Opportunities for a Clean and Green Pakistan A Country Environmental Analysis Opportunities for a Clean and Green Pakistan © 2019 The World Bank 1818 H Street NW, Washington DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org Some rights reserved This work is a product of the staff of The World Bank. The findings, interpretations, and conclusions expressed in this work do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this work is subject to copyright. 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A Country Environmental Analysis Table of Contents Acronyms������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 1 Acknowledgements��������������������������������������������������������������������������������������������������������������������������������������������������������������� 5 Executive Summary��������������������������������������������������������������������������������������������������������������������������������������������������������������� 7 Introduction������������������������������������������������������������������������������������������������������������������������������������������������������������������������ 16 1...............Impacts and costs of environmental degradation���������������������������������������������������������������������������������������������� 18 1.1............... Approach �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 19 1.2............... Air quality in Pakistan: A key environmental health concern�������������������������������������������������������������������������������������������������� 20 1.3............... Water pollution in Pakistan: Another challenge for healthy citizens�������������������������������������������������������������������������������������� 24 1.3.1........... Main sources of water pollution����������������������������������������������������������������������������������������������������������������������������������������������������� 24 1.3.2........... Water, sanitation, hygiene, and loss of welfare����������������������������������������������������������������������������������������������������������������������������� 25 1.3.3........... Arsenic in drinking water, another major concern �������������������������������������������������������������������������������������������������������������������� 27 1.4............... Toxic waste, soil contamination and occupational safety in industry ������������������������������������������������������������������������������������ 28 1.4.1........... Lead exposure������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������ 28 1.4.2........... Occupational safety��������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 29 1.5............... Overall cost of environmental degradation ��������������������������������������������������������������������������������������������������������������������������������� 30 2...............Policy and institutional framework for environmental management, pollution control, and cleaner production �������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 34 2.1............... The importance of institutions to improve environmental management������������������������������������������������������������������������������ 35 2.2............... The evolution of environmental governance in Pakistan and the changes brought by the 18th Amendment��������������� 36 2.3............... The main stakeholders in Pakistan’s environmental governance��������������������������������������������������������������������������������������������� 38 2.4............... The main challenges for better environmental governance������������������������������������������������������������������������������������������������������ 39 2.4.1........... Strengthening the institutional and regulatory framework for air quality management ��������������������������������������������������� 41 2.4.2........... Strengthening the institutional and regulatory framework for water quality management ���������������������������������������������� 44 2.4.3........... Strengthening the institutional and regulatory framework for toxic waste management and industrial pollution������� 45 2.5............... Matching the institutional framework with key functions for better environmental services������������������������������������������� 47 3...............New approaches to address environmental challenges at the province-level: the cases of Khyber Pakhtunkhwa and Punjab���������������������������������������������������������������������������������������������������������������������������������������������������� 53 3.1............... Managing the environment in Khyber Pakhtunkhwa ��������������������������������������������������������������������������������������������������������������� 54 3.1.1........... Institutional structure for environmental management and green growth �������������������������������������������������������������������������� 56 3.1.2........... Functional review of existing environmental management systems��������������������������������������������������������������������������������������� 60 3.1.4........... The way forward�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 65 3.2............... Resource efficiency and cleaner production in Punjab������������������������������������������������������������������������������������������������������������� 68 3.2.1........... Industrial resource use and pollution in Punjab������������������������������������������������������������������������������������������������������������������������� 68 3.2.2........... Opportunities for greening Punjab’s industries�������������������������������������������������������������������������������������������������������������������������� 71 3.2.3........... Policies to foster sustainable industrialization����������������������������������������������������������������������������������������������������������������������������� 75 3.2.4........... The way forward �������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 82 4...............A way forward����������������������������������������������������������������������������������������������������������������������������������������������������� 86 References��������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 90 Annex 1 – Cost of Environmental Degradation data���������������������������������������������������������������������������������������������������������� 98 Annex 2 – Pakistan’s National Environmental Quality Standards ����������������������������������������������������������������������������������� 103 Tables Table 1. Estimated cost of environmental degradation for air, water, toxic waste contamination, and occupational safety (in US$, billion)����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 11 Table 2. Estimated annual costs of health effects of ambient air pollution in Pakistan, 2016 (US$, billions)������������������������������������ 24 Table 3. Estimated annual cost of inadequate WASH in Pakistan (US$, billions)����������������������������������������������������������������������������������� 27 Table 4. Lead hotspots in Pakistan��������������������������������������������������������������������������������������������������������������������������������������������������������������������� 28 Table 5. Summary of the estimated costs of environmental degradation for air, water, toxic waste contamination, and occupational safety (US$, billion). �������������������������������������������������������������������������������������������������������������������������������������������������������������������� 30 Table 6. Comparison of 2004 reassessment and 2016 COED studies in Pakistan����������������������������������������������������������������������������������� 31 Table 7. Comparison of the data and the assumptions that were used in the calculations of the COED for 2004, reassessment of 2004 and 2016��������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 32 Table 8. Summary of the main reasons for the differences in the estimations of COED for AAP, HAP, and WASH����������������������� 33 Table 9. Institutions involved with the environment in Pakistan����������������������������������������������������������������������������������������������������������������� 39 Table 10. Classification of Punjab industries by environmental impact����������������������������������������������������������������������������������������������������� 69 Table 11. Annual PM2.5 concentration in Pakistan’s cities��������������������������������������������������������������������������������������������������������������������������� 99 Table 12. Percentages of Pakistani households using solid fuel�������������������������������������������������������������������������������������������������������������������� 99 Table 13. Estimates of exposure to PM2.5 air pollution in Pakistan����������������������������������������������������������������������������������������������������������� 99 Table 14. Annual mortality burden attributed to AAP and HAP by age in urban areas������������������������������������������������������������������������100 Table 15. Annual mortality burden attributed to ambient air pollution (AAP) and household air pollution (HAP) by age in rural areas���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������100 Table 16. WASH tiers in Pakistan���������������������������������������������������������������������������������������������������������������������������������������������������������������������101 Table 17. Annual mortality attributed to inadequate WASH���������������������������������������������������������������������������������������������������������������������101 Table 18. Baseline data for estimating morbidity cost����������������������������������������������������������������������������������������������������������������������������������101 Table 19. Estimated annual diarrheal morbidity burden attributed to WASH in Pakistan������������������������������������������������������������������102 Table 20. Estimated annual burden of inadequate WASH in Pakistan�����������������������������������������������������������������������������������������������������102 Table 21. Estimated distribution of population in Pakistan by arsenic concentration in drinking water������������������������������������������102 Table 22. Relative risk associated with exposure to arsenic in drinking water by cause of death��������������������������������������������������������102 Table 23. Estimated annual number of deaths associated with arsenic contamination�������������������������������������������������������������������������103 Table 24. Recent studies on BLL in Pakistan�������������������������������������������������������������������������������������������������������������������������������������������������103 Table 25. Annual health burden (mortality) attributed to occupational safety risks in Pakistan��������������������������������������������������������103 Table 26. Comparison of Pakistan ‘s draft national air quality standards with WHO, EU and U.S. air quality guidelines���������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������104 Table 27. National Standards for Drinking Water Quality��������������������������������������������������������������������������������������������������������������������������104 Table 28. Pakistan NEQS for municipal and liquid industrial effluents (mg/l)��������������������������������������������������������������������������������������106 Table 29. Pakistan NEQS for industrial gaseous emission (mg/Nm3, unless otherwise defined)������������������������������������������������������107 Table 30.�����������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������������108 Figures Figure 1. Comparison of health burden attributable to environmental/occupational risks in selected countries ��������������������������� 20 Figure 2. CO2 emissions (kg per 2010 US$ of GDP), 1990 to 2014���������������������������������������������������������������������������������������������������������� 22 Figure 3. Drinking water tiers in Pakistan��������������������������������������������������������������������������������������������������������������������������������������������������������� 25 Figure 4. Sanitation tiers in Pakistan������������������������������������������������������������������������������������������������������������������������������������������������������������������ 25 Figure 5. Share of Environment Department in the Federal PSDPs before and after the 18th Amendment������������������������������������� 41 Figure 6. Conceptual framework highlighting the drivers, trends, required changes, and achievement targets for environmental management�������������������������������������������������������������������������������������������������������������������������������������������������������������������������������� 55 Figure 7. Institutional structure of the department governing KP’s environment sector����������������������������������������������������������������������� 56 Figure 8. Evolution of manufacturing gross value-added in Punjab (constant 2005/06 prices) ���������������������������������������������������������� 68 Figure 9. Sanitation-service development in Pakistan (number of people with the service)���������������������������������������������������������������100 Boxes Box 1. Four phases of air quality management planning�������������������������������������������������������������������������������������������������������������������������������� 22 Box 2. Pakistan : Getting More from Water������������������������������������������������������������������������������������������������������������������������������������������������������ 27 Box 3. The nexus between water and fisheries������������������������������������������������������������������������������������������������������������������������������������������������� 27 Box 4. Punjab province taking the lead with key reforms������������������������������������������������������������������������������������������������������������������������������ 48 Box 5. Performance reviews: Swedish experience of involving stakeholders and citizens���������������������������������������������������������������������� 49 Box 6. Systematic performance reviews������������������������������������������������������������������������������������������������������������������������������������������������������������ 49 Box 7. An example of green investments: combined effluent treatment plants in Punjab���������������������������������������������������������������������� 50 Box 8. The ‘Karachi Platform’������������������������������������������������������������������������������������������������������������������������������������������������������������������������������ 51 Box 9. Improving the service delivery in urban local governments for a better environment��������������������������������������������������������������� 51 Box 10. Opportunities for coordination and support to environmental policy and institutional measures��������������������������������������� 52 Box 11. Description of the GGI’s major sectoral activities���������������������������������������������������������������������������������������������������������������������������� 63 Acronyms AAP Ambient Air Pollution ADP Annual Development Plan AIS Agriculture Innovation System AQI Air Quality Index AQM Air Quality Management BCI Better Cotton Initiative BIPP Burki Institute of Public Policy BISP Benazir Income Support Program BLL Blood Lead Level BOD Biochemical Oxygen Demand BRT Bus Rapid Transit CBDRM Community-Based Disaster Risk Management CCD Climate Change Department CCI Council of Common Interests CCKP Climate Change Knowledge Portal CCM Country Coordination Mechanism-Pakistan CDCP Citizens Damage Compensation Program CEA Country Environmental Analysis CIS Climate Information Services CLIS Crop Loan Insurance Scheme COD Chemical Oxygen Demand COED Cost of Environmental Degradation COI Cost of illness COPD Chronic obstructive pulmonary disease CPEC China Pakistan Economic Corridor CPEIR Climate Public Expenditure and Institutional Review DALY Disability-Adjusted Life Year DG-EPA Director General of the EPA DHS Demographic and Health Survey DPF Diesel Particulate Filter DRF Disaster Risk Financing DDMA Disasters Management Authority DRM Disaster Risk Management DRR Disaster Reduction and Recovery EEA European Economic Area EIA Environmental Impact Assessment EID Environmental Information Disclosure EIP Eco-industrial Park EMP Environmental Management Plan EMS Environmental Management System EnMS Energy Management System EPA Environmental Protection Agency EPD Environmental Protection Department EPI Environmental Performance Index 1 Opportunities for a Clean and Green Pakistan A Country Environmental Analysis EPO Environmental Protection Order EPR Extended Producer Responsibility EPRD Environmental Performance Rating and Disclosure EPT Environmental Protection Tribunal ERMC Environmental Research and Monitoring Center ERRA Earthquake Reconstruction and Rehabilitation Authority ESCAP United Nations Economic and Social Commission for Asia and the Pacific ESIA Environmental and Social Impact Assessment ESSA Environmental and Social Systems Assessment ET Environmental Tribunal EU European Union EUAD Environment and Urban Affairs Division EWS Early Warning System FAO Food and Agriculture Organization FATA Federal Administrated Tribal Areas FDRA Fiscal Disaster Risk Assessment FDRAP Federal Disaster Response Action Plan FIEDMC Faisalabad Industrial Estates Development and Management Company GCISC Global Change Impact Studies Centre GBD Global Burden of Disease GDP Gross Domestic Product GFDRR Global Facility for Disaster Reduction and Recovery GGI Green Growth Initiative GHG Greenhouse Gas GIIP Good International Industry Practice GIZ Deutsche Gesellschaft fur Internationale Zusammenarbeit GIS Geographic information system GLAAS Global Analysis and Assessment of Sanitation and Drinking Water GLOBIOM Global Biosphere Management Model GLOF Glacial Lake Outburst Flooding GLOFRIS Global Flood Risk with Image Scenarios GPP Green Public Procurement HAP Household Air Pollution IBI Information-based Instrument IBIS Indus Basin Irrigation System ICID Industries, Commerce and Investment Department ICT Islamabad Capital Authority IDS Integrated Development Strategy IEE Initial Environmental Examination IHME The Institute for Health Metrics and Evaluation IIASA International Institute for Applied Systems Analysis IMF International Monetary Fund INDC Intended Nationally Determined Contributions IRSA Indus River System Authority IE Industrial Estate ISO International Organization for Standardization Opportunities for a Clean and Green Pakistan 2 A Country Environmental Analysis IUCN International Union for Conservation of Nature JICA Japanese International Cooperation Agency KP Khyber Pakhtunkhwa LGO Local Government Ordinance LSM Large-Scale Manufacturing MBI Market-based Instrument MDM Ministry of Disaster Management MEA Multi-Lateral Environmental Agreement M&R Maintenance and Repair MHVRA Multi-hazard and Vulnerability Risk Assessment MOCC Ministry of Climate Change MOWP Ministry of Water and Power MTDF Mid-Term Development Framework MTIGS Medium-Term Inclusive Growth Strategy NADRA National Database Registration Authority NARC National Agricultural Research Centre NCPC National Cleaner Production Center NCS National Conservation Strategy NDC Nationally Determined Contribution NDM National Disaster Management NDM National Disaster Management Act NDMC National Disaster Management Commission NDMF National Disaster Management Fund NDMP National Disaster Management Plan NDRMF National Disaster Risk Management Fund NEP National Environmental Policy NEQS National Environmental Quality Standards NFC National Finance Commission NFPP National Flood Protection Plan NGO Nongovernmental Organization NRE New and Renewable Energy NSER National Socio-Economic Registry O&M Operations and Maintenance OD Open Defecation OECD Organisation for Economic Co-operation and Development PAMRA Punjab Agricultural Marketing Regulatory Authority PAPMO Punjab Agricultural Produce Markets Ordinance PARB Punjab Agriculture Research Board PARC Pakistan Agricultural Research Council PASSCO Pakistan Agricultural Storage and Services Corporation PCAP Pakistan Clean Air Program PCRWR Pakistan Council of Research in Water Resources PDMA Provincial Disaster Management Authority P&D Planning and Development PEECA Punjab Energy Efficiency and Conservation Agency PEPA Pakistan Environmental Protection Act 3 Opportunities for a Clean and Green Pakistan A Country Environmental Analysis PEPC Pakistan Environmental Protection Council PEPO Pakistan Environmental Protection Ordinance PEQS Punjab Environmental Quality Standards PHB Punjab Horticulture Board PHEDs Public Health Engineering Departments PIEDMC Punjab Industrial Estates Development and Management Company PM Particulate Matter PMD Pakistan Meteorological Department PPE Personal Protective Equipment PPP Public-Private Partnership PSDP Public Sector Development Project PSIC Punjab Small Industries Corporation RCP Representative Concentration Pathway RECP Resource-Efficient and Clean Production S&L Standards and Labelling SBP State Bank of Pakistan SCEA Strategic Country Environmental Assessment SDPI Sustainable Development Policy Institute SEA Strategic Environmental Assessment SECP Securities Exchange Commission of Pakistan SMART Self-Monitoring and Reporting Tool SME Small and Medium Enterprise SPEI Standardized Precipitation Evapotranspiration Index SSM Small-Scale Manufacturing TFP Total Factor Productivity TMAs Tehsil Municipal Administrations TSIP Toxic Sites Identification Program TSS Total Suspended Solids UNDP United Nations Development Programme UNEA United Nations Environment Assembly UNEP United Nations Environment Programme UNICEF United Nations Children's Fund UNIDO United Nations Industrial Development Organization USAID United States Agency for International Development USAR Urban Search and Rescue VA Voluntary Agreement VOC Volatile Organic Carbons VSL Value of Statistical Life WASH Water, Sanitation, and Hygiene WCFC Watan Card Facilitation Center WHO World Health Organization WQM Water Quality Management WSTF Water Sector Task Force of the Friends of Democratic Pakistan WWF World Wide Fund for Nature Opportunities for a Clean and Green Pakistan 4 A Country Environmental Analysis Acknowledgements This report builds on consultations in Pakistan with technical experts in line ministries, development partners, and civil society representatives active working on environmental sustainability, the analysis of existing reports and studies, as well as interviews with World Bank specialists. A focus group discussion took place on Jan 25th, 2019 in Islamabad with representatives from Federal and Provincial governments, CSOs, NGOs, and development partners.  The outcomes of the report were presented during the meeting and the participants provided feedback. The contribution of the institutions and experts listed below is gratefully acknowledged. All errors and omissions remain the sole responsibility of the authors. • Government of Pakistan: Global Change Impact Studies Centre (GCISC); Pakistan Environmental Protection Agency (Pak- EPA); Ministry of Climate Change (MoCC); Water Resources Ministry; Planning and Development Commission; Planning Commission; Government of Balochistan (Environmental Protection Department, Forest Department); Government of Khyber Pakhtunkhwa (Planning and Development Department, Environmental Protection Department); Government of Punjab (Environmental Protection Department, Planning and Development Department, Forest Department); and Government of Sindh (Environmental Protection Department). • Development partners: World Health Organization (WHO), U.K. Department for International Development (DFID), United Nations Development Programme (UNDP), Agence Française de Développement (AFD), Australian High Commission, U.S State Department (U.S. Embassy in Pakistan), United States Agency for International Development (USAID), Asian Development Bank (ADB), Deutsche Gesellschaft fur Internationale Zusammenarbeit (GIZ), Food and Agriculture Organization (FAO), and World Food Programme (WFP). • Nongovernment organizations: Pakistan Council of Research in Water Resources (PCRWR), International Union for Conservation of Nature (IUCN) Pakistan, World Wide Fund for Nature (WWF) Pakistan, and Civil Society Coalition for Climate Change (CSCCC). • World Bank staff: Mohammad Farhanullah Sami (Senior Water Supply and Sanitation Specialist), William Young (Lead Water Resources Specialist), Lixin Gu (Program Leader), Cristina Santos (Program Leader), and Raymond Muhula (Senior Public Sector Specialist). The report has underpinned the preparation of the Environmental Sustainability Note prepared under the World Bank’s flagship publication ‘Pakistan @ 100 – Shaping the Future Initiative’. The team thanks the Korean Green Growth Trust Fund (KGGTF) for supporting the analytical work of section 3.2 of this report “the Resource Efficiency and Clean Production (RECP)”. This report has been prepared by a World Bank team led by Marcelo Acerbi (Senior Environmental Specialist) and Hisham Osman (Young Professional) with technical inputs from Rahat Jabeen (Environmental Specialist), Ahmad Aslam (Environmental Specialist), Adriana Damianova (Consultant), Antoine Coste (Economist), Elena Strukova (Consultant), Shahida Jamil (Consultant), Nida Asif (Consultant), Azher Uddin Kahn (Consultant) and Marjory-Anne Bromhead (Consultant). The team also included Muhammad Naeem (Senior Program Assistant). Technical inputs from the Sustainable Development Policy Institute (SDPI)1 were also incorporated in this report including contributions form Abid Suleri, Syeda Maliha Naveed, Masooma Hassan, and Imran Ahmed. The report was prepared under the guidance and advice of Illango Patchamuthu (Country Director), Melinda Good (Operations Manager), Lixin Gu (Program Leader), Fei Deng (Country Program Coordinator), Kseniya Lvovsky (Practice Manager) and Lia Sieghart (Practice Manager). The concept note of the CEA was reviewed by Javaid Afzal (Senior Environmental Specialist), Fernando Loayza (Senior Environmental Economist) and Enrique Blanco Armas (Lead Economist). Peer reviewers for this report were Helena Naber (Senior Environmental Specialist), Suiko Yoshijima (Senior Environmental Specialist), and Raymond Muhula (Senior Public Sector Specialist). Stan Wanat provided editorial support. 1 SDPI. 2018. “Environmental Sustainability in Pakistan.” Technical Note prepared for the World Bank. 5 Opportunities for a Clean and Green Pakistan A Country Environmental Analysis To be cleaner and greener, Pakistan can… Improve environmental monitoring and planning capacity • Build Environmental Protection Agencies (EPA) and local governments’ environmental monitoring network and establish appropriate laboratory and modelling capacity. • Strengthen the planning capacity of EPAs, including (i) air and water quality management planning with, protocols and technical/ financial capacity; (ii) regulatory reform; and (iii) protocols for information disclosure and citizen engagement. • Understand current pollution levels and sources and develop an effective pollution reduction plan. Harness the power of public pressure • Make urban communities, including schoolchildren, more aware of the value of natural resources in urban settings and importance of their protection. • Ensure public access to environmental data. • Strengthen environmental protection departments’ capacity to disclose environment information and engage citizens. Enhance devolution for improved local service delivery • Improve local government capacity in provision of environmental infrastructure and services, such as solid waste management, local transportation, water and sanitation. • Clarify responsibilities of water and sanitation departments at the provincial, district and sub-district levels. • Adopt air shed and watershed management approaches by provincial and local governments. • Integrate environment into provincial planning documents and revise Provincial Environmental Protection Acts after consultations with stakeholders. • Update urban zoning policies and master plans to reduce urban sprawl, allow for efficient public transport and green spaces. Improve coordination across different levels of Government and sectors • Develop effective institutional mechanisms to manage environmental cross boundary challenges such as airsheds and watersheds. • Clarify federal, provincial, and local responsibilities given boundary and efficiency issues. Greening investments • Facilitate access to green financing by issuing green banking guidelines and exploring public-private partnerships. • Support development of resource efficient clean production (RECP) technologies in industry. • Invest in point of use water treatment facilities and safe management of fecal waste while improving regulations in groundwater extraction. • Develop mass transit systems in cities. • Complement/combine regulatory approaches with incentives, economic tools, fiscal policies, and financing. • Have a better financing regime for industries and small and medium enterprises. This is an opportunity to develop green financing that makes access easier for environmentally responsible enterprises/activities. Opportunities for a Clean and Green Pakistan Executive Summary Introduction and Objectives 1. This document aims to deepen the understanding of the effects of environmental pollution on health and standards of living in Pakistan. It seeks to assess institutional capacity to facilitate a transition to environmentally sustainable growth, as well as to strengthen dialogue among different stakeholders. 2. The Country Environmental Analysis (CEA) builds on a substantial body of related work. This includes a CEA conducted in 2006, as well as documents addressing environmental management in Sindh, sectoral water resources, forestry and fisheries management, and analyses of climate risks. The CEA recognizes the importance of increasing climate resilience (Pakistan is the fifth most exposed country in the world to climate change) but climate change management is not the main focus. The CEA takes account of Pakistan’s broader development trends and has underpinned a 2019 World Bank publication ‘Pakistan @100: Shaping the Future 2047’ which outlines a strategy for the country to achieve upper-middle- income status by 2047 by ensuring that the unsustainable use of finite resources does not constrain growth in the future, and that everybody can benefit from and contribute to growth. It is shaped also by the strategy of the Ministry of Climate Change (MoCC) and its vision for a Clean, Green Pakistan as well as for meeting its Nationally Determined Contribution (NDC) commitments. 3. The CEA is written within the context of recent important institutional and political development, including the 18th Amendment of 2010. These changes included a greater focus on devolution. Most environmental oversight functions were decentralized from the federal government to the provincial administrations, and also involve local governments. Four technical areas of analysis, on the health costs of air and water pollution, on decentralization, on environmental management in Khyber Pakhtunkhwa (KP) and on environmental management of industry in Punjab—provide key inputs. The document builds on consultations involving stakeholders from the national and provincial governments, nongovernmental organizations (NGOs), and international cooperation agencies. Although the CEA recognizes the importance of addressing natural resource degradation and air and water pollution in rural areas, recommendations focus on measures to address pollution in urban areas. 4. The conclusion is that air and water pollution and natural resource degradation continue to impose heavy costs on Pakistan’s citizens and the economy through their impact on health and productivity. A more environmentally sustainable growth path will play a key role in Pakistan’s longer-term development and transformation to an upper-middle- income country. Priorities for improved environmental management focus include (a) improving environmental monitoring by environmental protection agencies (EPAs) and local governments; (b) enhancing the devolution of environmental responsibilities for better service delivery; (c) improving coordination among the federal, provincial, and local levels, and among sectors; (d) ‘greening’ future investments, and (e) using the power of public pressure. Growth, Vulnerability, and Urbanization trends 5. Economic performance has been uneven over the last decade.2 Growth over the 2011–18 period averaged 4.4 percent per year and in 2018 was estimated at 5.8 percent, but the economy is facing macroeconomic imbalances linked to rapid increases in recurrent expenditure and limited revenue growth on the fiscal side and a large current account deficit on the external side. Growth is expected to slow over the next two years as authorities take measures to correct macroeconomic imbalances. Pakistan was also hard hit by devastating floods in 2010 and 2018 and severe earthquakes in 2013 and 2015. Human development indicators for Pakistan are among the lowest in South Asia. 6. Pakistan has achieved progress in poverty reduction, but geographical disparities persist. There were significant declines in poverty over the 2001–15 period, from 64.3 percent in 2001 to 24.3 percent in 2015. Drivers include economic growth, an increase in international migration, and the expansion of social protection, along with urbanization and growth of the (informal) off-farm economy. The poorer districts within provinces experienced more rapid reductions in poverty. However, except in KP, the poverty gap between urban and rural areas increased over the period. Furthermore, while poverty rates were halved in Sindh, progress was slower in Balochistan. Furthermore, consumption growth of the bottom 40 percent 2 The figures in this paragraph are drawn from ‘Pakistan @100: Shaping the Future 2047’. 7 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan decelerated between 2010 and 2015, and also grew more slowly than the average for the total population. Reducing inequality remains a major challenge. Population growth (2.4 percent) is more rapid and average number of children (3.7) greater than in most other South Asian countries. Pakistan in 2017 had 207 million people,3 ten times the number at independence. These growth rates bring challenges in providing quality education and employment opportunities for Pakistan’s young people. They also increase environmental pressures, especially on water, land, urban, and air quality management. 7. Pakistan is urbanizing, but over 60 percent of the population continues to live in rural areas. Annual population growth rates averaged 2.8 percent in urban and 2.2 percent in rural areas between the 1998 and 2017 census periods. There are, however, regional differences. In Sindh, 52 percent of the population (total population was 48 million) was urban in 2017 compared with 37 percent for Punjab (total 110 million), 19 percent for KP (total 31 million), and 28 percent for Balochistan (total 12 million). Urbanization is a driver of economic growth and innovation, but brings environmental challenges, particularly in air quality, waste management, drainage, and management of the built environment. Building on Existing Strategies 8. The 2006 Strategic Country Environmental Assessment (SCEA) estimated losses from environmental degradation at 6 percent of gross domestic product (GDP). It quantified three major causes of environmental damage: (a) illness and premature mortality caused by air pollution (indoor and outdoor, almost 50 percent of the total damage); (b) diarrheal diseases and typhoid due to inadequate water supply, sanitation, and hygiene (about 30 percent), and (c) reduced agricultural productivity due to soil degradation (about 20 percent). Costs fell mostly on the poor. The SCEA was selective in scope, focusing on issues connected with growth and urbanization, and on the instrument of environmental impact assessment (EIA) to guide new investments. Key recommendations included addressing gaps in institutional design, in the regulatory framework, in capacity limitations, and above all in incentives and public accountability. 9. The Pakistan@100 strategy for achieving upper-middle-income status by 2047 has five main recommendations. These include investing in human capital, transforming the economy through boosting labor and capital productivity, increasing investment to accumulate physical capital, protecting the environment to sustain growth through improved natural resource management, and enhancing governance to provide an enabling environment for growth and reforms. The report emphasized three principle environmental challenges: (a) managing air and water pollution; (b) managing land and water sustainably (the agriculture and water nexus is key in Pakistan, where agriculture accounts for over 90 percent of water withdrawals); and (c) building resilience to natural disasters. It highlighted capacity, monitoring, and governance constraints in all three areas, but focused on recommendations to improve water management and productivity, especially through reforms in pricing, accountability, and equity in access. 10. The government has articulated a Pakistan Vision 2025 roadmap and a strategy for a Clean, Green Pakistan. The Vision 2025 roadmap includes pillars for human capital development; inclusive growth; improving governance; water, energy, and food security; private sector development; a knowledge economy; for modernizing transport and greater regional productivity. The Clean, Green Pakistan strategy developed by the MoCC includes actions in seven priority areas related to the environment. These are (a) increasing forest plantations, including in and around urban areas; (b) waste management, including industrial, liquid, and hospital as well as domestic waste; (c) safe sanitation; (d) improving hygiene, in particular relating to the food and the environment; (e) air pollution control; (f) safe drinking water; and (f) clean oceans and coasts. MoCC recognizes the importance of coordination and will work in these areas primarily through the relevant ministries and local government departments. Air, Water, and Industrial Pollution 11. Recent estimates of the global burden of disease (GBD) suggest that for Pakistan the costs of air and water pollution, Lead exposure, and occupational risks are broadly in line with countries of similar per capita GDP. They are lower than India, which has higher per capita GDP, but higher than Bangladesh, whose per capita GDP is similar to Pa- kistan’s. This CEA assesses environmental and natural resource degradation broadly but attempts to quantify the losses to GDP only of air and water pollution as two main unsolved issues with significant implications for the human capital of the country, its productivity, and its growth. 3 The figure is from Pakistan Bureau of Statistics. http://www.pbs.gov.pk/content/population-census A Country Environmental Analysis 8 Opportunities for a Clean and Green Pakistan Air Pollution 12. Air pollution has been recognized as a key environmental challenge since the 1970s. Mobile air pollution sources include heavy-duty vehicles and motorized two- and three-wheelers. Stationary sources include point sources such as thermoelectric power plants and industrial units, and non-point sources such as the burning of agricultural residues, sugarcane fields, and municipal waste, and natural dust clouds due to dry weather conditions. For cooking, 60 percent of households still use solid fuel (85 percent in rural areas, 13 percent in rural areas), and health impacts from household air pollution (HAP) are also significant. Particularly serious are levels of PM2.5, fine particulate air pollution associated with increased incidence of a range of cardiovascular diseases; levels over much of the Indus Valley, where Pakistan’s population is concentrated, are three to four times the World Health organization (WHO) guidelines of 10 µg/m3, and in Karachi they are seven times the recommended level. 13. About 114,000 Pakistanis die annually from the impact of air pollution, accounting for about 9 percent of all deaths. About 38,000 people in urban and 12,000 people in rural areas die annually from ambient air pollution, and about 7,500 people in urban and 56,000 people in rural areas from HAP. The cost of illness and premature death from ambient air pollution (AAP) was estimated at equivalent to 2 percent of GDP annually in 2016, and that from HAP an additional 2.5 percent of GDP annually. Programs to address air pollution are limited in effectiveness and there is some lack of clarity regarding the different responsibilities of provincial and local authorities. Although there are industrial and vehicle emissions standards, the latter apply only to commercial vehicles, and there are severe capacity constraints in monitoring and enforcement. Programs to address HAP, which affects in particular women and children, are even more limited. Photo credit: Caroline Suzman/World Bank Water Pollution 14. Discharge of untreated wastewater from households, industry and agriculture into rivers, streams, and groundwater is the primary source of water pollution in Pakistan. There are active programs to extend access to water 9 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan and sanitation, but improved, safe service is still limited. As of 2015, just over 30 percent of the rural and 40 percent of urban population had access to safely managed water supplies; as regards sanitation, while nearly 60 percent of the rural and 80 percent of urban population have access to basic or limited sanitation services, full and safe treatment and disposal of wastewater is almost nonexistent. Programs to limit open defecation (OD) have had limited impact on health since they have not addressed the issue of safe disposal of fecal waste. 15. Unsafe drinking water and inadequate treatment of wastewater carry heavy health costs. Information on the causes of death is inadequate in Pakistan, but waterborne diseases are estimated to be the primary cause of death of about 15,000 people living in urban and 25,000 people in rural areas, annually. The burden of illness is significant. About 91 rural and 37 million urban cases of diarrhea are reported annually, including about 18 million urban and 49 million rural children under five. As of 2016, the annual cost of inadequate water, sanitation, and hygiene (WASH) in Pakistan was estimated to be US$2.4 billion in urban areas (0.9 percent of GDP) and US$5.1 billion in rural areas (1.8 percent of GDP in 2016). 16. Contamination of groundwater with arsenic brings an additional health cost from contamination of drinking water wells. About 119 million people in Pakistan, mostly living in the Indus Valley, may live in areas with elevated levels (above the recommended WHO threshold of 10 µg/L) of arsenic in drinking water. About 32 million have arsenic- concentration exposures of 50–149 µg/L, 11 million have 150–299 µg/L, and about 7 million have more than 300 µg/L. Chronic exposure to arsenic can cause cancers, increase mortality from heart disease, and infectious diseases. Arsenic also impairs intellectual function, especially in children. Deaths linked to arsenic contamination are estimated at 31,000 annually. The incidence of arsenic-related disease is much higher. The annual costs to GDP of arsenic-related illness and death are estimated at over US$ 3 billion annually, or about 1 percent of GDP. Industrial Pollution and Occupational Safety 17. The health impacts of industrial pollution and unsafe working environments are significant though insufficiently understood. Lead, however, is a pollutant that has been studied extensively. The toxic sites identification program (TSIP) database estimates that about 575,000 Pakistanis are exposed to Lead contamination from a range of industries, mostly in Punjab and Sindh. Of these, about 15,000 children suffer exposure levels sufficient to lead to loss of intellectual function. Unsafe working environments bring additional risks and exposures. Work-related deaths are estimated at about 19,000 persons annually; work-related illness is much higher but accurate estimates do not exist. The annual cost of work-related mortality is estimated at about 0.8 percent of GDP annually. This figure is an under-estimate since it focuses on deaths related to industrial occupations and does not include, for example, mortality associated with farming, or the trucking and transport industry. Overall cost of environmental degradation 18. The overall cost of air, water and industrial pollution and occupational safety is estimated at 8.9 percent of GDP.4 Table 1 summarizes these costs. The table does not distinguish between urban and rural, but the costs of air pollution and inadequate WASH as a percentage of GDP are higher in rural than in urban areas. 