the physical, economic and social
dimensions of different pollution problems. Work  76.     Use    of   environmental   impact
assessments.    The  Environmental  Impact



26                                                                                Summary
Assessment (ELA) is a useful instrument for            of environmental issues and facilitate
environmental  regulation,  particularly  for          their positive involvement in supporting
addressing major environmental impacts, cross-        the implementation and enforcement of
media issues, and projects involving resettlement      environmental policies
of the affected population. In Argentina, the use
of EIA's has just begun, as they are only required  (b)    Use of the ELA process as an opportunity
for hydroelectric projects, mining projects and in     for informing and educating the public
some provinces. Their wider application has been       on  controversial aspects  of major
put in abeyance. While the recent national Public      projects, and identify concerns and needs
Investment Law requires ElAs for selected public       of the affected population
projects, or projects with public contributions
and guarantees, the regulations covering the    (b)    Establishment of formal consultative
implementing regulations have not been issued.         mechanisms with the public and other
Given the importance of this tool for successful       stakeholder  in  relation  to  the
environmental management, it is recommended            determination of pollution standards,
that the government issue the regulations for the      environmental  priorities,  and  the
use of EIA's for public investment projects and        formulation of an agreed vision for
extend their application to all projects involving     environmental management
miajor envirounmental impacts.                  79.    The need for a common vision. Most
77.   Increasing    public   participation.     successful  governments  have  based  their
Participation by public and other stakeholders  management of environmental concerns on long-
has proven to be an effective tool for developing  term planning, including an identification of the
political support and sustainability for the setting  key environmental problems of the country and
of environmental standards. In Argentina, public  an analysis of the design of menus of options to
participation in environmental management has   solve these problems. This form of strategic
been very limited. The problems in finding a    thinking, based on a vision of the sector, tends to
suitable location for a hazardous waste treatment  help nascent environmental authorities build an
plant demonstrate amply how pollution problems  increasingly broad base of support.   The
can be aggravated by lack of local participation.  implementation of this vision consists of spelling
A positive example is found in the EIA process in  out the marching orders for policy makers in a
Mendoza, which includes public hearings. Public  long  range  plan. Having  recognized  this,
participation is most effective when the public  SERNAH  is already working to prepare a
has been  informed  and  educated  on  the      National Environmental Policy and Action Plan
environmental risks to which it is exposed, and  that would define a vision of the environment
the costs associated with alternative levels of  common to both the general population and the
pollution and pollution abatement. Open access  economic actors.
to information is also an important condition for
effective public participation.                 Towards an Integrated Plan of Action
78.   In  view  of the  importance  of a        80.   Given  the  environmental  pollution
participatory  policy  making  process  for     problems facing Argentina, and the multiplicity
developing political support for and improving  of options for addressing them, it is usefuul to
the effvciency and effectiveness of environental  integrate the results into a plan of action for the
manage inent, the foflowing is recofmended:     Government to consider. Based on the findings of
the report, the strategy that emnerges should
(a)    Strengthening    of    environmental     revolve around  the following  cross-cutting
education to increase public awareness   themes:



Summary                                                                                          27
(a)    setting  agreed  national targets  for        institutional responsibility, the time frame for
environmental quality, taking the uses of    implementation, and a reference to the more
water and air bodies into account, and       detailed discussion in the technical report are
determining    appropriate    emission       provided. The  recommendations  have  been
standards for achieving them;                organized into three categories: (i) priorities for
policy reform  and improved management, (ii)
(b)    clarifying the institutional arrangements     priorities for research, information and analysis,
for  environmental  management,  by          and (iii) priorities for investment.
having each province and municipality
designate an agency responsible for
environmental policy-making, monitoring
and enforcement, while the federal role
focuses on establishing standards,
collecting and disseminating information,
and supporting the development of the
weaker provincial agencies;
(c)    using effluent fees and other economic
instruments to provide an incentive for
waste minimization and mobilizing
resources for adequate environmental
management and services.
81.    In addition, despite data limitations, an
environmental strategy should also reflect a well
ordered set of priorities for action. A number of
alternative criteria and considerations for
prioritizing interventions have been used in
various countries. Initially, the same criteria used
for prioritizing environmental problems and for
selecting instruments apply to the ranking of
interventions. Thus, Argentina may want to
prioritize actions that will (i) benefit the greatest
number of people; or, (ii) will benefit mostly the
poor; or, (iii) which have multiple (i.e., beyond
strictly environmental) benefits-actions aimed
at problems with greater effects on health,
problems that are recurrent or with irreversible
effects, and problems posing the greatest risk or
uncertainty. Priority actions also have to be cost-
effective,  politically   and   administratively
feasible, and conform to government investment
budgets (i.e., financial capacity).
82.    The  tables  below   summarize  the
recommendations for action that follow from the
preceding discussions. Wherever feasible, the
degree of priority (high, moderate, or low), the



