ഊContents Preface 3 1. Introduction 1.1 When to use the guide 4 1.2 How to use the guide 5 2. Why screen for environmental issues? 2.1 The environment is important for the poor 6 2.2 Why is screening important? 7 2.3 Policy background 8 3. Who does environmental screening and when? 3.1 Who does screening? 10 3.2 When does screening happen? 10 3.3 What next? 11 4. How to do environmental screening 4.1 Step-by-step guide to completion of an environmental screening note (ESN) 13 4.2 Top tips on screening 17 4.3 How to screen poverty reduction strategies and direct budget support 18 5. Further environmental investigation 5.1 Is more information needed? 20 5.2 Environmental advice 20 5.3 Environmental analysis 20 5.4 Environmental impact assessment 20 5.5 Environmental audit 23 5.6 Strategic environmental assessment 23 5.7 Further sources of information 25 6. Checklists and example environmental screening notes 6.1 Checklists by development themes 26 6.2 Examples of completed environmental screening notes 52 7. Frequently asked questions, glossary and acronyms 7.1 Frequently asked questions 58 7.2 Glossary 60 7.3 Acronyms 62 DFID Environment Guide A guide to environmental screeningഊഊPreface This is a revised and updated version of DFID’s Environmental Guide. It provides advice on planning and managing the environmental appraisal of DFID interventions. The guide aims to provide all DFID staff, particularly project officers, with sufficient advice and guidance to enable them to undertake environmental screening. The guide provides a summary of the activities involved in environmental screening, and wider appraisal processes. It does not contain all the answers, but it will help you to find out where to get more detailed advice. It contains: guidance on completing the simplified screening note and complying with the new procedures, which require the screening note to be submitted at the same time as a project header sheet for interventions over £1 million; new checklists identifying key environmental opportunities and risks – covering a range of aid instruments, from projects and programmes to sectoral approaches and budget support; and answers to common questions and sources of further information. This guide will help you mainstream issues of environmental sustainability into all DFID’s development activities with the aim of achieving sustainable poverty reduction. DFID will continue to keep guidance on environmental appraisal under regular review, and the most up-to-date information is available on DFID’s INSIGHT or on the website: www.dfid.gov.uk June 2003 3ഊ1.1 When to use the guide When to start This guide focuses on the environmental screening process, which should be done during the design phase of an intervention. Screening notes need to be submitted at the same time as the project header sheet and project concept note to allow spending to start. Environmental appraisal is not a single action but an ongoing process that takes place throughout a project or programme cycle. Environmental issues should be taken into consideration during identification, design and appraisal, and also during implementation, review and evaluation. Financial thresholds The procedures in this guide must be applied to all DFID interventions with a value of £1 million or more, including jointly funded initiatives where DFID’s contribution is over this threshold. Below the £1 million threshold screening is also required where there are potential environmental impacts. It will be difficult to decide whether there are potential impacts unless you screen, and so it is strongly recommended that screening be carried out even below this threshold. For example, DFID support to policy development may be below this threshold but could have significant environmental implications. The role of project/desk officers It is the responsibility of project/desk officers to complete the screening note and ensure that it is submitted with the other project documentation. It is also the responsibility of the project officer to ensure that any actions identified during screening are taken forward. Specific actions should be reflected in the project memorandum and logical framework (also known as the log frame). In troducti on 1.1 When to use the guide 1.2 How to use the guide 1ഊThe role of environment advisers An environment adviser is often the best source of professional environmental advice. An environment adviser should be consulted at the screening stage, particularly if there is uncertainty as to the possible environmental issues or the appropriate action to take. Screening notes are signed off by both the project officer and the environment adviser. 1.2 How to use the guide The guide has seven main sections: 1. Introduction – gives a brief overview of the whole guide. 2. Why screen for environmental issues – explains why environmental issues are important to DFID’s mission to eliminate poverty. 3. Who does environmental screening and when – explains who is responsible for environmental appraisal, particularly the initial screening, and where it fits in project and programme cycle management. 4. How to do environmental screening – takes you through the process of completing an environmental screening note (ESN). 5. Further environmental investigations – provides guidance on practical tools and approaches for the stages beyond screening, including sources of further information. 6. Checklists and examples – the checklists, although not comprehensive, give examples of environmental sustainability issues to be considered by project officers. They are organised around themes/topics. Examples of completed screening notes are also provided. 