4 The World Bank CEA study (2006) has assessed the health effects and costs of ambient air pollution, household air pollution, and WASH in Pakistan using data from 2004 with a different methodology than the one used in this study. Therefore, the cost figures from CEA (2006) can’t be compared directly with the cost figures from this CEA. For detailed information on this, please see section 1.5. A Country Environmental Analysis 10 Opportunities for a Clean and Green Pakistan Table 1. Estimated cost of environmental degradation for air, water, toxic waste contamination, and occupational safety (in US$, billion) High Low Average   % GDP in % GDP % GDP in   Urban Rural Total Urban Rural Total Total 2016 in 2016 2016 PM2.5 air pollution Ambient 6.1 1.92 8.02 2.9 2.33 0.73 3.06 1.1 5.54 2 Household 1.19 8.97 10.16 3.6 0.46 3.42 3.88 1.4 7.02 2.5 Inadequate WASH Impacts 4 8.5 12.5 4.4 0.8 1.7 2.5 0.9 7.5 2.65 Arsenic in drinking water Impacts 4.5 1.6   1.7 0.6 3.1 1.1 Toxic waste and soil contamination Impacts 0.06 0.02   0.011 0.004 0.0355 0.012 Occupational safety Impacts 2.4 0.9   1.4 0.5 1.9 0.7 Total 37.64 13.42 12.551 4.504 25.10 8.962 Source: Strukova 2018. Natural resource degradation: Inter-linked with air and water pollution 19. Air and Water pollution are closely linked with the way that land, water and forests are managed: In addition to the water pollution, poor land and water management brings heavy costs in terms of lost productivity and these costs will increase unless policies change. Agriculture currently represents over 90 percent of water withdrawals, but irrigation practices are wasteful and inequitable and poor drainage contributes to contamination and salinization of groundwater. Irrigation water is underpriced, covering, for example, only 10-15 percent of O&M costs in Punjab. There is potential to improve water productivity and orient water toward higher value uses, but devolution has contributed to allocation, funding and coordination challenges. Agricultural practices contribute to air pollution, through the burning of crop residues after harvest, as well as to groundwater contamination from excessive fertilizer and chemical use. Poor water quality in turn reduces the productivity and health of the fishing industry, which if sustainably has considerable potential for growth in Pakistan both from inland and coastal waters. Trees and forests have a strong role to play in air quality management in both urban and rural areas: in urban areas green spaces and green belts improve urban livability, provide respite from extreme heat, help disperse pollutants and improve drainage. In rural areas shelter belts and trees in the production landscape can reduce soil erosion and dust-storms, increase soil productivity; riverine forests protect water courses from erosion and contamination. Larger scale forest can help reduce flooding and absorb carbon, mitigating the effects of climate change. Measures to address air and water pollution need also to include programs to improve land, water and forest management. Except in mountainous areas Pakistan is forest scarce but there is great potential to increase tree cover in both rural and urban areas. Climate Change: another pressure on air quality and water scarcity 20. Pakistan is highly exposed to climate risks: air and water pollution, poor natural resource management, and vulnerability to climate change are intertwined. Pakistan is ranked seventh on the Global Climate Risk Index and climate change is expected to increase the occurrence and severity of extreme weather events, with high human and economic costs. Annual temperatures in Pakistan have increased by 0.87°C (maximum) and 0.48°C (minimum) from 1960 to 2007 and the frequency of periods of extreme heat has increased fivefold. By the end of this century, the annual mean temperature in Pakistan is expected to rise by 3°C to 5°C, inter-annual rainfall variability to increase and sea level to rise by as much as 60 11 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan cm5. Deforestation and poor land and water management have increased vulnerability to extreme weather events. Extreme climate events between 1994 and 2013 have resulted in an average annual economic loss of almost US$4 billion. The last five floods (2010–2014) have resulted in monetary losses of over US$18 billion with 38.12 million people affected, 3.45 million houses damaged, and 10.63 million acres of crops destroyed.6 Likewise, over 1,200 people lost their lives due to the unprecedented heat wave in Karachi in 2015. Pakistan is working to improve hydro-meteorological monitoring and early warning systems as well as disaster risk management at both federal and provincial levels. 21. Although Pakistan overall makes a small contribution to global greenhouse gas (GHG) emissions, they are growing rapidly. GHG emissions were estimated at 405 MtCO2e (Intended Nationally Determined Contributions - INDC) in 2015, more than double the level in 1994 and would continue to rise rapidly under a ‘business as usual’ scenario. Energy accounts for about 46 percent of emissions, agriculture and livestock 45 percent, industry 3.9 percent, and land-use change in the forest sector 2.6 percent. Within the energy sector, transport accounts for a significant and growing share; road traffic contributes 23 percent of all CO2 emissions (Sánchez-Triana et al. 2014a) and is a primary source of PM2.5 which comes with its particular health risks. Short-lived climate pollutants—particularly black carbon, methane, tropospheric ozone, and high global warming potential hydrofluorocarbons—are responsible for a significant fraction of near-term climate change. Exposure to ozone is also associated with health impacts, particularly impacts on chronic lung diseases and on the ecosystem. Pakistan’s ozone concentrations have increased steadily since 1990. Air pollution and climate change are thus intertwined and managing air pollution also contributes to climate change mitigation. 22. Pakistan’s NDC commits the country to reducing GHG emissions by 20 percent over ‘business as usual’ and articulates several actions. These include investments at both federal and provincial level in renewable energy and energy efficiency, improvements in public transport, especially in urban rail and bus transport, improved agricultural water management and climate smart agriculture, reforestation agro-forestry, improved disaster risk management, developing climate resilient infrastructure, and more effective urban planning. Key elements include enhancing synergies between adaptation and mitigation actions, enhancing public awareness, and improving coordination between sector levels of government. Institutions and Decentralization Environmental Management in a Decentralized Context 23. Responsibilities for most environmental protection and oversight were transferred from the federal to the provincial and local governments in 2010, as part of a broader constitutional reform agenda under the 18th Amendment. At the federal level, the MoCC now has strategic responsibility for climate change management functions. Part of the 2010 institutional reorganization included a ministerial consolidation within the federal government, including of the former Ministry of Environment and Environment Protection Agency, which are now under the authority of the MoCC. Previously, federal laws could override provincial legislation, and environmental oversight was the responsibility of the Federal Ministry of Environment. There were institutional and capacity limitations, difficulties in coordinating between government agencies and between levels of government, gaps in the regulatory framework, and limited incentives and public accountability for environmental management.7 These constraints remain in the context of devolution, while there are new challenges in developing nationally coordinated approaches to environmental issues which cross provincial boundaries, including air pollution and water resource management. 24. Each province in Pakistan has its own environmental legislation and institutional structure and each has created a provincial EPA. District level agencies are responsible for detailed implementation of provincial legislation. Capacity constraints remain: data collection and monitoring are weak, and provincial EPAs lack human resources, technology, enforcement capability, and financial resources. It will take time to overcome these constraints and build institutions which are able to coordinate with key sectoral agencies within and across provinces. More detailed assessments review progress in two provinces. 5 This paragraph is based on “A Climate Change Profile of Pakistan.” Asian Development Bank. 2017. 6 Government of Pakistan: International Nationally Determined Contributions Statement 2016. 7 While the National Environmental Policy (NEP 2005–15), for example, articulated strategies addressing a wide range of environmental issues it was not able assign responsibilities for implementation but relied on voluntary execution of its recommendations. A Country Environmental Analysis 12 Opportunities for a Clean and Green Pakistan Environmental management in a decentralized context: KP 25. KP has articulated ambitious strategies for improving environmental and natural resource management but there are challenging capacity and financing constraints. KP is the most rural of Pakistan’s provinces; its population growth rate (2.9 percent per year) is exceeded only by Balochistan (3.3 percent per year), labor force participation is lower than the national average and it faces particular human development and gender challenges. Nevertheless, KP has developed a green growth initiative (GGI) which recognizes the multidimensional challenges of environmentally sustainable growth, has articulated environmental legislation adapted to the provincial context, and established provincial environment departments and a provincial EPA. 26. The KP GGI recognizes the potential of KP for sustainable natural resource management, given its varied and spectacular geography. GGI aims to be a source of green job creation. GGI’s six target areas are forestry, protected areas, clean energy, climate resilience, water/sanitation, and waste management. Recognizing the productive, protection, and climate services that forests provide it has ambitious plans to increase forest cover, and has launched the ‘billion tree initiative’, with active local community participation and a youth forest nurseries program. It seeks also to expand protected areas, create recreational wildlife parks in every district, and support a youth park management force. It has developed a clean energy program aiming for zero carbon emissions, with 80 percent power generation to be based on hydro and solar and including small-scale community hydro projects and aims to improve air quality monitoring in the main cities. Waste management programs include management of industrial and hospital waste and control of plastic bag use. Energy efficiency is a key component of its climate strategy and spans the industrial, agricultural, and transport sectors; as in other provinces vehicle emissions. KP acknowledges the need for a ‘culture of vehicle maintenance’ and recognizes the weakness of the traffic police department in coordinating its efforts with KP EPA. KP EPA aims to learn also from ‘good practice’ approaches in other provinces; regarding brick-kiln emissions, for example, Punjab EPA has assisted brick-kiln owners’ adoption of energy-efficient and less polluting brick-kiln technology. 27. Environmental oversight responsibilities are clear, but implementation and enforcement are challenging. Environmental oversight is the responsibility of the Department of Forestry, Environment, and Wildlife and the provincial EPA. According to the 2014 Environmental Protection Act, EPA has the responsibility for the broad range of environmental functions, preparation and implementation of policies, guidelines, and environmental quality standards, cross-department coordination, assistance to government and non-government bodies, monitoring, licensing, and certification, review of environmental mitigation plans, working with the public, and establishment of a website. EPA has sections covering monitoring, technical, geographical information systems and laboratory work, litigation and court work, administration and sub-regional bodies. While in principle EPA’s powers are far-reaching and include the power to enter premises with a search warrant, levy fines, and initiate criminal cases, in practice the country’s power structures and culture impede full exercise of these powers. Implementation is further limited by budgetary and capacity constraints; there are currently only three equipped offices outside Peshawar, for example. So, while environmental legislation, including EIAs and enforcement, is in conformity with international standards, effective implementation is highly challenging. Increasing budget allocation to EPA to strengthen technical, operational, and human capacity will be a key input into more effective environmental management and accountability to citizens. Environmental management in a decentralized context: The industrial sector in Punjab 28. Punjab is Pakistan’s most industrialized province; the industrial sector is highly polluting but there is scope for a transition to cleaner production systems. Punjab represented nearly 60 percent of national industrial value-added in 2015–16; the sector is diverse but uses key inputs such as water and energy inefficiently and is a source of air and water pollution.8 These features bring costs to public health but also undermine industrial competitiveness, as industries fail to meet environmental standards increasingly demanded by importing countries. 29. Resource-efficient and clean production (RECP) has been promoted since the 1990s but it has not yet been mainstreamed due to lack of capacity and incentives. RECP requires continuous assessment of production methods to identify the causes of resource inefficiency/pollution and to generate cost-efficient options to minimize them; it brings 8 Major sources of water pollution include textiles, sugar, pulp and paper, and leather tanning, while cement, stone and brick-kiln subsectors are a 13 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan environmental and industrial management closer together. Projects have tended to provide diagnostics and recommendations to firms, rather than build their capacity to incorporate RECP into work processes. Capacity building for government agencies and industry associations has been neglected. Few projects have sought to foster development of private RECP technology and service suppliers. Most initiatives have focused on pilots for individual firms. 30. There is scope for fostering industry-level RECP in Punjab, as industries are increasingly clustered in industrial estates (IEs) where environmental issues can more easily be managed. The ‘eco-industrial park’ (EIP) model, for example promotes exchanges of waste material, waste energy, and wastewater between firms. Many IEs in Punjab currently lack essential environmental infrastructure (for example common effluent treatment plants and landfill) and there has been inadequate allocation of responsibilities between GoPunjab, zone developers, and tenants regarding construction, maintenance, and operations. Beyond infrastructure, IEs’ regulatory frameworks have tended to regard environmental management, narrowly, only within the context of compliance with environmental standards, rather than within the broader context of resource efficiency, cleaner production, and competitiveness. However, the situation is changing; an IEB strategy is being developed under the Punjab Green Development Program, financed with the support of the World Bank. 31. Punjab can also take advantage of the experience of other countries in its transition to greener industrial production by moving beyond a focus on command-and-control. To date a ‘compliance approach’ has had limited success. GoPunjab will work collaboratively with industry to achieve better environmental performance and promote RECP. Other instruments, including market-based and information-based instruments (IBIs), could be used more extensively. The system of pollution charges and taxes should be updated with a much greater focus on public disclosure. This would also improve the enabling environment for civil society participation and awareness of environmental issues. There needs to be greater outreach to smaller industries and support for appropriate financing instruments for RECP. Over the longer term, GoPunjab could promote a more integrated approach to industrial development, working between levels of government and sectors such as water and energy, considering the social and spatial as well as economic and environmental dimensions, aligned with linked policies, for example, in areas such as trade and pricing, or education and training. 32. More effective inter-agency coordination would improve the institutional framework for the greening of industries. Key agencies include the Department of Environmental Protection, which intends to complement its regulatory role with support functions for greening of industries through strengthening its capacity, including establishing new departments for environmental monitoring, piloting, and demonstrating cleaner technologies, and policymaking. They also include the Industries, Commerce, and Investment Department (ICID) which despite budget increases has not yet focused on facilitating environmentally sustainable industrial development. The Energy Department has traditionally focused more on supply than demand-side issues. Establishment of the Punjab Energy Efficiency and Conservation Agency (PEECA) and initial work on standards and labelling of electric appliances are welcome developments. Better intra-government coordination needs to be complemented with public-private sector dialogue, and with much greater participation from civil society. Toward a green and clean Pakistan: Key recommendations 33. Reduction of air, water and industrial pollution is a key step toward a Green, Clean Pakistan. The previous sections have outlined the health impacts of pollution, as well as the interlinkages between pollution and sustainable land and water management, and the importance of additional key measures for improving productivity and inclusive growth. The recommendations summarized below, however, focus mostly on measures to address water and air pollution together with institutional improvements in the context of a decentralization. 34. Priorities for improved pollution reduction focus include (a) improving environmental monitoring by EPAs and local governments; (b) enhancing the devolution of environmental responsibilities; (c) improving coordination among the federal, provincial, and local levels, and among sectors; (d) ‘greening’ future investments; and (e) using the power of public pressure. (a) Improve environmental monitoring: High priority measures include (i) building provincial and local government environmental monitoring, laboratory and modelling capacity; (ii) developing a network of air (PM2.5, SO2, NO2, source of air pollution. A Country Environmental Analysis 14 Opportunities for a Clean and Green Pakistan Photo credit: Oozi Bubblez/Shutterstock.com and CO) and water (bacterial and chemical contamination) quality monitoring; (iii) improving data on WASH to enhance service delivery, and (iv) strengthening the planning capacity of EPAs in air and water pollution reduction planning, developing protocols for public disclosure, citizens’ engagement and regulatory reforms as needed. (b) Enhance the devolution of environmental responsibilities: Priorities include (i) Improving local government capacity in provision of environment services, including solid waste, water and sanitation, local transport and urban planning; (ii) clarifying the responsibilities of each water and sanitation department at the provincial, district and sub-district levels; (iii) adopting airshed and watershed management; (iv) integrating environment into provincial Planning and Development programs, budgets and annual plans and supporting Provincial Governments in preparation of Green Development Plans and revising Provincial Environmental Protection Acts after consultations with stakeholders, and (v) improving urban zoning policies to reduce urban sprawl, allow for provision of efficient public transport infrastructure and services, urban forestry, green belts, and bicycle and pedestrian pathways (c) Improve coordination among the federal, provincial, and local levels, and among sectors for better environmental management. Priorities include (i) making use of existing coordination mechanisms such as the Pakistan Environmental Council and the Council for Common Interest to address issues which cross administrative boundaries, while establishing a National Water Council as proposed in the National Water Policy; and (ii) adopting airshed and watershed management approaches that cross administrative boundaries, to coordinate actions on pollution management. (d) Greening future investments: Priorities include (i) facilitating access to green financing by issuing green banking guidelines and exploring public-private partnerships; (ii) investing in point-of-use water treatment with subsidies if needed while investing in safe management of fecal waste and improving regulations in groundwater extraction ; (iii) Supporting resource efficient and clean production guidelines and developing green labelling guidelines for industrial and agricultural products; (iv) supporting public transport, mass transit and non-motorized transport systems and investing in green spaces and trees in cities. (e) Using the power of public pressure: Priorities include: (i) Ensuring disclosure of environmental data as well as the health impact of air and water pollution; (ii) Strengthening environmental protection and broader local government capacity to engage citizens in environmental issues, city development and broader planning processes; (iii) supporting education and awareness raising to empower citizens including among schoolchildren. 15 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan Introduction 35. This study aims to deepen understanding of key environmental priorities in Pakistan with a clear and direct effect on pollution and standards of living. It seeks to assess institutional capacity to facilitate a transition to environmentally sustainable growth by implementing policies to address key environmental degradation issues, as well as to strengthen dialogue among different stakeholders. This report analyzes how pollution and poor delivery of environmental services are detracting from a sustainable growth trajectory, since they negatively affect standards of living, health, and productivity, with a clear cost for Pakistan’s economy. 36. Environmental sustainability is an essential factor for long-term growth. This report provided inputs to the sustainability framework included in the Pakistan@100 report which considers the essential elements for a growth strategy that other countries have followed. One of those elements is sustainability, where long-term growth is not only about accelerating, but also about sustaining it for an extended period. This requires responsible handling of environmental quality and the natural resource base. Governance is a cross-cutting theme as it provides the environment for any reform to succeed. Transparency and accountability are key for this. A set of reforms are necessary to improve environmental management and sustainability but can overwhelm limited government capacity. The main analytical contribution of this Country Environmental Analysis (CEA) to Pakistan @100 study was the figures and estimates for the cost of environmental degradation that supported the recommendations and the messages of the flagship report. While Pakistan @100 highlights water management issue as an environmental priority with lesser focus on the pollution issues, this CEA complements Pakistan @100 by providing an expanded analysis on the pollution issues and environmental management system (EMS). 37. Pakistan is the world’s sixth-most populous country, with a 2017 population of approximately 207 million9 and a per capita income of US$1,629 (World Bank 2018a). The poverty rate (US$1.90 per day or less) has decreased from 13.2 percent of the population in 2007 to an estimated 4.9 percent in 2017–18 (World Bank 2018a). However, Pakistan’s human development indicators—education, nutrition, and gender equity, among others—remain low compared to countries globally and to other South Asia nations. This is particularly true in rural areas, home to two-thirds of the population. In addition to these challenges in Pakistan’s rural areas, the environmental impacts from—and to—the country’s urban areas also need to be addressed. 38. Good environmental management should be a key aspect to develop human capital to have healthy and productive citizens. Pakistan’s human capital potential is huge, yet, it is still untapped. Human capital is the most important component to the growth of wealth globally, and especially so in low-income countries. In these economies, the contribution of human capital to total wealth has increased over time as more educated youth have joined the labor market. Creating a skilled labor force that is more productive and able to adopt and adapt to new technologies seems to be the path for growth in developing countries. To this end, improvements in education and skills should go hand in hand with improvements in health and well-being to maximize the cognitive potential of the population and that of men and women in the labor force. 39. Managing urbanization in Pakistan will require augmenting the environmental infrastructure and delivery of environmental services and solutions by the relevant institutions within the next years. Urbanization in Pakistan is the fastest in South Asia, and it is estimated that about half its population will live in urban areas by 2030. In the context of developing countries, high rates of urbanization, industrialization, and modernization result in environmental degradation and that contributes to loss of human well-being. Governments have a role to play in addressing the great expansion of population, and in laying the foundation for sustainable, decarbonized economic growth across the country. Failing that, the country should expect to see more migration, unemployment, frustration, and anger in the years ahead. Therefore, Pakistan needs to invest in environmental management at the local and city levels, since these areas represent the greatest concentrations of pollution sources and deleterious impacts. The problem of air pollution is amplified in the cities—the engines of Pakistan’s growth—with urban agglomerations such as Lahore reaching levels of PM2.5 in the range of 2 to 14 times World Health Organization (WHO) guidelines. In rural areas, most people use solid fuel for cooking, and as result are exposed to high concentrations of PM2.5 that range from 90–165 µg/m3. Concurrently, 69 percent of Pakistan’s water sources do not meet the national standards for drinking water. Industrial and agricultural effluents are another major concern 9 http://www.pbs.gov.pk/content/population-census A Country Environmental Analysis 16 Opportunities for a Clean and Green Pakistan 40. Environmental degradation and pollution in Pakistan have severe economic consequences. The annual cost of Pakistan’s air pollution in 2016 was estimated at 2.5–6.5 percent of GDP equivalent (Strukova 2018). The 2016 annual cost of inadequate water, sanitation, and hygiene (WASH) was estimated at 0.9 percent of GDP equivalent in urban areas and 1.8 percent of GDP equivalent in rural areas (Hutton and Varughese 2016). Inequality in access to WASH correlates directly with income levels and varies significantly across regions. In the business-as-usual scenario, given that Pakistan currently has more deaths due to air pollution per 100,000 than China, Pakistan is likely to see a detrimental increase in public health costs, with disproportionate impacts on the urban poor. Pakistan’s environmental issues are not restricted to poor air and water quality. Natural resource degradation (such as deforestation, land degradation, biodiversity loss, and overexploitation of fisheries) has significant impacts on sustainable growth. Climate change further exacerbates these pressures, while environmental pollution and degradation are often associated with increases in greenhouse gas (GHG) emissions. Structure of the report and main topics 41. This report has benefited from five analytical activities and consultations with a wide range of stakeholders. It is structured as follows: Chapter 1 presents updated information on the impacts and costs of environmental degradation in Pakistan’s urban and rural areas, based on assessments of the economic and social costs of air, water, and toxic waste and soil contamination. Chapter 2 analyzes the institutional framework for environmental management in Pakistan. It outlines recommendations to improve policies, regulations, and institutional capacity in the areas of pollution management, resource efficiency, and environmental performance. Chapter 3 shows how the challenges presented in the first two chapters play out in two of Pakistan’s provinces, namely, Khyber Pakhtunkhwa (KP) and Punjab,10 and the new approaches that their respective governments have introduced to address them and foster greener growth trajectories. Chapter 4 summarizes the findings and prioritizes recommendations for Pakistan to improve environmental management. 10 Punjab’s case is also presented in more detail in the companion publication Coste, 2019. Sustainable Industrial Development in Punjab. World Bank. 17 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan 1 Impacts and costs of environmental degradation Photo credit: Vitaly Vlasov/pexels.com A Country Environmental Analysis 18 Key messages Opportunities for a Clean and Green Pakistan • Despite recent efforts to reduce environmental degradation, pollution levels in Pakistan still imposes a major health bur- den on the population, especially vulnerable groups such as children, with severe social and economic impacts. Pollutants such as fine particulate matter in the air, bacterial contamination and chemicals in water, and Lead in soil are of partic- ular concern. • Using the Cost of Environmental Degradation (COED) methodology, this report estimates the mortality/morbidity and the entailed economic costs associated with air and water pollution, and soil pollution from industry. Overall, the total annual mortality linked to pollution is estimated at more than 170,000, with economic costs of about US$ 25.10 billion, equivalent to nearly 9 percent of GDP. • Trends such as poorly managed urbanization, motorization and industrialization, widespread use of solid fuels, poor land and water management and inadequate treatment of fecal waste are likely to aggravate further this health burden if determined action is not taken to curb pollution. 1.1 Approach 42. Environmental degradation in Pakistan causes very significant damage to the population’s health, to the country’s economic productivity and international competitiveness, and to its natural resources. This section presents some of the key impacts of environmental degradation in Pakistan and assesses the environment’s value to society, including the social and economic benefits derived from the environment in the form of environmental externalities. This is also a key aspect related to human capital in Pakistan. In the process of setting environmental objectives and priorities, policy makers and stakeholders can derive insights from the results of the COED assessment conducted in the present report. 43. The CEA assesses a set of specific issues with regard to Pakistan’s environmental challenges related to air pollution, water pollution, land contamination, and occupational safety. The selected issues have important links with the megatrends facing Pakistan, including urbanization, population growth, and climate change. The rationale behind focusing on these selected issues is that they put additional pressure on the country to reach better competitiveness in the international markets. 44. This report has used a methodology based on the Global Burden of Disease (GBD) 2016 to estimate the health risks attributed to environmental pollution.11 Like previous World Bank studies,12 it adopted the World Health Organization’s (WHO) approach to estimate the relative risk of premature death associated with environmental pollution. Based on the COED approach, the following steps were taken to quantify the relative risk associated with environmental pollution. First, the pollutant is identified, and its concentration measured. Second, the number of people exposed to that pollutant and its concentration is calculated. Third, the attributable fraction of each disease outcome linked to the pollutant exposure is estimated (based on the relative risk calculated in epidemiological studies). The result is expressed as a total disease burden in terms of annual cases of disease outcomes linked to the population’s exposure to a specific pollutant. Finally, this disease burden is expressed in monetary terms to provide additional guidance for allocating public and private resources across socioeconomic development goals. 45. During the past decade, Pakistan has attempted to reduce the health impacts of environmental pollution, but significant efforts are still necessary. The GBD database reflects Pakistan’s position among South Asia countries and trends in Pakistan’s environmental impact reduction. The latest GBD results suggest that the overall health burden attributable to environmental/occupational risks in Pakistan is about 152 deaths per 100,000 population. This is about 32 percent less than in India, about the same level as in Bangladesh and China, but 41 percent higher than in Indonesia (Figure 1. Comparison of health burden attributable to environmental/occupational risks in selected countries). It is more than twice as high as 11 To examine the burden of disease attributable to pollution risk factors, this report relies on the GBD 2016 results coordinated by the Institute for Health Metrics and Evaluation (IHME). The GBD project analyzes the environmental and occupational risks for 1990–2016 for most countries and by major aggregates, linking these risks with the burden of disease attributable to them. The GBD study provides the annual health burden estimates at the na- tional level and relies on modeling, rather than analyzing direct observations of environmental quality parameters. In addition, it applies aggregated exposure information. GBD 2016 data are available at http://ghdx.healthdata.org/gbd-2016 and the IHME website (http://www.healthdata.org/gbd/publications) presents the methodology for the GBD analysis. 12 World Bank (2014, 2016d). 19 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan in Mexico and Turkey. Countries with a significantly lower health burden attributed to environmental/occupational risks have two to three times the GDP per capita in Purchasing Power Parity of Pakistan. Such high GDP per capita outcomes require significant government efforts to ensure environmentally friendly growth. If adequate policies are not implemented, economic growth might not be sustainable. For instance, although China has about three times the GDP per capita of Pakistan, China’s health burden attributed to environmental pollution is comparable to Pakistan’s. Figure 1. Comparison of health burden attributable to environmental/occupational risks in selected countries 200 25,000 180 GDP/capita, Purchasing Power Parity Int.$ 160 20,000 140 120 15,000 Mortality cases per 100,000 100 80 10,000 60 40 5,000 20 0 0 ia an h na ia y ico ke es es d ist i Ch In ex lad r on Tu k M Pa ng d In Ba Unsafe water, sanitation, and handwashing Ambient particulate ma er pollution Household air pollution from solid fuels Lead exposure Occupational risks GDP/capita, PPP, Int.$ Source: Estimated from GBD (2016). 1.2 Air quality in Pakistan: A key environmental health concern The context of air quality problems 46. Air pollution is a major cause of health-related issues worldwide. According to the WHO, an estimated 12.6 million people worldwide die from environmental health risk annually, and air pollution is the fourth-leading risk factor for deaths affecting mainly young children and the elderly.13 The major health risks related to air pollution are allergies, acute and chronic respiratory diseases including asthma, heart diseases and stroke, and lung cancer.14 47. In Pakistan, air pollution is a major environmental challenge due primarily to poorly managed and increasing motorization and industrialization in urban areas, and to household air pollution, dust and ash from burning fields in rural areas. Particulate matter (PM) is the air pollutant associated with the largest health effects.15 PM2.5 is fine particulate air pollution that penetrates deep into the human body. Recent evidence suggests that exposure to PM2.5 at even lower concentrations may increase the risk of fatal health conditions (Cohen et al. 2017; World Bank and IHME 2016). The amount of particulate matter (PM10) in Pakistan’s air is among the world’s highest—twice the levels in China and India.16 Other significant air pollutants with notable health and environmental hazards in Pakistan are ozone (O3), nitrous oxide (NOX), sulfur dioxide (SO2), carbon monoxide (CO), carbon dioxide (CO2), and volatile organic carbons (VOCs). The two pollutants 13 http://www.worldbank.org/content/dam/infographics/780xany/2016/sep/WB_cost-of-pollution-infographic-ENGLISH_for_web.jpg 14 WHO. http://www.who.int/mediacentre/factsheets/fs313/en/ 15 PM2.5 and PM10 are particulates with a diameter equal to or smaller than 2.5 and 10 µm, respectively. In 2005, the WHO reduced its guideline value for annual average ambient concentrations to 10 µg/m3 for PM2.5 and 20 µg/m3 for PM10. 16 Sánchez-Triana et al. (2014b). A Country Environmental Analysis 20 Opportunities for a Clean and Green Pakistan with the most severe economic and health damages are PM2.5 (a subset of PM10) and ozone (Sánchez-Triana et al. 2014b). Unfortunately, Pakistan does not systematically monitor PM2.5. The deteriorating air quality is further threatened by toxic smog that engulfs major parts of Punjab province, reducing visibility on roads and creating health-related issues. This smog affects cities in Punjab’s south and central districts, and commonly lasts 10–25 days annually between November and February. Photo credit: AKlion/Shutterstock.com 48. Pakistan has a vast and heterogeneous mix of air pollution sources, including mobile ones such as heavy-duty vehicles and motorized two- and three-wheelers. Stationary sources include point sources, such as thermoelectric power plants and industrial units, and non-point sources, such as the burning of agricultural residues and municipal waste, and natural dust clouds due to dry weather conditions. At the sector level, Pakistan’s transport and energy sectors contribute more than two-thirds of particulate matter. The road-transport sector is responsible for 85 percent of PM2.5 emissions and 72 percent of PM10 emissions. The poor quality of fuel contributes to air pollution—for example, the high sulfur content in petroleum (0.5–1 percent) and furnace oils (1–3.5 percent) is responsible for high SO2 emissions in the air. The high sulfur content prevents installation of Diesel Particulate Filters (DPFs), which are devices many countries use to control emissions from diesel vehicles, to keep sulfur content in the 0.05–0.5 percent range.17 49. Air pollution and climate change are intertwined and managing air quality thus also contributes significantly to climate change mitigation. As shown in the United Nations Environment Programme (UNEP) and World Meteorological Foundation 2011 Assessment, short-lived climate pollutants—particularly black carbon, methane, tropospheric ozone, and high global warming potential hydrofluorocarbons—are responsible for a significant fraction of near-term climate change. Exposure to ozone is associated with health impacts, particularly impacts on chronic lung diseases and on the ecosystem. Pakistan’s ozone concentrations have increased steadily since 1990. The road-transport sector is largely responsible for Pakistan’s air pollution and greenhouse gases (GHGs);18 consequently, air quality management (AQM) also contributes significantly to mitigation efforts. While Pakistan’s GHG emissions are significantly lower than those in developed countries, Pakistan produces more GHG emissions per unit of GDP than other countries in the region, with the exception of India (Figure 2. CO2 emissions (kg per 2010 US$ of GDP), 1990 to 2014). 17 http://environment.gov.pk/PRO_PDF/PositionPaper/Air percent20Pollution.pdf 18 Road traffic is the main source of PM2.5 in Pakistan, and road traffic contributes 23 percent of all CO2 emissions (Sánchez-Triana et al. 2014a). 21 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan Figure 2. CO2 emissions (kg per 2010 US$ of GDP), 1990 to 2014 1.5 1.0 0.5 0.0 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 Pakistan India Sri Lnaka Bangladesh Nepal Source: World Bank World Development Indicators. 50. A better management of Pakistan’s forestry sector and expansion of trees and green areas in cities will improve air quality and climate mitigation as well as the national economy. Trees and forests provide ecosystem services that have positive effects on air quality, as they remove air pollutants, sequester carbon, and alter micro-climates and consequently can help improve human health (Nowak et al. 2018). Trees, green spaces and green belts in and around urban areas also play a key role in dispersing air pollution, protecting streets and built up areas from extreme heat and enhancing urban livability. I rural areas they help control dust storms, enhance soil fertility and protect streambeds and water courses from erosion. The latest forest assessment for Pakistan, from 2011, estimates 4.47 million ha of total forest area in the country (5.1 percent of the total land area) (Bukhari, Laeeq, and Ali 2012), but with a much higher percent in KP (33 percent), where mountain forests provide key watershed protection as well as production and climate regulation services. A recent study by the World Bank (World Bank, 2018f) concluded that long-term forest investments are required to harness the huge potential of forest contributions to resilient ecosystems, rural livelihoods, the national economy, and the global environment. In recent years the government has augmented its attention to forests, as demonstrated by the nationally determined contribution (NDC), the Green Pakistan Program, and the Billion Tree Tsunami Afforestation Program. Future support is needed to enhance and scale up these new and important initiatives to strengthen landscape management, reduce poverty and improve livelihoods, and foster private sector development. 51. Pakistan still lacks the main building blocks for AQM. This is a planning process that could be started in parallel to other key institutional and policy measures to improve air quality. The country needs to have a good understanding of pollution levels, sources (derived from the bottom up through emissions inventories and from top down through source apportionment studies), health impacts, and prioritization of sectoral interventions (based on cost-effectiveness or cost- benefit metrics) (Box 1). Box 1. Four phases of air quality management planning 1 2 Emission quantities: Ambient air quality: Priority to well-understood sources of primary Priority to sources that deliver largest emissions in cities improvements in ambient air quality, based on source-apportionment 3 4 Cost-effectiveness: Cost-benefits ratios: Priority to sources that deliver largest ‘Fine-tune’ the ambition levels of policy improvements in population exposure at least interventions by balancing costs against monetized costs health benefits A Country Environmental Analysis 22 Source: Internal World Bank workshop (April 2018). Opportunities for a Clean and Green Pakistan Air pollution and welfare loss 52. Air pollution has high economic consequences for countries, with resulting GDP losses. According to the Organisation for Economic Co-operation and Development (OECD), global air pollution related health costs are projected to increase from US$21 billion in 2015 to US$176 billion by 2060 (OECD 2016). In South Asia alone, deaths resulting in lost labor income for working-age men and women accounted for more than US$66 billion in 2013— equivalent to nearly one percent of the region’s GDP.19 Fine particulate air pollution is associated with increased mortality and morbidity from cardiovascular disease, stroke, chronic obstructive pulmonary disease (COPD), lung cancer (among adults), and lower-respiratory-infection mortality and morbidity (among children under five years of age and adults). Emerging evidence suggests that additional causal associations may exist between PM2.5 pollution and several highly prevalent noncommunicable diseases. These include diabetes, decreased cognitive function, attention deficit or hyperactivity disorder and autism in children, and neurodegenerative disease, including dementia, in adults. PM2.5 pollution may be linked to increased occurrence of premature birth and low birth weight (Stieb et al. 2012). 53. PM pollution levels in Pakistan’s major cities are several times higher than the WHO’s air quality standards. Annual PM2.5 concentrations are high throughout the country, but particularly so in Punjab and Sindh provinces. Major urban centers, where a large share of the population lives, are particularly affected, with annual PM2.5 concentrations estimated by different available data sources at 41–88 µg/m3 in Karachi, 67–143 µg/m3 in Lahore, and 47–111 µg/m3 in Peshawar.20 54. Household air pollution (HAP) from the use of solid fuels for cooking and other purposes is also associated with deleterious health effects. This is because combustion of solid fuels generates fine PM and other pollutants harmful to human health in the same way as ambient air pollution (AAP). Other fuels (for example, LPG, biogas, kerosene) are cleaner and generate substantially less PM. In Pakistan, the share of households using solid fuel for cooking is about 85 percent in rural areas (compared to 13.4 percent in urban areas), and a vast majority of households cook in the house, as opposed to separate buildings or outdoors.21 55. The results of the present COED assessment suggest that air pollution is responsible for about 9 percent of total annual mortality in Pakistan. Estimates of PM2.5 exposure from ambient (AAP) and household (HAP) sources22 were used to estimate the health burden in terms of annual mortality attributed to both types of air pollution sources in urban23 and rural areas24. The final health burden estimate is adjusted for multiple risks that affect the exposed population and is attributed to the same health endpoints (cardiovascular mortality, COPD, lung cancer, and lower respiratory infection). Overall, about 114,000 Pakistanis are estimated to die annually due to air pollution, including 46,000 urban areas and 68,500 in rural areas. The total annual mortality attributed to AAP was estimated at about 38,000 cases in urban Pakistan and about 12,000 cases in rural Pakistan. Total annual mortality attributed to HAP was estimated at about 7,500 cases in urban Pakistan and about 56,000 cases in rural Pakistan. 56. Annual welfare losses from air pollution in Pakistan are sizeable when compared to GDP. Following the COED methodology, the monetary cost of mortality is calculated by multiplying the estimated number of deaths by the ‘value of statistical life’ (VSL)25. The cost of morbidity is calculated at 10 percent of mortality cost. presents the annual costs of air pollution in Pakistan, which is estimated at 2.5–6.5 percent of 2016 GDP. 19 http://www.worldbank.org/content/dam/infographics/780xany/2016/sep/WB_cost-of-pollution-infographic-ENGLISH_for_web.jpg 20 Annex 1, Table 11. Annual PM2.5 concentration in Pakistan’s cities. 21 Annex 1, Table 12. Percentages of Pakistani households using solid fuel. 22 Annex 1, Table 13. Estimates of exposure to PM2.5 air pollution in Pakistan. 23 Annex 1, Table 14. Annual mortality burden attributed to AAP and HAP by age in urban areas. 24 Annex 1, Table 15. Annual mortality burden attributed to ambient air pollution (AAP) and household air pollution (HAP) by age in rural areas. 25 World Bank (2016d): “The value of statistical life (VSL) represents the sum of many individuals’ WTP for marginal reductions in their mortality risks. It is not the value of any single person’s life or death, nor does it represent a society’s judgment as to what that value should be.” 23 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan Table 2. Estimated annual costs of health effects of ambient air pollution in Pakistan, 2016 (US$, billions) Urban Rural Total % GDP in 2016 Ambient air pollution Cost high (US$, billions) 6.10 1.92 8.02 2.9% Cost low (US$, billions) 2.33 0.73 3.06 1.1% Average cost (US$, billions) 4.18 1.32 5.51 2.0% Household air pollution Cost high (US$, billions) 1.19 8.97 10.16 3.6% Cost low (US$, billions) 0.46 3.42 3.88 1.4% Average cost (US$, billions) 0.82 6.19 7.02 2.5% Source: Strukova 2018. World Bank. Unpublished report. 