28                                                                                                                 Summary
83.      Priorities for Policy Reform  and Improved Management
Policy Management and Reform                         Priority      Responsibility          Time Frame  Ref.
Para
A. Water Supply and Sewerate
Water and aewage tariff reform                    High          ETOSS and provincial     3 yean       2.54
agaeies
- Regulatory incentives for efficieny and privatization  High      Water agencies          5 years      2.64
- Low cost technologies for poor                     High          SERNAH, ETOSS           3 year       2.56
B. Industrl Pollution Control
- Clarification of environnental rules through Sectoral  High      SERNAHI provinces        I year      3.54
Action Plan
. Financial incentives for SMEs                      Moderate      SERNAH                  3 years      3.55
- Effluent fes for all discharges                    High          SERNAE AA                I years     3.56
. Selection of a site for a hazardous waste faclity though a  High  SERNAH  PBA             I year      3.57
compensation auction
C- Transport Polution and Spatil Management
. Emission standards enforcement                     Moderate      Municipalities          I year       4.37
- Pollution-adjusted fuel taxes                      Moderate      National Govenment      I year       4.36
- Coordinating body for AMBA                         Moderate      AMBAjurisds.            I year       4.39
- Measures to reduce congestion and promote public   Moderate      AMBAjurisds             I year       4.38
D. Sold Waste Management
High          Municipalities          3 years      5.21(a)
- Solid waste collection fees
Moderate      SERNAH                  3 years      5.21(b)
- Technical guidance and financial incentives for
municipalities
Moderate      Municipalities          3 years      5.21(c)
Waste collection by neighborhood associations and NGOs
E Institutional Framework
- National Envirorunental Policy and Action Plan     Moderate      SERNAH                  I year       6.63
- Consolidation and decentralization of responsibilities  High     SERNAH provinces        3 years      6.56
- Strengthening the legal syetems                    Moderate      SERNAH                  2 years      6.61
- Universal application of EIAs                      High          SERNAHE provincs        I year       6.58
* Increasingpublicparticipation                      High          SERNAH provinces         I year      6.62



Summary                                                                                                                          29
84.       Priorities for Research, Jnfonnation, and Analysis
Analysis and Studies                         Priority        Reponibility          Tiue Frame  Pm
No
A. Water and Sewerge
. Least cost ewse treenat d rledr for AMBA   M    kode       ETOSS, AA             2 yas        2.57
Grmdwatr study for AMBA                   Moderate        ETOSS. AA              5 yeZY      2.56
B. Industrial PoUution Control
- Leas ot co duti rl pollution control srelr for    Mhiodere  SERNAH, PBA, AA       I yaw       3.538
AMBA
C. Traipoot Pollution Managemet
. Systeatic monitnuing of aquality          Hiah             Mwcipalities           2 years     1.32(a)
- Mer plan for public trapont               Law              AMBAjurisd.           2 ye.        4.3'(O)
- LUnd use plamming for urban am            Low              AMBAjurixd.            3 yes       4.39(b)
D. Solid WatAe M_gmet
- Eoononiuc of faml reccling                LoW              Min. de E   aoomla    2 yea        5.21
B. Intitubonal Framework
- Stuy of thc health ffects of pollut        Hih             SERNA1 MimL de Salud   2 yeaI      1.81(b)
* Econo_ icevaluAtionof avrAn_entdags     LOW             SERNAH Uni vaities    3 ye         1.31(c). 6.39
85.       Priorities for Investment
Invetmenb                                               Priority        R_i llity             Time Fame         Pam
No
A. Water nd Sewerage
. Supply and  ewag collection                           High            Water CoS              15 yn .          2.54
* Scwagc tbetent in GBA                                 LOw             Water Cos             Not until studied  2.57
K Industral POuion Control
* Hazardous wst bt isapdisosal facilities for AMBA    High              Private Oprator       2 yeat            3.57
- Indugrial pollution reduction through proce changes at   High         Irndtry                15 yn.           3.55
the time of investment or replacement of equipmentt
- Industrial pollution reduction through invedment in end-   Moderate   lntry                 5 yeats           3.54
ofpipe treatmen facilities
C. Transport Pollution Management
- Bus lanes, indermodal cxgchanes                       Moderate        Municipslitie          15 yeat          4.38
- Rehabthtatjon of ubwayr and uburban                   Moderate        NaL OovL               10 yeats         4.38
railways
D. Solld Wate Mangement
- Sanitary landfillr in larger cities where they do not yet  High       Municipalities         10 yr.           5.21
K  onttutionl Franework
- National Envirom    la Information System             Moderate        SERNAH, PBA            10 y..           6.62