7. Frequently asked questions, glossary and acronyms – provides short and accessible answers to some key questions, and explanations of some technical terms. INTRODUCTION 5 We must harness the benefits that better environmental management can offer to poor people Secretary of State for International Development, June 2002ഊ2.1 The environment is important for the poor Ensuring environmental sustainability is one of the Millennium Development Goals to which DFID and the international community are committed. As well as being a goal in its own right, improving environmental sustainability also makes a vital contribution to the achievement of the other seven goals. The environment matters greatly to people living in poverty. It affects their livelihoods and health and can increase their vulnerability to external shocks. Livelihoods – poor people tend to be most dependent upon the environment and the direct use of natural resources. They are therefore the most severely affected when the environment is degraded or their access to natural resources is limited or denied. The drying up of the Aral Sea in Central Asia due to poorly planned and executed irrigation systems has destroyed the local natural resource base and exacerbated poverty in the region. Health – poor people suffer most when water, land, and the air are polluted. Environmental risk factors are a major source of health problems in developing countries. It is estimated that 30% of the burden of disease in sub-Saharan Africa is due to environmental causes, such as lack of sanitation and clean water, poor indoor air quality and unsafe working conditions. Vulnerability – the poor are often exposed to environmental hazards and environment-related conflict and are least capable of coping when they occur. In 1992 Hurricane Andrew hit the USA and resulted in 32 deaths. In 1991 a cyclone of similar force hit Bangladesh and killed over 139,000 people. Taking a longer term view of development Addressing the environmental issues that matter most to the poor is critical to achieving sustained poverty reduction. Developing countries are already experiencing environmental degradation and exhaustion of environmental resources that are vital to long-term development. Without a greater focus on the sustainability of their development, these problems will increase as their economies grow. Why sc ree n f o r env i ronment al issues? 2.1 The environment is important for the poor 2.2 Why is screening important? 2.3 Policy background 2ഊ2.2 Why is screening important? The three main objectives of screening are to: identify and exploit environmental opportunities and benefits of a proposed intervention. For example, a screening note might identify the need to include environmental services (water, waste management etc.) in a local government development programme. identify and manage environmental risks associated with the intervention and ensure that appropriate action is taken. For example, improving rural road networks can have many social, economic and environmental benefits, but the risks (e.g. damage caused during construction) need to be managed. ensure that DFID activities are consistent with policy at the national and international level. For example, screening should identify if there is national legislation with which the intervention needs to comply. Ideally a screening note should also highlight any links to multilateral environmental agreements and international best practice. WHY SCREEN FOR ENVIRONMENTAL ISSUES? 7 Myth: The poor cause most environmental degradation. Reality: In general, the rich use more resources and have greater environmental impact than the poor. But poverty can force people to use resources unsustainably. Myth: Economic growth inevitably leads to environmental degradation. Reality: Economic growth can pay for a better environment; and improved environmental management enhances and sustains growth. Myth: The poor don’t care about the environment. Reality: The poor are acutely aware of the negative effects of a poor environment on their lives, particularly as they often depend directly on the environment for survival. Myth: The poor lack the knowledge and resources to improve their environment. Reality: The poor can and do invest in better environmental management, particularly where incentives and information are available. Their traditional knowledge is often undervalued and ignored. Box 1: Some myths and realities about the poor and their environmentഊ2.3 Policy background DFID Policy It is DFID policy that the procedures in this guide should be followed. Screening must be carried out for all DFID interventions with a value of £1 million or more. Screening is also recommended below that threshold, as there may still be environmental impacts. DFID’s commitment to environmental sustainability is reflected in two White Papers on International Development. The first White Paper on International Development was published in November 1997 – Eliminating World Poverty: A Challenge for the 21st Century. In this, the UK Government states its commitment to international development through “support for international sustainable development targets and policies which create sustainable livelihoods for poor people, promote human development and conserve the environment”. These commitments are expanded in the second White Paper on International Development – Eliminating World Poverty: Making Globalisation Work for the Poor (December 2002). In this, the Government states that it will promote equitable and environmentally sustainable economic growth. It also commits itself to: work to reduce the contribution made by developed countries to global environmental degradation; and