Transcript Document 7913235

Integrating SEA into Decision Making:
An Economic Approach
Dan Biller
The World Bank East Asia and Pacific Region
Presentation Outline
Introduction
 Environment multi-dimensions
 An Economic Conceptual
Framework
 Conclusion
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Environment as a
Multidimensional Issue
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“1: the circumstances, objects, or conditions
by which one is surrounded; 2: the aggregate
of social and cultural conditions that influence
the life of an individual or community".
(Webster Dictionary).
• The potential impacts related to the economy
and the environment extend well beyond the
project level.
• The issue is accounting for 2nd and 3rd tiers,
which requires integration and can be
significant.
Environment as a
Multidimensional Issue
(Cont’d)
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Environmental economics:
Transformation of
environmental processes
(physical and biological) into
economic and social
processes - Welfare issue.
An Economic Conceptual
Framework for SEAs
Macroeconomic
Factors
Market
Public Goods
Information
SEA
Growth
Factor
Civil Society
Externalities
Government
Microeconomic
Factors
Where to Use the
Framework?
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The Planning process has
several levels:
•Policies
•Plans
•Programs
•Projects
An Economic Conceptual
Framework for SEAs
Macroeconomic
Factors
Public Goods
Information
Growth
Factor
Microeconomic
Factors
Externalities
Growth Factors
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Key Question: Economic growth versus
environmental quality?
Use: Policies, Plans, and Programs
Tools
• Situation assessment: Broader understanding of
capital
• Time: Using appropriate discounting methods
• Technological assessment: Are there
alternatives?
Examples
• The Irish National Development Plan (1994-99)
An Economic Conceptual
Framework for SEAs
Macroeconomic
Factors
Public Goods
Information
Growth
Factor
Microeconomic
Factors
Externalities
Macroeconomic Factors
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Key Question: What are the impacts
of Macroeconomic Policies on
environmental quality?
Use: Policies, Plans, and to lesser
extend Programs and Projects
(macroeconomic factors are given).
Macroeconomic Factors
(Cont’d)
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Tools
• Situation assessment: Finding the baseline
• Understanding both positive and negative
impacts.
• Assessing costs and benefits
• Suggesting mitigation measures,
implementation, and monitoring.
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Examples
• Trade reform, decentralization, structural
adjustments*.
An Economic Conceptual
Framework for SEAs
Macroeconomic
Factors
Public Goods
Information
Growth
Factor
Microeconomic
Factors
Externalities
Microeconomic Factors
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Key Question: What are the
impacts of Pricing / Sectoral
Policies on environmental quality
through what are the impact of a
project on individual preferences
related to environment?
Use: Policies, Plans, Programs, and
Projects
Microeconomic Factors
(Cont’d)
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Tools
• Situation assessment: Finding the baseline
• Understanding the impacts both positive and negative.
• Analyze impacts of price changes: Supply responses,
demand responses, location responses (e.g. elasticities)
• Assessing costs and benefits, participatory mechanisms
• Suggesting mitigation measures, implementation, and
monitoring.
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Examples*
• Policy Plan Drinking Water Supply, the Netherlands
• South Africa Park
An Economic Conceptual
Framework for SEAs
Macroeconomic
Factors
Public Goods
Information
Growth
Factor
Microeconomic
Factors
Externalities
The Economic Value of the
Environment:
Total Economic Value (TEV) = USE
VALUE + NON-USE VALUE
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The Economic “Values” of Biodiversity
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Use Values
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Direct Use
Values
Outputs
Indirect Option and
Quasi-option
Use
Values Values
Benefits/Ecological Services
Non-Use Values
Existence and
Bequest Values
Biodiversity and
Its Values
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Direct Extractive Use: products of commercial value
(food, plants...).
Direct Non-Extractive Use: ecotourism, education,
recreation and the development of new
pharmaceuticals.
Indirect Uses: services provided by ecosystems such
as water supply, flood control, soil conservation.
Option Values: the option of using a resource in the
future.
Existence or Bequest Values: Mere existence and
biodiversity for future generations.
The Market Failures
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Key Question: Markets at list in part
reflect “use” values (i.e. resulting
from direct enjoyment of good), but
many environmental issues are linked
to non-use value as well (without
markets), how do we capture these?
Use: Policies, Plans, Programs, and
Projects
The Market Failures
(Cont’d)
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Tools
• Situation assessment: Understanding the
role of information, externalities and
public goods
• Assessing non-market net benefits
• Suggesting mitigation measures,
implementation, and monitoring.
Examples
• Several using at least some of the tools
above
Conclusion: Environment
& Natural Resources
Environmental & Natural
Resource Policies
Legal
Framework
Priority
Setting
Information
Instruments:
CAC, Mkts, Econ. Instrument Design
Valuation