The Cost of Inaction in the Middle East and North Africa (MNA) Countries

Transcription

1 The Cost of Inaction in the Middle East and North Africa (MNA) Countries by Sherif Arif Regional Environmental Advisor and METAP Coordinator, MNA Region The World Bank Presented at The 11th Euro-Mediterranean Economic Transition Conference Mediterranean Economies and the Immediate Environmental Challenge Brussels, June 2007

2 MNA Environmental Strategic Tools To increase decision-makers awareness of the need to conduct economic assessments to support policy formulation, particularly as they relate to strategic environmental decisions linked to environmental inter-sectoral planning, and sectoral planning (energy, water and ICZM policies) Assessment is at two levels: MACRO LEVEL THROUGH COST OF ENVIRONMENTAL DEGRADATION (COED) STUDIES SECTOR LEVEL THROUGH: THE ASSESSMENT OF IMPACTS OF ENVIRONMENTAL MEASURES IN THE ENERGY, WATER AND COASTAL ZONE SECTORS.

3 COST ASSESSMENT OF ENVIRONMENTAL DEGRADATION Objective: Estimate the Damage Costs resulting from environmental degradation. Damage costs include: Impact on human health and on the quality of life (morbidity, mortality, loss in recreational value, etc.) Impact on natural resources (e.g. impact on ecosystem, deforestation) Estimates reflect order of magnitude and therefore represent an indication of actual costs. Financed through the Mediterranean Environmental Technical Assistance Program (METAP) by the Swiss and Finnish Governments and EC/SMAP III Conducted by a team of World Bank staff and local consultants under the task leadership of Ms Maria Sarraf

4 The Cost of Environmental Degradation in the MNA countries Environmental Category: Percentage of GDP Percentage of GDP Water Soil Air Coastal Zone Waste 2.74% 2.1% 3.41% 3.49% 3.67% 3.7% 4.8% 1 0 Tunisia Jordan Lebanon Syria Algeria Morocco Egypt

5 Egypt: Health Damage Costs due to Transport, Industry and Burning of Wastes 10 Local Damage Costs (LE billion/year) CO SO2 NOx PM / /11

6 Egypt: Damage Costs 2010/2011 with Price Reform & Sector Measures Compared with Business as Usual L.E. Million mn LE Actual (1999/2000) BAU Price reform Sector measures Combined

7 EGYPT: DAMAGE COSTS RELATED TO WATER QUALITY Damage Costs of Components Under Actions as a % of National GDP % of GDP 3.50% 3.00% 2.50% 2.00% 1.50% 1.00% Water Treatment Fisheries Agriculture Health 0.50% 0.00% No Action 2014 Central Action 2014 Central + Decentral Action 2014 Full Coverage 2014 Hygiene Promotion

8 WATER QUALITY IN ALGERIA Evolution of damage of socio economic and environmental costs with different intervention scenarios till 2015 ( in US$ million) No Action DC Action C Action F Coverage

9 Estimated Annual Cost of Water Quality Degradation in Tunisia (% of GDP in 2004) Lower bound Upper bound 0.00 Agriculture Fishing Health Tourism Biodiversity Overexploitation underground water % of GDP

10 The Cost of Coastal Environmental Degradation in Selected Areas in Algeria, Egypt, Morocco and Tunisia

11 COST OF INACTION IN SELECTED COASTAL ZONES Cost of Environmental Degradation of Selected Coastal Zones in MNA Countries Per cent of GDP Tunisia Morocco Algeria Egypt

12 Egypt: Annual Cost of Environmental Degradation in the Governorate of Alexandria, 82 km of coast. ENVIRONMENTAL DAMAGE COST % OF GDP 3,00 % 2,50 % 2,00 % 1,50 % 1,00 % 0,50 % 0,00 % Urbanisation Health Marine and fresh water production Beaches Wetlands % OF GDP Agriculture Tourism The total annual environmental damage costs are estimated at million LE per annum, which is 5.0 to 7.5 % of the total GDP

13 Comparison of COED and Cost of protection % of GDP COED, % of GDP Cost of protection, % of GDP Algeria Egypt Morocco Tunisia