work with developing countries to ensure that their poverty reduction strategies reflect the need to manage environmental resources sustainably, and strengthen their capacity to participate in international negotiations. Partner country policy An increasing number of partner countries require an environmental examination of certain proposed policies, plans and programmes before agreement and implementation. DFID interventions must comply with any partner country regulations. DFID ENVIRONMENT GUIDE 8ഊPublic Scrutiny Environmental screening notes may soon be open to public scrutiny. The Aarhus Convention – on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental matters – aims to increase the transparency and accountability of government. The UK Government hopes to ratify by the end of 2003. Ratification will mean that members of the public can ask to see ESNs, and only in exceptional circumstances would DFID be able to refuse. This places an additional onus on DFID to ensure a high quality of screening. The Aarhus Convention website is: www.unece.org/env/pp/treatytext.htm WHY SCREEN FOR ENVIRONMENTAL ISSUES? 9 • The UN Convention on Biological Diversity (1994) established three main goals on biodiversity: the conservation of biological diversity; the sustainable use of its components; and the fair and equitable sharing of the benefits from the use of genetic resources. • The UN Framework Convention on Climate Change (1994) provided the foundation for intergovernmental efforts to address climate change. The Kyoto Protocol (1997) broke new ground with its legally-binding constraints on greenhouse gas emissions from developed countries, and its innovative mechanisms aimed at cutting the cost of curbing emissions. • The UN Convention to Combat Desertification (1996) aimed to promote effective action on desertification through innovative local programmes and supportive international partnerships. Box 2: Examples of Multilateral Environmental Agreements Multilateral Environmental Agreements The UK has ratified a number of Multilateral Environmental Agreements (MEAs). They commit the UK to observing environmental agreements at home, and to help developing countries meet their own commitments. The targets set in these agreements are important for reducing poor people’s vulnerability and meeting the challenges of development.ഊ3.1 Who does screening? Who completes the note? Environmental screening is the responsibility of the project officer – who should consult colleagues as required. Environment advisers can provide advice on the completion of the note. Sign off The environmental screening note (ESN) needs to be signed off by both the lead project officer and the appropriate environment adviser. 3.2 When does screening happen? When to complete the note An ESN should be completed at the same time as the project concept note. Screening is the earliest stage in the environmental appraisal process. It may indicate the need to consider alternatives e.g. different approaches, timing, scale and location. Late screening may result in delays, additional costs and lost opportunities. Early screening also ensures that environmental opportunities and risks can be fully integrated into the design process and adequately reflected in the project memorandum and log frame. DFID’s environmental appraisal procedure is integrated into project/programme cycle management. The process is illustrated in the flow diagram, Figure 1. Completion of an ESN is mandatory An environmental screening note must be completed for all interventions over £1 million before funding is released. It is recommended to complete one even for interventions below this threshold. The ESN should be included in the project documentation that is submitted. Follow-up A completed ESN is not the only output of screening. Any significant issues and actions that have been identified need to be highlighted in the project memorandum and log frame. Follow-up actions are the responsibility of the project officer, with support from an environment adviser if necessary. Who does environmenta l screeni ng and w he n? 3.1 Who does screening? 3.2 When does screening happen? 3.3 What next? 3ഊ3.3 What next? An ESN can lead to a number of different important follow-on actions (see Figure 1 overleaf): No further action is needed – because no significant environmental opportunities or risks have been identified. Identification of environmental opportunities and risks – there are issues that need to be managed to ensure both maximum benefit for the poor, and that the intervention is environmentally sustainable. Identification of the need for further studies – in some cases further environmental studies will be needed (e.g. an environmental impact assessment or a strategic environmental assessment) to inform subsequent decisions. The results and recommendations of these studies will be incorporated into the design of the intervention. Allocation of staff responsibility and accountability – any follow-up actions that are required during design or implementation should be allocated to an appropriate adviser/project officer and noted on the ESN. Decision that the intervention is inappropriate – it is possible, but unlikely, that an intervention will reach concept stage before a serious risk has been identified. The ESN may recommend that the intervention does not continue in its current form. WHO DOES ENVIRONMENTAL SCREENING AND WHEN? 11 • Consider environmental issues early – ideally as soon as an intervention is identified. • Screening is a crucial first step – it identifies environmental opportunities and risks, and determines the level of detail of any further environmental