1.3 Water pollution in Pakistan: Another challenge for healthy citizens 1.3.1 Main sources of water pollution 57. Wastewater from Pakistan’s cities mostly remains untreated and is poured directly into nearby water bodies. Surface water supplies are increasingly threatened by wastewater pollution. In 2013, only 50 percent of effluents were being collected and only 10 percent of those collected were treated (Sánchez-Triana et al. 2015). Water pollutants include heavy metals, fecal coliform bacteria, phosphorous, sodium, nitrogen, and sediments, as well as pathogenic bacteria and viruses. For instance, wastewater from Lahore City remains virtually untreated and is deposited into the River Ravi, which is a source of water for downstream communities. Similarly, Karachi City deposits approximately 87 percent of its sewage in the Arabian Sea without any treatment.26 Untreated wastewater is the major cause of polluting groundwater near wastewater conduits, making such groundwater unfit for human consumption. This is a significant concern for communities and cities that depend on groundwater for drinking. According to a 2017 study, groundwater in the Indus plain areas contains five times the arsenic limit in the WHO guidelines, putting 50 to 60 million people at risk (Podgorski et al. 2017). Open defecation (OD) is another source of contamination of surface and groundwater, causing many bacterial diseases, diarrhea, and other health-related issues. 58. Industries are another major source of Pakistan’s surface and groundwater pollution. Industrial sectors especially prominent in Pakistan’s water pollution are textiles, pharmaceuticals, tanneries, cement, electrical equipment, glass and ceramics, pulp and paper board, petroleum refining, fertilizer, and pesticides. Such industries generally have no mechanisms for treating wastewater before disposal either into the municipal sewage network or directly into a nearby drain. 59. Agriculture is also recognized as one of the major sources of water pollution in Pakistan. The effects of agriculture on water quality entail quality impairment by agrochemicals, salts, and toxic leachates. Runoff from agriculture contains nitrogen and phosphorus-based fertilizers, and varying pesticides that seep through the surface and enter the groundwater.27 According to the UN Food and Agriculture Organization (FAO), the chemical nitrate is the most common contaminant of groundwater aquifers globally.28 The presence of agrochemicals, especially pesticides, is a major cause of human poisoning in Pakistan. It is estimated that in 2015 alone, around 500,000 Pakistanis suffered from agrochemical poisoning, out of which around 10,000 died.29 26 Siddiqui, Khalid M. 2014. “State of Urban Water Supply and Sanitation Sector in Sindh.” Paper presentation at Pakistan Urban Forum, Karachi, Jan- uary 10–12. http://puf.urbanunit.gov.pk/Presentations/Marquee%201/Day%202/02Khalid%20Mehmood%20-%20sindh%20Watersanitation%20for%20 DG.pdf Last Visited 1/29/2018. 27 IDFC (Infrastructure Development Finance Company). 2011. India Infrastructure Report. https://www.idfc.com/pdf/report/IIR-2011.pdf Ac- cessed February 6, 2018. 28 FAO (UN Food and Agriculture Organization). 2017. Water Pollution from Agriculture: A Global Review. http://www.fao.org/3/a-i7754e.pdf Accessed on March 18, 2019. 29 Shahid et al. 2016. Pesticides Pollution in Agricultural Soils of Pakistan. In Soil Science: Agricultural and Environmental Perspectives, edited by K. Hakeem, J. Akhtar, and M. Sabir. Springer, Cham. https://doi.org/10.1007/978-3-319-34451-5_9 A Country Environmental Analysis 24 Opportunities for a Clean and Green Pakistan 1.3.2 Water, sanitation, hygiene, and loss of welfare 60. The population of many areas in Pakistan lack an acceptable water supply and even more people have inadequate sanitation. Pakistan is ranked 9 globally on the list of countries with lowest access to clean water, with 21 million out of the total population of 207 million not having access to clean water.30 Prevention technologies and systems exist, but poverty and lack of knowledge constrain the adoption of improvements. Inadequate water supply and sanitation are the main reason for microbiological water pollution that often causes life-threatening diseases. The impacts of water supply on health are intensified where industrial pollutants contaminate water systems, because treatments for controlling infectious agents do not remove many toxic chemicals from drinking water. Lack of regulated municipal waste collection may lead to contamination of drinking water. There are hundreds of industrial and households’ chemicals, pharmaceuticals, and pesticides in water systems. Many of the worst instances of biological and chemical pollution of drinking water are seen in rapidly urbanizing and industrializing areas, where local waterways and groundwater are heavily polluted and serious health conditions are widely reported, but no alternative water sources exist. 61. Pakistan’s water and sanitation sectors improved dramatically in the last several years, but large shares of the population still do not have access to safely managed service. WASH tiers define the relative risk attributed to the health burden from water pollution.31 Improved WASH reduces the transfer of harmful pathogens through water and sanitation facilities and thus reduces negative effects on human health. The health burden from inadequate WASH is reduced by hygiene using a basic handwashing facility that has soap and water. About 43 percent of Pakistan’s rural population and 83 percent of its urban population practice handwashing with soap and water ( JMP 2015). Figure 3 and Figure 4 present population distributions for different WASH tiers in Pakistan for drinking water and sanitation.32 Although basic service is expanding rapidly, the total population with unimproved sanitation still grew by 30 percent since 2000 due to demographic growth.33 Figure 3. Drinking water tiers in Pakistan Figure 4. Sanitation tiers in Pakistan 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Rural Urban Rural Urban No service Unimproved Limited service Basic service Safely managed Source: JMP 2015 62. Pakistan’s health burden attributed to inadequate WASH is significant. The principal diseases linked to water pollution are acute and chronic gastrointestinal diseases, most importantly diarrheal diseases, typhoid fever, paratyphoid fever, and lower respiratory infections. The population attributable fraction for diarrheal and typhoid disease is estimated at 42 percent for urban areas and 53 percent for rural areas following the WHO methodology (Pruss-Ustun et al. 2014). Approximately 80 percent of encephalitis and dengue, and 50 percent of the malaria burden is attributed to inadequate WASH (Pruss-Ustun et al. 2014). Using exposure data from Figure 3 and Figure 4 for urban and rural Pakistan, this report 30 The Water Gap - State of the World’s Water. https://washmatters.wateraid.org/publications/the-water-gap-state-of-the-worlds-water 31 Annex 1, Table 16. WASH tiers in Pakistan. Definitions of the WASH tiers in Pakistan are adapted from JMP: https://washdata.org/monitoring/ methods/ estimation-methods. 32 Arsenic in drinking water is not considered here but is estimated in the next section. 33 Annex 1, Figure 9. Sanitation-service development in Pakistan (number of people with the service) 25 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan estimates the annual mortality due to inadequate WASH at between 7,939 and 22,784 cases in urban areas and between 16,746 and 46,888 cases in rural areas.34 Moreover, diarrheal prevalence, while it is difficult to estimate, also imposes significant morbidity on the population in Pakistan35. The annual diarrheal morbidity attributed to WASH in Pakistan is estimated at 34–40 million in urban areas 84–98 million in rural areas.36 63. Measures to reduce environmental damages are justified in a number of areas on cost-benefit grounds, as well as on grounds of benefiting the poor, as shown by studies in different low-income countries with similar WASH problems. For water supply and sanitation, improvements in facilities in rural areas yield benefits in excess of costs under most assumptions. In urban areas, the focus should be on monitoring drinking water and on rehabilitating piped water supply and sewage systems. Hygiene programs have estimated benefits far exceeding costs and should receive the highest priority. The same applies to programs to disinfect drinking water. All interventions to improve WASH also reduce malnutrition. Application of the relative risks of illness and malnutrition rates indicates that about 40–50 percent of mortality of Pakistani children under five is associated with malnutrition. This report calculates that about 3,400 annual urban deaths, and about 9,850 annual rural deaths, of children under five are associated with underweight linked to unsafe WASH in Pakistan.37 Since diarrhea is accounted for earlier, this report includes only additional deaths from lower respiratory infection, measles, and protein-energy malnutrition for children under five in this estimate. These deaths should be added to the annual diarrheal mortality attributed to WASH presented in Table 17 to get an annual estimate of health burden from inadequate WASH in Pakistan. Table 20 presents the total estimated annual burden of inadequate WASH in urban and rural Pakistan. 64. On average, the annual cost of inadequate WASH in Pakistan is estimated at US$7.5 billion. This includes US$2.4 billion in urban areas (0.9 percent of GDP in 2016), and US$5.1 billion in rural areas (1.8 percent of GDP in 2016).38 To value the health burden of inadequate WASH, the same method is applied as for air pollution (VSL for annual mortality valuation). To estimate the cost of illness (COI) for diarrhea, the report adds cost of medical treatment and value of income and time lost to illness. Table 3. Estimated annual cost of inadequate WASH in Pakistan (US$, billions) presents the estimated annual cost of inadequate WASH in Pakistan. 65. In addition to the WASH issues presented above, other analytical activities by the World Bank (2018, 2019) highlighted the significant economic cost from the lack of proper water management in Pakistan. The total economic loss in Pakistan due to inefficient water resources management and from poor water and sanitation, floods, and droughts are 34 Annex 1, Table 17. Annual mortality attributed to inadequate WASH. 35 It is practically impossible to identify all cases of diarrheal morbidity, because a substantial share of cases is not treated or does not require treatment at health facilities and is therefore never recorded—and cases treated by private doctors or clinics are often not reported to public health authorities. There- fore, household surveys provide the most reliable indicator of total cases of diarrheal illness. However, most household surveys contain information only on children’s diarrheal illness. Moreover, the surveys reflect diarrheal prevalence only at the time of the survey. Since there is often high seasonal variation in diarrheal prevalence, extrapolation to an annual average will result in either an overestimate or an underestimate of total annual cases. Correcting this bias is difficult without knowledge of seasonal variations. The Demographic and Health Survey 2012–2013 (DHS 2012–2013) reports a diarrheal prevalence (preceding two weeks) rate of 21.9–22.7 percent for children under five years of age in urban and rural Pakistan. This rate is used to estimate annual cases per child under five, and then total annual cases in all children under five. DHS 2012–2013 does not (nor does any other household survey in Pakistan) provide information on diarrheal illness in the population over five years of age. Since Pakistan has no readily available data on the annual number of diarrheal hospi- talizations, international data on the total number of intestinal disease hospitalizations—corresponding to about 0.3 percent of diarrheal cases—were used in the estimates below. Table 18. Baseline data for estimating morbidity cost in Annex 1 presents baseline data for estimating the health burden associated with inadequate drinking water supply and sanitation. The duration of diarrheal illness is assumed to be 3–4 days. 36 Annex 1, Table 19. Estimated annual diarrheal morbidity burden attributed to WASH in Pakistan. The final estimates of health burden are adjusted for multiple risks, because the same diseases are associated with different environmental risk factors. 37 Annex 1, Table 20. Estimated annual burden of inadequate WASH in Pakistan. 38 The World Bank has recently published a diagnostic report on the state of water supply, sanitation, and poverty in Pakistan and its impact on child stunting. The main focus of the report is to examine the relationship between poverty, access to water and sanitation, and the nutritional status of children— specifically, child stunting. The study reports that the lack of safe water and sanitation is costing Pakistan greatly, and the economic burden of poor sanita- tion in Pakistan is Rs. 1.25 trillion (around US$8.9 billion) which is about Rs. 6,305 (US$45) per capita. These estimated costs are reported from a recent IMF study (Khalid 2018). The study also argues that the budget for the sector needs to be increased. Providing ‘safely managed’ water and sanitation to the entire population would require spending at least Rs. 393 billion (US$2.8 billion) a year (1.4 percent of GDP) until 2030—an injection of Rs. 4.7 trillion (US$33.6 billion). In addition, the World Bank (2018) study argues that the policy focus on the elimination of OD in the absence of any significant invest- ment in the safe management of fecal waste, has been largely responsible for the lack of decline in the rates of diarrhea and stunting. The elimination of OD was translated into policy as the need to rapidly expand access to latrines, with little or no attention to fecal waste management or latrine quality, resulting in an unprecedented concentration of untreated fecal waste near human settlements. This is shockingly evident in the level of bacterial (E. coli) contamination observed in surface and ground water. Studies also suggest, high levels of bacterial contamination of the soil, multiplying the channels through which the oral transmission of fecal bacteria can occur—food, flies, fingers, fields, and fluids. The use of untreated waste water for crop irrigation, creates further down- stream effects. A Country Environmental Analysis 26 Opportunities for a Clean and Green Pakistan conservatively estimated to be 4 percent of GDP, or around US$12 billion per year (Box 2). Moreover, another recent study by the World Bank (Box 3) reported that water pollution in Pakistan puts pressure and threatens the development of the fisheries sector, which is very important to food security and job opportunities in the country. Table 3. Estimated annual cost of inadequate WASH in Pakistan (US$, billions) Urban Rural High Low High Low Mortality 3.3 0.4 6.7 0.9 Morbidity 0.2 0.2 0.3 0.3 Malnutrition 0.5 0.2 1.4 0.5 Total 4.0 0.8 8.5 1.7 % of GDP in 2016 1.4% 0.3% 3.0% 0.6% Source: Strukova 2018. World Bank. Unpublished report. Box 2. Pakistan : Getting More from Water The World Bank has recently published a water security diagnostic study for Pakistan (Young et al., 2019). The study lists the major challenges that are compromising water resources management in the country as (i) poor water data, information, and analysis; (ii) weak processes for water resources planning and allocation; (iii) environmentally unsustainable levels of water withdrawal; (iv) widespread pollution; and (v) low water productivity in agriculture with excessive use of fertilizers, poor irrigation and drainage practices contributing to water pollution and soil salinity, Without major reforms, Pakistan would see only minor improvements in water productivity. . Urban water security would likely decline, and environmental degradation of both groundwater and surface water would worsen. A lack of resilience, especially to increasing drought severity, could lead to increased conflict over water between provinces and sectors. The economic costs to Pakistan from poor water and sanitation, floods, and droughts are conservatively estimated to be 4 percent of GDP, or around US$12 billion per year. These costs are dominated by the costs of poor water supply and sanitation. Moreover, the economic costs of degradation of the Indus Delta are estimated to be around US$2 billion per year. Box 3. The nexus between water and fisheries A water scarce scenario along with the pressure from pollution is damaging the potential and sustainability of the fisheries sector. Fisheries employ 390,000 people directly, and when secondary jobs such as processing, transporting, and retailing are considered, the number rises to 900,000–1,800,000 jobs. Pakistan’s marine and inland fisheries and aquaculture sub-sectors have an opportunity to become a much stronger engine of economic growth and social devel­opment, in part because global demand for protein-rich fisheries products However, marine and coastal ecosystems, inland waterways and the Indus Delta face serious threats from industrial and domestic pollution and from agricultural run-off. For example, Karachi produces almost 500 million gallons of wastewater per day, which is discharged into coastal waters. As much as 87 percent of hazardous waste from industries flows into the Arabian Sea untreated. Karachi generates a further 12,000 tons of municipal solid waste daily, much of which also ends up in coastal waters. 1.3.3 Arsenic in drinking water, another major concern 66. A considerable number of Pakistan’s wells are contaminated with arsenic. Recently, arsenic levels were measured 27 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan in groundwater samples collected from about 1,200 wells throughout Pakistan at depths of 3 to 70 meters. Nearly two- thirds exceeded the WHO-recommended threshold of 10 µg/L, and extremely high concentrations—above 200 µg/L— were found in the Indus River Valley. Podgorski et al. (2017) estimated the number of people relying on groundwater for drinking and concluded that 50–60 million Pakistanis might use water containing more than 50 µg/L of arsenic. Chronic exposure to arsenic can cause cancers, increase mortality from heart disease, and infectious diseases. Arsenic also impairs intellectual function, especially in children (Flanagan, Johnston, and Zheng 2012). A World Bank study (2016a) estimated that medium levels of arsenic concentration (10–50 µg/L) reduce the chances of attaining overall child development by about 4 percentage points, while high concentrations of arsenic (above 50 µg/L) tend to reduce this by about 12 percentage points. About 119 million people in Pakistan might live in areas with elevated levels (above WHO guidelines) of arsenic in drinking water, including about 32 million with arsenic-concentration exposures of 50–149 µg/L, 11 million with 150–299 µg/L, and about 7 million with more than 300 µg/L.39 67. In Pakistan, about 31,000 annual mortality cases from cancer, cardiovascular or infectious disease could be attributed to arsenic contamination.40 This is estimated using arsenic-related relative risks for nonaccidental disease from Flanagan, Johnston, and Zheng (2012),41 although the uncertainty of such estimate is quite high. To be on the conservative side, the present report accounts only for deaths from cancer, cardiovascular, and infectious disease. To value the health burden of exposure to arsenic in drinking water, the same method is applied as for air pollution (VSL for annual mortality valuation). The cost is estimated at about US$3.1 billion (US$1.7–4.5 billion), which is equivalent to 1.1 percent of GDP in 2016. 1.4 Toxic waste, soil contamination and occupational safety in industry 1.4.1 Lead exposure 68. Unregulated waste disposal and industrial pollution are associated with a significant amount of toxic discharges. Generally, there is a lack of comprehensive assessments that look at the collective health effects from exposure to most forms of soil, heavy metal, and chemical pollution. However, Lead is an exception as it has been studied extensively. This report estimates the annual cost of exposure to Lead in children under five, and the cost of occupational risks in Pakistan. In reviewing data on the burden of disease attributable to soil pollution caused by toxic chemicals and heavy metals, this report relied on information from the Blacksmith Institute/Pure Earth toxic sites identification program (TSIP), which obtains data through studies that use a protocol adapted from a U.S. Environmental Protection Agency assessment tool. The TSIP database estimates that about 575,000 Pakistanis are exposed to Lead. Table 4. Lead hotspots in Pakistan presents major known Lead hotspots. Table 4. Lead hotspots in Pakistan Key Site name Province Industry Pollutant Begum Kot Lahore Punjab Dye Industry Lead Begum Kot Lahore Punjab Dye Industry Lead Ravi Town Lahore Punjab Industrial/Municipal Dump Site Lead Maloo Road,Sooa Mission Kaalar, Sheikhupura Blank Lead Ganda nullah Aalia Town, Lahore Punjab Fertilizer Manufacturing Lead Industrial Estate (mixed Malir River Karachi Sindh Lead industries) Industrial Estate (mixed SITE Town Karachi Sind Lead industries) Khanewal Site:Moosa Wirk, Mian Channu Punjab Paper Mill Lead 39 Annex 1, Table 21. Estimated distribution of population in Pakistan by arsenic concentration in drinking water. 40 Annex 1, Table 23. Estimated annual number of deaths associated with arsenic contamination. 41 Annex 1, Table 22. Relative risk associated with exposure to arsenic in drinking water by cause of death. A Country Environmental Analysis 28 Opportunities for a Clean and Green Pakistan Multan Site 2: Pir Shah Wala, Basti Darkhaana, Near Industrial Estate (mixed Punjab Lead Sher Shah. industries) Faisalabad Site 4: Main Khuryanwala. Punjab Dye Industry Lead Kot Lakhpat, Lahore Punjab Multiple Diverse Industries Lead Banda Ali Khan stream, near Ayub Medical Northwest Medical (hospitals, clinics) Lead Complex, Abbotabad. Frontier Hyderabad site 1: Haji Darya Khan Panwar, Sindh Industrial Estate (mixed Sindh Lead province industries) Hyderabad site 2: Wakeel, Near Haji Daryan Khan Sindh Lead-Battery Recycling Lead Panwar, Sindh province Karachi site 2, Mehran town, Sharif abad, Near Oil Industrial Estate (mixed Sindh Lead Refinery, Chamra Chorangi. industries) Karachi site3 Korangi Creek, Beside IBM college Sindh Industrial/Municipal Dump Site Lead Banda Ali Khan stream, near Ayub Medical Northwest Medical (hospitals, clinics) Lead Complex, Abbotabad Frontier Source: TSIP database. 69. Young children are the group most vulnerable to Lead (Pb) exposure, and many are affected by high Blood Lead Levels (BLLs) in Pakistan. This report estimated the Lead-exposure impact on children residing around industrial sites where Lead is the principal pollutant. Children are at greatest risk of exposure, because they play close to the ground and because of their common oral exploratory behavior.42 A well-established effect of Lead exposure is neuropsychological impairment in children, measured as IQ losses.43 The effect occurs even at very low BLLs (Lanphear et al. 2005; Schwartz 1994). International research literature has identified no BLL threshold below which there is no impact on children’s IQ. Gilbert and Weiss (2006) argue for a BLL action level of 2 µg/dL. For the purpose of this study, the concurrent BLL lower threshold value of 1.5 µg/dL is applied in these calculations, because it corresponds to a lifetime BLL lower threshold value of 2.0 µg/dL. Based on recent studies estimating BLL in children in Pakistan’s industrial and rural areas (Khan et al. 2011) and in seven South Asian countries (Caravanos et al. 2013)44, mean BLL of the children in those two studies is estimated at 11.5 µg/dL (Table 24). 70. Total loss of IQ points in Pakistan’s polluted hotspots are estimated at about 46,000–105,000 or 3.0–7.0 IQ points per child in a 1-year-old cohort. This range was obtained applying Schwartz’s approach (1994) to yield the lower end of the range, and Lanphear et al.’s (2005) to yield the higher end of the range. The cost of IQ losses is estimated based on the present value of reduction in lifetime income (1.4–1.9 percent) in Pakistan’s manufacturing sector, corrected for labor force participation (83 percent45) and survival rate (76 percent). The cost of Lead exposure for the 15,000 children exposed to Lead in the TSIP hotspots amounts to US$11–60 million annually, or about US$2,300 lifetime cost per child exposed to Lead—about 6 percent of the child’s lifetime income. 1.4.2 Occupational safety 71. Workers often face various hazards from chemicals, biological agents, physical factors, adverse ergonomic conditions, allergens, a complex network of safety risks, and various psychosocial factors (WHO 2004). In addition to injuries, more than 100 occupational diseases are listed in the tenth revision of the International Classification of Diseases and Related Health Problems (ICD-10). These include respiratory, musculoskeletal, cardiovascular, reproductive, neurotoxic, dermatological, psychological, hearing loss, and cancers. 42 Current sources of Lead exposure include industry and workshops, dust and soil, food and fish, drinking water, housing materials, paint, cosmetics, utensils, and children’s toys. Human exposure to contaminated soil at toxic sites can result from ingestion, inhalation, or dermal absorption. Ingestion is the most common pathway. 43 Intelligence quotient (IQ) is a score on standardized tests designed to assess intelligence. 44 Annex 1, Table 24. Recent studies on BLL in Pakistan. 45 World Development Indicators. 2018. World Bank. URL: https://data.worldbank.org/country/pakistan 29 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan 72. The annual cost of health burden attributed to occupational risks in Pakistan is estimated at US$1.4–2.4 billion for annual cases of mortality estimated, equivalent to 0.8 percent GDP in 2016.46 Annual estimates developed by IHME for GBD 2016 were used to estimate the annual mortality due to diseases attributed to unsafe working environments in Pakistan.47 The annual health burden (mortality) attributed to occupational health risks for Pakistan’s population over 15 years of age is estimated at about 19,000 persons annually (midpoint of range), after adjustments for multiple risks. 48 Among these cases, 40 percent are caused by chronic respiratory diseases. 1.5 Overall cost of environmental degradation 73. This CEA estimates the average total cost of environmental degradation in 2016 at US$25.1 billion (8.96 percent GDP equivalent) for air pollution, water pollution, inadequate WASH, soil contamination, and occupational safety. Table 5. Summary of the estimated costs of environmental degradation for air, water, toxic waste contamination, and occupational safety (US$, billion). shows that the total cost in 2016 ranges from US$12.55 billion to US$37.64 billion with 4.5 and 13.42 percent GDP equivalent, respectively. Table 5. Summary of the estimated costs of environmental degradation for air, water, toxic waste contamination, and occupational safety (US$, billion). High Low Average   % % GDP GDP % GDP   Urban Rural Total Urban Rural Total Total in 2016 in in 2016 2016 PM2.5 air pollution Ambient 6.1 1.92 8.02 2.9 2.33 0.73 3.06 1.1 5.54 2 Household 1.19 8.97 10.16 3.6 0.46 3.42 3.88 1.4 7.02 2.5 Inadequate WASH Impacts 4 8.5 12.5 4.4 0.8 1.7 2.5 0.9 7.5 2.65 Arsenic in drinking water Impacts 4.5 1.6   1.7 0.6 3.1 1.1 Toxic waste and soil contamination Impacts 0.06 0.02   0.011 0.004 0.0355 0.012 Occupational safety Impacts 2.4 0.9   1.4 0.5 1.9 0.7 Total 37.64 13.42 12.551 4.504 25.10 8.962 Source: Strukova 2018. 74. The total cost for AAP, HAP, and WASH in 2016 was US$20 billion (7.2 percent GDP equivalent) compared to US$11 billion (11.3 percent GDP equivalent) in 2004 (Table 6. Comparison of 2004 reassessment and 2016 COED studies in Pakistan). The World Bank study (2006) has assessed the health effects and costs of AAP, HAP, and WASH in Pakistan using data from 2004 with a different methodology than the one used in this study. To compare the 2004 COED to the one from this study, the 2004 COED has been reassessed using the same methodology explained in the earlier sections. As a result, the 2004 reassessment results could be compared with the annual environmental health cost in Pakistan in 2016 as estimated in this study. Table 7 presents a comparison of the data and the assumptions that were used in the calculations 46 Estimated using the same methodology as for air pollution. 47 GBD 2016 used the established relative risk indicators to link exposure to unsafe work-environment conditions, on the one hand, to specific health endpoints, on the other hand. GBD 2016 analyzed health impact attributed to exposure to asbestos, arsenic, benzene, beryllium, cadmium, chromium, diesel engine exhaust, formaldehyde, nickel, polycyclic aromatic hydrocarbons, silica, sulfuric acid, trichloroethylene, asthmagens, PM, and occupational noise. 48 Annex 1, Table 25. Annual health burden (mortality) attributed to occupational safety risks in Pakistan. A Country Environmental Analysis 30 Opportunities for a Clean and Green Pakistan of the 2004 COED, reassessment of 2004 and 2016. The main reasons for the significant difference are summarized in the Table 8. Table 6. Comparison of 2004 reassessment and 2016 COED studies in Pakistan 2004 2016 2004 2016 2004 2016 2004 2016 Mortality rate per Mortality, thousand 100,000 Cost, US$, billion Cost, % GDP AAP 49.7 50 33 24 2.1 5.5 2.1 2.0 HAP 80 63.9 54 31 3.7 7 3.9 2.5 WASH 105.7 61.5 71 30 5.2 7.5 5.3 2.7 Total 235.4 175.4 158 85 11 20 11.3 7.2 Source: Estimated by the World Bank team 75. Although there has been a decline in the level of some pollutants in Pakistan over recent years, because of revised methodologies for estimating the cost of the health burden of disease, the health costs to GDP have remained broadly similar. The population of Pakistan increased by about 40 percent from 2004 to 2016, while ambient PM2.5 declined by 20 percent in urban areas. As a result, annual deaths from ambient PM2.5 reduced by 9 percent from 2004 to 2016. The reassessment indicates that the mortality from ambient PM in 2004 was over twice the level presented in World Bank (2006), (Table 6. Comparison of 2004 reassessment and 2016 COED studies in Pakistan). This is explained by the nationwide coverage of the reassessment and application of the revised methodology for health burden assessment. Although annual health burden remained approximately the same, the cost of AAP increased more than two times, that is, US$5.5 billion vs. US$2.1 billion, because the Value of Statistical life (VSL) in Pakistan increased and mortality in children is valued using VSL approach in the current study. 76. The population of Pakistan exposed to HAP increased by about 24 percent from 2004 to 2016, however, annual deaths from ambient PM2.5 reduced by 20 percent from 2004 to 2016. Deaths from ambient PM2.5 per 100,000 population declined by 43 percent as the crude mortality reduced in Pakistan over that period and the share of population that use solid fuel for cooking reduced from 67 percent to 60 percent. The reassessment also indicates that the mortality from HAP in 2004 was more than twice the level estimated in the World Bank report (2006), which is explained by the application of the revised methodology for health burden assessment. Although annual health burden reduced, the cost of HAP increased by about 80 percent, that is, US$7.02 billion vs. US$3.72 billion, and this again, because VSL in Pakistan increased and mortality in children is valued using VSL approach in this study. 77. Similarly, despite progress in improving access to WASH, the cost of inadequate WASH increased over the period. The number of people exposed to unsafe WASH (without improved sanitation) in rural areas reduced by 19 percent for the period 2004–2016, and the annual deaths were reduced by 42 percent for the same period. Deaths from unsafe WASH per 100,000 population declined, by 58 percent, as the diarrheal and typhoid/paratyphoid mortality rate reduced in Pakistan over that period and the share of rural population without improved sanitation reduced from 72.5 percent to 43 percent. The reassessment indicates that there were nearly 1.4 times more deaths from unsafe WASH in Pakistan in 2004 than presented in World Bank (2006). Although annual health burden reduced, the cost of unsafe WASH increased by about 44 percent, that is, US$7.5 billion vs. US$5.2 billion. 31 A Country Environmental Analysis Table 7. Comparison of the data and the assumptions that were used in the calculations of the COED for 2004, reassessment of 2004 and 2016 World Bank World Bank World Bank Report (2006) (this report) (this report) 2004 (reassessment Year of assessment 2004 2016 with the GBD 2016 methodology) Ambient Air Pollution (AAP) Cities with Location coverage population above Nationwide Nationwide 100,000 Cost of AAP (% equivalent of GDP) 1.10% 2.00% 2.10% Exposed population, million 32 208 149 Urban: 77 Urban: 95 Annual ambient PM2.5, µg/m3 95 Rural: 28 Rural: 28 Annual deaths from PM 21,800 50,000 49,700 Methodology for estimating annual Ostro, 2004 GBD 2016 GBD 2016 deaths from PM Household Air Pollution (HAP) Location coverage Nationwide Nationwide Nationwide Cost of HAP. (% equivalent of GDP) 1.10% 2.50% 3.90% Exposed population, million 98 122 98 Annual deaths from HAP 35,900 63,900 80,000 Methodology for estimating annual Desai, Mehta, and GBD 2016 GBD 2016 deaths from HAP. Smith (2004) WASH Location coverage Nationwide Nationwide Nationwide Cost of unsafe WASH (% equivalent 1.80% 2.70% 5.30% of GDP) Exposed population, million 149 207.8 149 Annual deaths from unsafe WASH 73,000 61,500 105,700 Methodology for estimating annual Fewtrell and Pruss-Ustun et al. Pruss-Ustun et al. (2014) deaths from unsafe WASH Colford (2004) (2014) Source: Estimated by the World Bank team Opportunities for a Clean and Green Pakistan Table 8. Summary of the main reasons for the differences in the estimations of COED for AAP, HAP, and WASH Ambient Air Pollution (AAP) 1. Location coverage and exposed population: The current study for 2016 is a nationwide assessment of health effects of AAP. The cost of health effects is therefore several times higher than in the 2004 study which only covers cities with population above 100,000 (World Bank 2006). 2. Ambient PM concentrations: The reassessment study by World Bank (this report) applied the PM concentrations for the urban areas similar to those applied in the 2004 assessment. In the rural areas PM2.5 concentrations similar to those estimated for 2016 assessment were applied. 3. Methodology for estimating health effects: The rate of annual deaths from ambient PM per 100,000 in 2004 as- sessment (World Bank 2006) is about twice as high in World Bank reassessment for 2004. The main reason for the difference is the assumption in World Bank (2006) that health effects increase linearly or proportionately with increases in ambient PM. Recent research suggests, however, that the marginal increase in mortality from PM de- clines with increasing concentrations of PM2.5 (Pope et al. 2009–2011). This exposure-response relationship is featured in the GBD health risk assessment methodology used in the current study for 2016. The estimates are ad- justed for the multiple negative health effects, when the same person is exposed to AAP and HAP simultaneously. Similar approach is used for the 2004 reassessment. 4. Methodology for valuing health effects: In the World Bank (2006) cost of mortality is based on the foregone out- put approach for children and VSL for adults. As recommended in the World Bank review study by Narain and Sall (2016), only VSL approach is applied to monetize mortality attributed to AAP in the current study and in the 2004 reassessment. Household Air Pollution (HAP) 1. The exposed population: The current study for 2016 assumes that 60% of population use solid fuel for cooking. It was 67% in 2004, applied in World Bank (2006). 2. Methodology for estimating health effects: Only mortality from acute respiratory illness and COPD in women and children was attributed to HAP mortality in Desai, Mehta, and Smith (2004). The current study and reassessment for 2004 utilizes the same GBD 2016 methodology to estimate mortality attributed to HAP that includes also mortality from ischemic heart disease, stroke and lung cancer in all population. The estimates are adjusted for the multiple negative health effects, when the same person is exposed to AAP and HAP simultaneously. 3. Methodology for valuing health effects: In the World Bank (2006) cost of mortality is based on the foregone output approach for children and VSL for adult women. As recommended in the World Bank review study by Narain and Sall (2016), only VSL approach is applied to monetize mortality attributed to HAP in the current study and in the 2004 reassessment. WASH 1. The exposed population: The current study for 2016 assumes that 57% of population in rural areas has improved sanitation ( JMP, 2015). It was 27.5% in 2004 ( JMP, 2015). 2. Methodology for estimating health effects: As Fewtrell and Colford (2004) recommended, 90% of all diarrheal and typhoid/paratyphoid disease and mortality in children under 5 years of age was attributed to unsafe WASH in the World Bank (2006). In this current study the population attributable fraction was estimated using Pruss-Ustun et al (2014). It is 40% of diarrheal and typhoid/paratyphoid disease in urban areas and 60% in 2004 and 50% in 2016 in rural areas for all population groups. Also, health burden from other diseases attributable to unsafe WASH, like malaria, measles, encephalitis, etc. is included in this current study. The most impact is from accounting of 50% of the children under 5 years of age mortality caused by malnourishment in Pakistan. The estimates are adjusted for the multiple negative health effects, when the same person is exposed to air pollutiaon and unsafe WASH simulta- neously. 3. Methodology for valuing health effects: In the World Bank (2006) cost of mortality is based on the foregone out- put approach for children. As recommended in the World Bank review study by Narain and Sall (2016), only VSL approach is applied to monetize mortality attributed to unsafe WASH in the current study and in the 2004 reas- sessment. Note: The functional form in Ostro (2004) used in World Bank (2006) also exhibits a marginal increase in mortality from PM, but it is declining. 33 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan 2. Policy and institutional framework for environmental management, pollution control, and cleaner production 2 Policy and institutional framework for environmental management, pollution control, and cleaner production Photo credit: Dilshad3/pixabay.com A Country Environmental Analysis 34 Key messages Opportunities for a Clean and Green Pakistan • The institutions, policies, and regulations that govern environmental management in Pakistan have evolved significantly over the last decades, mainly as a response to the growing environmental challenges analyzed in the previous chapter. By far the most momentous evolution came with the 18th Constitutional Amendment of 2010, which enhanced provincial autonomy and reshaped federal– provincial relations on environmental matters. • The devolution of environmental policy and management of air, water, and soil quality to the provinces offers opportunities to adapt policy to province-specific challenges and to bring service delivery closer to local populations. At the same time, it has led to major challenges, including persisting issues related to the lack of capacity and resources of provincial authorities, as well as to the lack of coordination framework for environmental challenges spanning several provinces. • Moving toward a cleaner and greener Pakistan will require new policies and strengthened institutions. Reforms will notably be needed to strengthen the capacity of provincial agencies in charge of environmental issues, chiefly the Environment Protection Departments/Agencies (for example, regulations and standards, monitoring, enforcement). Integrated strategies for air, water, and waste management coordinating the action of all relevant government agencies are also highly necessary. Likewise, mechanisms will be needed to ensure adequate balancing of functions and resources across the federal, provincial, and local levels. Finally, measures should be taken to maximize citizen engagement in environmental policy, coordinate with civil society organizations, strengthen the effectiveness of the judiciary for environmental issues, and facilitate green financing and investments from the private sector. 2.1 The importance of institutions to improve environmental management 78. The context of environmental policy in Pakistan has evolved significantly over the last decade. In 2006, the World Bank published the first CEA for Pakistan, which focused on a set of issues in the context of growth and urbanization. This led to a focus on the Environmental Impact Assessment (EIA) system, the principal instrument for managing the environmental risks of new investments, and a focus on the management of air and water quality. As discussed in more detail in the next section, the 18th Constitutional Amendment passed by the National Assembly on April 8, 2010, dramatically changed the institutional and governance context analyzed by the 2006 CEA. In parallel, environmental challenges have become aggravated because of megatrends, such as population growth, urbanization, and climate change. 79. The policy, regulatory, and institutional framework governing environmental management in Pakistan suffers from limitation that, without significant capacity building, strengthened accountability and improved coordination, environmental challenges will grow. The 18th Amendment enhanced provincial autonomy and reshaped federal–provincial relations. In parallel, a new resource redistribution formula under the 7th National Finance Commission (NFC) Award of 2010 shifted greater funding to the provinces. The provinces’ taxing powers were expanded, including a sales tax on services, and internal and external borrowing by provinces was permitted. Pakistan has developed a set of policies and regulations for environmental management and pollution control at the national and subnational levels, but there is a pressing need for provinces to implement these policies and regulations and to increase the institutional capacity of enforcement agencies and other key players, which is inadequate at present. In particular, new institutions, such as provincial EPAs, need support and restructuring if they are to take a leading role in this decentralized management framework. 80. Several institutional, financial, and capacity issues analyzed in this chapter have undermined the success of past environmental reforms in Pakistan. Environmental planning and monitoring could not be sustained. Resources and capacity limitations mean that existing environmental organizations are unable to fully deliver their mandates, such as managing air pollution against existing or new standards. Issues related to accountability and transparency in the different levels involved with environmental management—together with limited citizen engagement, public consultations, and disclosure—have also prevented improvements in enforcement. Complex environmental pollution problems are being managed without considering the scope of airsheds and watersheds which often crosses provincial boundaries. Lack of interjurisdictional and intersectoral coordination underpins the failure of past reforms. Finally, elite capture has limited systemic changes in environmental institutions, and limited polluters’ behavioral changes and compliance with regulations. 81. Moving toward a cleaner and greener Pakistan will require new policies and strengthened institutions. It is becoming increasingly urgent for Pakistan to strengthen its regulatory framework and institutional capacity to manage negative environmental externalities associated with rapid industrial and urban growth. This includes significantly 35 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan strengthening environmental monitoring, enforcement, and public-awareness efforts, as well as better embedding environmental considerations across government ministries, particularly at the provincial level. At the same time, the private sector needs to be incentivized to grow cleaner, including by adopting resource-efficient and cleaner production (RECP) technologies and practices, building on successful existing initiatives. In addition, cities need to proactively plan and manage their environmental assets to ensure continued livability. The economic potential of water, forests and fisheries needs to be unlocked by sustainable management of the countries’ main natural assets. 2.2 The evolution of environmental governance in Pakistan and the changes brought by the 18th Amendment 82. Pakistan’s institutional framework for environmental governance has been developed over the last five decades. Major steps in the pre-devolution period have included the following: • In a context of growing global awareness about environmental issues, Pakistan established in 1974 the Environment and Urban Affairs Division (EUAD) within the Ministry of Housing and Works. EUAD had the responsibility for formulating a national environmental policy and administering national EIA procedures. • The 1983 Pakistan Environmental Protection Ordinance (PEPO) was Pakistan’s first major consolidated environmental legislation. PEPO created a high-level policy-making forum, the Pakistan Environmental Protection Council (PEPC) under the Prime Minister’s chairmanship, which met infrequently. This law also created a federal-level EPA, Pakistan Environmental Protection Agency (Pak-EPA), and four provincial-level EPAs, which remained practically inoperative for more than a decade. • In 1993, the government approved National Environmental Quality Standard (NEQS), which were to apply to all new industrial units, requiring them to use more environmentally friendly processes and machinery. Three years later, the PEPC constituted two subcommittees, the Environmental Standards Committee and the Expert Advisory Committee, which have done very useful work for developing guidelines and regulations to implement environmental standards. • In 1997, PEPO 1983 was improved after extensive and prolonged consultation with all stakeholders, and a new law, the Pakistan Environmental Protection Act (PEPA) 1997, was promulgated. The law notably included several provisions to enhance government enforcement powers and empowered all affected citizens to approach the courts regarding any environment-related damage. • Faced with the need for a comprehensive national environmental policy to address continuing environmental degradation, Pakistan’s government prepared its NEP (2005–15). The policy’s supplementary papers, strategies, and plans address a wide range of environmental issues. However, the NEP does not assign responsibility for certain tasks to specific institutions and agencies, but relies on voluntary execution of its recommendations by federal, provincial, and local government agencies, and other environmental stakeholders. 