30                                                                               Summary
86.   The strategy that emerges is consistent   distortions  in  competition-and  (ii)  the
with the overall economic strategy for the      perception  of concem  for environmentally
country. Specifically, the reconumended plan of  responsible production systems among the most
action is consistent with the following objectives:  developed of Argentina's trading partners-the
(i) maintaining macroeconomic stability and     European Union and the USA-who account for
increasing the competitiveness of the Argentine  more than a third of the country's exports.
economy, (ii) poverty alleviation, (iii) private
sector development, and (iv) decentralization of  88.   Potential support from the World Bank
government   functions.   Basically,   most     To support the Government in implementing the
investments for pollution control will have to be  recommended plan of action, the proposed work
undertaken by the private sector in response to  program  for the World Bank includes the
the appropriate changes in the regulatory and   following  (including projects already  under
incentive structure. In the water sector, tariff  preparation):
reform would strengthen water companies access
to financing from the capital markets. Improved  (a)    The largest investment requirements are
regulation  and  enforcement  for  industrial         in the water and sewerage sector. Future
pollution control will, in principle, put the burden   projects would provide financing for
of investment on the polluter. In some cases of        service expansion of provincial water
industrial pollution, financial incentives can be      companies and advance the detailed
justified in order to ease monitoring requirements     policy agenda defined in this report and
and improve political acceptability of improved        in the World Bank Water and Sewage
pollution control policies. Hazardous waste            Sector  Note,  including   inproved
facilities are likely to attract private investors     management        and        further
once the regulatory framework is sufficiently          commercialization of the water and
reliable to generate predictable demand for these      sewerage sector. Support for studies
services. Sanitary landfills, outside of AMBA,         recommended in this report (i.e. a
will  require  significant  investments  by            sewage treatment and disposal plan for
municipalities or, preferable, private sector          AMBA) would be included.
operators.
(b)   In the area of industrial pollution control,
87.   Support for the recommended plan of              most investments would be undertaken
action should be strong, as the demand for             by the private sector. As a complement
improved environmental management is growing.          to ongoing regulatory improvements, and
A recent survey showed that 76 percent of the          the establishment of agreed government-
population believes that over the past ten years,     industry sectoral environmental action
the environment has deteriorated. The same             plans, a project could provide financing
survey indicates a willingness to incur the costs     for    pollution    control/prevention
to remedy this problem: 48 percent of those            investments and technical assistance for
surveyed would be willing to pay more taxes if         SMEs.
the revenue was earmarked for environmental
protection. Pressure for change also comes from  (c)    Significant  investments  for  the
the new outward and competitive orientation of         improvement of solid waste management
Argentina's economy. Improved enviromnentally          and the construction of sanitary landfills
management is becoming a necessity imposed by:         are required in many urban areas. A
(i) MERCOSUR-which requires harmonization              project could combine financing with
of  environmental  legislation,  regulation,          technical  assistance  toward  the
standards and monitoring approaches, to avoid



Summary                                                                               31
commercialization and privatization of
solid waste management services.
(d)    A project focused on the rehabilitation of
the existing surface and underground
railway network in Gran Buenos Aires,
plus its integration with bus transport,
could rake a significant contribution to
the improvement of the environment
through reducing congestion and the
share of private vehicles.
(e)    Several of the studies recommended in
this report could be financed through a
technical assistance loan, such as the
Public Investment Strengthening T.A.
Project. This includes studies on service
provision in low income neighborhoods,
a systematic air quality monitoring
program, and the economic evaluation of
environmental damages.
(f)    Several provinces could greatly benefit
from    technical   assistance   for
environmental policy management. Such
an  initiative  should  be  strictly
complementary and closely coordinated
with  the   IDB's   Environmental
Institutions   Strengthening   Project,
working with SERNAH and a few
selected provinces.
(g)    Global concerns, such as climate change
and ozone depletion, can be addressed
through specific projects funded on a
grant  basis  through  the  Bank-
administered Global Environment Fund
and   Montreal   Protocol   Fund,
respectively.






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