studies. • Integrate key issues and actions – the issues identified through screening need to be reflected in relevant project/programme documentation (e.g. the log frame). • Environmental appraisal is iterative – if new environmental issues come to light during design and implementation, appropriate action should be taken. • Monitoring is important – to ensure opportunities and risks raised during screening and design are being managed effectively. Box 3: Key points on environmental appraisalഊConcept Stage Design and Appraisal Stage Implementation and Monitoring Stage Project concept note Output to purpose review Project memorandum Significant environmental issues. Feedback to project team and either halt intervention or agree required changes No additional action required Some further action required Integrate environmental management issues into design process and appropriate documentation – including budget and log frame Implement environmental management actions Monitor, review and evaluate, including monitoring against actions identified during screening and design Further environmental investigation needed e.g. environmental impact assessment or environmental analysis (see section 5 of the guide) Identify actions without formal detailed investigation Environmental screening Project/programme concept Figure 1: Flow diagram of the environmental appraisal process DFID ENVIRONMENT GUIDE 12ഊ4.1 Step-by-step guide to completing an environmental screening note It is the responsibility of the project officer to complete the screening note. Project officers do not need to be environmental specialists, but they should draw on their judgement as development professionals. For many interventions screening will be a simple and rapid process conducted as a desk exercise. Sometimes it will mean drawing on advice from environment advisers and possibly even external experts. Step 1: Familiarise yourself with this environment guide. It may be helpful to look at: examples of completed environmental screening notes (ESNs); and the topic-related checklists which may give you ideas for your note. Step 2: Open up a blank environmental screening note. Blank ESNs can be taken from the forms repository or the environment pages of DFID’s Intranet system - INSIGHT. Step 3: Complete sections A & B of the ESN using the advice in the guided version of a screening note that immediately follows this section. Advice is in red. Step 4: Circulate the draft ESN to relevant staff for feedback – notably the environment adviser. Step 5: Integrate feedback. Step 6: Ensure actions recommended in the ESN are set in motion and recorded in other relevant documents such as the log frame, project memorandum etc. Screening needs to be closely linked with all other intervention design and implementation activities (see section 4.2 Top tips on screening). Step 7: The project officer should sign-off the ESN and send it to the environment adviser for their sign-off too. Step 8: Look at the project header sheet carefully and ensure that, if appropriate, the Environmental Sustainability PIMS marker and any environment related input sector codes (formerly economic sector codes) are highlighted. Step 9: Ensure the ESN is submitted to DFID’s Statistical Reporting and Support Group (SRSG) along with the project header sheet and other relevant documentation. Only when the ESN is received will spending blocks be lifted. ESNs will be stored on DFID’s project document storage system – PRISM (Performance Reporting Information System Management) – for ease of future reference. How t o do e n vi ronmen tal s creeni ng 4.1 Step-by-step guide to completing an environmental screening note 4.2 Top tips on screening 4.3 How to screen poverty reduction strategies and direct budget support 4ഊDFID ENVIRONMENT GUIDE 14 Environmental Screening Note (ESN) Section A – Basic Information Project title: copy from concept note or other relevant document Project cost: may have to be an estimate at this stage – mentioning if agencies outside DFID are involved in co-funding Duration: may have to be an estimate at this stage Country: you will know this! Department: relevant funding department/s in DFID Lead project/desk officer: project officer identified for the intervention Officer responsible for environmental screening: may be same as above but please specify for monitoring purposes Brief description of intervention: this could be the ‘purpose’ of the intervention taken from the concept note. Please mention any specific aspects that are of particular relevance to the environment or to poor people’s livelihoods. Screening note - guided version Section B – Assessment Environmental issues: (refer to checklists in the Environment Guide) Please list the key environmental issues raised by this intervention. This might include: • opportunities to strengthen the environmental sustainability of this intervention; or • risks that need to be managed. Please refer to the checklists in section 6, which are organised according to topics/sectors. These will offer further guidance, although the lists are not intended to be exhaustive.