83. In 2010, Pakistan’s EMS moved in a new direction with the 18th Constitutional Amendment. This amendment has exerted a far-reaching impact on environmental protection in Pakistan in general, and on the legislative and regulatory structure and power of the Ministry of Environment and the former federal EPA in particular. In the pre-amendment era, federal and provincial governments shared authority over environmental pollution and ecology, allowing them to frame laws governing natural resources and environmental management. PEPA 1997 operated as a federal law and held the superseding authority to nullify any inconsistency or conflict among the federal and provincial governments regarding the environment. After 2010, most federal attributions regarding environmental management were handed over to the provinces, with provincial environment departments becoming directly responsible for overseeing implementation of international conventions, projects/programs, standard setting and benchmarking, as well as enforcement and implementation. 84. The conferment of such powers to the provinces represents both challenges and opportunities. Challenges include the following: • Governance of environmental activities integral to international conventions, such as climate change and biodiversity, that are now directly a provincial governance subject; • Establishing authorities for cross-boundary issues (for example, air pollution, river pollution), and EIA of cross-provincial A Country Environmental Analysis 36 Opportunities for a Clean and Green Pakistan projects; • Development of a uniform mechanism to define parameters of environmental quality standards and benchmarks for provincial units that was previously defined by a federal framework; • Management and financing of equipment previously installed by the federal government in provinces; and • Defining responsibilities for implementation, enforcement, and monitoring, for which provinces currently lack capacity and resources. On the other hand, the conferment of such power also presents an opportunity to reduce bureaucratic delays as decision making will be at the provincial level. Environmental strategies can be adapted to the different challenges faced at provincial and district level. Not only will there be a greater sense of ownership in the provinces, but environmental laws and regulations scattered across different sectoral arrangements can be consolidated. Ideally, the decentralized system should result in an adequate balancing of functions and resources across the federal, provincial, and local levels. 85. The 18th Amendment devolved the right to legislate and regulate environmental matters exclusively to the provinces. Consequently, PEPA 1997 no longer has the power to override provincial laws and regulations. The authority of PEPA 1997 now extends only to the Islamabad Capital Authority (ICT) and areas that are not part of any province.49 The provinces amended the federal PEPA 1997 and each enacted a province-specific environmental act. Punjab did so in 2012, Balochistan in 2012, Sindh in 2014, and KP in 2014. Punjab also promulgated its first environmental policy in 2015, followed by an environmental action plan (PEP 2015). 86. The provincial EPAs were tasked with administering and implementing the new provincial environmental laws. The federal EPA got a new role after the amendment. Some of the formal mechanism linking PEPA 1997 (at the federal level) to the provincial EPAs were ended. However, other issues related to common interest such as climate change were reinforced at the federal level. As a consequence, post-amendment, PEPA was limited to coordinating the implementation of international treaties and agreements among the provinces and representing the country in the international space (in addition to its authority over the ICT and areas not part of any province). However, for effective implementation of policy instruments, some coordination mechanism between federal and provincial EPAs is necessary. At the district local/level, the district environment officer coordinates with provincial-level officers to implement action plans. The district mayor, district police officer, district education officer, district health officer, and any other member/s nominated by the provincial government constitute the team that implements plans. 87. In June 2011, the Ministry of Environment was abolished, and its functions and staff transferred to a newly created Ministry of Disaster Management (MDM), later renamed Ministry of Climate Change (MoCC). The Pakistan EPA moved to the Capital Administration Division, which limited Pak-EPA’s authority to the capital territory. In 2012, MDM was renamed the MoCC and Pak-EPA and PEPC were transferred back to it. According to the 18th Amendment, the federal government can enact legislation on specific subjects that remain exclusively under federal jurisdiction. At present the MoCC is using opportunities strategically through the all-encompassing and overarching climate change agenda to support areas as pollution, forestry, and disasters risk management. The MoCC is equipped with five wings to deliver on strategic priorities (Administration, Development, Environment, Forestry, and International Cooperation) and directly supervises four agencies: the Global Change Impact Studies Centre (GCISC)50, the National Disaster Management Authority, the Pakistan EPA, and the Zoological Survey Department. The MoCC is allocated funds through Public Sector Development Projects (PSDPs). The MoCC is currently working on a number of projects; it is tasked with overseeing international conventions and treaties and meeting Pakistan’s international obligations at various forums abroad (Planning Commission, Ministry of Planning, Development and Reform 2017). Climate-related policies and frameworks are constituted by the MoCC at the federal level and from there drop down to the provincial and district levels. Pakistan’s government has taken some encouraging measures, including passage of the Pakistan Climate Change Act 2017 and formation of the Climate Change Council. 49 However, PEPA 1997 remained in force in the provinces until it was revised (Pastakia 2012). 50 The GCISC was instituted in 2002 and works as a dedicated research institute for the Government of Pakistan exclusively on climate change and its impact on society. 37 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan 2.3 The main stakeholders in Pakistan’s environmental governance 88. A diverse range of institutions play a role in managing Pakistan’s natural resources and environmental problems. They include international, federal, provincial, local, and private institutions (see Table 9. Institutions involved with the environment in Pakistan). The most influential stakeholders within the government include finance, economic, and development policy institutes at the federal and provincial levels. Their influence of some specific sector and allocation decisions have a huge impact on the environment. Moreover, federal ministries and sector-specific provincial departments have power to influence such decision-making processes, related to for example EIA or setting of environmental standards, among others. Agencies directly responsible for environmental management—federal and provincial EPAs— have started to strengthen their leadership on environmental governance and green growth, as is the case of Punjab or KP provinces. The way departments, corporate bodies, and the private sector align to operate has substantial impact on environment quality and citizens’ well-being. 89. Most public departments focus primarily on initiating new projects and forgo the management of environment. Infrastructure and rural support programs initiated in Pakistan generally lack adequate environmental monitoring systems that EPAs should be supervising. However, the fact that international lenders are supporting the development of some of the key sectors pushes for the adoption of best international practices in the preparation, implementation, and monitoring of environmental management plans (EMPs). 90. The judiciary has played an increasingly decisive role in the enforcement of environmental laws. Section 20 of PEPA authorized the Government of Pakistan to establish environmental tribunals (ETs) which could exercise jurisdiction within specific territorial limits or class of cases. Two provincial ETs have been instituted in Karachi and Lahore. So far, the performance of ETs has been hampered by periods of inactivity, often due to lack of expert staff, legal loopholes, and a lack of mechanisms for collecting imposed sanctions. The Supreme Court of Pakistan has considered cases regarding the degradation of the environment and has concluded that the right to a clean environment was a fundamental one of all citizens of Pakistan. The High Courts in the provinces have also intervened and rendered decisions affecting future environmental management. As an example, the Lahore High Court appointed the Lahore Clean Air Commission to develop and submit a report on feasible and specific solutions and measures for monitoring, controlling, and improving vehicular air pollution in the city of Lahore. 91. Thousands of civil society organizations, nongovernmental organizations (NGOs), and think tanks are active in environmental management at all levels across Pakistan. However, these efforts are scattered and lack coordination mechanisms. There needs to be technical cooperation among institutions at all levels concerned with Pakistan’s environment to build capacity for environmental management. A key goal of such cooperation should be strengthening provincial and local governments’ and private institutions’ capacity for formulating community-based environment-related action plans, and their implementation and evaluation. Photo credit: walisheru/Shutterstock.com A Country Environmental Analysis 38 Opportunities for a Clean and Green Pakistan Table 9. Institutions involved with the environment in Pakistan Federal Level Provincial Level Private Sector, Civil • International Level Society • National Assembly, Standing Commit- • Planning and Develop- • UNEP tee on Environment ment (P&D) Depart- • Environment Com- • South Asia Cooperative ments mittee, Federation • PEPC Environmental Program • Agriculture Depart- of Pakistan’s Cham- • MoCC ments bers of Commerce • Multilateral Environ- • Pak-EPA • Irrigation and Power and Industry mental Agreements Departments • The United Nations • Ministry of Food, Agriculture and Live- • Forestry and Wildlife • Environment cells, industries, and in- Convention on Biologi- stock Departments dustrial estate (IE) cal Diversity • Ministry of Finance • Public Health Engi- associations • Convention on Interna- neering Departments • Ministry of Petroleum and Natural Re- (PHEDs) • International NGOs tional Trade in Endan- sources • Provincial EPAs with environmental gered Species of wild • Ministry of Planning, Development • Local governments agendas flora and fauna and Reforms • City district govern- • National, regional, • United Nations Conven- ments and local NGOs tion to Combat Deserti- • Alternative Energy Development Board • Municipal administra- with environmental fication • Ministry of Science and Technology tions agendas • Karachi Water and Sew- • United Nations Frame- • Pakistan Council for Research in Water • Village organiza- work Convention on erage Board Resources tions with natural Climate Change and • Water and sanitation • Ministry of Water and Power agencies resource manage- Kyoto Protocol • Provincial Forestry and ment agendas • Basel Convention on the • Planning and Development Division Livestock Departments • Electronic and print Control of Trans-bound- Environment Section • Provincial disaster man- media with coverage ary Movement of Haz- • Other federal ministries (for example, agement authorities of environmental ardous Wastes and their Industries and Communications, with and natural resource disposal EIA responsibilities) management issues • Rotterdam Convention • Pakistan Forest Institute on the Prior Informed • Pakistan Agricultural Research Council Consent for Certain Hazardous Chemicals • National Disaster Management Au- and Pesticides in Inter- thority national Trade • GCISC • The Stockholm Con- • Zoological survey of Pakistan, vention on Persistent Organic Pollutants • Pak environmental planning and archi- tectural consultants • The Montreal Protocol on Substances that de- • Council of Common Interests (CCI) plete the ozone layer • National Economic Council • International Finance • NFC Institutions Source: SDPI (2018), Country Environment Analysis, ADB (2008) and Climate Public Expenditure and Institutional Review (CPEIR), UNDP (2015). 2.4 The main challenges for better environmental governance 92. The effects of pollution analyzed in the previous chapter, as well as Pakistan’s high vulnerability to climate change, justify the urgency for the country to strengthen its environmental institutional capacity. In some cases, 39 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan institutional development in the environment sector has remained slow due to poor governance, officials lacking competence, and inefficient policies. While the federal-level EPA faced limitations in capacity and enforcement the post-devolution diversity in institutional structure at the provincial levels makes the formulation of an effective coordinated approach on climate change and pollution more challenging. In particular, the provincial EPAs are under the administrative control of the Environment Department in Punjab and KP, but under the Environment, Sports, and Youth Affairs in Balochistan, and the Environment and Energy Development Board in Sindh (CPEIR 2015). The Environmental Protection Acts of each province and their respective EPAs now function without federal oversight to harmonize management and the diversity of approach could grow with time as amendments are made by each province. This could in turn increase challenges to addressing transboundary issues, such as pollution. 93. Provincial environmental protection departments lack the necessary human resources to meet critical environmental challenges. There are very limited staff trainings and environmental audits of the provincial EPAs to build departments’ capacity (required human resources and technology). There is a need for staff to have relevant knowledge to enhance EPAs’ productivity. Lack of funds, power, and resources is a limitation. Although the provincial EPAs have authority over environment-related projects, the EPAs lack the power and required funds for enforcement activities (PEPA 2018). 94. Pakistan has set of NEQS (Annex 2), but the main challenge is environmental agencies are unable to monitor pollutant discharge, and regulatory actions are only undertaken in response to public complaints. As such, regulatory enforcement is selective and shallow. The provincial authorities, which are charged with the implementation of the existing legal and regulatory framework, have ambitious mandates, but in general, they face obstacles in their work because they have insufficient staff, small budgets, little administrative autonomy, and high staff turnover rates. The agencies have rarely been adequately staffed with experts to monitor and enforce ambient air, water, and soil quality standards, and protect valuable natural resources. As a result, the enforcement of mandatory regulations is lax, and stricter penalties that are sometimes available in the laws are almost never imposed because of, among other reasons, the lack of technical capacity to provide sound evidence of infractions and the fear of political retribution. Furthermore, use of the provincial EPA’s limited resources is not typically based on priority setting supported by sound analytical work, including analysis of cost-effectiveness (World Bank 2015a). 95. In addition to building institutional capacity, strengthening public involvement in environmental management will be important in the future. Few public hearings have traditionally been conducted to evaluate projects’ environmental impacts, and there is limited public involvement in consultative decision making on environmental policies. However, projects benefiting from international financing are pushing the consultation and public disclosure agenda, including the design and implementation of grievance and redress mechanism. Moreover, the Green, Clean Pakistan Campaign launched by the government last year is seeking stronger public involvement in environmental issues. 96. The judiciary branch will also need to be strengthened to provide recourse for resolving environmental conflicts when enforcement fails. The courts notably require mechanisms for monitoring implementation of court orders either through the establishment of judicially appointed oversight committees or through judicially mandated reporting requirements. In addition, while Pakistani courts have established a constitutional right to a clean environment, there are still no citizen suit provisions in the enabling environmental statutes. Existing and future laws should explicitly provide for citizen engagement in protecting the environment. 97. It will also be difficult to substantially strengthen environmental management without considering higher budget allocations for the sector at the federal and provincial levels. The share of the federal budget going to environmental management has declined since the 18th Amendment was passed. While the environment division’s share in the total PSDPs allocated to all federal ministries/divisions and corporations averaged about 1.25 percent in the decade leading up to the passage of the 18th Amendment, in the eight years after the amendment this share only averaged about 0.10 percent (Figure 5).51 Out of the record PSDPs of Rs. 1,001 billion in fiscal year 2017/2018, only Rs. 815 million were allocated for environmental protection and climate change related measures, 94 percent of which was dedicated to ongoing projects and only Rs. 51 million to new ones. The shift of responsibilities for a large share of environmental issues to the 51 Pakistan’s federal government annually produces PSDPs through the Ministry of Planning, Development and Reforms, that presents explicit alloca- tions for each ongoing and new public sector project/program. (See: https://www.pc.gov.pk/web/psdp). A Country Environmental Analysis 40 Opportunities for a Clean and Green Pakistan provinces can partly explain this. However, the very low share of the federal budget going to this sector makes it challenging to address environmental issues that require a coordinated country-wide approach as well as to develop a response to climate change commensurate with the scale of the threat for Pakistan, which has been ranked among the world’s most vulnerable countries. At the same time, provincial budget allocations for environmental management have not been in line with the new attribution of the provinces, and the environment is arguably yet to be made a priority at both the federal and provincial levels. Figure 5. Share of Environment Department in the Federal PSDPs before and after the 18th Amendment 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% 1 3 5 7 9 1 3 5 7 -0 -0 -0 -0 -0 -1 -1 -1 -1 00 02 04 06 08 10 13 14 16 20 20 20 20 20 20 20 20 20 Source: SDPI (2018) 2.4.1 Strengthening the institutional and regulatory framework for air quality management 98. As mentioned in the previous section, air pollution has been recognized as a primary environmental challenge for several decades. In 1992, Pakistan released the National Conservation Strategy (NCS), which had selected the subject of pollution prevention and abatement as a core priority area. That document identified action items, along with the need for either economic or regulatory tools to successfully enforce the action. The main outcome of NCS’s action plan was the formulation of PEPA 1997 and the creation of an environment section in the Planning Commission and in most provinces’ P&D Departments. Otherwise, NCS remained limited to awareness-raising programs on environmental management and protection. No air-quality-related actions was implemented because (a) no cost/benefit analysis was performed to get a complete monetary picture of the program, (b) no specific regulatory or economic tools were identified, (c) no budgetary support for the action plan was provided, and (iv) Pak-EPA’s enforcement capacity was weak.52 99. Several plans and regulations have sought to address air pollution over the years. A milestone in air pollution control was the formulation and release by Pak-EPA of the NEQS in 1993, which were revised in 2009 and 2010 for all new and in-use vehicles, and for ambient air quality.53 The enforcement of the standards has remained limited mainly because of Pak-EPA’s persisting capacity issues. In 1997, Pakistan released its first environmental act—PEPA 1997, which mandated Pak-EPA to implement PEPA’s provisions under the supervision of PEPC. The act further empowered Pak-EPA to levy pollution charges on industries exceeding NEQS; mandated that vehicles have pollution-control devices, use specified fuel, and undergo prescribed maintenance and testing; established ETs and appointed environmental magistrates; and developed the EIA system. Other notable programs and action plans were the National Environment Action Plan in 2001, which introduced unleaded gasoline and diesel fuel with reduced sulfur; the NEP in 2005; the Pakistan Clean Air Program (PCAP) in 2006, whose main objective was controlling air pollution’s health and economic impacts by directly tackling emissions from vehicles, industries, solid-waste burning, and natural dust. PCAP was an ambitious program demanding extensive stakeholder engagement and participation. However, the program design did not offer any formal coordination mechanism and therefore fell short of expectations. 100. The 18th Amendment in 2010 transferred responsibility for AQM to the provinces. In this new governance 52 IUCN. 2000. Mid-term Review of National Conservation Strategy: Environmental Laws. http://www.environmental-mainstreaming.org/nssd/ country/pakistan/pamtr03.htm 53 See Annex 1. 41 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan hierarchy, local government bodies have a crucial role in managing air quality and curbing air pollution through various departments, such as solid-waste management, transport, urban forestry, agriculture, and health. However, this role has not been fully realized because of capacity, financial, and political issues.54 101. As an environmental regulatory agency, Pak-EPA relied mainly on ‘command-and-control’ measures—such as mandatory emissions standards for various pollutants, ambient standards, and technological standards—to maintain and monitor urban air quality. Pak-EPA did not use any market-based instruments (MBIs)—such as an emission-trading program or a carbon tax—except for pollution charges from the industries. Currently, two important AQM programs run by the provincial EPAs are the self-monitoring and reporting (SMART) program55 for industrial emissions and the vehicular emission testing program. Due to SMART’s voluntary nature, industries’ self-reporting has not been encouraging. Recently, Sindh’s EPA made this program mandatory, but its effectiveness remains to be evaluated. The vehicular emission inspection program has been applied only to commercial vehicles, as private vehicles have been exempted so far, which does not realize the full potential of the program. 102. As explained in chapter 1, poor air quality affects not only individuals’ health, but on a much larger scale, also affects economic and natural systems and their productivity, therefore an integral approach is needed. A sound program for AQM needs to engage a large number of stakeholders across different governance levels and sectors. Key stakeholders include provincial and district health departments, agriculture departments, and departments dealing with solid-waste management, industries, transportation, urban forestry, and land-use planning. At the city level, zoning laws and codes are the most effective tool for city master planners to control multiple challenges associated with sprawling urbanization, including high rates of motorization, industrialization, and growing slum areas. Public and private organizations and NGOs dealing with poverty reduction, health, and nutrition programs—with a strong focus on gender aspects—are important components for programs to reduce air pollution, since research studies show that the poor, women, children, and other marginalized groups are the ones most affected by poor air quality. Civil society and citizen action groups have played a very important role in enforcement of PEPA by taking either Pak-EPA or the federal and provincial governments to court. 103. At the provincial and federal levels, the most crucial partners are ministries with their respective agencies and departments dealing with petroleum and energy, transport, climate change and environmental management, water resource development, agriculture, forestry and fisheries, finance, planning, and development. At the sectoral level, the energy and transport sectors are two of the biggest stakeholders in air quality management and monitoring. Pakistan’s energy consumption increased by almost 80 percent from 1994 to 2010. The energy supply comes from indigenous gas (45 percent), oil imports (35 percent), hydropower (12 percent), coal (6 percent), and nuclear (2 percent). The transport sector is one of the country’s biggest users of natural gas. 104. The main challenges to strengthen Pakistan’s framework for AQM are related to the following three categories: (A) the lack of an integrated approach, (B) persisting capacity issues, and (C) governance shortcomings. A. In spite of good efforts, there is still a lack of comprehensive and coordinated policies and regulations 105. PEPA 1997 contains limitations that ultimately compromise EPAs’ power and authority as an apex regulatory agency at both the federation and province levels. These include the following: • PEPA 1997 did not include new avenues for environmental taxes. EPAs can make recommendations to the government regarding ‘taxes duties or other levies’ (section 6(2)(d)(ii), but such recommendations are not binding on the government. This could be an opportunity to strengthen EPA’s power and authority. 54 The Nation. 2016. “SC Orders Transfer of Powers to Local Government.” https://nation.com.pk/21-Apr-2016/sc-orders-transfer-of-powers-to-lo- cal-govts 55 SMART is designed to be used by the industrial units in the country to generate reports of their emissions levels (environmental data) and send the same electronically to Environmental Protection Agencies for compilation and analyses (Khwaja, 2001). A Country Environmental Analysis 42 Opportunities for a Clean and Green Pakistan • The polluter pays principle, which deals with penalties for environmental offenses, is indirectly incorporated in PEPA 1997. However, PEPA 1997 does not provide a systematic procedure to ensure that the polluter pays for the cleanup. • For cross-border or transboundary pollution issues that cross international or provincial jurisdiction boundaries (such as Punjab’s winter smog problem), there is no clear coordination and cooperation mechanism among the affected parties. • The Environmental Protection Council in provinces acts as the apex decision-making body on environmental issues. However, there is no mechanism for systematic oversight or for monitoring the council’s performance and progress. The council has been mostly dormant in provinces, with no active role played so far. • Public consultation56 with relevant stakeholders, local authorities, and representatives of communities and organizations directly affected by projects is required (guidelines for public consultation). Aspects of the public consultation are better in projects financed by banks, and multilateral and bilateral organizations. Although the timings and techniques of consultations are clearly stated in the provincial guidelines, generally public consultation is carried out at two stages, that is, during the socioeconomic and inventory surveys at the baseline data collection stage of the EIA and during public hearing during the processing of EIA reports. The objectives of consultation are not met because in most cases these are conducted under pressure from the government sectors involved. 106. Moreover, Pakistan’s AQM program suffers from incoherent, conflicting, and/or uncoordinated sectoral policies. Air pollution is a cross-cutting problem demanding a coordinated approach, integrated policy frameworks, and integrated action plans from policy makers and decision makers across different sectors and governance levels—both horizontally and vertically—to deal with this transboundary environmental challenge. B. Government agencies have capacity issues 107. Currently, EPA and other departments and line ministries with a role to play in AQM suffer from various capacity issues. A major obstacle to a solid and effective action plan is the lack of data and other information on the types of air pollutants, and their sources and levels in the air. Additionally, there are not enough qualified personnel to perform various technical functions such as reviewing EIAs, preparing and revising NEQS and other quality standards, monitoring industrial and other emission levels, and reporting those levels out. Due to EPA’s technical deficiencies, there are some critical inefficiencies in the system that makes project proponents—both public sector and private—to go through a weak EIA process that grants approval to low quality reports and the implementation of inadequate EMPs. Another bottleneck area frequently reported by EPA is the lack of an adequate operational budget to purchase and maintain AQM equipment and laboratories. 108. There are capacity constraints in ongoing EPA programs, such as the SMART program for industrial units in Pakistan. This program’s effectiveness is low, since it is unable to provide complete information on stationary sources’ pollution emissions. In 2014, only 99 out of 6,417 industrial facilities had registered their emissions under this program. The major reason for industries’ poor participation is the lack of any incentives to join the program. Furthermore, the EPAs do not have a complete inventory of industries in their respective jurisdictions. Currently, new industries register with the chamber of commerce, and EPAs do not have a formal process to access those data or intervene in the registration process. Consequently, EPAs cannot assess the types, amounts, or sources of emissions released into the air, or the emissions’ economic and social costs. It is also a challenge for EPAs to evaluate the in-house capacity that would be required if programs became mandatory. The vehicle emission program also faces many challenges. This program requires only commercial vehicles to be inspected for pollution control; private cars are exempt from this inspection process. Even in the case of violations, polluting vehicles are not obligated to pay pollution charges. Motor vehicle examiners are neither trained nor equipped to conduct standard testing and certification procedures. Another capacity limitation is the small and insufficient number and quality of certified environmental laboratories in the provinces. 56 Andre et al (2006) defined public consultation as “the involvement of individuals and groups that are positively or negatively affected by a proposed intervention (e.g., a project, a program, a plan, a policy) subject to a decision-making process or are interested in it.” 43 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan C. Governance challenges related to a decentralized organizational setup 109. The great diversity in provincial-level institutional arrangements makes formulating an effective coordinated approach to managing and monitoring air quality more complex and challenging. In addition, there is no formal coordination mechanism between the federal and provincial EPAs. Before devolution, PEPA 1997 as a federal law provided a common link between the EPAs. Considering air pollution’s cross-boundary nature, EPAs need a coordination committee with a mechanism to ensure harmonization of regulatory efforts across jurisdiction levels for effective implementation of policy instruments and initiatives. Furthermore, the amended provincial PEPA 1997 did not clearly define the roles of local organizations and actors. In case of any conflicting provisions between provinces and local government, it is unclear who has the overriding or nullifying power to make the final decision. The local government system is fiscally highly dependent on the provincial government for development funds, thereby constraining local government efforts relating to pollution control. 2.4.2 Strengthening the institutional and regulatory framework for water quality management 110. The issue of water pollution was first highlighted in Pakistan’s NCS 1992. NCS recommended action in 14 key program areas, including protection of watersheds, water bodies, and fisheries; preventing and abating pollution; and managing urban wastes. As previously mentioned, the 2000 midterm review of NCS revealed that its achievements had focused primarily on raising awareness and building organizations, rather than on substantially changing Pakistan’s environmental situation. 111. As with air pollution issues, PEPA 1997 was the first legislative document to explicitly address water pollution. This act empowered Pak-EPA as the central rulemaking and implementing agency, with federal and provincial-level offices. PEPA required Pak-EPA to prepare, revise, and establish NEQS for water. NEQS were made public in 1993 with limits for discharge from industries for industrial and municipal effluents. PEPA was further revised in 1999 and 2000. PEPA 1997 makes those polluters that exceed NEQS levels liable to pay a pollution charge to the government. However, governments have hesitated to implement such charges due to either lack of capacity for monitoring emissions or due to industries’ political pressures. After 2010, the new provincial Environmental Protection Acts explicitly prohibited emissions of wastewater exceeding NEQS limits. 112. In urban areas, according to the 1973 Constitution, policy, planning, and financing responsibilities lie with the provinces, and service provision lies with local governments.57 Consequently, operations are at the municipal level, since water supply and sanitation services are at local levels. However, since environmental pollution and ecology matters were on the Concurrent List (where both federal and provinces have jurisdiction), it fell to the Ministry of Environment to develop relevant policies.58 After the promulgation of the 18th Amendment, the Ministry of Environment was devolved to provinces and the Concurrent List was abolished; consequently, no sole federal-level entity dealt with the water and sanitation sector. However, the Ministry of Finance and the Planning Commission play an indirect role in approving and financing provincial development projects costing more than US$1 million.59 The overall impact of devolution’s reforms can be assessed as positive and in line with international trends to bring service-provision responsibilities closer to the people. However, implementation challenges have created substantial uncertainties resulting in lack of clarity about key agencies’ roles and responsibilities, along with weak accountability, leading to a sector whose overall governance is poor. 113. In rural areas, Tehsil Municipal Administrations (TMAs) manage urban water supply operations, and PHEDs construct water and sanitation services for O&M by TMAs. In rural areas, as in urban areas, TMAs and PHEDs are mainly responsible for water and sanitation services, as mandated by Local Government Ordinance (LGO) of 2001.60 57 World Bank. 2013. Water Supply and Sanitation Sector. Volume I: Urban Water Supply and Sanitation. http://www.hudphed.punjab.gov.pk/system/ files/8 percent28a percent29-Pakistan percent20Urban-Vol percent20I percent2012-6-13 percent20print.pdf Accessed February 2, 2018. 58 Alam 2010. 59 World Bank. 2013. 60 World Bank. 2013. A Country Environmental Analysis 44 Opportunities for a Clean and Green Pakistan However, because certain sections of the ordinance relevant to TMAs and PHEDs are not being followed, a different scenario plays out on the ground. In practice the provinces have implemented the LGO the way they deemed fit or in few cases reverted on some developments made earlier. TMAs face significant capacity and resource issues in trying to fulfil their many responsibilities. 114. Lack of data on water pollution levels and sources, and of institutional capacity, continues to hinder an effective response to the situation. Only one government department in the country works on water resources research: the Pakistan Council for Research in Water Resources (PCRWR) is primarily a research organization studying a broad array of topics related to water management. However, PCRWR is not an implementation agency and only collects and analyzes data. Finally, provincial environmental departments lack the human resources necessary to meet a growing nation’s demands. 115. In terms of water quality management, the NEQS are generally aligned with the WHO standards, with the notable exception of arsenic, which is a known issue in the country and has a higher set standard than advised by the WHO. There are three main issues that hamper a solid foundation of WASH policies. First, as noted in the 2017 Global Analysis and Assessment of Sanitation and Drinking Water (GLAAS) report, Pakistan lacks consistent and effective implementation of these policies across the country. Second, the existing framework, and the government agenda for WASH in general, remains focused on new supply, with little attention to rehabilitation of old infrastructure for WASH, recycling of wastewater or climate change adaptation and resilience. Policy gaps remain, particularly regarding ambient water bodies and the adoption of use-based national drinking water standards, which were made a responsibility of the provinces since the passage of the 18th Constitutional Amendment and lack correlation at the national level. 116. WASH subnational allocations are not linked to access rates at the district level. In Pakistan, the lion’s share of overall intergovernmental transfers goes to provincial capitals that are among the richest districts in the nation. Even when provincial capitals are excluded from the analysis, there is no relationship between district-level poverty levels and resource allocation. This pattern holds for WASH-specific investments as well. Districts where a relatively large share of households have access to improved water and sanitation benefit from a higher rate of WASH expenditure per capita than districts where access rates are low. While this is partially explained by the higher O&M expenses in high-access districts, it is indicative of under investment in water and sanitation infrastructure in low-access districts. 2.4.3 Strengthening the institutional and regulatory framework for toxic waste management and industrial pollution 117. Industrial pollution aspects in Pakistan were analyzed by different World Bank studies (World Bank 2015a, 2016a). Overall emission of untreated effluent from industries that do not meet the NEQS result in considerable environmental pollution and degradation. Industries like tanneries, textiles, and apparel, like most others, emit raw untreated wastewater that does not comply with the NEQS. IEs produce large amounts of wastewater, nearly all of which is discharged untreated to natural and constructed drains. In Pakistan, the drains are part of an irrigation system and were specifically constructed to drain subsoil water, control waterlogging and salinity, and carry the surface runoff from surrounding lands. They mostly discharge to the rivers and rarely to the canals. At present, most also carry wastewater and thus function as part of urban sewerage/drainage networks with negligible perennial natural water inflows. These drains are governed under ‘The Canal and Drainage Act 1873’. 118. In general, there is a legacy of lack of political will to regulate industry or to do any form of compliance monitoring. Neither the industries nor the provincial EPA tested the discharged effluent from the plants and estates with any frequency. Limited data on wastewater concentrations and loading are available owing to the limited operations of the laboratories. The key required compliance standards for industries, as part of the overall NEQS, are listed in the Annex 2. These standards were gazetted on November 26, 2010 by the federal government in Islamabad and later adopted by some provincial governments. 119. A different analysis has reported high levels of biochemical oxygen demand (BOD), chemical oxygen demand (COD), total suspended solids (TSS), and other parameters that far exceed permissible standards. Heavily polluted, untreated wastewater from the estates makes its way directly into surface water bodies, such as streams and rivers, or gradually 45 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan into groundwater. For example, in Punjab province there are only two estates that have Common Effluent Treatment Plants (CETPs). One is owned and operated by the Pakistan Tanners Association at Korangi Sector 7-A in the province of Sindh and the other by the Kasur Tanners Association at Kasur tanneries cluster in the province of Punjab. Both CETPs are operating only partially and do not comply with the NEQS because of organizational reasons and lack of capital. Partially operated biological treatment processes cannot achieve NEQS compliance. 120. Solid and hazardous waste management is also an important environmental problem. Industries dispose of some of the most toxic and persistent pollutants, including heavy metals and synthetic organic chemicals, directly on land and to water bodies, without any form of environmental treatment or protection. This indiscriminate disposal of toxic waste by industries is contaminating fresh groundwater and prime arable land. Leaching of heavy metals at dumping sites is one of the major sources of groundwater contamination. Open burning of toxic industrial waste at low temperatures produces carcinogenic pollutants with adverse public health implications. Hazardous Substances Rules 2007 is the relevant environmental legislation on the issue of hazardous waste management in estates although compliance is weak or nonexistent. Hazardous waste exposure can be minimized by adopting best occupational health and safety measures. Detailed surveys are needed at the industrial unit level and by sector in all the IEs to quantify hazardous solid waste generation. Photo credit: A M Syed/Shutterstock.com 121. Industries are not released form issues related to air pollution and some improvements have been introduced in the sector. Cement, iron and steel, fertilizer, sugar, power generation, and brickmaking are the major industry sectors that generate high levels of air pollution. Most cement factories in Pakistan have installed electrostatic precipitators and bag A Country Environmental Analysis 46 Opportunities for a Clean and Green Pakistan filters to control the total suspended particulate emissions. Fertilizer plants, sugar mills, and power plants have also taken measures to reduce total suspended particulate emissions. For iron and steel plants and brick kilns, no commercially viable solution exists; partial compliance can be targeted for these sectors. In other industry sectors, high emissions of carbon monoxide are due to poor maintenance of boilers and generators. Most industries also face indoor air pollution issues. 122. Pakistan has a robust network of stakeholders and institutions around pollution driven by the industrial sector. This includes Environmental Protection Departments, Environment Sections of P&D Departments, Directorates of Land Reclamation, industry departments, local governments and water and sanitation agencies, industry development and management companies, IEs’ Boards of Management, and industry sector specific industrial associations, ETs and green benches. 123. As discussed previously, environmental governance goes only marginally beyond preparation of legislation and policies and establishing environmental institutions. Generally, the reasons are overall poor governance in the province, fluctuating business performance of industry, low level of societal demand for better environmental quality, and low level of capacity of environmental agencies for the enforcement of environmental laws. In the case of Punjab, more precisely for NEQS compliance, the reasons for poor enforcement of PEPA 2012 are no enforcement of pollution charge rules and PEPA 2012 not providing legal cover to cleaner production and energy efficiency, which is the mainstay for compliance with the NEQS for toxic metals, air pollutants, hazardous waste, and occupational health and safety. 124. Regarding an EIA/Initial Environmental Examination (IEE), the EPAs are relatively successful in the enforcement of applicable rules. At present, most of the proponents of new projects prepare the EIA/IEE reports to secure no objection certificates (NOCs) from the EPAs. However, absence of follow-up monitoring is one of the most important reasons behind the low level of implementation of the EIA/IEE reports. Multilateral and bilateral institutions such as the World Bank, Asian Development Bank, U.S. Agency for International Development (USAID), and United Nations Development Programme (UNDP) have contributed positively in promoting the culture of an EIA/IEE in the country. 2.5 Matching the institutional framework with key functions for better environmental services 125. Since 2010, Pakistan started transitioning toward a decentralized system that is necessary to manage a country with a large geography and growing population. This is a sound decision that several countries have made around the world to provide better services to citizens and manage the environment. In the previous sections, this report has presented environmental challenges that are the result of the lack of coordination of the various structures dealing with environmental issues, the lack of traction of policy changes, the mismatch between the ambition of the federal government and the political realities of policy implementation in a devolved context, and the lack of the technical capacity and the political will to implement important reforms in the sector. Overall, there is a mismatch between form and function, that is, the structure of the institutional framework on the one hand, and how these institutional framework works to deliver public value, on the other. Several entities are charged with managing various aspects of environmental quality at both the provincial and federal level. Several policies have been developed. Several reforms have been attempted. Yet, the functional aspects of existing bodies have space for significant improvements. This section seeks to identify those areas of improvement and tries to present some of the key elements that a full-fledged institutional framework for the environment sector might look like. 126. The new setup with the decentralization created a provincial diversity to the point of developing some conflicting approaches for environmental management. Among others, the amendment transferred federal functions such as environment to provinces and augmented the mandate of the CCI to coordinate intergovernmental relations. Pakistan’s decentralization agenda has not been finalized in the environmental space. The 18th Constitutional Amendment is an important first step in a series of reforms to create a more responsive and accountable EMS in Pakistan. However, over time, and as this report has demonstrated in previous sections, critical reforms that were needed to ensure that environmental management serves the citizens and reduces pollution were either not fully made or initiated. 