14 Arab Republic of Egypt Optimizing Urban Wastewater Investments Along the Mediterranean Coast Financed by SMAP III

15 14.0 No Action Scenario 94% Connection and 75% Treatment Coverage (59/16): Population (Million) No Action Scenario In 2005: Sewer con. 94% Treatment 75% with 59% primary and 16% secondary 128,000 Tons of untreated BOD 000' Tons Million US$ Million Total Population 2005 Population with Network 2005 Population with Primary 2005 Population with Secondary Coverage 2020 Total Population 2020 Population with Network 2020 Population with Primary No Action Scenario 94% Connection and 75% Treatment Coverage (59/16): BOD Emission and Untreated (000' Tons) 2020 Population with Secondary 2005 BOD Emissions 2005 BOD Untreated 2020 BOD Emissions 2020 BOD Untreated BOD No Action Scenario 94% Connection and 75% Treatment Coverage (59/16): Cost/Benefit (US$ Million) Ecosystem Tourism Lakes Recreation Diarrhea Annual Cost 2005 Annual COED 2006 Annual 2020 Annual COED avertedinvestment/coed Cost 2020 Annual COED no Action 2020 Annual COED averted

16 Scenario E 100% Connection and 100% Treatment (10/90): Population Coverage (Million) Scenario E Target: Sewer con. 100% Treatment 100% (10% pr & 90% sec) Untreated 2005 BOD level -50% Cost: US$ 61 Mn pa Ben: US$ Mn pa from Health and Env but RR > 10% (time-lag for benefits to accrue) Million 000' Tons US$ Million Total Population 2005 Population w ith Netw ork 2005 Population w ith Primary 2005 Population w ith Secondary 2020 Total Population Coverage 2020 Population w ith Netw ork 2020 Population with Primary Scenario E 100% Connection and 100% Treatment (10/90): BOD Emission and Untreated (000' Tons) 2020 Population w ith Secondary 2005 BOD Emissions 2005 BOD Untreated 2020 BOD Emissions 2020 BOD Untreated Scenario E 100% Connection and 100% Treatment (10/90): Cost/Benefit (US$ Million) 2005 Annual Investment Cost 2005 Annual COED 2005 Annual COED averted BOD Ecosystem Tourism Lakes Recreation Diarrhea Investment/COED 2020 Annual Investment Cost 2020 Annual COED no Action 2020 Annual COED averted (Order of Magnitude)

17 Coastal WW Investment Scenarios WW Investments (US$ million) WW Investments and Residual BOD by 2020 (US$ million and BOD 000' tons) Annual Investment Residual BoD Cost of 100% Sewer Network Coverage Scenario A Scenario B Scenario C Scenario D Scenario E Scenario Residual BOD (000' tons) Scenario A: No Investment in Treatment (+50% BOD) cov. 59/16 prim/sec Scenario B: 2005 Treatment level = 2020 Treatment level (+33%) cov. 71/16 prim/sec Scenario C: 2005 BOD level = 2020 BOD level (+0%) cov. 70/30 prim/sec Scenario D: 2005 BOD level Greater than 2020 BOD level (-33%) cov. 30/70 prim/sec Scenario E: 2005 BOD level Greater than 2020 BOD level (-50%) cov. 10/90 prim/sec All Scenarios have a 100% sewer network coverage

18 WW Investment Decision Tradeoffs between WW investments and environmental benefits (COED) are reached at a investment rate of return equal to the discount rate (10%). Scenarios A, D and E exceed optimal investment points and reap health as well as marginal environmental benefits (D and E only). Nevertheless, confounding factors (industrial effluents, agriculture run-offs, watershed pollution, etc.) prevent a better quantification of environmental benefits for the time being.

19 Outcome of the Cost of Environmental Degradation (COED) Within the World Bank, COED has been adopted in Asia ( China) Africa ( Ghana) Latin America ( Columbia) COED was recognized in the Cairo Declaration on Horizon 2020 as inaction is no longer acceptable In the MNA region, COED is used by other donors and national agencies in Algeria, Morocco and Egypt In the Gulf countries, COED is used by ESCWA for economic evaluation

20 Outcome of COED in the MNA countries COED has been included in the World Bank Country Assistance Strategies of Algeria, Morocco, Lebanon, Jordan, and Egypt and helped identify lending operations in these countries The Government of Algeria decided to provide in 2001 an additional US$ 450 million for environmentrelated investments Lebanon is using COED as one of its sustainable indicators Syria has required in its 10 th Development Plan, that COED be included in all environment policies and programs

21 THANK YOU VERY MUCH FOR YOUR ATTENTION