ഊHOW TO DO ENVIRONMENTAL SCREENING 15 Next steps: (where possible indicate the responsible officer and the time frame) Summarise any actions to deal with the issues above, and who will be responsible for taking these actions forward. The project officer should ensure that: • these actions are reflected in project documentation including the log frame and project memorandum; • a budget is set aside for these activities if necessary; and • appropriate monitoring and evaluation is identified, and carried out through the project cycle management process. If you are having trouble completing the ESN due to lack of information, there may be a need for further study. The best person to talk to is the environment adviser who can provide advice on further environmental investigation. Any other comments: This is a space for other relevant information such as: • comments on capacity for environmental management in country; • capacity of implementing institutions; • comments on environmental trends in the country or region; or • information on related environmental projects implemented by government or other donors. Section C – Sign off Environment adviser: Date: Lead project officer: Date:ഊDFID ENVIRONMENT GUIDE 16 Relationship between screening and the project header sheet There are two important ways in which environmental issues are reflected on the project header sheet: There is a space where you need to complete the date and officer responsible for environmental screening. The officer res-ponsible is normally the project officer. Some input sector codes and policy information makers (PIMS) relate to the environment. Instructions on this are found on the Statistics Department page on INSIGHT and in DFID’s Pink Book, otherwise known as “Project Header Sheet Guidance incorpor-ating Input Sector codes and Policy Information Marker System (PIMS)”. • Have the relevant issues been addressed and specialist environmental advice sought where appropriate? • Does the approach contribute to the environmental priorities in the DFID Country Assistance Plan or national Poverty Reduction Strategy or equivalent? • Have all significant pro-poor environmental opportunities been identified, including appropriate actions for the design process? • Have all the significant environmental risks and assumptions been identified, including appropriate actions for the design process? Box 4: Questions to ask before signing off an ESN 1. 2.ഊHOW TO DO ENVIRONMENTAL SCREENING 17 4.2 Top tips on screening Start as early as possible. Screening should go hand in hand with project concept development. This way environmental opportunities and risks can be appropriately and easily integrated into subsequent design stages, rather than being brought in at the last minute. Consider indirect effects. Some important environmental effects may be secondary or indirect – for example changes in government policy on taxation may have far-reaching but not immediately obvious environmental implications. Indirect effects can often result from social responses to a project, for example forest encroachment due to the access provided by a new road. Consider existing causes of environmental change. Underlying causes of change may include: increased environmental hazards; market failure; perverse policies; weak institutions; unclear property rights; and inadequate knowledge. How will the intervention contribute to or reduce these causes? Consider gender aspects of environmental concerns. Women living in rural areas are often more vulnerable to environmental degradation – because of existing inequality in access to land, natural and productive resources, training, credit, and development programmes. Women in urban and in low-income areas can be particularly vulnerable to environmental risks in the home and the workplace. Consider impacts on different social groups. Different groups in society feel positive and negative impacts of environmental issues differently. Varying socio-economic circumstances mean that there are winners and losers. Screening is the start of the process, not the end. Key results from all stages of environmental appraisal must be integrated into project or programme cycle management. Actions need to be included in log frames, project documents etc, and be monitored and reviewed during output-to-purpose reviews (OPRs) and/or in the mid-term review (MTR). If there is any environmental output, purpose or PIMS marker, there should be appropriate objectively verifiable indicators (OVIs) and means of verification (MOVs) in the log frame. Keep the ESN up-to-date. The ESN may need revising if issues are addressed by design changes, or if new problems arise. Use the ESN to help complete the project header sheet. The project header sheet also contains PIMS (Policy Information Marker System) markers and input sector codes. Screening should highlight whether the intervention contributes to the environmental PIMS or economic sector codes. Make sure the ESN is included in the project documentation submitted. Funding above the £1 million threshold will not be released without an ESN on file. Even ESNs that indicate no environmental impact should be sent.ഊ4.3 How to screen poverty reduction strategies and direct budget support DFID is committed, where appropriate, to moving away from supporting individual projects to providing assistance directly to recipient government budgets in support of an agreed national development plan such as a poverty reduction strategy (PRS)1 . This section explores how environmental screening should tackle this new approach. Poverty reduction strategies and the environment Poverty reduction strategy papers (PRSPs) are a vital way of highlighting how better environmental management can reduce poverty. The development and review of national poverty reduction strategies provides an opportunity to integrate key environmental issues into national planning processes. For a more detailed list of ideas when supporting PRSP processes see the PRSP checklist. Direct budget support and the environment The nature of budget support – general support to the government rather than support to specific projects – dictates that ensuring good environmental management in the country as a whole becomes important. Detailed consideration of environmental issues is therefore an important step before the provision of direct budget support. 