127. A cross-cutting organizational aspect affecting pollution management is related to the regulatory and capacity constraints of environmental organizations to deliver on their core mandates and to coordinate with other sectors on the development space. In previous sections, this study highlighted the inadequate capacity of the provincial Environmental A Country Environmental Analysis Opportunities for a Clean and Green Pakistan Protection Department (EPD) in performing its environmental quality monitoring and enforcement responsibilities. The EPDs were reported to have limited monitoring and analytical infrastructure and technical capacity, constrained human resources and budgetary allocations, and an environmental regulatory regime unfit for the province’s environmental challenges. Box 4. Punjab province taking the lead with key reforms Provinces in Pakistan can take a leading role in the structural transformation toward better environmental governance and green investments. The Government of Punjab has recently developed a broad program to address environmental issues and promote green development in Punjab in the short, medium, and long term. This program is presented in recent strategic documents adopted by GoPunjab, such as the Punjab Environment Policy 2015, the Punjab Smog Policy 2017, and the Punjab Climate Change Policy (under preparation). The objectives of these policies are to improve environmental quality in the province and reduce air, soil, and water pollution; address deforestation, floods, and land degradation; manage surface water and groundwater resources; conserve natural resources and protect biodiversity; promote sustainable urbanization and industrialization; devel- op public transportation and other alternatives to private motorized vehicles; integrate environmental considerations in public policy making and private investments; comply with international standards and enhance green competitiveness; and promote resource and energy efficiency. The EPD is the main department responsible for ensuring the implementation of these policies, in coordination with relevant line departments. To support the implementation of these policies, GoPunjab designed a program and sought World Bank financial support in 2017/18. This innovative program seeks to strengthen environmental governance and promote green investments. Specifically, the program will obtain the following results: average time to obtain IEE approval of investments with low safeguards risks, stack emission and effluent discharge inspections carried out by EPA, volume of carbon emissions avoided from green investments, and volume of new public and private capital leveraged for green investments. Source: World Bank, Punjab Green Development Program - Project Appraisal Document (2018). 128. Urbanization, competitiveness issues, pressure from citizens for better environmental quality, and climate change are defining a context with opportunities for EPDs to go through restructuring and regulatory reforms. EPDs can restructure their organization, improve their policy instruments, and modernize their administrative procedures and systems. Part of these key reforms could include the implementation of networks of fixed and mobile air and water quality monitoring stations for the provinces, environmental reference laboratories equipped with the tools required to analyze the data collected; the creation of technical systems or partnerships with research and scientific entities to support the EPDs on sound decision making through studies on priority environmental issues, and to support the EPDs on assessing potential RECP and pollution control technologies for priority polluting sectors once they have been piloted and demonstrated. 129. On the regulatory space, there are multiple entry points for policy changes to review and revise existing, as well as to identify new, environmental policies and standards, focusing on key pollution challenges. One example could be the revision of the existing Environmental Protection Acts. Another priority is the adoption of mechanisms to engage with citizens development and to provide an adequate access to information. Environmental quality standards need revisions, and new standards can be developed on surface water bodies, noises and vibration, and soil quality. On the policy side, the range of environmental problems described in previous chapters suggest the importance of moving toward a pollution levy system, and strategies for air quality management, water quality management, and integrated waste management. 130. While WHO standards remain a long-term goal, it is important to set realistic standards, which are tightened over time and supported by credible compliance plans (developed on an airshed/watershed basis), with respective institutional arrangements. The adoption of revised NEQS to ensure the permissible ambient concentrations of all pollutants consistent with the levels recommended by the WHO are desirable measures. International experience shows this is a progressive process with political, economic, social, environmental, and institutional implications. It is important to define a roadmap for air or water quality management. Definition of airsheds and watersheds are critical for the subsequent definition of monitoring systems, standards, inventories, and emissions limits. Since it will require time to implement this roadmap a long-term approach needs to be adopted. 131. The range of necessary changes should make environmental entities more efficient, more transparent, and A Country Environmental Analysis 48 Opportunities for a Clean and Green Pakistan accountable. EPDs can also revise their procedures and systems to better serve diverse demands from the public and private sectors in a transparent manner, as well as to better coordinate with other related departments on environmental governance and green development of the provinces. Areas of interest could be environmental permitting, environmental assessment, grievance redress, environmental inspection and enforcement, and environmental information disclosure (EID), and citizen engagement. The EPDs administrative efficiency could also be improved with environmental management information system, which could be used to make modern and transparent the filing of complaints and the issuance of NOCs, and so on. 132. Citizen engagement is critical. The significant impacts of these environmental costs and climate risks on growth, assets, and well-being have taken center stage in public debate. The population’s growing awareness gives the Government of Pakistan a better opportunity to heighten—and most importantly, harness—the power of public pressure on government institutions at all levels to strengthen enforcement and accountability. Furthermore, public pressure can motivate polluters to increase compliance. Evidence of public awareness includes the findings of a 2017 poll by Gallup and Gilani Pakistan. Their poll found that 79 percent of Pakistanis cited water pollution as a very or somewhat critical problem in their locality, while 43 percent cited air quality. Similarly, the population’s concerns about climate risks have grown: In 2015, only one-third of the population believed it was necessary to act immediately against climate change, while two years later, in 2017, half the population declared itself concerned about climate change. Echoing these concerns, Pakistan Vision 2025 recognizes the need to address these mounting climate change risks and to reverse environmental degradation if the country is to reach its aspirational target of becoming an upper-middle-income economy within the next 30 years. Box 5. Performance reviews: Swedish experience of involving stakeholders and citizens Systematic Performance Reviews. Within the legislative limits of oversight, systematic performance reviews, with routine reporting requirements, could be adopted for departments, government organizations, and other authorities dealing with or affecting the environment. Performance reviews by upper-level authorities are not the only type of cross- jurisdictional evaluation that helps ensure a level playing field for the regulated community. For example, in Sweden, some 80 local authorities belonging to the Stockholm Business Alliance send out a questionnaire every two years to solicit views from regulated businesses regarding the European Economic Area’s (EEA) performance. The questions touch on how well inspectors perform their duties and how effective they are in providing relevant information. The response rate for these questionnaires is usually quite high, about 60–70 percent. Comparison of results across municipalities provides a subjective but nonetheless valuable perspective on differences in compliance-assurance practices. With a similar objective, local governments in England and Wales (which have substantial enforcement responsibilities) have created a voluntary Link Authority system to engage in industrial sector-specific networking as well as peer review and benchmarking exercises on environmental compliance. Source: OECD 2011. 133. Moving toward better environmental governance and green investments need the creation of capacity for environmental organizations to deliver in that direction. Interventions such as training, technical assistance, knowledge management, awareness-raising activities to develop the technical and administrative capacity of EPDs, relevant provincial departments (Health, Transport, Energy, Housing, Urban Development and PHEDs, Industries, Mining, Local Government and Community Development, Agriculture, and Irrigation) and industrial associations on environmental governance and green development. Box 6. Systematic performance reviews Capacity building needs to be accompanied by improvements in human resources and appointments to jobs and promotions. By law, all government jobs should be advertised; however, the advertisements are vague job descriptions allowing for manipulation of criteria and appointment of persons with no capacity to fulfil the job’s responsibilities. Furthermore, the promotions system is based on annual confidential reports, written by the immediate senior officer, that count for 75 percent of the evaluation’s weight, and only 25 percent based on performance. This should be changed to promotions being based on 75 percent for performance and 25 percent for the annual confidential report, which the senior officer should write, but which that officer’s immediate supervisor should countersign. Moreover, the right of termination-at-will and the right of termination in lieu of one month’s salary should be restored in practice, with the 49 A Country Environmental Analysis courts upholding it rather than censuring it. Opportunities for a Clean and Green Pakistan 134. Making the decentralized scheme effective also means promoting green investments in the public and private sectors; and providing green financing schemes to provide sustained financing for green investments. The Government of Punjab with World Bank support (World Bank 2018) has appraised the following areas for public sector investments: (a) energy efficiency and conservation in public buildings; (b) vehicle emission control with a focus on vehicle emission inspection; and (c) demonstration of low-cost wastewater treatment technologies. For the private sector, Punjab has prioritized the provision of both technical and financial support to enable polluting firms in priority sectors to adopt RECP technologies. Such investments will improve both the financial bottom line and environmental performance of polluting firms, for small and medium enterprises (SMEs), and thus will motivate wide adoption of such technologies in the targeted sector and generate sustainable impacts. Punjab is taking the lead with three key changes: (a) provision of grant support to pilot and demonstrate RECP technologies; (b) provision of concessional financing to scale up the adoption of mature RECP technologies; and (c) provision of support to the Sialkot tanners. For this purpose, two priority sectors were identified: brick kiln for air pollution control and leather for water pollution control. 135. Long-term financing for green investments is important and specific mechanisms and facilities need to be created for that purpose. For example, there are opportunities to work with the Finance Department to develop financing strategies. This could include banking guidelines to reduce vulnerability of banks/Development Finance Institutions from risks arising from the environment, fulfill their responsibilities for the protection of environment, and provide finance to transform the economy into a resource-efficient and climate-resilient one. Provision of appropriate financial incentives to promote green investments in SMEs is needed. To promote SME development, financing schemes could consider the support of SMEs on a commercial basis lowering credit risk through guarantees and focus on green investments and providing technical support and incentives to SMEs to prepare bankable projects for such investments. Financing schemes should also consider efficient use of public-private partnerships (PPPs) to finance key public infrastructure to address environmental challenges. 136. In some provinces, the Environmental Protection Acts authorize the creation of provincial environmental funds to finance environmental protection projects with resources from the federal and provincial governments, foreign aid, and private contributions. Provinces can make these funds operational and use the external financing for capitalization, preparing the operation manuals, and assigning personal. Funds’ investments could be targeted to priority areas to address pollution, among other things. Box 7. An example of green investments: combined effluent treatment plants in Punjab An example of green investments: combined effluent treatment plants in Punjab. Existing IEs in Punjab present numerous serious legacy environmental and social challenges. Left unattended or ignored, these problems will continue to cause significant environmental and social harm; however, they represent a very significant opportunity to improve the living conditions and reduce exposures to environmental contaminants. Strong evidence shows that both market forces and pressure for improved regulatory compliance are creating opportunities for change. Through the Jobs and Competitiveness ( J&C) Program the government seeks to move toward the effective development of industrial infrastructure through PPPs and by improving the supply of more inclusive and sustainable IEs. Source: World Bank, 2016. Punjab J&C Program. Program Appraisal Document. 137. Another key pillar of the Pakistan decentralized system for environmental management is at the local government (cities) level. The decentralization of political, administrative, and financial responsibility to local governments is laid down in the country Constitution. The 18th Constitutional Amendment of 2010 transferred responsibility for local governments from the federal to provincial governments. Mandates for urban governance and service delivery overlap between the provincial government and local governments. For example, the Government of Punjab is currently assessing options for decentralizing service delivery to the Metropolitan/Municipal Corporations and Municipal Committees and is creating the enabling legislative and institutional framework. Under PEPA 1997, the government has the power to act A Country Environmental Analysis 50 Opportunities for a Clean and Green Pakistan as an envoy that delegates environmental management functions and commands to provincial governments; provincial governments have this authority—to delegate—over district governments. Box 8. The ‘Karachi Platform’ Karachi platform The Government of Sindh and Karachi has stepped up to transform Karachi into a more livable, inclusive, and competitive megacity, and address its numerous constraints through a multisectoral and long-term engagement with the World Bank. As the first financing of this engagement, the World Bank approved the ‘Karachi Neighborhood Improvement Project’ in 2017 to support high-visibility but small-scale interventions to demonstrate potential for city transformation. To address major challenges of the city, the Government of Sindh is now preparing a suite of three projects simultaneously with a total Bank financing package of around US$1.0 billion, focusing on the following: (a) livability, competitiveness, and institutional capacity; (b) water and sanitation services - ‘Karachi Water and Sewerage Services Improvement Project’ (P164704); and (c) urban mobility - ‘Karachi Urban Mobility Project’ (P166732). Source: World Bank. 2018. Competitive and Livable City of Karachi Project. Draft Project Appraisal Document 138. Some critical municipal services in cities have low coverage and quality, and this is leading to environmental pollution. There is a legal framework to revert this trend that needs to be supported. As discussed in previous chapters, many areas such as AQM and sanitation remain unserved, while others suffer from unreliable or low-quality service. “Weak investment planning and asset management processes contribute to investment decisions that are neither evidence-based nor responsive to the priority needs of residents, and to inefficient management of service delivery infrastructure” (Word Bank 2018, PCP PAD). It is also interesting to note that the Punjab Local Government Act (2013) defines general powers of local government including measures with significant environmental implications. Those include arboriculture, building and land-use control, drainage and sewerage, spatial planning, public health, and sanitation and water supply. Specifically, in regard to environmental protection and water quality the Local Government Act (LGA) established that “a local government may prepare and implement schemes for the prevention of the pollution of air by gases, dust or other substances exhausted or emitted by automobile engine, factories, brick or lime kilns, crushing machines for grain, stone, salt or other materials and such other sources of air pollution as the bye-laws may provide and a local government may prepare and implement schemes for the prevention of the pollution of water or land from such sources and in such manner as the bye-laws may provide.” Clearly, with this enabling framework, cities need to be incentivized and supported to manage pollution. Box 9. Improving the service delivery in urban local governments for a better environment Improving the service delivery in urban local governments for a better environment. One way to effectively deepen the decentralization at its third government level is to strengthen the performance of local entities such as municipal council. Some cities in Punjab province are starting this process by developing institutional and financial systems with a focus on secondary cities, as they provide the most conducive opportunity to pilot an urban-local-government centric model of improving urban governance and service delivery. In this context, around 16 cities will also be creating and/or strengthening their environmental and social management systems, starting or improving environmental monitoring systems. This is a clear example to show how decentralization can be completed at the local government level, a level with a significant role in environmental management. Source: World Bank 2018, Punjab Cities Program, Project Appraisal Document. 139. Horizontal and vertical coordination in federal systems is a useful tool for environmental management and promoting standardization. Pakistan has some mechanism such as the CCI to work collaboratively with provinces, A Country Environmental Analysis Opportunities for a Clean and Green Pakistan local governments, and communities from a foundation of trust, transparency, and collaboration. These mechanisms can enhance shared accountability between the federal government, provinces, and communities through joint governance and compliance assistance, and increase transparency and collaboration by listening and working with affected stakeholders and providing effective platforms for public participation and meaningful engagement. Cooperation does not mean that one province can dictate standards for the rest of the country. For example, the CCI could be the platform to agree on the maintenance of a minimum federal criteria for those environmental challenges involving watersheds and airsheds. Provincial laws could replicate the agreed minimum standards or simply reference them and go beyond them. Coordination would also help to set up financial mechanisms for the implementation of federal programs. Box 10. Opportunities for coordination and support to environmental policy and institutional measures Pakistan has institutional mechanisms that could be optimized as part of the support forking process related to environmental management and sustainability: Council of Common Interest (CCI). The 18th Constitutional Amendment, 2010 not only redefined, but also increased the powers of the CCI, stating in Article 154(1) that, “The Council shall formulate and regulate policies in relation to matters in Part II of the Federal Legislative List and shall exercise supervision and control over related institutions,” thereby this mechanism intervenes in such matters as railways, electricity, mineral oil and natural gas, dangerously inflammable liquids and substances, development of industries, Pakistan Water and Power Development Authority and the Pakistan Industrial Development Corporation and all undertakings, projects and schemes of such institutions and many others, and handing over their overall governance to the CCI. By virtue of Article 154(7) of the Constitution, “If the Federal Government or a Provincial Government is dissatisfied with a decision of the council, it may refer the matter to Parliament in a joint sitting whose decision in this behalf shall be final.” The National Economic Council. This mechanism has been entrusted with the power to “review the overall condition of the country and shall, for advising the Federal Government and the Provincial Governments, formulate plans in respect of financial, commercial, social and economic policies; and in formulating such plans it shall, amongst other factors, ensure balanced development and regional equity and shall also be guided by the Principles of Policy set out in Chapter 2 of Part-II.” Under 156(5), it has also been made responsible to the Parliament. Such subjects that deal with “National planning and national economic coordination including planning and coordination of scientific and technological research”, and the drivers of pollution, such as railways, electricity, mineral oil and natural gas, dangerously inflammable liquids and substances, development of industries, Water and Power Development Authority, Pakistan and the Pakistan Industrial Development Corporation and all undertakings, projects and schemes of such institutions, major ports declaration and delimitation and their constitution and powers of port authorities and all regulatory authorities established under a Federal law”, have all been placed in Part II, entirely under the domain of the CCI, which “shall formulate and regulate policies in relation to matters in Part II of the Federal Legislative List and shall exercise supervision and control over related institutions.” The National Finance Commission. This mechanism has been designed like the CCI, that is, consisting of “the Minister of Finance of the Federal Government, the Ministers of Finance of the Provincial Governments, and such other persons as may be appointed by the President after consultation with the Governors of the Provinces.” Under Article 160(2), it deals with making recommendations to the President as to the distribution of the net proceeds of the taxes between the federation and the provinces, such as taxes on income, including corporation tax, taxes on the sales and purchases of goods imported, exported, produced, manufactured, or consumed, export duties on cotton, and such other export duties as may be specified by the President, the making of grants-in-aid by the federal government to the provincial governments, the exercise by the federal government and the provincial governments of the borrowing powers conferred by the Constitution and any other matter relating to finance referred to the Commission by the President. A Country Environmental Analysis 52 Opportunities for a Clean and Green Pakistan 3 New approaches to address environmental challenges at the province-level: the cases of Khyber Pakhtunkhwa and Punjab Photo credit: Vetr/shutterstock.com 53 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan Key Messages • The scale of environmental degradation in Pakistan, and the persisting shortcomings of policy, regulatory, and institutional frameworks in place to address them in the different provinces call for reforms and innovative approaches. • This chapter shows how the challenges presented in the first two chapters play out in two of Pakistan’s provinces, namely, KP and Punjab, and the new approaches that their respective governments have introduced to address them and foster greener growth trajectories. 140. To reach upper-middle-income status, Pakistan will need to implement reforms capable of reducing environmental degradation and of enabling green growth. The previous chapters showed the large impacts of environmental degradation and pollution in Pakistan, and argue that the institutional, policy, and regulatory framework in place to address those issues was not yet sufficiently up to the task. The government has undeniably made important strides in strengthening the environmental management framework. However, there are some areas where additional reforms are necessary, including enhancing environmental policy and organizations at the national, provincial, and local levels; investing in environmental management at the local/city level; strengthening the enforcement and accountability regime; leveraging MBIs, unlocking green financing and promoting RECP as a means to reconcile environmental performance with competitiveness; and harnessing the power of public pressure. 141. This chapter presents case studies about the environmental challenges, and recent policy initiatives to address them, in two provinces of Pakistan, namely KP and Punjab. While both provinces are affected by the challenges described in the two previous chapters, promisingly their respective governments recently adopted new approaches for environmental management, which the rest of the country could learn from. These approaches, while they differ on specifics, have in common a focus on investing in better environmental management to both improve environmental quality and health and to reap economic gains in terms of human capital, competitiveness, jobs creation, and green growth. These two cases show how the country has a strategic opportunity to act quickly to address critical environmental priorities, while addressing human development aspects, competitiveness, and good environmental governance. 3.1 Managing the environment in Khyber Pakhtunkhwa 142. KP faces numerous challenges in achieving higher economic growth. Not only is its per capita income growth lower than the rest of Pakistan, but its population growth rate is the country’s highest. KP’s poverty rate is about 39 percent, surpassing that of other provinces in Pakistan. Furthermore, along with having the country’s highest dependency ratio, KP also has the lowest rate of labor force participation and the maximum unemployment rate. Considering the increased labor force, job creation growth has to be around 3 percent annually. A minimum 6 percent annual economic growth rate is required to achieve this figure. The prudent approach would be to address the underlying challenges to sustainable economic growth. In this regard, the Government of KP developed a pro-poor and pro-people reform agenda for addressing the pressing needs in its Integrated Development Strategy (IDS) 2014–2018 along with the Medium-Term Inclusive Growth Strategy (MTIGS) 2015–2018.. 143. This section analyzes the EMS of KP to identify constraints and opportunities to support a greener trajectory of growth. The analysis mainly centers around the institutional and functional assessment of KP’s Environmental Protection Agency (KP-EPA) since this organization is at the frontline of environmental protection and regulation. Henceforth, this analysis shall provide insight into a solution for greening public infrastructure; provision of environmental infrastructure; and strengthening environmental regulations and institutions. Figure 6 presents a conceptual framework based on the theory of change for improving the environmental management in the province. Figure 6 summarizes the drivers of the current situation, trends, and the required changes to achieve sustainable EMS in the province and improved trajectory toward green growth. A Country Environmental Analysis 54 Opportunities for a Clean and Green Pakistan Figure 6. Conceptual framework highlighting the drivers, trends, required changes, and achievement targets for environmental management • Limitation in political will • Absence of strategic/sectoral environmental assessment • Poor environmental governance in the province • Out-dated regulatory framework • Lack of coordination among the other depts. and sectors • Lack of environmental awareness in public and private • Lack of sustainable management system vision in the sector. EPD • Absence of clearly identi ed monitoring indicators and • Lack of advisory role in EPD to promote the Green priority se ing growth development agenda of the province • Technological and nancial limitations in the EPD • Lack of environmental consideration in long term • Ine ective policy formulation and strategic planning to developmental planning of province meet the needs of the province • Pressure on natural resource due to developmental activities • Deteriorated environmental situation and management • Poor physical presence across the province in the province • Non-strategic planning of EPD and its annual planning • Ine ective policy implementation monitoring syste schemes • Adhoc or super cial environmental compliances in all • Ine ective role of EPD in the planning process of the provincial development schemes development agenda of province • Insu cient technical and quali ed sta to meet the • Absence of sectoral environmental assessment by the requirements of environmental management in the EPD province • Establish environmental sustainability agenda of the system province and develop linkages for sustainable • Increased awareness regarding environmental management options in the mega projects management • A strengthened EIA processing and evaluation system • Improve integrated involvement of EPD across all • Establishment of strong linkages and among development sectors of province • Departments for improved coordination in project • Strengthen and and monitor the environmental implementation as well as policy planning compliances in all ADP schemes • Strengthening of EPD and its associated sectors • Increase physical presence of EPD in the province • Enhanced and improved environmental management • Consolidation of a systematic and progressive • Improved trajectory towards green growth sustainable environmental management system in the province 55 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan 3.1.1 Institutional structure for environmental management and green growth 144. In KP, the environment sector is governed by the Department of Forestry, Environment and Wildlife, under the chairmanship of a Secretary. In addition, a Special Secretary, one Additional Secretary, two Deputy Secretaries, and five Section Officers besides the Director (Budget and Accounts) and Deputy Director Planning help facilitate this department’s functioning (Figure 7. Institutional structure of the department governing KP’s environment sector). Figure 7. Institutional structure of the department governing KP’s environment sector Forestry, Environment and Wildlife Department Environmental Forest Forest Wildlife Pakistan Forest Protection Development Department Department Institute Agency Corporation 145. The Director General of the EPA (DG-EPA) supervises the following sections: • Directorate Malakand • EIA Review and Monitoring Section • EPA Lab • Planning • Technical • Litigation • Environmental Protection Tribunal (EPT) • Session Court/High Court/Supreme Court • Geographic information system (GIS) Lab • Administration • Accounts • Directorate South • Directorate North • Directorate Malakand Assessment of KP’s EPA 146. KP’s EPA is the key player for environmental management in the province. KP-EPA is delegated with a wide range of responsibilities and powers for ensuring the implementation of KP’s Environmental Protection Act 2014. KP-EPA’s pivotal role as the focal point for the development, implementation, and monitoring of environment related tasks makes it a preeminent element of this sector. KP-EPA is inherently a regulatory and monitoring body whose primary focus is the protection, conservation, and rehabilitation of the environment, as well as the strengthening of existing systems to enhance the management of valuable natural resources. The prevention and control of pollution and the promotion of sustainable development in KP are also a mandate for KP-EPA. Promulgation of the KP Environmental Protection Act 2014 was carried out by the agency through a series of year-long deliberations with the involvement of stakeholders from government organizations, NGOs, representative members of chambers of commerce and industry, and the private sector. However, no prior baseline research studies were conducted. A Country Environmental Analysis 56 Opportunities for a Clean and Green Pakistan 147. KP’s Environmental Protection Act 2014 defined the core function of the agency as follows: • Preparation and implementation of policies, guidelines, and environmental quality standards; • Preparation of environmental profile reports; • Coordination among other governmental and non-governmental bodies; • Provision of assistance to other KP governmental bodies to advance climate change adaptation; • Carrying out cost studies and establishment of methods and methodologies for pollution prevention and mitigation; • Environmental monitoring; • Certification of laboratories; • Issuance of license for hazardous waste management; • Initiation of legislation in all sectors of environment; • Provision of advice and assistance for environment-related matters; • Provision of help to government agencies, local councils, local authorities, and other persons for proper waste-management implementation in accordance with environmental standards; • Public guidance and awareness-raising; • Establishment of a website; • Development, in consultation and coordination with relevant parties for contingency-plan preparation, of specifications for avoiding disasters and accidents caused by human actions; • Reviewing and approving mitigation plans and provision of assistance to carry out cleanup operations under the Environmental Protection Act; • Promote NGOs, community, and village organizations to advance sustainable development practices; • Undertake tasks as advised by the Council.61 148. The act gives KP-EPA considerable powers, which include, but are not limited to the following: • Enter any premises (surprise visit) to collect evidence and initiate investigation by collecting samples and seal/seize property or machinery. The ET or Environmental Magistrate shall provide the relevant search warrant; • Initiate inquiry of any person; • Levy charges/fines or contracts; • Launch a criminal case for encumbrance of official functions; • Have full cooperation of police forces as well as other government agencies/line departments during emergency situations; • Seek help and cooperation of any governmental body; • Provincial Environmental Co-ordination Committee shall be formed at the provincial level to enforce the Act. 149. Various factors impede KP-EPA’s full exercise of these powers; the foremost factor is external influences from the general political environment and the country’s culture. As in many countries enforcement of environmental regulations is impeded not only by capacity constraints but also by powerful interests. These attempts affect the ability of agency personnel to wield the full extent of the power given them under the Act. Such ‘regulatory capture’ at different levels of policy implementation can be mitigated by increased transparency, the lack of which could otherwise thwart national 61 Khyber Pakhtunkhwa Environmental Protection Act 2014. 57 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan policies and regulatory implementation and undermine economic sustainability. 150. As a regulator, the functions of the KP-EPA involve the issuance of a NOC to all private enterprises as well as to government initiatives. The Environmental Protection Act 2014 specifies two project categories: Schedule I projects are required to submit an IEE, and Schedule II projects are required to submit an EIA. IEE and EIA Regulations 2000 stipulate the standard procedures of filing for and IEE/EIA. Guidelines governing these submissions state, “The agency shall confirm within 10 working days of IEE or EIA having been deposited, whether the document is complete in all aspects. If revisions/ edits are necessitated, the agency shall complete process for an IEE review within 40 days and an EIA within 90 days of filing.” 151. According to KP-EPA staff members, there is a very limited number of personnel to adequately review IEE/ EIA reports and ensure subsequent monitoring. Delays can be attributed to the limited capacity and number of field staff and limited financial resources. Field visits, especially in Pakistan’s northern areas, require vehicles built for tougher terrain and long-term traveling. Staff members also reported financial issues related to travel, such as the payments of toll tax, which is done by the employees themselves, and that the reimbursement process hinders rather than facilitates these visits. In the absence of sufficient number of vehicles (as well as the lack of appropriate vehicles for traveling through KP’s mountainous terrain), and other resources, staff mobility is limited and stressful. Additionally, staff members noted that, due to the unavailability of enough resources, field visits were at times conducted via clients’ cooperation and help, and arrangements for field visits/inspections were made by the client (organization to be monitored) themselves. 152. Review of IEE and EIA Regulations 2000 establishes that currently, on paper, the scope and procedural aspects for conducting EIA/IEE studies are in accord with accepted international standards. The problem lies with the actual implementation of IEE and EIA regulations. This is especially true for government projects where EIA environmental assessment and feasibility studies are carried out as mere formalities, rather than as thorough processes. The substantive aspects also indicate several shortcomings, particularly in relation to the implementation of Annual Development Plan (ADP) projects, where political pressure overrides fulfillment of preliminary environmental requirements prior to initiation of project activities. In addition, resources for environmental mitigation and monitoring are lacking. 153. Section 12 of the Act states how Strategic Environmental Assessment (SEA) should be conducted: It shall cover plans and policies regarding socioeconomic growth, including infrastructure development; industrial, agricultural, urban, or rural improvement; land-use and water use management; utilization of resources; waste management; tourism; and any activity, plan, or policy likely to affect the environment. This includes government agencies, local councils, local authorities, and departments. 154. However, no work as yet has been done by KP-EPA to initiate a SEA. This mandate has yet to be passed by the Provincial Environmental Council, which is still in its infancy. Pursuing SEA as an important tool for green growth can bridge several gaps and inconsistencies among local governmental policies and thus promote sustainable development in the province (Fischer 2018). The agency has a role as an advisor as well as a whistleblower for which effective communication links are required. Subsequently, an important aspect in this regard is close linkage with the public. This would ensure proper public consultation and awareness raising through campaigns and use of print, media, and electronic tools to achieve better cooperation from the public. However, to induce greater public involvement, vigorous and strategic awareness-raising schemes are required. This would also help address the environmental degradation–poverty nexus. 155. An adequate physical presence of the agency in the province is essential. Currently, construction of three main field offices is under way in D. I. Khan, Abbottabad, and Malakand. Similarly, to effectively monitor the environment, sufficient field offices, along with properly equipped laboratories with state-of-the-art equipment are required. These three offices are insufficient for implementing environmental policies and monitoring environmental issues in the province’s 25 districts. Climate Change Cell 156. The Climate Change and Multi-Lateral Environmental Agreements (MEAs) Cell was established as an attached department to KP-EPA in 2012. Initially, the team was set up for the project. Subsequently, an Advisory Committee was formed under the leadership of DG-EPA and was supervised by Secretary Forestry, Environment and Wildlife Department, A Country Environmental Analysis 58 Opportunities for a Clean and Green Pakistan Government of Khyber Pakhtunkhwa. The Climate Change Policy for the province was formulated in June 2016, which laid out the framework for tackling climate change by both adaptation and mitigation measures. The policy addresses the issue of climate change in all sectors of the province and addresses the core issues that the region faces. 157. The Climate Change Action Plan and the Committee are in place. In this regard, three meetings have been held up to and including 2018. These were the initial orientation meeting and implementation meetings. Significant work has been initiated, including arranging seminars and awareness-raising campaigns. The provincial Climate Change Cell is working in close coordination with the federal MoCC. Assessment of Environmental Tribunal and Magistrates 158. The ET was established under Section 21 of the KP Environmental Protection Act 2014 to deal with judicial matters put forth by the agency or the public. The Chairperson heads the ET. The Chairperson shall be a Judge of the High Court, with two additional members. A ‘technical’ member with suitable environmental professional qualifications is mandatory. Further, at least two ETs are allowed, according to territorial jurisdiction. Additional information not covered by the act, regarding procedure, follow the Civil Procedure Code, 1908 and the Code of Criminal Procedure, 1898. The ETs fully exercises it powers, with all the case verdicts implemented in their entirety. Cases are sometimes referred to the High Court, where the penalty might be reduced to an extent where its impact is negligible. 159. The ETs, according to agency staff members, has successfully delivered verdicts following procedures laid out in the KP Environmental Protection Act, 2014. EPA staff members have reported that, in some cases, the original penalty has been softened by the High Court. EPA staff members, due to the legal nature of their work, feel the need to have security during the field visits, especially during inspections. In such instances, the domineering behavior of the proponent subject/ business owner tends to be intimidating. 160. After the initiation of EPT functions in July 2017, 1,839 cases have been filed up to December 2018, generating revenue of Rs. 39,795,000. Of the cases filed from various KP regions, the KP-EPA Head Office Peshawar had the highest number (815 cases), which could be attributed to its effective operations and greater accessibility as the main hub of environmental functioning in the province. Financial management, budgeting, and resource allocation 161. The projects proposed in Pakistan’s ADP are prepared by the agency and submitted to the P&D Department through the Administrative Section for further processing. This report assessed that KP-EPA is not always systematic when it comes to identifying priority projects. In most project proposals, there was limited focus on vulnerable populations. These two shortcomings are mostly attributed to the agency staff ’s limited technical capacity. Furthermore, despite the rapid growth of urbanization and subsequent deterioration of natural resources, prioritization of environmental management issues has taken the back seat in national budget allocations. It is important to note that KP-EPA is a regulatory and monitoring body that has no control over disbursement of funds allocated in the ADP. 162. The CEA has determined that, in the face of increasing environmental challenges, the absence of significantly increasing budget allocations to KP-EPA during the past 10 years is worrisome. Budget allocations during the past 10 years for the development sectors (such as transport, health, education, and industry) indicated that substantial development activities occurred in the province. Those development activities must have caused environmental impacts on KP’s natural resources and population, and the ‘flat’ budget allocations for KP’s environment sector indicate that those impacts have been largely unaddressed. HR management system 163. KP-EPA currently has no system for carrying out employee appraisal or providing performance feedback to employees. In addition, there is no form of ‘employee reward system’ based on performance, such as annual bonuses. Staff hiring depends on the availability of a position, which is announced publicly; such openings provide opportunities for the potential promotion of junior staff members. There is general dissatisfaction about the absence of promotion policies based 59 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan on work performance. This could affect employee morale and work efficiency. Employees’ salaries are fixed by the provincial government policy. The government also decides annually the process for determining raises for the staff, which are based on the employee’s existing job grade instead of performance. Policies and practices relating to reimbursements for travel and meal expenses need attention to make them more worker-friendly and thereby increase productivity. Importantly, due to financial constraints, capacity building programs for employees are strictly restricted. Use of technology 164. KP-EPA has limited use of technology. KP-EPA does not have a separate website/portal, but the formation of this website is under way. It shall be multipurpose, providing information and updates regarding the organization’s work and output, while also providing a portal for the general public to lodge/file complaints on environmental management in the province. Effective use of digital databases would increase the organization’s productivity. 