1 Poverty reduction strategy or PRS is used as shorthand for “poverty reduction strategy or equivalent national development plan” DFID ENVIRONMENT GUIDE 18ഊHOW TO DO ENVIRONMENTAL SCREENING 19 Top tips for screening direct budget support Thorough environmental analysis should take place before providing direct budget support. There are no hard and fast rules, but the following points should be considered: Support the inclusion of key environmental issues in national policies and plans such as PRSPs. This may include: understanding how natural resources contribute to economic growth; analysis of the relationship between environment and poverty; analysis of the drivers of environmental change; definition of environmental standards; use of poverty-environment indicators; monitoring/auditing and capacity-building in environmental management. It may be helpful to read the checklist on national development plans/poverty reduction strategies (PRSs). Support strategic environmental assessment (SEA) processes. An SEA enables the environmental impacts of national development plans, such as poverty reduction strategies, to be considered. Consider the capacity of key governmental and non-governmental stakeholders to engage with national development processes. Supporting natural resource/environment ministries to engage with processes such as PRSPs is a way of helping address environmental issues related to economic growth, livelihoods and poverty elimination. Another useful step is in supporting environmentally-related civil society groups. Ensure environmental issues are addressed in key analytical inputs into national planning. Environmental issues can be included in the methodology for participatory poverty assessments and poverty and social impact analyses. Consider the approaches of other agencies, particularly the World Bank and the International Monetary Fund (IMF). DFID support will often be linked to support by the World Bank (through the Poverty Reduction Support Credit) or the IMF (through the Poverty Reduction Growth Facility). It may, therefore, be important for DFID to encourage the World Bank and the IMF to cover environmental issues in their budget support instruments. For a more detailed list of ideas, see the direct budget support checklist.ഊ5.1 Is more information needed? Screening may highlight the need for further environmental investigation, for any of these reasons: a) there is insufficient information to complete screening; b) screening identifies issues that need investigation before design is completed; or c) further work is needed during implementation and monitoring. This section lists the most common forms of further environmental investigation to meet these needs. 5.2 Environmental advice DFID environment advisers, partner institutions, and consultants can all provide advice for completing an ESN. They should also highlight whether further studies are necessary. A brief discussion with an environment adviser who has worked on similar interventions may be all that is required. 5.3 Environmental analysis This is the most frequently used level of further study. Environmental analysis can take the same approach as an environmental impact assessment (see below) but either at a lower level of detail or more narrowly focused on specific concerns. The term is commonly used to cover field studies of individual issues and environmental inputs to design activities. These may result in the preparation of an environmental annex (for the project memorandum) for the proposed initiative. The objective of environmental analysis is to enhance benefits, as much as to solve potential problems. The resulting recommendations may include action at a strategic level (e.g. through changes in national policy) as well as at the programme or project level. 5.4 Environmental impact assessment (EIA) An environmental impact assessment (EIA) is a multidisciplinary, compre-hensive and detailed study of the expected significant interactions between a proposed development and the environment within which it is to be implemented. Furt her envi ronmental inves t i ga t ion 5.1 Is more information needed? 5.2 Environmental advice 5.3 Environmental analysis 5.4 Environmental impact assessment (EIA) 5.5 Environmental audit 5.6 Strategic environmental assessment (SEA) 5.7 Further sources of information 5ഊWhen an EIA is needed An EIA is the appropriate environmental appraisal tool to use for major development projects – and, to a lesser extent, multi-project programmes – and so it is not often applied to DFID initiatives. However, where DFID provides technical assistance to support infrastructure developments financed by other agencies, an EIA must be undertaken. National ownership An EIA will usually be undertaken under the auspices of the national government of the partner country. Most partner countries have statutory environmental standards or advisory guidelines that must be applied to development interventions. In the absence of such standards, DFID’s approach is to develop specific standards with the partner government, which take into account local environmental conditions, costs of compliance, obligations under international law etc. Publication of the EIA is the responsibility of the partner governments, in accordance with their own legislation. Timing and resources for an EIA An EIA can only be undertaken at the planning or early design stage of an intervention and should be initiated as early as possible. As a multi-disciplinary study, it will require a team which might include economists and sociologists as