3.1.2 Functional review of existing environmental management systems Assessment and management of environmental and social risks 165. A system for environmental assessment in KP exists—that is, IEE for projects with environmental impacts of low significance, and EIA for projects with environmental impacts of medium to high significance. However, risk- based classification is not comprehensive. Risk assessments for social, cultural, gender, and vulnerable groups were typically not of the desired quality. Guidelines for alternative analyses exist, but in most cases, project proponents conduct a cursory alternative analysis. 166. Environment and social assessment of ‘associated facilities’ varies with respect to project size. Assessment of ‘associated facilities’ for projects financed by donors and multilateral organizations is conducted. However, the depth of the assessment is typically limited in the case of projects financed by the public or private sectors. Under IEE and EIA, a spot analysis of impacts is typically conducted. There is no framework or set of guidelines for cumulative impact assessment throughout the project lifecycle. The cost of environmental mitigation and monitoring is mostly built in the project design. 167. The following assessment tools are currently not being used: tools for social impact assessment, environmental audit, hazard or risk assessment, social and conflict analysis, social management plan, environmental and social management framework (regional or sectoral EIA), and strategic environmental and social assessment. 168. EIAs of large infrastructure and industry projects cover the following: • National and provincial policy framework; • National laws and regulations; • Capabilities (including implementation) relating to environment and social issue; • Country environmental or social studies; • National environmental or social action plans; • Obligations under international treaties and agreements; • Other relevant Good International Industry Practice (GIIP). However, the above constraints are not the case for medium and small projects in the industry sector. 169. Limited resources are allocated for projects’ environmental management aspects, thereby limiting measures geared toward community safety (including dam safety and safe use of pesticides); climate change and other transboundary or global risks and impacts; material threat to the protection, conservation, maintenance, and restoration of natural habitats and biodiversity; and ecosystem services and the use of living natural resources, such as fisheries and forests. 170. The EMP prepared under EIA is rarely implemented in public sector and private sector projects. The following monitoring measures are generally very weak regarding the following: A Country Environmental Analysis 60 Opportunities for a Clean and Green Pakistan • Recording information to track performance; • Establishing relevant operational controls to verify and compare compliance and progress; • Environmental hazards accidently occurring during the project implementation; • Actions requested by relevant regulatory authorities; • Feedback from stakeholders such as community members are generally very weak; • Effective monitoring of the proposed EMPs. Monitoring reports during projects’ implementation and operations are rarely prepared by the project and monitored by KP-EPA. KP-EPA argues that this is due to lack of available human and financial resources. 171. There is a serious lack of the interdepartmental coordination essential for effective environmental management. However, whenever KP-EPA demands necessary information about projects, then departments/organizations typically provide the required information. Assessment and provision of guidance and strengthening and capacity building of associated departments/organizations is the mandate of EPA, but in practice, EPA rarely does this. KP-EPA does work collaboratively with other departments/organizations whenever required; however, this does not frequently occur. 172. A comprehensive system and guidelines exist for public consultation. Public and stakeholder consultations are mostly organized by the proponent of the project before the issuance of NOC at the proposal stage. The CEA has determined that participants in stakeholder consultations many times are not the true stakeholders. During project implementation, stakeholder consultations are rarely done by project owners. In the case of complaints from stakeholders, KP-EPA conducts the monitoring of the project. An E-Complaint/Grievance Redressal System for stakeholders and the public exists. KP-EPA reported that KP-EPA generally responds to such complaints. 173. Contractors for medium and large projects that are donor-financed or multilaterally financed generally adhere to environmental rules and regulations. However, in public and private sector financed projects, detailed commitment plans are not prepared and agreed on in those projects’ initial stages, and the systematic laying down of responsibilities is neglected. This can also be seen in activities such as unplanned construction, lack of use of personal protective equipment (PPE), and lack of medical claims/coverage for laborers. Occupational health and safety 174. EMP covers aspects of occupational health and safety. Aspects related to fair treatment of workers (including vulnerable groups, child labor, migrant workers, and contracted labor) exclusively fall under the Labor Department. Monitoring by Labor Department is scanty and not well organized. Many instances of noncompliance are reported by labor and media. Medium and large projects funded by international financiers have accessible, properly designed grievance mechanism for addressing labor-force issues. Furthermore, workers on such project receive information, training, and proper PPE. This is not the case for locally financed public sector and private sector projects. 175. Implementation of systematic, periodic review and upgrading based on occupational health and safety system results and third-party verification varies from project to project. Projects that comply with international standards certifications (including International Organization for Standardization [ISO]) conduct periodic reviews by themselves and also invite third parties for verification. However, this is not the case with many projects and industries. Sustainable resource utilization and pollution management 176. Measures for conservation of natural resources and compliance with environmental standards are typically part of EMP. Actual implementation of natural resources conservation varies from project to project. In internationally financed project, these activities are frequently implemented. Adoption of cleaner production and energy efficiency measures in the case of industry projects are rarely made part of EMP, primarily because the Environmental Protection Act 2014 does not require adoption of cleaner production and energy efficiency measures. This act demands compliance of environmental standards at pollution discharge points, while adoption of cleaner production and energy efficiency measures is considered voluntary for industries. Installation of pollution abatement and treatment facilities is a last-resort response by industries 61 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan to pressure from KP-EPA and international buyers. In many cases, these facilities operate only at the time of KP-EPA and international inspection. Soil contamination from previous project operations is not properly investigated; where such issues are found, they are rectified by the industry or project without reporting. 177. KP-EPA has yet to establish procedures regarding documentation of ambient conditions and social baseline data, even though the KP Environmental Protection Act 2014 requires such documentation. While this Act provides for establishment of ambient standards, promulgation of ambient standards might lead to better alternatives for the project implementation and operations. 178. Climate change aspects are only considered for large infrastructure projects such as dams and IEs. Environmental assessments of large projects prepared in the recent past include climate change adaptions (such as sustainable agriculture, forestry, and sustainable transport alternatives); and mitigations (such as GHG emissions, energy efficiency, renewable energy, and alternatives to refrigerants). 179. Hazardous waste management is the weakest link in the environmental assessment and management system. Only large industrial operations have safe disposal facilities. In most cases, there is no tracking of hazardous waste or inventories of hazardous waste; generally, compliance with national laws and international treaties is absent. KP does not have any hazardous waste management facility. The only option available for the hazardous waste management is to bury such waste at some distant and safe location. In most cases, monitoring of contractors hired by the industry to dispose of hazardous and solid wastes is nominal and unsatisfactory. However, large industries make proper arrangements for hazardous waste handling, storage, transport, and disposal in line with national and international obligations. Appropriate environmental management measures are included in EMP and health and safety manuals and studies. This is not the case for small and medium industries and projects. Biodiversity management, conservation, and sustainable development 180. Applicable KP legislation requires that project activities be avoided in unique and irreplaceable biodiversity areas. If no viable alternative exists for projects undertaken in critical habitat (areas of critically endangered, endangered, or restricted-range species population), these laws require that projects conform with international obligations and national laws, and that projects avoid significant conversion or degradation of critical habitats. Transparency, information dissemination, and stakeholder engagement 181. Stakeholder engagement typically takes place at the design stage of the project. KP-EPA organizes public consultations before EIA approval and NOC issuance. There is limited KP-EPA and stakeholder engagement after issuance of environmental NOC and during project implementation and operations. For large and internationally financed projects, stakeholder engagement varies from fair to satisfactory. A few projects do timely dissemination of relevant information in an understandable, accessible, and appropriate manner and format. KP-EPA operates an online Grievance Redress Mechanism for addressing stakeholder issues; this resource needs to be improved and its operations made transparent. Large and internationally financed projects conduct independent third-party assessments based on stakeholder analysis with respect to stakeholders’ engagement and satisfaction with the project implementation; however, this is not the case for small and medium locally financed projects. 3.1.3 The Green Growth Initiative 182. Considering the multisectoral nature of environmental management, KP Government has launched in 2014 the ‘Green Growth Initiative’ (GGI). This initiative is intended to bring about revolutionary change centered on sustainable economic development. The focus of GGI’s approach is the nexus between environmental degradation and poverty. GGI aims to not only improve the quality of life of the public by protecting the ‘right to live’, but to also be a source of green job creation—and, hence, poverty eradication. GGI uses a community-based approach, while focusing on improving the natural environment. GGI’s six target areas are forestry, protected areas, clean energy, climate resilience, water/sanitation, and waste management (Box 11). A Country Environmental Analysis 62 Opportunities for a Clean and Green Pakistan Box 11. Description of the GGI’s major sectoral activities Billion Tree Tsunami The Billion Tree Tsunami Afforestation Project centers on sustainable development of KP’s forestry sector. Based on the principles of social forestry, the project involves forest plantation, rehabilitation, and conservation. Creating jobs for youth is an important part of the project and thus involves close collaboration with the communities, which would help ensure the project’s sustainability. Developmental nurseries are to be established at each forest division. Further, local community growers are to be involved in the growth of nursery units, with quotas reserved for youth, women, and the elderly. Objectives of Billion Tree Tsunami Project: • Support KP Forest Department, as a catalyst, to plan, design, and launch sustainable development in the forestry sec- tor through active involvement of local communities; • Rehabilitate and improve KP’s existing forest ecosystems by arresting environmental degradation; • Enhance forest resource base for livelihood improvement and job creation for rural youth at their doorstep. National parks and wildlife protection Pakistan’s major forest cover and the largest share of its biodiversity are located in KP. GGI integrates ecotourism into the expansion, proper administration, protection, and preservation of protected areas/national parks. To accomplish this transformation, GGI puts forth the following measures: • Establishment of a high powered and autonomous ‘National Parks Authority’ through legislation. • A professional, trained, and specialized Youth Park Management responsible for protecting nature and generate em- ployment. • Formation of a Wildlife and Parks Fund through legislation, connected with small conservation funds to be estab- lished at each national park. The Wildlife and Parks Fund would include direct fundraising and prudent disbursements for protection, conservation, and management of wildlife and parks. • Further, the Wildlife and Parks Fund eventuates to the National Parks Management project, under which funding would be managed for the above purposes. • Wildlife parks in all districts. KP targeted increasing protected areas from 11 percent to 15 percent by 2018, surpassing Pakistan’s Millennium Develop- ment Goals commitment. Listing this initiative under the Asian National Parks Authority is a step toward establishing an international linkage. These initiatives serve the dual purposes of recreation and public sensitization. Climate change and zero carbon growth GGI additionally strives to build climate resilience through vulnerability mapping and climate-proofing of infrastructure, with KP’s government committing to zero carbon growth. The main clean energy programs and carbon sequestration mea- sures are as follows: • Carbon sequestration through promotion, protection, and conservation of forests as above. • Promotion of clean and renewable energy by committing to 80 percent of power generation through solar and hydro energy resources, increasing the green energy base by 3,000–4,000 MW. A trademark example of clean energy generation under GGI is the construction of 356 micro-hydel power plants in remote areas of the province, in collaboration with the local community, thus resulting in generation of 35 MW of cheap, clean, re- newable energy—as well as the generation of employment. Another project for solar power utilization includes a solar roofs project in Peshawar and a solar tube wells provision for KP farmers. 183. KP-EPA formulated the following strategies for a GGI five-year plan: • Conserve water by discouraging excessive water usage by car wash stations; • Totally phase out non-biodegradable plastic bags; 63 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan • Discourage, for health and safety reasons, the growth of Base Transceiver Station (BTS) towers (mobile communica- tion) • Enforce NEQS under Section-11 of KP Environmental Protection Act 2014 in industrial units, particularly cement, steel, sugar, chipboard, marble, granite, marble chips, and stone power-crushers; • Regulate dairy farms in urban residential area; • Environmental hazards and impacts of Wedding Halls in Residential/Sensitive receptors; • Combat climate change by implementing the Provincial Climate Change Policy 2017; • Manage hospital waste; • Establish fixed and mobile air monitoring stations in KP’s major cities: Peshawar, D. I. Khan, Mardan, Bannu, Mingora, and Abbottabad; • Promote a clean and green environment; • Rehabilitate KP’s mining areas; and • Regulate coal storage and tire pyrolysis units. KP’s climate change policy 184. The Government of KP also adopted a Climate Change Policy in 2016. This policy aims to ensure that climate action is mainstreamed in development planning, especially in the economically and socially vulnerable sectors of the economy; and to steer the province toward green growth and climate compatible development.62 The policy’s chapter ‘Towards Green Growth and Climate Compatible Development’ puts forth an integrated approach for responding to climate change impacts and warranting effective application of provincial initiatives to actualize its Green Growth Vision. It proposes climate-compatible development as an umbrella framework, under which this dual objective can be achieved. To mitigate climate change, the policy further proposes policy measures for • Promoting energy efficiency and conservation in commercial, industrial, and residential sectors; • Reduction of GHGs in transport sectors; • Waste generation; • Other sectors including the industrial sector; urban planning; carbon sequestration; and forestry, agriculture, and live- stock. 185. Under KP’s climate change policy, many energy efficiency projects need to be implemented. Energy conserved is actually a replacement for energy generated and contributes to a sizeable reduction of carbon emissions and air pollution. Energy efficiency in the water supply and sanitation, industry, and agriculture sectors offers high potential for reducing carbon emissions and air pollution. A large number of tube wells and disposal pumps for urban water supply and sanitation services are energy inefficient. 186. KP’s situation with the tube wells in its agriculture sector is similar to the situation in Punjab, where urban water supply and disposal pumps have an energy efficiency potential of 15–20 percent. Major issues faced by these pumps were old age and poor maintenance. While reliable data for tube well efficiency in KP are not available, the CEA assessed that most of these tube wells offer good potential for energy efficiency and can be shifted to solar energy. Old pumps should be replaced, and capacity should be created for the effective maintenance of the pumps. 187. The experiences of industry-sector energy-efficiency projects in Punjab and Sindh establish that there is a potential for 10–15 percent energy efficiency. KP’s industries have a comparable situation, and an energy efficiency program can be started for KP’s industries. Similarly, energy efficiency projects for public sector and high-rise buildings are 62 Government of Khyber Pakhtunkhwa. 2016. Khyber Pakhtunkhwa Climate Change Policy. Environmental Protection Agency, Forestry, Environ- ment and Wildlife Department, 2016. A Country Environmental Analysis 64 Opportunities for a Clean and Green Pakistan equally important to make KP energy efficient. In addition, vehicle emissions and brick-kiln emissions are main contributors to KP’s air pollution. Two actions can substantially reduce vehicle emissions: better tuning of cars and regularizing vehicle registration. The ‘culture of better car maintenance’ can be created by expanding the network of vehicle-emission testing centers. Regarding brick-kiln emissions, KP can learn from Punjab, where that province’s EPA has begun to assist brick-kiln owners’ adoption of energy-efficient and less polluting brick-kiln technology—specifically, Zig Zag. KP can start similar projects. 3.1.4 The way forward Strengthening KP-EPA and the ESIA system 188. KP-EPA’s most important tool is IEE/EIA for development projects in the public and private sectors. This tool should be for all project stages: design, implementation, and operation. The coverage of social aspects in IEEs/EIAs needs to be strengthened. It will be more fruitful to reformulate the IEE/EIA guidelines and framework as Environmental and Social Impact Assessment (ESIA). ESIA is used successfully by multilateral financing organizations and many developed countries. ESIA ensures comprehensive coverage of air, water, soil, and noise pollution, along with their impacts on worker safety and public health. KP-EPA faces two types of capacity limitations for IEE/EIA compliance and monitoring: technical capacity and physical capacity. Technical capacity can be enhanced by appointing appropriately qualified professionals and later exposing professionals to applied training on relevant subjects and issues. Physical capacity is the availability of proper physical resources such as laboratory, field monitoring tools, vehicles, and so forth. Capacity strengthening requires increased budgetary allocations by the provincial government. This could be achieved by • Allocating a separate building for EPD and related agencies; • Increasing staffing to better manage the load in a decentralized manner on all levels; • Equipping the department with equipment, machinery, and vehicles (including four wheelers for easy maneuvering and access through the mountainous terrain of KP); and • Streamlining and revising existing operational procedures for better facilitation. 189. KP-EPA’s technical capacity can be strengthened by establishing a fully resourced Environmental Research and Monitoring Center (ERMC), which would consist of a certified laboratory with trained staff to test and develop a database of emissions from different sources, so as to determine their compliance with NEQS and conditions stated in NOC. Improved public information disclosure and dissemination 190. Along with awareness raising by key organizations, campaigns for raising the public’s awareness levels could create pressure and increase demand for sustainable and greener development. This could be achieved by disclosing and disseminating environmental information and by engaging citizens in environmental management. Sharing transparent and easily accessible data related to environmental monitoring, annual consultations, reporting on EPD performance, and publishing an annual report on the state of KP’s environment using an online platform (real-time) and other channels (such as social media, WhatsApp, TV, newspapers, and radio) could further the sustainable development agenda. Establishing a telephone hotline and internet portal in the local language would also provide citizens with an easily accessible channel for filing complaints. Improved interdepartmental coordination 191. The wide spectrum of environmental and social issues and their intricate relationships highlight the interdependence of various sector departments in government operations and settings. KP’s existing EMS lays down the foundation for promoting green investments but requires further reform and fortification. To increase advocacy of environmentally sound approaches in various government departments engaged in their respective sectoral development projects, those departments’ linkages with KP-EPA need to be established and strengthened. 192. Three organizational platforms are available in KP-EPA’s legal and organizational system for effective interdepartmental coordination. 65 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan • The Provincial Environmental Council, under the KP-EPA Act 2014, consists of representatives from all relevant de- partments and private sector stakeholders. The council is not active in making the consensus-based environmental management policy and strategic decisions. There is an urgent need to activate the council and organize its periodic meetings as per the requirements of the KP-EPA Act 2014. • The Provincial Development Working Party (PWDP) includes KP-EPA as a permanent member along with all other departments. An Environmental Committee under PWDP should be established to ensure that environmental assess- ment of all development projects is effectively conducted. • An Environment Cell, established in the P&D Department, is responsible for reviewing projects proposed by EPA. As part of P&D, this cell can also provide services for interdepartmental coordination. KP-EPA should increase its coordination with PWDP and P&D Environment Cell, and through the P&D Environment Cell further coordinate with other provincial development departments for effective environmental monitoring of public sector projects at all stages. These aspects of environmental governance can be best activated by establishing an environmental policy section within EPA. KP’s strategic governance planning 193. IDS (2014–2018) and MTIGS (2015–2018) delineate the KP government initiatives and budget allocation to address the environmental governance challenges described above. A summary of measures of the strategies thus encompasses • Improvements in investment climate; • Development of improved infrastructure; • Improvement in policy and rules implementation and governance; • Supplementation of research and development for various sectors and capacity development; • Involvement of communities and other stakeholders/players, incorporating a multidimensional and inclusive ap- proach 194. The IDS provides the basis for ADP budget planning. It is imperative that the KP Assembly ensure the prudent allocation and utilization of resources for environmental management. According to the ADPs, funding for environmental management and sustainable development in KP is provided either directly to the environment sector, or indirectly through various schemes for other sectors such as Forestry, Labor, Mines and Minerals, Multi-Sectoral Development, Water, and Urban Development. 195. The CPEIR, conducted in KP in 2015 and 2017,63 identifies the amount and pattern of public spending on programs related to greening and to combating climate change in KP. With limited Domestic Climate Finance,64 the cost of achieving the country’s climate change adaptation objectives, as indicated in the NDC,65 is in the range of US$7–14 billion per year. The gap in the required budget and the available funding could provide a host of avenues for national and international funding agencies, to build on existing development-budget finances, enabling KP to embark on a more sustainable development trajectory. Water supply and sanitation 196. Most of cities in KP face a lack of water supply and sanitation services. Major issues are old infrastructure with minimal maintenance, and infrastructure deficiency at the urban periphery, where most real estate developments in the last 10–15 years lack water supply and sanitation services. These areas were not connected to existing water supply and sanitation networks. Wastewater treatment is another major issue in all KP cities. At present, most municipal and industrial wastewater is discharged into the natural streams and rivers without any treatment. Stretches of natural streams and rivers 63 Khyber Pakhtunkhwa Province Climate Change Financing Framework 2018. 64 Domestic Climate Finance includes the funds generated from public assets and revenue streams. 65 NDCs are the long-term goals submitted by partner countries of the Paris Agreement to limit global warming to 1.5–2°C above pre-industrial levels (Source: UNFCC site, United Nations Climate Change https://unfccc.int/process/the-paris-agreement/nationally-determined-contributions/ndc-regis- try.) Accessed October 5, 2018. A Country Environmental Analysis 66 Opportunities for a Clean and Green Pakistan in urban areas are seriously contaminated. Most of KP’s IEs consist of small industries, except industries located in Hatar IE and sugar mills. 197. The production processes of most small industries in small IEs are dry, and the composition of wastewater from small IEs and SMEs is similar to municipal wastewater. Most IEs typically discharge wastewater into the municipal network. The most cost-effective solution is implementation of combined wastewater treatment systems at the city level. The CEA assessed that 10 effluent-treatment plants are urgently needed to maintain the environmental health of natural streams and rivers in KP. Hatar IE should install an independent treatment plant. Sugar mills can adopt simple natural oxidation ponds technologies for wastewater treatment. 198. Bruner’s marble industry is a special case of wastewater pollution, since marble-industry wastewater is contaminated by suspended particles of marble powder. The marble industry discharges untreated wastewater into natural streams that flow into rivers. Because marble powder is relatively heavy, it quickly settles in the natural streams beds and does not reach the rivers. As a result, most natural streams in Buner City are choked and cause serious damage to the natural drainage system. The solution is simple—installation of properly designed sedimentation tanks at each marble industry site. A secondary problem will be the final use or disposal of sludge from the sedimentation tanks. KP’s government can conduct a research study and pilot project to determine the most beneficial and economical use of this sludge. The CEA assessed that the sludge can be used as a road base, but this use needs to be pilot tested, along with other possible uses. Cleaner production and resource-efficiency programs for KP’s industries 199. While the production processes of KP’s SMEs are not pollution intensive, they are not resource efficient. The pollution from medium and large industries can be reduced 15–20 percent, and consumption of natural resources and raw materials reduced 20–30 percent by adopting RECP measures. Elsewhere in Pakistan, most investments in RECP offer payback within a year. The CEA proposes that KP-EPA, in collaboration with industry sector-specific associations and IE associations, should start a Cleaner Production and Resource Efficiency Program for KP industries. Solid-waste management 200. All KP cities face a lack of facilities for solid-waste collection and safe disposal. City-specific solid-waste management should be developed with special emphasis on city governments’ technical, physical, and financial capacity development. The feasibility of regional or city-specific sanitary landfills needs to be determined. Solid waste from hospitals and a few industries is hazardous. A hazardous waste management facility can be established using a public-private sector model. Lahore City has successfully implemented a project (the Shalimar Hospital Hazardous Waste Management Facility) using that model. Another approach for large hospitals is establishing a hazardous waste management facility at the hospital level. Karachi and Lahore have successful examples that KP can replicate. Photo credit: Antoine Coste/World Bank 67 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan 3.2 Resource efficiency and cleaner production in Punjab 3.2.1 Industrial resource use and pollution in Punjab 201. Punjab is Pakistan’s most industrialized province with ambitious plans to boost industrial output. Punjab represented nearly 60 percent of national industrial value-added in 2015/16, up from 50 percent a decade earlier (PERI 2017). Its industry is dominated by manufacturing, which accounted for 76 percent of its value-added in 2015/16, with major sectors including textile, leather, sugar, cement, pulp and paper, steel, automotive, agribusiness, pharmaceuticals, chemicals and fertilizers, bricks, machinery and equipment, surgical instruments, and sports goods. Around 80 percent of manufacturing value-added comes from large-scale manufacturing (LSM). Small-scale manufacturing (SSM) has also been a dynamic growth source in the last decade; the vast majority of Punjab’s firms are SSM. Official statistics likely underestimate the contribution of large numbers of informal SMEs in various sectors. Industrial value-added in Punjab has grown rapidly over the last decade (Figure 8), thanks to good performance in sectors such as automobiles, fertilizer, chemicals, iron and steel, pharmaceuticals, and leather. Private sector-led growth has been a key pillar of the Punjab Growth Strategy 2018, which includes ambitious objectives for private investment and exports (Government of Punjab 2015a). In applying this strategy, the Punjab Industries Sector Plan 2018 presented policies, reforms, and projects aiming at boosting industrial investments and growth (Government of Punjab 2015b). GoPunjab intends to foster a stronger and more stable contribution of the manufacturing sector to the province’s economy. Figure 8. Evolution of manufacturing gross value-added in Punjab (constant 2005/06 prices) 1,200 Rs. Billions 1,000 800 600 400 200 0 6 7 8 9 0 1 2 3 4 5 6 /0 /0 /0 /0 /1 /1 /1 /1 /1 /1 /1 05 06 07 08 09 10 11 12 13 14 15 20 20 20 20 20 20 20 20 20 20 20 LSM SSM Source: PERI 2017. 202. Punjab’s industry remains spatially concentrated, and its environmental impacts particularly affect cities. The LSM sector is mostly located in a small number of urban districts in northeastern Punjab, including Lahore, Kasur, Sialkot, and Faisalabad. The SSM sector is spread more evenly across the province (PERI 2017). Industries’ spatial concentration has not changed noticeably in Punjab over the last two decades, and no new industrial production center emerged during this period.66 This concentration is expected to continue, in parallel with the rapid growth of major urban population centers (Sánchez-Triana et al. 2014a). There are 34 IEs throughout the province, including large ones, such as Sundar IE, Multan IE, and Quaid-e-Azam IE, which concentrate large numbers of units. Many manufacturing units are in residential urban areas. This geographical concentration and inadequate land-use planning compound local pressure on natural resources, especially water, and adverse impacts from industries on urban population. 203. Industries consume significant amounts of materials, energy, and water in Punjab, in a context of relatively 66 By contrast, in countries such as Bangladesh, India, and Sri Lanka, several of the largest industrial districts by employment have changed between the 1990s and 2000s (Lopez-Acevedo, Medvedev, and Palmade 2017). A Country Environmental Analysis 68 Opportunities for a Clean and Green Pakistan low, but rapidly growing, national-level resource consumption. Available evidences suggest that several key manufacturing sectors currently operate at low resource efficiency levels. Studies for Punjab, Pakistan, and South Asia show that firms in resource-intensive and polluting sectors, especially SMEs, tend to use materials, energy, and water inefficiently.67 A recent report found that investments in more-efficient technology and equipment could reduce the energy consumption of Pakistan’s textile mills by 22 percent (2.4 million MWh) and save them over US$60 million (IFC 2016). The same study found significant energy/water and cost-saving opportunities in the sugar, pulp, paper, and leather sectors. Two of Pakistan’s largest export industries—textile and leather—rarely use technologies to recover toxic chemicals and minimize their use. 204. Punjab’s industries are major water users—directly through uncontrolled operational processes and indirectly through the use of agricultural inputs. Agricultural and industrial water efficiency are linked, since water-thirsty crops, such as sugarcane and cotton, are inputs for the agribusiness and textile industries.68 On-site pumping of groundwater is the main channel for direct consumption in the sugar (61 percent), textile processing (90 percent), and pulp and paper (98 percent) sectors (IFC 2016). There can be wide within-sector variation in consumption. For instance, medium-size textile mills processing export-quality fabric use more water per unit of output than large firms (which have better equipment and optimized processes) and small units (which produce lower-quality fabric) (CPI 2018). In several industries, high water consumption results in effluents that remain untreated and contaminate Punjab’s water systems. There is scope for much- needed improvements in water-management practices in Punjab industries. Overall, firms in water-intensive industries such as textile tend not to measure, control, or benchmark their water use in the absence of incentives to do so, leading to increased use of energy and chemicals (CPI 2018). Poor maintenance of machines and water pipes contributes to wastage. Better water-management practices, by pushing for water efficiency and reuse along supply chains and in operations, are important for industries to mitigate water-related operational, regulatory, and reputational risks likely to grow with water scarcity (WWF 2015). 205. Industries are a major source of Punjab’s air, water, and soil pollution, which in many cases exceeds applicable provincial environmental standards and GIIPs. A classification of Punjab’s industrial sectors based on the average unit’s pollution load and the number of units in the province shows that a dozen sectors have highly adverse environmental impacts (Industries are a major source of Punjab’s air, water, and soil pollution, which in many cases exceeds applicable provincial environmental standards and GIIPs. A classification of Punjab’s industrial sectors based on the average unit’s pollution load and the number of units in the province shows that a dozen sectors have highly adverse environmental impacts (Table 10).).69 Table 10. Classification of Punjab industries by environmental impact Pollution level Approx. Environmental Hazardous Density units Water Air impact waste Sugar 46 H M M H H Cement 13 L H L M H Large size Fertilizer 6 H M M L M Industrial chemicals 7 H M M L M Automobiles 4 M M M L L Petroleum refinery 2 L M M L L 67 CPI 2018; IFC (2016); IIP (2014); World Bank (2018c). 68 A primary cause of Pakistan’s water intensity is low water productivity in agriculture, a sector responsible for over 90 percent of domestic withdrawals (World Bank 2018a). Fertilizer and pesticide loads in agricultural runoffs also contribute to the pollution of surface and groundwater. Efforts under the Bet- ter Cotton Initiative (BCI) to make Pakistan’s cotton production more sustainable have shown strong efficiency gains: in 2013, about 37,000 participating farmers achieved sizeable reductions in their use of water (−21 percent), fertilizers (−22 percent), and pesticides (−37 percent), while increasing their gross margin (+29 percent) (WWF and IKEA 2014). By the 2016/17 growing season, the number of BCI-licensed farmers in Pakistan had increased to 90,000, who produced 316,000 tons of cotton on 359,000 hectares of land (https://2017.bciannualreport.org). 69 Other sectors also have significant environmental impacts and could benefit in various ways from improved resource efficiency and environmental practices. 69 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan Pollution level Approx. Environmental Hazardous Density units Water Air impact waste Dairy 91 H M L H H Oil and ghee 54 H M M M H Textile processing  400 H M L M H Beverages 30 H L L M H Small and medium size Tanning 200 H L M M H Steel melting 182 L H L H H Marble cutting >300 L H L H H Brick kilns >10,000 L H L H H Stone crushing >650 L H L H H Pulp and paper 28 H M M L M Paint 26 H L M L M Pesticide 10 L L H L M Source: CPI 2018. 206. Pollution has become a major public health hazard, with social and economic impacts. Degrading ambient air and water quality has dire consequences for Punjab’s citizens, especially vulnerable population categories such as the poor, children, and pregnant women, and the elderly.70 Pollution is estimated to cause around 340,000 deaths per year in Pakistan, with over 70 percent due to air pollution (Landrigan et al. 2017).71 This represents a quarter of Pakistan’s total annual deaths, making Pakistan one of the world’s most-affected countries. Production processes that pollute also cause high occupational health and safety risks for workers—for instance, brick-sector industries expose workers to extremely high suspended PM and toxic chemical levels, and thus an increased risk of cancer, acute and chronic respiratory disease, and potentially anemia (World Bank 2018c). Finally, pollution also negatively influences current and future labor productivity and participation by causing diseases and affecting cognitive abilities.72 207. Poor industrial resource efficiency and pollution/waste management directly undermine the productivity and competitiveness of Punjab’s industries. Energy-inefficient production processes unnecessarily increase the production costs of Punjab’s industrial firms. In the longer term, low efficiency could expose some industries to growing costs to access sufficient quality fresh water in a context of changing climate and increased water scarcity.73 Noncompliance with pollution standards also undermines the competitiveness of export-oriented industries, as firms struggle to meet the environmental and social standards of international buyers and their governments (Sánchez-Triana et al. 2014a). This has been identified as a factor behind the declining competitiveness of Pakistan’s leather and textile exports.74 According to Zafar (2012), the lack 70 Pakistan ranked 177 out of 180 countries for environmental health on Yale’s 2018 Environmental Performance Index’s (air quality, water and sanita- tion, and exposure to heavy metals), ahead of only Bangladesh, India, and Nepal. 71 See https://www.pollution.org for country-level data. 72 Studies have estimated that reducing air and water pollution in various contexts increased the hours worked and productivity of local workers by 3–6 percent. Overall, the annual cost to GDP due to productivity loses caused by pollution-related diseases has been estimated at 2 percent in low and middle-in- come countries (Landrigan et al. 2017). 73 A recent study estimated that the adoption of resource efficient and cleaner technologies in the Bangladeshi textile and leather industries could reduce long-term investments and operational expenditures needed to ensure a continued supply of water by up to US$9 billion by 2030 (WRG 2015). 74 Major brands, such as Adidas, H&M, IKEA, and Nike, are increasingly seeking to buy products from manufacturers that comply with internation- al standards set by the Leather Working Group (LWG), as well as the Registration, Evaluation, Authorisation, and Restriction of Chemicals Regulation (REACH) of the European Union (EU). Since 2014, Pakistan has been a beneficiary of the EU’s Generalized Systems of Preferences (GSP+), which grant duty-free market access for over 60 percent of EU tariff lines and require ratification of, and compliance with, 27 international conventions, including eight on the environment. A Country Environmental Analysis 70 Opportunities for a Clean and Green Pakistan of CETP and SWM facilities in the Sundar IE made it more difficult to attract export-oriented investors to the estate, which sought to meet foreign clients’ expectations. Photo credit: Antoine Coste/World Bank 3.2.2 Opportunities for greening Punjab’s industries 208. Resource efficiency and waste/pollution prevention are key elements of modern industrial environmental management. Pollution control has historically been focused on the ‘end-of-pipe’ and aimed to achieve acceptable pollutant concentration in different media. However, since the 1990s, preventive approaches have gained increasing prominence globally as a needed complement.75 This shift stemmed from realization that, while pollution control can effectively reduce pollution, it can be costly,76 technically challenging, and difficult to implement in the absence of strong monitoring and enforcement capacity. This shift emerged as two major concerns came to the fore: (a) the growing resource use and waste generation trends throughout the world and (b) the need to curb industrial GHG emissions in the context of climate change mitigation, notably through energy efficiency and renewable energy. In contrast to end-of-pipe pollution control, preventive approaches aim at finding opportunities to reduce resource use and minimize pollution/waste at the source, thus improving productive efficiency, reducing end-of-pipe treatment costs, and benefiting firms’ bottom line. 209. There is unexploited scope to improve Punjabi and Pakistani industries’ environmental, economic, and social performances by promoting preventive strategies to reduce resource use, waste, and pollution. Such opportunities can be found at the firm level, can be developed between firms in the same or in different industries, and can leverage principles of the circular economy (CE). In all cases, in contrast to end-of-pipe approaches, preventive approaches require questioning the way goods are produced and industries are organized. This implies bringing environmental and industrial policies closer together. Despite several pilot initiatives, little has been done so far to mainstream these approaches in Punjab. Firm-level investments in Resource Efficient and Cleaner Production (RECP) 210. Firm-level RECP has been the most widely promoted preventive approach in recent decades.77 Central to 75 Resource efficiency and preventive approaches have been promoted by countries such as China (Law on the Promotion of Cleaner Production 2002), Republic of Korea (Law Promoting the Shift to an Environment-Friendly Industrial Structure 1995), and the United States (U.S. Pollution Preven- tion Act 1990). These approaches have also been championed by international organizations including UN Environment, United Nations Industrial Devel- opment Organization (UNIDO), and the World Bank (for example, World Bank 1998). 76 For instance, the CETP technologies required to meet applicable effluent standards in Punjab are capital intensive, require a large and constant ener- gy supply, and create hazardous sludge that must be disposed of (World Bank 2016a). 77 UNIDO and UN Environment have played leading roles in promoting RECP in developing countries since the 1990s, notably through the global RECP program and network of National Cleaner Production Centers (NCPCs) (http://www.recpnet.org). 71 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan RECP is the continuous assessment of current production methods to identify the main sources and causes of resource inefficiency/pollution and to generate cost-efficient options to minimize them.78 RECP aims at promoting use of more- efficient and greener technologies and practices. This is intended to yield a broad range of benefits: (a) economic gains for the firm (enhanced productivity,79 innovation, lower end-of-pipe treatment costs and potential environmental liability, and compliance with export market standards); (b) environmental gains (conservation of natural resources, and pollution and waste reduction); and (c) social gains (well-being of workers and local communities). RECP options include ‘low- hanging fruit’ with low capital requirement and short payback time that can be implemented easily even by small companies. Examples of ‘low-hanging fruit’ options include good ‘housekeeping’, input change, and process control. Examples of more- financially and technically demanding investments include equipment modification or technology upgrade. As mentioned, SMEs represent a relatively small share of industrial value added in Punjab but account for the vast majority of firms, with notably large cumulative environmental impacts. However, there is also an increasing focus on technological options to improve energy efficiency and decarbonize in heavy industries, such as cement, steel and chemicals (IEA 2017; McKinsey 2018). Over two decades after the concept was popularized, there is strong evidence from the literature that RECP has proven to be an effective approach, capable of generating the above-mentioned environmental, economic and social gains in a large diversity of countries and sectors (Marques Matos et al. 2018). 