well as environmental experts. The resources needed for an EIA depend on its nature and location, but may be significant, perhaps 1% of total implementation costs. Role of donors If an EIA is to be undertaken, funding and additional technical assistance may be provided by DFID or the lead donor agency. Donors, for example, might review an EIA for adequacy, with particular attention to mitigation and environmental management plans - or support ongoing monitoring. Monitoring environmental impacts The monitoring programme should be presented as part of a broader environmental management plan (EMP), which is used to guide implementation of the project, and which would include: significant environmental risks and uncertainties; applicable environmental legislation and standards; mitigation measures (including in-country institutional support); monitoring programme; resources and funds required for environmental management; contractual and management arrangements; and consultation and participation arrangements. FURTHER ENVIRONMENTAL INVESTIGATION 21ഊDFID ENVIRONMENT GUIDE 22 Scoping highlights the most important environmental issues Baseline studies provide data on the current situation and can use existing studies if they are available Environmental management plan and monitoring mitigation and monitoring proposals may be written up in an environmental management plan. The monitoring programme should track the actual impacts of the project during implementation Mitigation and monitoring proposals and prescription lists the measures needed to enhance environmental benefits and minimise adverse environmental effects Presentation of findings and proposals in the environmental impacts statement the formal presentation of the EIA process Impact prediction the estimated impacts of the proposed intervention based on scoping, baseline data and knowledge of previous interventions Description and evaluation of baseline studies identify critical issues and provide a basis for monitoring Primary Pathway Feedback Loop N.B. Consultation should take place throughout, and formal public participation is normally a crucial step before finalising the EIA. Adapted from Morris, P. and Therivel, R. “Methods of Environmental Impact Assessment”, 2001. A Basic EIA Processഊ5.5 Environmental audit An environmental audit uses the same basic approach as an EIA (see above), but it is applied to existing projects/activities rather than new developments. An environmental audit has been most often applied: to industrial sites to identify existing environmental risks and liabilities (pre-acquisition audit); to relate operations to standards, licenses and laws (compliance audit); and to record environmental performance at regular intervals (environmental reporting). DFID is most likely to undertake an environmental audit as part of support for privatisation programmes, or the improvement of facilities. However, an environmental audit may be useful if more information is needed about existing environmental conditions or trends in order to inform decisions. For example an audit may highlight the need for an area-wide programme of sanitation, soil conservation or waste management. Audits may be conducted as part of a strategic environmental assessment (see below). 5.6 Strategic environmental assessment (SEA) Strategic environmental assessment (SEA) is an emerging tool, which can be applied to higher levels of decision-making hierarchy than an EIA (which is more suitable for individual projects). What is SEA? An SEA is a process for analysing the environmental consequences (positive and negative) of proposed policies, plans, major investment decisions and other strategic interventions. It is undertaken to inform and enhance strategic decision-making and to ensure that the costs and benefits of policy choices are considered. It ensures that environmental considerations are taken into account alongside economic and social factors as early as possible in the policy and planning process. An SEA is a flexible process. There is no template of procedures and methodologies such as those available in the application of EIA. The methodology will vary according to the purpose of the SEA. What we do have, however, is a set of evolving principles and criteria that help describe the SEA process. FURTHER ENVIRONMENTAL INVESTIGATION 23ഊExperience with SEA Considerable experience exists in applying SEA-type approaches to sector specific proposals - such as energy, transport, trade and land-use planning. Pioneering work is underway to link SEA with development co-operation initiatives such as poverty reduction strategies. SEA can be used to ensure environmental opportunities and constraints are reflected in PRSPs or national development plans. When is SEA appropriate? SEA may be appropriate in a wide variety of situations. It can be used to evaluate existing policy choices (in such a case assessment is likely to be a relatively quick exercise provided some baseline information exists). It can also influence the range of policy and strategy options developed (a longer and more complex exercise). To be most effective SEA must be initiated proactively before decisions have been made and when alternatives are still available. DFID ENVIRONMENT GUIDE 24 • Fit for purpose: The SEA process should be customised to the context and characteristics of the policy, strategy, plan or programmes development. • Decision relevant: The process should provide rigorous data and information in a form relevant to the level of decision-making. • Sustainability-driven: The process should identify how development options and proposals contribute to environmentally, socially and economically