211. RECP has been promoted in Pakistan since the 1990s, particularly in Punjab. With support from international donors, a large and increasing number of RECP pilot projects have been implemented in several key industrial sectors, with a focus on textile and leather. However, after more than two decades, RECP has not been mainstreamed in Punjab’s different industrial sectors. Hundreds of SMEs’ RECP efforts have been directly supported through past projects, and hundreds more made familiar with RECP through training and engagement with industrial associations. Studies suggest that there is still a large potential for efficiency gains in several resource-intensive and polluting sectors, with profitable investment opportunities and payback periods often ranging from a few months to 2–3 years.80 In spite of this potential, in Punjab, like in many countries, RECP has not passed the pilot stage to achieve sector-wide mainstreaming. Consequently, the mainstreaming of RECP in Punjab and the rest of Pakistan presents an important challenge, but one that can lead to major economic, environmental, health, and other social benefits. 212. What factors explain the failure of many firms to adopt efficient and cleaner technologies in Punjab? Of 230 manufacturers supported with energy efficiency assessments in each of four different sectors, as little as a fifth had implemented recommended energy saving techniques in a recent study on Pakistan (IFC 2016). Global RECP experience shows that multiple constraints can limit firms’ capacity to invest in profitable RECP options, including lack of (a) awareness and information about available technologies, (b) skills and technical capacity to implement them, (c) access to finance, (d) providers of affordable clean technology services and equipment, and (e) needed complementary infrastructure such as electrical connection. Sector-specific constraints also exist. Such constraints can apply differently to firms in different sectors, and to different types of firms (small vs. large, domestic vs. foreign-owned, formal vs. informal) within each sector. One lesson from past RECP projects in Punjab and elsewhere is that communicating a clear and convincing business case for such investments was essential. 213. The various initiatives in Punjab to promote RECP have had shortcomings that have limited their impacts’ scope and sustainability. Projects have tended to provide diagnostics and recommendations to firms, rather than building their capacity to conduct such diagnostics and help them structure employee training, incentives, and responsibilities so that a framework for continuous improvement can be established (UNIDO and Government of Pakistan 2014). Likewise, 78 See, for instance, the handbook prepared by UNIDO and UN Environment (2010) to develop firm-level management plans for resource efficiency (water, energy, materials, and chemicals) and waste/pollution minimization. 79 Productivity gains come mostly from reduced input use and lower treatment costs, although there could be broader gains. For instance, research on the impact of adopting energy-efficient LED lighting in Indian garment factories suggests that firms investing in such lighting reap labor productivity co-ben- efits due to lower building temperatures (Adhvaryu, Kala, and Nyshadham 2017). 80 For instance, the IFC (2016) study covers the textile, sugar, pulp and paper, and leather sectors. The study, based on audit data of 230 Punjabi textile, sugar, paper and leather manufacturers, found they had implemented energy-saving recommendations that reduce consumption by more than 287,000 MWh annually. However, these manufacturers could further reduce their energy consumption by 3.7 million MWh annually and save over US$76 million in energy costs (IFC 2016). Likewise, CPI (2018) extensively covers textile, leather tanning, steel furnaces, brickmaking, dairy, sugar, oil and ghee, beverag- es, marble cutting and stone crushing. CPI (2018) identifies several technologies to address inefficiencies and increase resource circularity in each sector. Ortolano et al. (2014) covers textile and leather. IIP and IFC (2014) assesses the potential for waste-heat recovery in different countries’ cement sectors, including Pakistan. IIP (2014) covers textile, bricks, shipbreaking, and steel re-rolling for South Asia. A Country Environmental Analysis 72 Opportunities for a Clean and Green Pakistan capacity building for government agencies and other key stakeholders, such as industry associations, has been neglected. Few projects have sought to foster development of private RECP technology and service suppliers, as well as of sustainable financing options. Initiatives have focused on the supply side, overlooking demand-side issues. Moreover, multiple initiatives, including those within the same sectors, have generally been implemented simultaneously with little coordination. Finally, most initiatives have focused on pilots for individual firms, missing opportunities to foster industry-level progress. Inter-industry approaches 214. Beyond firm-level improvements, cooperation between multiple firms within or across sectors can offer additional opportunities to reduce their environmental footprint, while generating economic gains. This can be done by relocating clusters of polluting industrial units in dedicated estates to jointly manage environmental issues; by strengthening environmental management in IEs to gradually shift toward an ‘eco-industrial park’ (EIP) model promoted by China; and by developing exchanges of waste material, waste energy, and wastewater between firms within and/or outside of IEs (‘industrial symbiosis’). Such approaches have been central elements in the strategies of countries that have successfully initiated the greening of their industrial sectors recently, such as China and Korea. 215. In Punjab, IEs provide opportunities to promote greener industrial development. A large share of the province’s industrial production—and pollution—is concentrated in IEs. The number of IEs has increased from 24 in 2006, to 34 in 2016, including 13 large ones managed by Punjab Industrial Estates Development and Management Company (PIEDMC) and Faisalabad Industrial Estates Development and Management Company (FIEDMC) (PERI 2017). Going forward, GoPunjab plans to develop facilities at existing IEs, including ones for effluent treatment, and to build several new IEs in different parts of the province (GoPunjab 2015b). The construction of nine Special Economic Zones is planned in the framework of the China–Pakistan Economic Corridor (CPEC), including one in Punjab (Faisalabad). This represents a good opportunity to target efforts at improving industrial environmental management in brownfield and greenfield IEs, through both end-of-pipe systems and preventive/RECP approaches. 216. Despite the large potential, little has been done to promote sound environmental management in Punjab’s IEs. Most IEs have suffered from lack of essential environmental infrastructure (for example CETP and landfill) due to inadequate allocation of responsibilities between GoPunjab, zone developers, and tenants to finance their construction, maintenance, and operations (World Bank 2016a). Beyond infrastructure, IEs’ policy, organizational, and regulatory frameworks do not emphasize environmental management and only consider it as part of compliance with environmental standards, which is generally not achieved. Zone developers and managers (PIEDMC, FIEDMC, and Punjab Small Industries Corporation [PSIC]) have insufficient understanding or concern about how improved resource efficiency and cleaner production within IEs could become a central element of their sustainability and competitiveness (UNIDO and Government of Pakistan 2014). 217. Introducing the concept of EIP could help achieve Punjab’s industrial and environmental objectives. Ensuring sound environmental management and promoting RECP in IEs can be a source of broad economic, social, and environmental gains, as shown by experiences in China and Korea. In Punjab, a generic Sustainability Framework was recently prepared (CPI 2013a) and applied to specific estates, such as Sundar IE (CPI 2013b) and Qaid-e-Azam IE, after consultations with their respective Boards of Management.81 This framework is a good step toward introducing the EIP model in Punjab’s existing and planned IEs, but it does not appear to have been implemented. Since the preparation of the Sustainability Framework, GoPunjab launched the J&C Program in 2016 with support from the World Bank.82 The program includes objectives for improving IEs’ environmental management. More recently, GoPunjab expressed its intention to develop an EIP strategy under the new Punjab Green Development Program, also supported by the World Bank. Using the previously developed IE sustainability framework and available international guidance,83 the time is right for GoPunjab to take concrete 81 This framework was prepared under the Dutch-financed Programme for Industrial Sustainable Development, Phase II (2010–2013). It looks at IE-level environmental planning and management, as well as at tenants’ individual practices and cooperation for RECP, and covers various EIP dimensions (for example, byproducts, wastewater and waste-heat exchanges, shared pollution/waste management infrastructure, support for RECP, green buildings, renewable energy, and social amenities). The work done by this program suggests a process to develop, operationalize, and monitor a customized sustainabil- ity framework based on a given IE’s prioritization of sustainability issues. 82 https://prmp.punjab.gov.pk/jandc 83 In particular, the World Bank, UNIDO, and GIZ recently published a joint EIP framework, which defines prerequisites and performance indicators for IEs to be considered EIPs regarding park management, environmental, economic, and social performances (World Bank, UNIDO, and GIZ 2017). The 73 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan steps to develop EIPs in the province. In doing so, the following principles and lessons from international experience should be kept in mind: • Compliance with environmental laws and regulation by IE tenant companies is a prerequisite. EIP, RECP, and indus- trial symbiosis are intended to bring about additional benefits; they can also lower end-of-pipe treatment and compli- ance costs. • There is no single EIP model, and different EIP elements can be gradually introduced in Punjab’s IEs based on local priorities and available resources. • Top-down EIP programs have a mixed record, showing that strong involvement from IE management and tenant in- dustries is essential. Governments can play an important role by (a) adopting an EIP strategy/policy and designating pilot IEs; (b) establishing a conducive regulatory and organizational environment; and (c) facilitating business-driven initiatives through information dissemination, provision of technical and financial support, while leaving flexibility for local implementation. • While improving environmental management within the estate would be a priority of EIPs, substantial environmental impacts may occur upstream or downstream from tenants’ supply chains, in which case initiatives could aim at involv- ing outside suppliers and clients. • EIP initiatives can yield significant gains but are no silver bullet or substitute for broader environmental policies. 218. GoPunjab could also consider facilitating the emergence of Industrial Estate (IE) networks in the province. Some exchanges of byproducts and waste already take place in Punjab, but these are often not done efficiently and can even generate environmental or health hazards—for example, protein-rich but chromium-laden tannery waste used to produce poultry feed (CPI 2013a). In many countries, IS linkages have successfully been established involving many different industries present in Punjab, such as textile, leather, sugar, and cement. Many more such linkages could likely be developed within and outside IEs in the province with better awareness and support. The literature on IS shows that a combination of direct and indirect support and incentives, through regulatory, fiscal and other policy instruments, can help facilitate IS.84 219. Finally, in some cases, relocating polluting industry clusters can be an option to reduce their environmental impacts and improve efficiency. Much manufacturing in Punjab takes place in and around rapidly growing cities, where there is insufficient land formally zoned for industry, although GoPunjab plans to improve industrial zoning (GoPunjab 2015b). As in other South Asian countries, polluting sectors such as textile and leather tend to be clusters of SMEs operating in similar ways. SMEs’ scattered locations, coupled with their often-informal status, make them difficult to regulate despite their local impacts in waste and pollution. Facilitating relocation of such clusters to appropriate locations may be needed to mitigate adverse environmental and health impacts. UNIDO recently prepared a useful review of the global experience with leather industry parks and derived lessons to implement them and maximize economic, environmental, and social benefits (UNIDO 2017). Circular economy 220. The CE85 framework aims to rethink production and consumption systems in ways compatible with sustainable development. The different definitions of CE that have been proposed agree on the overarching objective of closing resource loops to minimize finite resource consumption, waste and pollution, which are constitutive elements of traditional linear industrial systems. While RECP’s focus on incrementally increasing efficiency is a necessary and complementary approach, CE goes a step further by aiming to ‘design out’ resource use and pollution/waste wherever possible. Likewise, improved recycling systems are an important part of the framework, but are considered a last resort, since recycling comes at the end of the product lifecycle. Other more-upstream CE elements are product eco-design (to increase products’ lifespan and make them easier to repair or recycle) and extended producer responsibility (EPR); industrial symbiosis; new business models such as product-as-a-service and the sharing economy; and reuse, repair, and remanufacture. same organizations and the Korean Ministry of Trade, Industry and Energy (MOTIE) subsequently published a detailed and practical handbook to develop a national EIP program, implement the EIP model at the estate level, and establish industrial symbiosis networks (World Bank, UNIDO, GIZ, and MOTIE 2018). 84 See Costa, Massard, and Agarwal (2010); European Commission (2018); and Jiao and Boons (2014). 85 Circular Economy means reducing resource use and reducing the load on our natural sinks. A Country Environmental Analysis 74 Opportunities for a Clean and Green Pakistan 221. Circularity—a relatively new concept—could offer opportunities to reduce the environmental impact of industrial development while generating economic and social gains.86 To date, most work on the topic has focused on high-income countries. However, some studies have begun on CE’s potential in low- and-middle-income countries, as well as the implications for them of future transitions toward more CE models in the north.87 A report for India looking at three topics (cities and construction, food and agriculture, and mobility and vehicle manufacturing) estimated that a CE path to development could bring India annual benefits of US$624 billion in 2050—equivalent to 30 percent of current GDP (Ellen MacArthur Foundation 2016). In South Asia, this transition could build on existing activities, such as shipbreaking and recycling industries, but needs to ensure they are conducted in ways that minimize health and safety risks for workers, consumers, and the environment (World Bank 2010b). 222. What could be the main opportunities to improve the economic, environmental, and social performances of Punjab’s industries through circular solutions? The CE framework is broad, covering multiple sectors in addition to industry, such as urban development, agriculture, energy, and transport. It adopts a lifecycle approach considering all stages from resource extraction to production, consumption, and disposal/recycling. Restricting the focus to manufacturing production, analysis is needed to determine how CE principles could be applied in Pakistan to solve major issues linked to industrial resource use and pollution—and to the consumption and disposal of products.88 3.2.3 Policies to foster sustainable industrialization 223. Governments have an important role to play to ensure industrialization does not undermine sustainable development, but rather contributes to it. Over the last 50 years, governments around the world have increasingly sought to minimize industries’ adverse environmental and social impacts by adopting stricter environmental policies. Since the 1990s, many governments have also adopted policies to promote resource efficiency and preventive approaches to industrial pollution and waste, as a less costly way to achieve this objective, which can also strengthen innovation, productivity, and competitiveness. 224. A range of complementary policy instruments should be used to minimize industrial resource use, waste, and pollution. Several reasons explain why firms do not always invest in RECP, even when this could increase profits. Adopting and enforcing appropriate environmental standards can create pressure to this effect but may not be sufficient. Countries that have been able to green their industrial sector, such as Korea, have tended to combine this traditional regulatory approach with other instruments of environmental policy (for example, MBIs and IBIs), as well as with a more proactive ‘green industrial policy’ to address obstacles limiting adoption of RECP, industrial symbiosis, and other tools for ‘greening’ their economies.89 The need to combine approaches is particularly relevant in developing countries, where industrial sectors generally consist of numerous small and often informal firms, and where enforcement capacity is low. 225. Beyond donor-funded projects, Pakistan and Punjab’s approach to address industrial pollution has focused on command-and-control regulations. Pakistan’s federal government, and the provincial one since the 2010 decentralization, have adopted environmental standards and attempted to enforce industries’ compliance with them, with limited success. Other environmental policy instruments have not been used extensively in Punjab and, despite multiple pilot RECP projects, preventive approaches have not been translated in policy. In particular, GoPunjab has made limited efforts to complement its regulating role with a facilitating role, working with industries to achieve better environmental performances. Consequently, expanded and improved collaboration with industries—as well as expanded and improved regulatory processes—will help Punjab and all of Pakistan to achieve a greener economy. Strategies and policies 226. While a number of policies and strategies contain relevant elements, Punjab lacks an integrated strategy for 86 See CEPS (2018); Geissdoerfer et al. (2017); and WEF, Ellen MacArthur Foundation, and McKinsey (2014). 87 See COER (2017); Gower and Schröder (2016); Preston and Lehne (2017); and Tearfund (2017). 88 Given its focus on Punjab’s industries, this chapter does not expand on the challenges posed by the increased consumption and disposal of various goods produced outside the province (such as electronics, appliances, and plastic goods) and the potential circular solutions, such as extended producer/ importer responsibility. 89 See UN Environment (2017a) for a comprehensive presentation of the concepts, instruments, and country experiences with green industrial policy, and OECD (2018) for a presentation of policy instruments focusing on greening SMEs. 75 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan sustainable industrial development. In recent years, strategies dealing with industrial development, energy efficiency, and environmental management have been adopted at both the federal and provincial levels. Overall, limited links are made between these different dimensions, especially in provincial strategies, thereby indicating lack of coordination between relevant departments. An integrated strategy—between national and provincial government entities, and across provincial government departments and industry sectors—with a credible action plan to achieve its objectives, would be a useful first step in enabling GoPunjab to foster a more sustainable pathway for industries. Chile,90 China (Qi et al. 2016; Zhu et al. 2018), Guatemala,91 and Vietnam92 are among the countries using national strategies to promote cleaner production and the CE. 227. In Punjab, such a strategy should provide an integrated assessment of the economic, social, and environmental dimensions of industrial development in the province. Data and indicators could be identified to measure the evolution of key variables, and targets could eventually be set. The strategy should consider a broad range of environmental and industrial policy instruments, including firm-level RECP, EIPs, and circularity, and ensure coherence with key linked policies—for example: trade,93 investment,94 energy, innovation,95 urban development and SWM,96 and education. Finally, an integrated strategy for sustainable industrial development would ensure participation and ownership by all key department and agencies, as well as cooperation with key stakeholders, such as industries, academia, and civil society. Photo credit: Antoine Coste/World Bank Institutional framework 228. The institutional framework in Punjab could be made much more conducive to the greening of industries. 90 “Política de Fomento a la Producción Limpia” 1998. http://www.tecnologiaslimpias.cl/chile/docs/PFPL_1997-2000.pdf 91 “Política Nacional de Producción más limpia.” http://www.marn.gob.gt/Multimedios/385.pdf 92 “Strategy on Cleaner Industrial Production to 2020.” http://www.chinhphu.vn/portal/page/portal/English/strategies/strategiesdetails?categoryId=30&articleId=10051863 93 This can concern lowering import tariffs on input and equipment that can support cleaner production. For instance, India’s large leather and textile sectors were affected in the 1990s by German regulations banning chemicals commonly used in their production processes. To help Indian manufacturers face the resulting compliance costs, the Indian government reacted decisively by lowering import duties on higher-quality and costlier chemicals, from 150–200 percent to 20 percent. Additionally, Germany worked with state-sponsored industrial bodies in India to provide technical support to firms for adaptation. Overall, this regulatory shock positively affected large Indian producers’ export revenues, by fostering investment in high-quality imported raw materials and technology. On the other hand, affected small leather and textile firms found it more difficult to adapt (Chakraborty 2017). 94 For instance, Morocco has actively promoted foreign direct investment to develop renewable energy, in parallel with efforts to support related skills-development and the emergence of domestic supplier industries (UN Environment 2017a). 95 On eco-innovation in industries, see Dutz and Sharma (2012) and OECD (2010). 96 In Europe, for instance, increasingly strict policies to regulate and tax landfilling have been one driver of industrial symbiosis (Costa, Massard, and Agarwal 2010). A Country Environmental Analysis 76 Opportunities for a Clean and Green Pakistan Countries that have successfully initiated the greening of their industrial sector (for example, China and Korea) have generally (a) involved various key government organizations in this agenda, beyond the ones in charge of environmental protection and (b) gradually strengthened the capacity of the different organizations to adopt and implement conducive policies on environmental issues and to support industries. Punjab’s main organizations suffer from shortcomings on both points, with little to no institutionalized capacity to promote preventive approaches beyond temporary donor-funded projects.97 • Punjab’s Environment Protection Department (EPD): Since devolution gave this department overall responsibili- ty for environmental management in the province, EPD and the attached EPA have suffered from insufficient capacity and resources to carry out their mandate to develop policies and regulations, monitor pollution, and enforce environ- mental regulations.98 Despite implementing some projects on industrial pollution, EPD has not complemented EPA’s regulatory role with a facilitation function to support the greening of industries. However, GoPunjab has expressed its intention to strengthen EPD’s capacity, including establishing new departments for environmental monitoring, pilot- ing and demonstrating cleaner technologies, and policy making. • Punjab’s Industries, Commerce and Investment Department (ICID): ICID and linked agencies99 are in charge of industrial development, including through IEs. ICID has not dedicated substantial focus nor resources to industries’ environmental sustainability, despite a sharp increase in the department’s budget since 2013.100 ICID has not estab- lished a dedicated unit and its staff generally has insufficient awareness of how industrial sustainability can be fostered through tools such RECP and EIPs. PIEDMC’s and FIEDMC’s top managers were assessed to be aware of environ- mental compliance issues, although each unit has only a one-person environmental section, and capacity to promote environmental sustainability at the estate-level is limited (World Bank 2016a).101 Punjab’s Industries Sector Plan ad- vocated a shift from ICID’s largely administrative and regulatory role to a role of facilitator of industrial development (Government of Punjab 2015b). Given the importance of RECP for industries’ productivity and competitiveness, this new role should cover environmental aspects. ICID should implement recommendations of the J&C Environmental and Social Systems Assessment (ESSA), collaborate with EPD, and ensure its staff is trained on environmental issues. • Punjab’s Energy Department: This department has traditionally focused more on supply than demand-side is- sues. Establishment of the Punjab Energy Efficiency and Conservation Agency (PEECA) and initial work on standards and labelling of electric appliances are welcome developments, even if PEECA still has limited ca- pacity and focuses on the public sector. However, PEECA could play an important future role in fostering in- dustrial energy efficiency, like the Korea Energy Agency has done by subsidizing firm-level audits, promot- ing Energy Management Systems (EnMS), and developing the Energy Service Companies (ESCO) market.102 229. Punjab’s EPD, ICID, and Energy Department could be reformed to better integrate the greening of industries into their mandate and activities. Key topics such as RECP, EIPs, and CE could be promoted by dedicated units under these departments or by a new agency. The two decades of experience with NCPCs in almost 60 countries offer lessons on how to establish and operate such centers (Luken et al. 2016), and Australia and South Africa offer examples of agencies dedicated to the greening of industries.103 230. Better intragovernmental coordination and public-private dialogue (PPD) are essential for green industrial 97 There are relevant federal institutions as well, which are not covered in detail here. They include the National Productivity Organization, which has provided technical assistance on energy efficiency in sectors such as textiles and steel over the past decade, and the Small and Medium Enterprises Develop- ment Authority. The Federal Ministry of Commerce and Textile and All-Pakistan Textile Mills Association have a plan to establish a sustainable production center for the textile industry, with support from GIZ. Finally, the judiciary has played an increasingly important role on environmental and pollution-related issues in recent years in Punjab, with the Punjab Environmental Tribunal and Green Benches in the High Court of Punjab (see World Bank [2016a] for a detailed analysis). 98 See World Bank (2016a) for an institutional analysis of EPD/EPA. 99 Punjab Board of Investment and Trade, PIEDMC, FIEDMC, and PSIC. 100 According to PERI (2017), the ICID’s average annual budget allocation between 2014 and 2017 (post-Punjab Growth Strategy) was over six times as high as before 2014. 101 The ESSA prepared for the J&C Program notably recommended the establishment and staffing of social and labor units in PIEDMC and FIEDMC. Since the program was adopted in 2016, ICID has been lagging on implementation of these and other measures identified to improve its environmental management capacity. 102 See http://www.energy.or.kr/renew_eng/energy/industry/enms.aspx 103 See https://www.greenindustries.sa.gov.au (Australia) and https://www.green-cape.co.za (South Africa). 77 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan development. There is insufficient coordination between key government departments, especially ICID and EPD. Punjab also lacks an adequate platform for all key public and private stakeholders, including agencies in charge of environmental management and industrial development, to discuss and coordinate issues related to industrial resource use, pollution, and waste.104 For instance, the Smog Commission established in December 2017 to identify the causes of Punjab’s smog episodes and to recommend priority actions did not include the ICID, despite industries‘ recognized contribution to the issue.105 The Punjab Environment Protection Council already has a mandate to “coordinate integration of the principles and concerns of sustainable development into Punjab development plans and policies.”106 However, it has been dormant; it could be reactivated and a committee on sustainable industrial development established under it, co-chaired by EPD and ICID, with representatives of key industry associations, academia, civil society, development partners, among others. Environmental regulations 231. Punjab’s environmental policy framework for industries lacks in completeness and implementation. While Punjab has adopted a legal and regulatory framework for environmental management, largely inherited from the federal one, several provisions concerning industries have not been meaningfully implemented. This framework focuses on command- and-control regulations, which mostly ignore preventive approaches, and complementary instruments are lacking, including market-based, information-based, and voluntary instruments. Consequently, the polluter pays principle has no meaningful application in the province, and industries face little incentive to improve resource efficiency. 232. GoPunjab’s capacity to enforce existing regulations on industrial pollution remains weak. Several laws and rules regulate industrial pollution.107 GoPunjab has also adopted several Punjab Environmental Quality Standards (PEQS). These include PEQS for industrial gaseous emissions and effluents, rules on hazardous waste management (under revision), and requirements for new projects to submit IEEs and EIAs.108 However, the provincial EPA’s capacity to monitor emissions and enforce compliance with these regulations is weak, especially for the provinces’ numerous SMEs. There is no real-time, remote monitoring of air and water pollutant emissions even for large plants, and the existing tool, SMART, for industries has never been widely used. A legacy lack of political will to take enforcement action against industry is also an issue. 233. Very few firms in polluting sectors, such as textile and leather, are sanctioned for noncompliance, and the number of fines collected annually has declined over 2012–2017 (WWF 2018). However, since 2016, EPA has ordered the closing of excessively polluting units as a temporary measure to mitigate smog risk.109 Firms that make efforts for environmental management generally do so because of pressure from foreign buyers much more than from regulators. While most investors submit required IEE/EIAs to obtain EPA’s non-objection, the quality of these reports and monitoring of their implementation are often lacking. There have also been debates on the adequacy of current PEQS, with some industry voices calling for less stringent standards. Standards should be achievable, but also ambitious enough to bring polluting industries in line with GIIPs. Developing industry-specific standards, as GoPunjab currently plans to do, would be a positive step. 234. Punjab’s regulatory framework does not foster preventive approaches that improve industrial resource efficiency and reduce pollution and waste. Regulations focus on end-of-pipe issues and pollutant concentrations, ignoring resource consumption, cleaner production, waste generation, and resource recovery, which industries consider to be voluntary actions. However, some general regulations, such as those on IEE/EIA and Environmental Protection Orders (EPOs),110 could be used to promote RECP solutions and the introduction of resource consumption benchmarks. 104 For guidance on PPD, country case studies, and lessons learned, see http://ppd.cipe.org and World Bank (2016c). 105 See https://epd.punjab.gov.pk/system/files/Smog%20commission%20report.pdf 106 This Council was established by PEPA as an apex decision-making body on environmental issues, headed by the provincial Chief Minister and made up of representatives of various government departments, the private sector, NGOs, and so forth. 107 These include the PEPA (1997) and, to a lesser degree, the Factories Act (1934) and Canal and Drainage Act (1873) (CPI 2018). A Boilers and Pressure Vessels Ordinance (2002) is in force, but it focuses on safety rather than efficiency. 108 See https://epd.punjab.gov.pk/rules_regulations 109 Temporary closures during the smog season have targeted steel furnaces and re-rolling mills without adequate pollution-control technologies since 2016, as well as non-zigzag brick kilns in some parts of Punjab in 2018 (Dawn 2016, 2018). Such measures may provide temporary relief and respond to public and judiciary pressure to tackle smog. However, they do not provide a comprehensive or permanent solution to air pollution, which remains high throughout the year, and have been criticized by plant owners as arbitrary. Such measures also have adverse economic and social impacts, leading in the case of bricks to soaring prices and lost income for workers. 110 When any entity is found to be, or about to be, violating the PEQS, Punjab EPA, after giving the entity an opportunity to be heard, may issue an EPO A Country Environmental Analysis 78 Opportunities for a Clean and Green Pakistan Other general regulations, such as the boilers and pressure vessels ordinance, could be updated to include a focus on energy efficiency. Punjab could learn from other countries that have sought to promote RECP, industrial symbiosis, and CE through regulations. Market-based instruments 235. MBIs can play an important role to incentivize the greening of Punjab’s industries. Substantial theoretical and empirical evidence supports the use of MBIs, including different types of environmental levies, taxes, and subsidies, to complement command-and-control regulations for reducing pollution.111 Furthermore, such instruments are central in the Porter Hypothesis, according to which well-designed environmental regulation can trigger innovation and competitiveness gains that can partly or even more than compensate for pollution-abatement costs (Ambec et al. 2013). Research studies also suggest that factoring in the inverse relationship between pollution and labor productivity/supply significantly increases the measurement of environmental taxes’ positive impacts on firm profitability and welfare (Pang 2018; Williams 2002). Taxing the use of nonrenewable resources and reducing taxes on activities such as repair, reuse, and recycling have been highlighted as key to promote CE (Webster 2017). 236. In Pakistan, MBIs have not been used to incentivize environmental compliance and RECP in industries. At the national level, fossil fuels have traditionally been taxed, but the government recently reduced rates to keep consumer prices from increasing.112 Recent discussions of a federal carbon tax have not yet led to concrete steps toward such a tax.113 Punjab does not have environmental taxes for industries. A pollution charge system was adopted in 2001 to push firms to comply with the NEQS, but not to promote improvements beyond compliance. GoPunjab has not implemented this pollution charge, despite recent injunctions from the Lahore High Court to do so.114 Punjab would benefit from introducing environmental taxes or fees designed not only to reduce end-of-pipe pollution, but also resource use and solid waste. Such taxes could be set at levels sufficient to create incentives for firms, with a credible timeline for escalation. Several developing countries, such as China, Malaysia, and Vietnam, have long experiences with environmental tax reform, from which Punjab could learn.115 On the waste side, landfilling taxes have been one driver of industrial symbiosis in Europe (Costa, Massard, and Agarwal 2010). While industries have often resisted environmental taxes (especially on carbon), claiming that they undermine competitiveness, several ways can be found to address such concerns while preserving taxes’ environmental effectiveness (World Bank 2018d). Finally, several countries, such as South Africa,116 the United Kingdom,117 and the United States,118 have introduced tax incentives for industries investing in cleaner and more efficient technologies and equipment. Information-based Instruments and Information Disclosure 237. IBIs can help drive greener production and consumption choices. Such instruments—including company rating and certification schemes, and product standard and labelling (S&L) schemes—can help bridge information asymmetries and create pressure for industries to internalize environmental externalities by greening their technologies and practices, allowing markets to function more efficiently. Providing information about the environmental footprint of firms and products can benefit consumers. Such information can also reward virtuous producers through improved reputation, reduced liability, product differentiation, capacity to capture consumers’ willingness to pay for green or energy-efficient products, and improved worker motivation. There is significant evidence that well-designed IBIs can be effective, notably concerning energy efficiency S&L schemes directing that entity “to take such measures as the Provincial Agency may consider necessary within such period as may be specified in the order,” which may include installation, replacement, or alteration of equipment to eliminate or abate pollution. 111 For more details, see the guidance note on MBIs in World Bank (2012). 112 Dawn 2018. 113 See https://unfccc.int/news/pakistan-explores-carbon-pricing 114 “Pollution Charge for Industry (Calculation and Collection) Rules, 2001.” https://epd.punjab.gov.pk/rules_regulations 115 Regarding environmental tax reform and industries in developing countries, see also Cottrell et al. (2016) and UN Environment (2017a). 116 The 12L Energy Efficiency Tax Credit provides an allowance for businesses to implement energy efficiency savings through waste-heat recovery and co-generation. http://www.sanedi.org.za/12L.html 117 The U.K. Government maintains a list of energy-efficient plants and machinery, investment in which is supported through tax credits for businesses. https://www.gov.uk/guidance/energy-technology-list 118 Several states have adopted such incentives for pollution-control equipment (https://www2.deloitte.com/content/dam/Deloitte/us/Documents/ Tax/us-tax-pollution-control-tax-credits-and-incentives-may-2017.pdf), energy efficiency (https://aceee.org/topics/industrial-energy-efficiency-pro- grams), and recycling (https://www.bna.com/incentives-watch-states-b57982092980/). 79 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan (IEA 2015a). Governments worldwide have adopted a growing number of IBIs as complements to command-and-control or MBIs, since IBIs are a cost-effective and politically acceptable way to pursue environmental policy objectives.119 238. IBIs have not been used extensively in Punjab. A few voluntary international standards and certification schemes are used by some export-oriented producers in Pakistan. These include Oeko-Tex’s Standard 100 (which focuses on minimal use of toxic chemicals in textile), BCI (which looks at the sustainability of cotton production), and the Leather Working Group (which certifies the environmental performance of leather manufacturers). Recently, PEECA has started developing energy-efficiency S&L for appliances, starting with electric fans and with plans to cover other appliances. There is scope for a broader use of green and energy-efficiency certification, standards and labelling in Punjab. These instruments could cover not only consumer products but also industrial equipment, such as motors and transformers, and could consider the whole lifecycle beyond the end-of-pipe impact of production.120 239. Another information-based approach to foster the greening of industries is public disclosure of environmental information. Several multilateral environmental agreements recognize the principle of public access to environmental information. In parallel with efforts to improve the collection and dissemination of data on ambient air and water quality (which Punjab lacks), disclosing information about resource-intensive, polluting, and waste-generating firms’ emissions and compliance could foster the greening of industries by generating public pressure and enabling firms to benchmark their performance. Global experience shows it is possible to design EID programs that are effective and manageable for regulators and businesses.121 Such programs can include a Pollutant Release and Transfer Register,122 which the EU and United States have used, and which Turkey is developing.123 These programs also include Environmental Performance Rating and Disclosure (EPRD) initiatives. Voluntary approaches 240. Voluntary agreements (VAs) negotiated between governments and industries may not be sufficient to promote compliance and RECP, but could play a useful initial role. Since the 1990s, a growing number of OECD and developing countries have used pollution-reduction VAs, which provide incentives but do not mandate pollution control. VAs’ effectiveness and efficiency have been debated, notably regarding their capacity to improve environmental performance beyond a business-as-usual scenario.124 While VAs in high-income countries have mostly been used to foster improved environmental performances beyond regulatory requirements, developing country regulators lacking enforcement capacity have tended to use them to reduce broad noncompliance (Blackman 2010). Evidence from developing countries suggests that VAs may not be sufficient to improve environmental performance in industries in the absence of regulatory pressure. However, VAs could help establish cooperative relationships between regulators and industries and build capacity for broader environmental policy reform. This could yield lessons for GoPunjab’s efforts to engage with different industrial sectors to promote environmental compliance and RECP. EPD could learn from this experience and aim to negotiate—with adequate incentives and sanctions—time-bound and performance-based VAs on these issues, starting with a pilot sector. 241. Government can also promote voluntary adoption by firms of EMS and EnMS to improve resource efficiency and prevent pollution/waste. Since the 1990s, EMS has been an increasingly popular tool globally for businesses to manage their environmental footprint while improving operating efficiency.125 While the literature shows mixed evidence that ISO-certified EMS improve environmental performance, there is evidence that in certain contexts, especially when the regulatory framework offers firms sufficient incentives and flexibility, EMS can help firms to become greener (Arimura et al. 2016; de Oliveira et al. 2010; McGuire 2014). EnMS have emerged more recently with a similar management system for 119 See https://globalecolabelling.net for examples of different countries’ eco-labelling schemes, and IEA (2014) for a presentation different energy efficiency S&L schemes. 120 See World Bank (2016b) for a presentation of the global experience with S&L scheme for industrial equipment. 121 For more details, see the guidance note on EID in World Bank (2012), and Kathuria (2009) on public disclosure initiatives in developing countries. 122 See http://www.oecd.org/chemicalsafety/pollutant-release-transfer-register 123 See https://eprtr.csb.gov.tr 124 For lessons learned based on experience in OECD countries, see http://www.oecd.org/env/tools-evaluation/voluntaryapproachesforenvironmen- talpolicy.htm 125 EMS is a system of organizational objectives, policies, and processes that an organization adopts, with the aim of achieving domestic environmental compliance, while also continuously improving environmental performance and operating efficiency, for both regulated and nonregulated issues. The main elements oaf sound EMS are defined internationally through the ISO 1400 series of voluntary standards and guidelines, including the ISO 14001 standard (see https://www.iso.org/iso-14001-environmental-management.html). A Country Environmental Analysis 80 Opportunities for a Clean and Green Pakistan firms to use energy more efficiently.126 Empirical evidence on the effectiveness of EnMS’s is sparse, especially for developing countries, although research on German manufacturing firms suggests a positive impact (Schulze, Heidenreich, and Spieth 2017). 242. ISO 14001 certification is rare in Pakistan, and GoPunjab could promote its dissemination. While it has slowly increased since the 2000s, only 350 Pakistani firms had certified EMS in 2017. A breakdown by sector shows that ISO certification among Pakistani firms is concentrated in some regulated and/or export-oriented sectors such as food products and beverages, textile, and pharmaceuticals. However, ISO certification is very rare or absent in most polluting sectors in South Asia; Pakistan has none. The ISO 5001 standard is virtually absent in Pakistan, with five certified firms in 2017, while this standard has spread rapidly in China (1,507 firms) and India (608 firms) in the last few years. GoPunjab could promote and facilitate the development of EMS and their certification among polluting industries, following the example of countries such as China, which has actively promoted ISO 14001 since the late 1990s (McGuire 2014), and of India, which partially reimburses the cost of acquiring ISO 14001 certification for SMEs.127 Green Industrial Policy 243. In parallel with reforms to strengthen its environmental policy, GoPunjab could gradually develop a more active green industrial policy. An array of policies and programs could be considered to provide technical and financial support to firms, develop EIPs, facilitate industrial symbiosis, and promote circularity. Lack of information and technical capacity has been shown to be a major obstacle to the adoption of RECP among SMEs worldwide. This justifies public interventions to draw firms’ attention to current inefficiencies and the magnitude of potential savings through RECP investments; facilitate industries’ regular monitoring of resource use and efficiency; disseminate information about best- available technologies; subsidize firm-level RECP audits;128 and foster the emergence of specialized service providers. 244. Even if firms are convinced that profitable RECP investment opportunities exist, firms may lack technical capacity to efficiently install and utilize new cleaner technology, as is the case of Punjab’s brick kilns. Support can be provided through training, programs to pilot and demonstrate new technologies, and by helping individual firms prepare feasibility studies and bankable investment projects. Many developing countries on all continents have established NCPCs to provide such services. Some countries have also actively developed the domestic supply of RECP technology and service providers or have facilitated access to international expertise. Others have sought to increase the supply of trained professionals.129 245. Sources of technical support on RECP need to be developed in Punjab. EPD has little capacity to promote the piloting and dissemination of environmental and RECP technologies, although it has plans to strengthen this capacity by establishing a dedicated center. Punjab’s three Cleaner Production Centers have provided valuable services to promote RECP for the last two decades. However, they are limited in their sectoral coverage and capacity for broad programs to support large numbers of firms across entire sectors (Sánchez-Triana et al. 2014a). The Cleaner Production Institute is active but remains a private organization whose size varies significantly based on the availability of clients and donor-funded projects. The scale of support provided to industries could be expanded through reforms to the financial and governance model of CPCs, possibly the establishment of a provincial CPC by GoPunjab, increased cooperation with the global network of NCPCs and with sectoral associations, as well as with increased focus on capacity building for local service providers. The scope of technical support could cover firm-level RECP, but also industrial symbiosis and circular business models. 126 ISO 50001 is the international standard defining the requirements for certified EnMS (see https://www.iso.org/iso-50001-energy-management. html). 127 See https://msme.gov.in/technology-upgradation-and-quality-certification 128 For instance, Japan subsidizes energy audits for firms with an annual energy use exceeding 1,500 kiloliters of crude oil equivalent and publishes ag- gregate data (showing that potential energy savings average 8 percent across sectors) to help convince other firms (IEA 2015b). Likewise, the French Agency for the Environment and Energy Efficiency (ADEME) launched a program in 2018 to foster adoption of RECP technologies and practices among micro, small, and medium enterprises. Under the program, each company works with an expert (trained by the agency) over a 12-month period to identify sources of efficiency gains, agree on a set of actions, and implement and evaluate them. Companies are charged for the services only if a minimum level of savings is identified and agreed upon. 129 For example, an Energy Efficiency and Demand Side Management Hub was established at the University of Pretoria in 2008 to train specialized masters and doctoral students. See https://www.up.ac.za/national-hub-for-postgraduate-programme-in-energy-efficiency-and-demand-side-manage- ment-eedsm-hub 81 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan Financing 246. Access to finance is a common obstacle for SMEs and, given the limits to public subsidies, scaling up the adoption of RECP in polluting industries requires leveraging commercial finance. Financing investment in RECP is often very challenging because of banks’ unfamiliarity with the concept and the less tangible returns coming from lower production or compliance costs. Many countries have promoted commercial financing of RECP through various modalities of grants, credit lines, and guarantees. Financing of green projects for SMEs is often undermined by insufficient pipelines of investment projects, lack of capacity of both potential borrowers and lenders, lack of collateral, and high transaction costs. 247. Strategies for increasing available financing sources for the greening of Punjab’s industries. Financial sector constraints have traditionally resulted in very low bank lending to SMEs. Green finance is also relatively new to the province, although the Green Banking guidelines adopted by the State Bank of Pakistan (SBP) in 2017 represent an opportunity to develop it.130 GoPunjab’s previous SME financing schemes, which have focused on interest rate subsidization, have had modest results, suggesting the need for a new approach. The different stakeholders (Finance Department, EPD, ICID, SBP, banks, and industry representatives) need to collaborate and identify workable financing options for RECP and circular businesses. Such options could include limited matching grants for initial piloting and demonstration of technologies, guarantees or insurance to cover potential losses or lower-than-expected savings after the installation of new equipment,131 credit lines and credit risk guarantees, coupled with capacity building for both firms and banks. EIP and Industrial Symbiosis 248. Punjab would benefit from proactive efforts to foster green IE development and industrial symbiosis. The experience of different countries, including China, Korea, and the United Kingdom, shows the potential value of active policies and programs promoting EIPs and industrial symbiosis. Punjab has not undertaken such initiatives, despite preliminary analytical work (CPI 2013a, 2013b). A sustainability strategy could be developed under GoPunjab’s new Strategic Framework for IE development and a pilot EIP and/or industrial symbiosis program could be developed in an IE, identifying priority organizational/regulatory reforms and investments. The recently published EIP framework and handbook provide useful guidelines and examples to develop a national EIP program, implement the EIP model at the estate-level, and establish industrial symbiosis networks.132 Green Public Procurement 249. Leveraging public procurement is another way the government has promoted the market for green goods and services. Most OECD countries and a growing number of developing ones have adopted policies and regulations to increase green public procurement (GPP), notably for construction material and buildings, food, vehicles, and energy-using products.133 GPP objectives generally include developing a stable demand for cleaner industrial products, driving green innovation and circularity, but also generating savings for the full lifecycle cost of procurement contracts (for example, LED lightbulbs). Countries starting GPP frameworks often face challenges, including higher cost of green products on a purchase basis, insufficient staff capacity, and lack of green products in the market. Based on the experience of China, Japan, Korea, and Thailand, success factors include strong government commitment, use of eco-labeling programs as a basis for GPP, adoption of clear rules and guidelines for procurement staff in parallel with capacity building, adoption of rigorous monitoring and evaluation systems, and active communication and promotion efforts (UN Environment 2017b). 3.2.4 The way forward 250. There is substantial scope to generate economic, social, and environmental gains in Punjab and in Pakistan by promoting a more sustainable industrial development pathway. The challenges posed by industries’ resource use, pollution, and waste currently jeopardize Punjab’s (and the rest of Pakistan’s) development and are expected to worsen 130 http://www.sbp.org.pk/smefd/circulars/2017/C8-Annex.pdf 131 For example, the All-Pakistan Textile Mills Association has in the past offered performance guarantees to members undertaking energy-efficiency investments, to reimburse them in case anticipated load reduction and savings did not materialize. According to the association, this guarantee was not called has participating firms managed to obtain the expected results. 132 World Bank, UNIDO, and GIZ 2017; World Bank, UNIDO, GIZ , and MOTIE 2018. 133 For international experience and best practices, see OECD (2017) and UN Environment (2017b). A Country Environmental Analysis 82 Opportunities for a Clean and Green Pakistan under a business-as-usual scenario. This preceding discussion of Punjab has identified significant unexploited opportunities to reduce industries’ footprint while improving their competitiveness through firm-level investments in RECP, development of EIP and industrial symbiosis, and promotion of resource circularity. However, various capacity constraints and market failures that have prevented this evolution imply that government support will be required. 251. GoPunjab should put sustainable industrialization at the center of its growth and development strategy and should modernize its policy toolkit for this purpose. Punjab’s Growth Strategy 2018 envisioned that growth must be private sector led, investment driven, export oriented, environmentally sound, and employment intensive. Developing an ambitious and integrated policy toward green industries is a strategic way to jointly achieve these objectives. In doing so, Punjab could become a lighthouse for all of Pakistan. This would require both strengthening environmental policy (‘stick’) and developing elements of a green industrial policy looking at investment, innovation, and trade (‘carrot’). Importantly, policy objectives should go beyond the current focus on pollution control and compliance to include preventive and circular approaches at the firm level and industry level that could yield environmental and productivity/competitiveness gains. Most Punjabi polluting industries have been exposed to RECP, which has been piloted in Punjab through donor-funded projects for two decades. However, these industries have not widely embraced RECP in the absence of sufficient incentives and support from GoPunjab. The time has come to integrate the concept in strategies and regulations, and to institutionalize and mainstream it across relevant government agencies. 252. To break the status quo, GoPunjab should identify priority actions to pave the way for greening the industrial sector. The ‘Pakistan @ 100’ report made the case that continued environmental degradation was partly caused by shortcomings in the post-devolution institutional and policy framework, as well as by political economy obstacles (World Bank 2018a). As showed in this discussion of Punjab, countries throughout the world have used many different policy instruments to green industries. While some instruments may be difficult to implement in the short term for legal, technical, financial, or political economy reasons, others could be introduced to break the status quo and build constituencies for change, including by establishing a more cooperative framework with industries (also including multinational companies sourcing products in Pakistan) and by engaging citizens in industrial pollution issues. GoPunjab, which recently adopted a broad five-year Green Development Program to promote green growth in the province, could prioritize actions on the industry side based on needs, capacity, and impact—with the following components: • Strategy: GoPunjab would benefit from developing and implementing an integrated medium-term strategy on sustain- able industrial development involving all key departments. This strategy should include targets for decoupling growth from resource use, pollution, and waste, as well as an action plan with timeline, institutional responsibility, and budget. Preparing a solid strategy with a sound analytical basis, strong government and industry ownership, and sufficient resource allocated, would take some time. The following could be undertaken in the short term, focusing on a small number of priority resource-intensive and polluting sectors. o Conduct analytical work assessing the scope for greening these sectors, including through RECP, industrial symbiosis, and circularity. This would look at economic, environmental, and social impacts, both positive and negative, and would benchmark Punjab’s industries with GIIPs. This should also include stepped-up efforts to fill data gaps on selected industries’ resource use, pollutant emissions, and waste. Finally, studies identified in 2016 by the J&C ESSA, including the inventory of industrial waste streams, should be carried out as planned by ICID and EPD. o Establish a platform for PPD on industrial sustainability and competitiveness. This could be a committee under the Punjab Environmental Protection Council, with representatives of key departments, industries, academia, environmental NGOs, and working groups for priority sectors. A PPD framework would facilitate identification of reforms, policies, and target; build ownership and a collaborative mindset among stakeholders; and enable feedback loops to adjust policies. • Environmental regulations: Stronger regulatory pressure is needed to push industries to better control pollution and invest in RECP. This requires an updated regulatory framework, including industry-specific emission standards and regulations for industrial resource consumption benchmarks, waste, and resource circularity. 83 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan Priority actions for key sectors could include the following. o Promote RECP through existing regulatory instruments, such as IEE/EIA and EPOs, and adopting implementation regulations for the 2016 National Energy Efficiency and Conservation Act. o Organize consultations on environmental standards with industry representatives to discuss needed reforms, considering domestic circumstances and international good practices.134 o Agree with industrial sector associations and their member industries on a roadmap for PEQS compliance, which could include time-bound intermediary pollution-reduction targets, commitments by firms to invest in pollution-control equipment and RECP, proposed modalities of government support, and the associations’ role as guarantor for individual members. o Consider the opportunity to develop a law and/or regulation on RECP, industrial symbiosis, circularity, and related matters. • Other environmental policy instruments: GoPunjab should explore opportunities to complement environmen- tal regulations with MBIs and IBIs, especially those likely to foster preventive solutions. GoPunjab could introduce environmental taxes and fiscal incentives to incentivize RECP and resource circularity, beyond compliance with the PEQS. It could also develop eco-labelling and certification schemes for firms and products. Additionally, it should work toward disclosing of information about resource-intensive, polluting, and waste-generating firms’ compliance to generate public pressure and enable firms to benchmark their performance. • Short-term actions could include the following: o Update and implement the existing pollution charge system for industries, focusing initially on large polluting units and IEs, and consider new environmental taxes on industries, which could be made revenue-neutral to increase their acceptability. o Continue efforts initiated on the standards and labelling of appliances and promote voluntary international standards (for example, the Leather Working Group) and certification schemes (for example, ISO 14001). o Improve the transparency and accessibility of existing information on industries’ environmental performance and compliance (for example, IEE/EIA, inspections) for citizens, the media and NGOs, and develop a pilot EPRD scheme, starting with large polluting firms. • Institutional capacity: GoPunjab’s capacity to regulate and engage with industries on sustainability issues, including preventive environmental approaches, should be gradually strengthened. In addition to strengthening EPD/EPA’s capacity—which is an absolute priority—with respect to strategy, policy, regulation, monitoring, and inspection), this strengthening could include establishing a cleaner production center/environmental technology center. In the shorter term, institutional reforms and training efforts could focus on the following: o Strengthen environmental monitoring (both ambient and point-source) and enforcement capacity, including through increased medium-term budget allocation for EPD/EPA, additional hiring, and training and investments in facilities and equipment.135 o Establish the proposed environmental technology center at EPD with adequate staffing and equipment to identify and pilot promising environmental and RECP technologies for priority sectors and establish the Environmental Policy Center with a mandate to carry out policy analysis on RECP, industrial symbiosis, and CE. 134 This could replicate the Shamslakha committee of experts established in the 1990s to reform the NEQS after extensive consultations (Sánchez-Tri- ana et al. 2014a). 135 Several reports since at least the early 2000s have made such recommendations with little effect (Sánchez-Triana et al. 2014a), although increased political pressure in recent years to address pollution made action on this agenda it more likely. A Country Environmental Analysis 84 Opportunities for a Clean and Green Pakistan o Establish sustainability departments at ICID, PIEDMC, and FIEDMC, and ensure all IEs have governance bodies and/or dedicated cells in charge of environmental issues, RECP, and circularity. o Develop PEECA’s capacity to promote industrial energy efficiency, working with its national-level counterpart NEECA. • Support to firms: In parallel with efforts to strengthen and modernize the environmental policy framework, Go- Punjab should start developing programs to support polluting SMEs’ adoption of greener technologies and practices, focusing on priority sectors. These programs should be owned by the implementing departments and avoid merely relying on donor support. They could include information dissemination and directly provide technical and financial assistance, and should involve industry association, academic experts, and financial organizations. To ensure sustain- ability and increase scale, a related objective should be developing the private market for RECP technologies and services, including by facilitating access to foreign expertise while the domestic supply is built. o Run large communication and training campaigns directed at SMEs in priority sectors to raise awareness about RECP (especially no- or low-cost options) and CE and to share success stories. Publish industry-specific guidelines and benchmarks on resource efficiency, pollution and waste. o Work with industry associations to identify, pilot, and demonstrate promising RECP technologies in a few priority sectors. o Establish a dedicated financing facility for RECP for SMEs addressing credit and risk constraints and leveraging commercial finance to the extent possible. • Industry-level programs: While many firm-level initiatives have been implemented in Punjab, there are virtually no programs to foster broader solutions, for instance on EIPs or industrial symbiosis. 253. GoPunjab could aim to replicate and adapt the successful experiences of other countries, starting for instance by the following actions: • Developing a pilot EIP program for a major zone, such as Sundar IE, covering institutional/regulatory reforms and investments for both end-of-pipe infrastructure (for example, CETP, sanitary landfill) and preventive/RECP ap- proaches. • Commission studies to research the potential for industrial symbiosis and CE in Punjab and develop a virtual information exchange platform on industrial waste. 85 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan 4 A way forward Photo credit: Johannes Plenio/pexels.com A Country Environmental Analysis 86 Opportunities for a Clean and Green Pakistan 254. Addressing the health and productivity impacts of pollution is a key step in moving towards a Green, Clean Pakistan. The 2010 devolution provides opportunities for sub-national authorities and non-government entities to innovate and seek solutions adapted to local realities. Experience from these innovations can be shared with other provinces and local governments. Examples include the work that is ongoing in Punjab with moving towards resource efficient and clean production (RECP), the green growth strategy in KP with action programs ranging from re-forestation to renewable energy, and steps to improve the local urban environment in Karachi, Sindh through better local service delivery, enhancement of public open spaces and improvements in construction permitting systems. There are challenges in capacity, in financing, in governance and in inter-agency coordination both within and between provinces. Furthermore, despite the presence of an active NGO community in Pakistan, “bottom-up” pressure to improve environmental management, which has been important in countries as varied as China, the Former Soviet Union and Britain, has been impeded by inadequate access to information about the impact of pollution, due in part to poor monitoring systems. Enhancing the power of public pressure will form an essential element in improving environmental management in Pakistan. 255. The analysis has focused on air and water pollution, but these cannot be addressed by environmental agencies alone or without addressing related environmental challenges, many of which are the responsibility of other sectoral organizations. In urban areas, for example, improving the management of urban growth, enhancing public green spaces and creating efficient, safe public transport systems will help improve air quality. Urban planning and transport organizations have primary responsibility in these areas. Pakistan will continue to urbanize over the coming years and there is an opportunity to improve urban planning and enhance urban livability. Controlling emissions from mobile sources is largely the role of transport and traffic agencies, the trucking industry and vehicle owners. Industries have a key role in controlling emissions from stationary sources; the analysis has emphasized the role of RECP in this regard. In rural areas, improved agricultural management practices, in control of post-harvest burning of fields and more trees in the production landscape, in particular better fertilizer and pesticide management as well as water conservation measures, will help improve both air and water quality. In both urban and rural areas better water quality requires improved management of fecal waste, the responsibility of both households and local utilities. Improved water quality also enhances the sustainability of the fisheries industry. Environmental agencies need to work within the broader institutional and governance context; capacity building, improved accountability and greening investments cross sectors and involve the private sector and citizens as much as government. 256. There are five sets of inter-related policy recommendations. These focus on air and water quality management but will also help to improve broader environmental management. 1. Improve environmental monitoring and planning capacity 257. Accurate information is the building block for priority setting in moving towards a green, clean Pakistan. Investment in data collection, monitoring and analysis has been insufficient at all levels. Specific actions include: (a) Building EPA capacity at provincial and local level for air and water quality modelling and planning with appropriate equipment, labs, analytics, human resources, protocols, and financial sustainability; training and human resource development would form a key element. Capacity could be further enhanced by partnering with local universities and research organizations, on topics such as chemical analysis of air samples, sampling and monitoring strategies, health impact assessment methods and environmental economics and policy analysis. (b) Improving air and water quality monitoring: This would include developing a network of air quality monitoring at provincial and local level (PM2.5, SO2, NO2, and CO), to include both mobile and stationary sources. It would focus initially on cities with developed industrial clusters and would include emissions monitoring from key enterprises. Mobile- source emissions inventories would use GIS based technology to enhance the reliability of the data. For water the work would include developing a network of water quality monitoring (bacteria, chemical contaminants including nitrates and arsenic), including both surface and groundwater; expanding national and provincial hydromet networks and improving the capacity of provincial water resource departments for groundwater for surface water monitoring. (c) Strengthening the planning capacity of EPAs in air and water pollution reduction planning, developing protocols for public disclosure, citizens’ engagement and regulatory reforms as needed. 87 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan 2. Enhance the devolution for improved service delivery 258. Devolution offers real opportunities to bring services closer to citizens and improve local accountability. But, to be effective, devolution of responsibilities needs to be accompanied by improvement of capacity to deliver, budget devolution and development of local planning and financing mechanisms. Specific actions include (a)Improving local government capacity in provision of environment services, including solid waste, water and sanitation, local transport and urban planning (b) Clarifying the responsibilities of each water and sanitation department at the provincial, district and sub-district levels, while improving data on poverty and access and enhancing service delivery; (c) Adopting airshed and watershed management approaches, to coordinate actions on pollution management, while reviewing existing provincial environmental quality standards, in particular for air pollution from mobile sources; (d) Integrating environmental measures into provincial local development medium term development planning frameworks and annual development plans, and aligning financing and delivery responsibilities and supporting Provincial Governments in preparation of Green Development Plans; consider broader revision of Provincial environmental legislation after consultation with stakeholders, including introducing regular assessment of environmental departments’ delivery of services to identify capacity and alignment shortfalls; (e) Supporting urban zoning policies to minimize the need to travel, reduce urban sprawl, allow for provision of efficient public transport, provide urban public green spaces, green belts, urban forestry, bicycle and pedestrian pathways; supporting pollution-management capacity in local governments; 3. Improve coordination among different levels of government and sectors 259. Decentralization can increase coordination difficulties in a number of areas, including legislation, government structures, accountabilities, exchange of information and coordination on planning and management issues that cross administrative boundaries. Airshed and watershed management issues can present particular challenges. Specific recommendations include: (a) Improving coordination between governmental and nongovernmental agencies, civil society, academia, development agencies and industry, at federal, provincial and local level, by creating a system of networked organizations and knowledge platforms, and by making use of existing coordination mechanisms such as the Pakistan Environmental Council and the Council for Common Interest; (b) Establishing a central apex body with a mandate for AQM and with responsibilities for coordination and exchange of information; supporting the establishment a National Water Council to provide strategic direction for cross- jurisdictional basin planning while supporting coordinated watershed management approaches and water quality and resource monitoring at all levels of government; support integrated approaches to airshed and watershed planning that cross administrative boundaries 4. Greening future investments 260. Pakistan’s manufacturing sector is export oriented, and international demand is increasingly for products which meet sustainability standards. At local level concerns about the public health impact of pollution will be increasingly strong drivers for transitioning to greener production approaches, enhancing the livability of the urban environment and developing agriculture, water and forest management approaches which reduce natural resource degradation. The transition to green A Country Environmental Analysis 88 Opportunities for a Clean and Green Pakistan investments needs to be underpinned by regulatory, incentive and social marketing measures. Green development plans can help set priorities. Specific recommendations regarding clean production and pollution reduction include: (a) Facilitating and diversifying access to green financing through adoption of Green Banking Guidelines, credit risks guarantee for SMEs, PPPs for environmental infrastructure, and green bonds; (b) Investing in point-of use water treatment, with the use of subsidies as needed, while more comprehensive systems are being implemented including rehabilitation of water supply and sewage systems in urban areas and investments in safe management of fecal waste supported by water quality monitoring and regulations on groundwater extraction (c) Supporting development of resource efficient and clean production (RECP) and green labelling approaches in industry, as well of technologies to prevent air and water pollution emitted from highly polluting industries; (d) Supporting establishment of mass transportation systems including improved public transport services, establishment of bus lanes and high occupancy vehicle lanes, measures to improve traffic flows, coordination of traffic signals, and improvement of infrastructure, such track rehabilitation (for rail lines), safe pedestrian crossing points and pathways, paving of roads and regular sweeping. 5. Use the power of public pressure, 261. Service and accountability to citizens is the core mandate of government. In part because of information asymmetries and poor data, citizens have not been sufficiently aware of the impact on their lives and livelihoods of poor environmental management, or of the potential for improvement. Furthermore, until the 2010 devolution there was an expectation of top- down government. Citizens’ groups now have the opportunity to press for a better environment and better environmental service, and to participate in decision making. But to do this, they need to be informed and decision-making processes need to engage local stakeholders. Specific measures would include: (a) Ensuring public access to pollution and other environmental data in a form that can easily be understood by citizens, distributing information about the sources of air and water pollution and their health impacts, and disclosing information about public and private entities organizations violating environmental regulations; (b) Strengthening the capacity of environmental and local government departments to engage citizens and encouraging the participation of local communities in city and local development planning processes (d) Promoting education and awareness of environmental issues, including the value of green spaces in cities and the impacts of water and air pollution, especially among schoolchildren. 262. Moving towards a Green, Clean Pakistan will require both a coordinated approach, and strategies adapted to local circumstances. Priorities will differ, based on geography, economic structure and capacity constraints. 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Annual PM2.5 concentration in Pakistan’s cities Average annual PM2.5 concentration (µg/m3) Population, millions, 2017 Cities WHO 2009–2010 PAQI 2017 World Bank 2014 ACAG 2015 (Census) Islamabad 66 45 61 43 1.0 Karachi 88 41 68 67 14.9 Lahore 68 116 143 67 11.1 Peshawar 111 65 71 47 2.0 Rawalpindi 107 45 44 2.1 Quetta 49 46 1.0 Faisalabad 44 3.2 Gujranwala 54 2.0 Multan 75 1.9 Hyderabad 68 1.7 Sources: ACAG; PAQI; Population Census of Pakistan 2017; WHO; World Bank. Table 12. Percentages of Pakistani households using solid fuel Households Households cooking in Households cooking in a Households cooking using SFC the house separate building outdoors Urban 13.4 95.4 4.1 0.2 Rural 85 92.8 6.4 0.4 Total 60 93.4 5.6 0.3 Sources: DHS 2012–2013, PLEASEM 2014–2015. Table 13. Estimates of exposure to PM2.5 air pollution in Pakistan Annual average PM2.5, adjusted for time inside and outside the Exposed population AAP share HAP share house, µg/m3 Urban 77 65,500,000 1 0 190 9,700,000 0.20 0.80 140 415,000 0.28 0.72 115 20,000 0.34 0.66 Rural 28 19,815,000 1 0 165 104,200,500 0.09 0.91 115 7,186,000 0.12 0.88 90 450,000 0.16 0.84 Source: Strukova 2018; World Bank, unpublished report. A Country Environmental Analysis 98 Opportunities for a Clean and Green Pakistan Table 14. Annual mortality burden attributed to AAP and HAP by age in urban areas AAP 0–4 5–14 15–49 50–69 70+ Total Deaths IHD 0 0 5,449 8,801 6,013 20,264 Deaths stroke 0 0 436 2,346 2,358 5,140 Deaths COPD 0 0 408 1,861 3,586 5,855 Deaths LC 0 0 217 773 382 1,372 Deaths LRI 2,811 249 455 626 1,559 5,700 Totals for AAP 2,811 249 6,966 14,407 13,898 38,331 HAP 0–4 5–14 15–49 50–69 70+ Total Deaths IHD 0 0 810 1,800 1,209 3,819 Deaths stroke 0 0 62 480 437 979 Deaths COPD 0 0 77 467 840 1,384 Deaths LC 0 0 44 208 96 349 Deaths LRI 338 38 85 156 363 980 Totals for HAP 338 38 1,077 3,112 2,945 7,510 Totals for AP 3,148 286 8,043 17,520 16,844 45,841 in urban areas Source: Strukova, 2018. World Bank. Unpublished report. Table 15. Annual mortality burden attributed to ambient air pollution (AAP) and household air pollution (HAP) by age in rural areas AAP 0–4 5–14 15–49 50–69 70+ Total Deaths IHD 0 0 1,187 2,550 2,242 5,979 Deaths stroke 0 0 83 513 676 1,272 Deaths COPD 0 0 129 649 1,370 2,149 Deaths LC 0 0 66 257 139 462 Deaths ALRI 1,228 101 135 205 560 2,230 Totals for AAP 1,228 101 1,601 4,174 4,988 12,091 HAP 0–4 5–14 15–49 50–69 70+ Total Deaths IHD 0 0 5,433 6,616 9,046 21,095 Deaths stroke 0 0 377 2,434 2,988 5,798 Deaths COPD 0 0 757 3,805 8,035 12,597 Deaths LC 0 0 431 1,685 913 3,028 Deaths ALRI 7,642 627 843 1,278 3,487 13,877 Totals for HAP 7,642 627 7,841 15,817 24,468 56,395 Totals AP in rural 8,869 728 9,442 19,991 29,456 68,486 areas Source: Strukova 2018. World Bank, unpublished report. 99 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan Table 16. WASH tiers in Pakistan Improved Water within 30 Free of E. coli at the Water-access tiers On premise water min. access source Safely managed x X x x Basic services x X Limited services x Improved Sanitation tiers Unshared Connected to sewerage sanitation Safely managed x X x Basic services x X Limited services x Source: https://washdata.org/monitoring/methods/estimation-methods Figure 9. Sanitation-service development in Pakistan (number of people with the service) 100,000,000 80,000,000 Population 60,000,000 40,000,000 20,000,000 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Basic Service Limited Service Open Defecation Unimproved Source: JMP 2015. Table 17. Annual mortality attributed to inadequate WASH Urban Rural High Low High Low Diarrhea, typhoid, paratyphoid 16,116 6,591 35,245 14,391 Encephalitis, dengue 4,665 732 8,145 1,279 Malaria 2,003 616 3,498 1,076 Total 22,784 7,939 46,888 16,746 Source: Strukova 2018; World Bank, unpublished report. Table 18. Baseline data for estimating morbidity cost Baseline Source Diarrheal 2-week prevalence in urban children under 5 years 21.9–22.7% DHS 2012–2013 Estimated annual diarrheal cases per child under 5 years 4.6–4.7 Estimated from DHS 2012–2013 0.6–0.8 Estimated from a combination of DHS 2014 Estimated annual diarrheal cases per person (> 5 years) and Egypt Survey, Colombia Survey Hospitalization rate (% of all diarrheal cases) 0.3 % Expert estimate Source: Strukova 2018; World Bank, unpublished report. A Country Environmental Analysis 100 Opportunities for a Clean and Green Pakistan Table 19. Estimated annual diarrheal morbidity burden attributed to WASH in Pakistan Urban areas Rural areas   Low High Low High Total diarrhea children under 5 18 million 18 million 49 million 49 million Total diarrhea population above 5 16 million 22 million 35 million 49 million Source: Strukova 2018; World Bank, unpublished report. Table 20. Estimated annual burden of inadequate WASH in Pakistan Urban average Rural average Diarrheal/typhoid/paratyphoid/malaria/encephalitis/dengue mortality 15,000 25,000 Diarrheal morbidity 37 million 91 million Malnutrition mortality in children under 5 3,400 9,850 ” Source: Strukova 2018; World Bank, unpublished report. Table 21. Estimated distribution of population in Pakistan by arsenic concentration in drinking water Arsenic concentration (µg/L) Proportion (%) Population in 2016 0–10 48 92,640,000 10.1–50 26 50,180,000 50.1–100 14 27,067,669 100.1–150 3 5,263,158 150.1–200 3 5,263,158 200.1–250 2 4,135,338 250.1–300 1 1,503,759 300+ 4 6,766,917 Source: MICS 2012. Table 22. Relative risk associated with exposure to arsenic in drinking water by cause of death Average arsenic concentration Relative Risk for cause of death (95% confidence interval) (μg/L) Non-accidental Cancer Cardiovascular Infection < 10 1 1 1 1 10–49 1.16 (1.06–1.26) 1.10 (0.77–1.59) 1.03 (0.82–1.29) 1.09 (0.92–1.30) 50–149 1.26 (1.18–1.36) 1.44 (1.06–1.95) 1.16 (0.96–1.40) 1.30 (1.13–1.49) 150–299 1.36 (1.27–1.47) 1.75 (1.28–2.40) 1.23 (1.01–1.51) 1.51 (1.31–1.75) ≥ 300 1.35 (1.23–1.48) 1.56 (1.06–2.30) 1.37 (1.07–1.77) 1.59 (1.33–1.91) Source: Flanagan, Johnston, and Zheng 2012. 101 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan Table 23. Estimated annual number of deaths associated with arsenic contamination Cardiovascular disease 15,305 Cancer 8,578 Infectious disease 7,160 Total 31,043 Source: Estimated by applying relative risk from Flanagan, Johnston, and Zheng 2012. Table 24. Recent studies on BLL in Pakistan Area Sample Mean BLL Study Rural area 123 children 1–6 years 9.0 µg/dL Khan et al. 2011 Punjab industrial areas Various TSIP sites in Pakistan Estimated using exposed population data 5.1–19.5 µg/dL Caravanos et al. 2013 Source: Derived from GBD (2016). Table 25. Annual health burden (mortality) attributed to occupational safety risks in Pakistan High Low Cardiovascular diseases 9,210 4,926 Chronic respiratory diseases 10,509 6,813 Neoplasms 2,706 1,506 Lower respiratory infections 521 134 Other 1,100 232 Total 24,046 13,611 Source: Derived from GBD (2016). A Country Environmental Analysis 102 Opportunities for a Clean and Green Pakistan Annex 2 – Pakistan’s National Environmental Quality Standards Table 26. Comparison of Pakistan ‘s draft national air quality standards with WHO, EU and U.S. air quality guidelines U.S. Pakistan Ambient Air Quality Standards EU Ambient WHO Air Time-weighted Ambient Air Quality Pollutants Quality average Air Quality Standards Effective 2010 Effective 2013 Guidelines Standards Annual average 200 µg/m3 120 µg/m3 20 µg/m3 40 µg/m3 PM10 24 hc 250 µg/m3 150 µg/m3 50 µg/m3 50 µg/m3 150 µg/m3 Annual average 25 µg/m3 15 µg/m3 10 µg/m3 25 µg/m3 15 µg/m3 PM2.5 24 hc 40 µg/m3 35 µg/m3 25 µg/m3 35 µg/m3 1h 25 µg/m3 15 µg/m3 1 µg/m3 Annual average 1.5 µg/m3 1 µg/m3 0.5 µg/m3 0.5 µg/m3 Lead (Pb) 24 hc 2 µg/m3 1.5 µg/m3 Sulfur Annual average 80 µg/m3 80 µg/m3 85.8 µg/m3 Dioxide (SO2) 24 hc 120 µg/m3 120 µg/m3 20 µg/m3 125 µg/m3 Nitrogen Annual average 40 µg/m3 40 µg/m3 40 µg/m3 40 µg/m3 100 µg/m3 Dioxide (NO2) 24 hc 80 µg/m3 80 µg/m3 200 µg/m3 188 µg/m3 Nitric Oxide Annual average 40 µg/m3 40 µg/m3 (NO) 24 hc 40 µg/m3 40 µg/m3 Carbon 8 hc 5 mg/m3 5 mg/m3 10 mg/m3 10 mg/m3 Monoxide (CO) 1h 10 mg/m3 10 mg/m3 40 mg/m3 Source: Adapted from World Bank 2011b. Table 27. National Standards for Drinking Water Quality Standard values for Properties/parameters WHO standards Remarks Pakistan Bacterial All water intended for drinking (E. coli or Must not be detectable in any Must not be detectable in Most Asian countries also follow thermotolerant Coliform 100 ml sample any 100 ml sample WHO standards bacteria) Treated water entering the distribution system Must not be detectable in any Must not be detectable in Most Asian countries also follow (E. coli or thermotolerant 100 ml sample any 100 ml sample WHO standards Coliform and total Coliform bacteria) Must not be detectable Must not be detectable in any 100 ml sample; in any 100 ml sample; Treated water in the in case of large supplies, in case of large supplies, distribution system (E. where sufficient samples where sufficient samples Most Asian countries also follow coli or thermotolerant are examined, must not are examined, must not WHO standards Coliform and total be present in 95% of the be present in 95% of the Coliform bacteria) samples taken throughout any samples taken throughout 12-month period. any 12-month period. 103 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan Standard values for Properties/parameters WHO standards Remarks Pakistan Physical Color ≤15 TCU ≤15 TCU Non objectionable/ Taste Non objectionable/Acceptable Acceptable Non objectionable/ Odor Non objectionable/Acceptable Acceptable Turbidity <5 NTU <5 NTU Total hardness as CaCO3 <500 mg/L — TDS <1,000 <1,000 pH 6.5 – 8.5 6.5 – 8.5 Chemical Essential Inorganic mg/L mg/L Aluminium (Al) mg/L <0.2 0.2 Antimony (Sb) <0.005 (P) 0.02 Standard for Pakistan similar to Arsenic (As) <0.05 (P) 0.01 most Asian developing countries Barium (Ba) 0.7 0.7 Boron (B) 0.3 0.3 Standard for Pakistan similar to Cadmium (Cd) 0.01 0.003 most Asian developing countries Chloride (Cl) <250 250 Chromium (Cr) <0.05 0.05 Copper (Cu) 2 2 Toxic Inorganic mg/L mg/L Standard for Pakistan similar to Cyanide (CN) <0.05 0.07 Asian developing countries Fluoride (F)a <1.5 1.5 Standard for Pakistan similar to Lead (Pb) <0.05 0.01 most Asian developing countries Manganese (Mn) < 0.5 0.5 Mercury (Hg) <0.001 0.001 Nickel (Ni) <0.02 0.02 Nitrate (NO3)a <50 50 Nitrite (NO2)a <3 (P) 3 Selenium (Se) 0.01(P) 0.01 0.2–0.5 at consumer end; Residual chlorine — 0.5–1.5 at source Standard for Pakistan similar to Zinc (Zn) 5.0 3 most Asian developing countries A Country Environmental Analysis 104 Opportunities for a Clean and Green Pakistan Standard values for Properties/parameters WHO standards Remarks Pakistan Organic PSQCA No. 4639-2004, Page No. 4 Table No. 3 Pesticides mg/L Serial No. 20- 58 may be consulted.b Phenolic compounds (as < 0.002 Phenols) mg/L Polynuclear aromatic hydrocarbons (as PAH) 0.01 ( By GC/MS method) g/L Radioactive Alpha Emitters bq/L or 0.1 0.1 pCi Beta emitters 1 1 Note: a. Indicates priority health related inorganic constituents which need regular monitoring. b. PSQCA: Pakistan Standards Quality Authority. Table 28. Pakistan NEQS for municipal and liquid industrial effluents (mg/l) Existing Into inland Into sewage Parameter Into sea standards waters treatment Temperature or Temperature increasea 40°C ≤3°C ≤3°C ≤3°C pH value (H+) 6–10 6–9 6–9 6–9 Biochemical Oxygen Demand (BOD)5 at 20°C 80 80 250 80b Chemical Oxygen Demand (COD) 150 150 400 400 Total Suspended Solids (TSS) 150 200 400 200 Total Dissolved Solids (TDS) 3,500 3,500 3,500 3,500 Oil and Grease 10 10 10 10 Phenolic compounds (as phenol) 0.1 0.1 0.3 0.3 Chloride (as Cl−) 1,000 1,000 1,000 SCc Fluoride (as F−) 20 10 10 10 Cyanide (as CN−) total 2 1 1 1 Anionic detergents (as MBAS) 20 20 20 20 Sulfate (SO42−) 600 600 1,000 SC c Sulfide (S ) 2− 1 1 1 1 Ammonia (NH3) 40 40 40 40 Pesticides 0.15 0.15 0.15 0.15 Cadmium 0.1 0.1 0.1 0.1 Chromium (trivalent and hexavalent) 1 1 1 1 Cooper 1 1 1 1 Lead 0.5 0.5 0.5 0.5 Mercury 0.01 0.01 0.01 0.01 Selenium 0.5 0.5 0.5 0.5 Nickel 1 1 1 1 Silver 1 1 1 1 Total toxic metals 2 2 2 2 105 A Country Environmental Analysis Opportunities for a Clean and Green Pakistan Zinc 5 5 5 5 Arsenic 1 1 1 1 Barium 1.5 1.5 1.5 1.5 Iron 2 8 8 8 Manganese 1.5 1.5 1.5 1.5 Boron 6 6 6 6 Chlorine 1 1 1 1 Note: a. The effluent should not result in temperature increase of more than 3oC at the edge of the zone where initial mixing and dilution take place in the receiving body. In case zone is defined, use 100 meters from point of the discharge. b. The value for industry is 200 mg/L. c. Discharge concentration at below sea concentration (SC). Table 29. Pakistan NEQS for industrial gaseous emission (mg/Nm3, unless otherwise defined) Existing Revised Parameter Source of Emission Standards Standards 40% or 2 40% or 2 Ringlemann scale Smoke Smoke opacity not to exceed Ringlemann or equivalent scale smoke number (a) Boilers and furnaces (i) Oil fired 300 300 Particulate matter a (ii) Coal fired 500 500 (iii) cement kilns 200 300 (b) Grinding, crushing, Clinker coolers and related process, 500 500 Metallurgical processes, converter, blast furnaces and cupolas. Hydrogen Chloride Any 400 400 Chlorine Any 150 150 Hydrogen Fluoride Any 150 150 Hydrogen Sulfide Any 10 10 Sulfuric acid/ Sulfuric Sulfur dioxides b,c acid plants Other plants except power Plants operating on oil and coal 400 1700 Carbon Monoxide Any 800 800 Lead Any 50 50 Mercury Any 10 10 Cadmium Any 20 20 Arsenic Any 20 20 Antimony Any 50 50 Zinc Any 20 20 A Country Environmental Analysis 106 Opportunities for a Clean and Green Pakistan Nitric acid manufacturing unit 200 200 Other plants except power Plants operating on oil and coal 400 3000 Oxides of Nitrogen c Gas fired 400 400 Oil fired — 600 Coal fired — 1200 Note: a. Based on the assumption that the size of the particulate is 10 micron or more. b. Based on 1 percent Sulfur content in fuel oil. Higher content of Sulfur will case standards to be prorated. c. In respect of emissions of Sulfur dioxide and Nitrogen oxides, the power plants operating on oil and coal as fuel shall in addition to NEQS specified above comply with the standards in table 31. Table 30. A. Sulfur dioxide Sulfur dioxide background levels (µg/m3) Criterion I Max. SO2 Criterion II Max. Allowable Background Air quality Max 24-hour Annual Average Emission (Tons per day per ground level increment to (SO2 Basis) interval plant) ambient (µg/m3) Unpolluted <50 <200 500 50 Moderately polluteda Low 50 200 500 50 High 100 400 100 10 Very pollutedb >100 >400 100 10 B. Nitrogen Oxide Ambient air concentration of nitrogen oxides expressed as NOx should not be exceeded and should be maintained as follows: 263. For fuel fired stream generators as Nanogram (100 -gram) per joule of heat input: Liquid fossil fuel 130 Solid fossil fuel 300 Lignite fossil fuel 260 Note: Dilution of gaseous emissions to bring them to the NEQS limiting value is not permissible through excess air mixing blowing before emitting into the environment. a. For intermediate values between 50 and 100 µg/m3 linear Interpolation should be used. b. No projects with Sulfur dioxide emission will be recommended. 107 A Country Environmental Analysis