sustainable development. • Integrative: The process should include consideration and trade-offs of social, health, economic and other impacts. • Participative: The process should provide the opportunity for multi-stakeholder dialogue and participation, which is appropriate to the level and issues of decision-making. • Transparent: The process should ensure public access to any information generated, and the choices to be made. Box 5: Selected principles of SEAഊSome examples of circumstances where a SEA would be usefully applied are: Macro policy initiatives – initiatives without discrete project-based outputs, such as poverty reduction strategies, agricultural subsidy reform, public sector reform, privatization, or trade policy. Sectoral investment or support programmes – (e.g. sector wide approaches) - in water resources, waste management, education, forestry, transport planning, the extractives sector etc. Sub-national strategic planning and policy formulation – coastal zone management, urban or industrial development plans, catchment management or regional development plans etc. Programmes with numerous small-scale developments or community projects – where individual appraisal would not be cost-effective. Here an SEA could highlight generic environmental issues and provide mitigation measures to apply across the whole programme. Cumulative impacts – situations where the effect of individual developments may be limited, but could be significant when considered together. The development concerned should be considered with other existing or proposed activities in the same sector, region or catchment. Also, projects or activities may induce development beyond the control of the project developer (e.g. industrial estates, urban development programmes and road projects). 5.7 Further sources of information The most accessible sources of further information are: Environment advisers working in the country/region and policy division staff working on environment-related topics and teams. The contact list for environment advisers and staff in policy division working on environment issues is available on the INSIGHT environment page. Environmental publications produced by DFID and partner agencies. These cover topics such as participatory poverty assessments and the environment, environment and trade, genetically modified organisms. Many are available on the environment pages of INSIGHT as well as the website: www.dfid.gov.uk Websites including: African Development Bank www.afdb.org Asian Development Bank www.adb.org European Bank for Reconstruction and Development www.ebrd.com European Union http://europa.eu.int/comm/environment/ Inter American Development Bank www.iadb.org United Nations Environment Program www.unep.org World Bank www.worldbank.org/environment FURTHER ENVIRONMENTAL INVESTIGATION 25ഊ6.1 Checklists by development themes The following checklists provide examples of environmental sustainability issues that might be relevant to the intervention under consideration. For each type of development intervention, some environmental opportunities and risks are given. They are presented to stimulate thinking and are not exhaustive in terms of intervention type or environmental issues. The following themes are currently covered by checklists: National development plans Poverty reduction strategies Participatory poverty assessments Direct budget support Economic growth Fiscal reform and public expenditure management Privatisation and reform of state-owned enterprises Reform of the financial sector and support to small and medium enterprises Trade and foreign direct investment Human development Health HIV/AIDS Education Governance Local government reform / decentralisation Strengthening civil society Tackling corruption Public sector reform (including public expenditure management) Safety, security and access to justice Livelihoods Rural development Water resource management Fisheries Forestry Infrastructure Urban development Conflict and humanitarian assistance Conflict analysis / management Humanitarian relief Assistance to refugees and internally-displaced people Checklist s and exampl e env i ronment al scr eeni ng no tes 6.1 Checklists by development themes 6.2 Examples of environmental screening notes (ESNs) 6ഊNational development plans Poverty reduction strategies (PRSs) Opportunities Environmental management is important for poverty reduction, and should therefore be included in national development plans/poverty reduction strategies. Environmental drivers of poverty – such as loss of soil fertility, lack of clean water, and vulnerability due to natural hazards/disasters, climatic variation and long-term climate change – should be addressed. A first step in the integration of environmental issues is to develop a good understanding of the links between environment, poverty and economic growth. This understanding can be developed through the inclusion of environment in participatory poverty assessment (PPA), and poverty-social impact analysis (PSIA). Specific studies could also assess the environmental dimensions of growth, and the macro-economic costs of environmental problems. Plans for sectors that are heavily dependent on environmental goods and services (such as agriculture, mining, energy) need to consider how long-term environmental sustainability will be achieved. This may require some form of strategic environmental assessment or sustainability analysis. Environment agencies and environmental civil society groups should be supported to engage in national planning processes and identify capacity building needs. Key poverty-environment indicators should be included in the PRS monitoring plan. This requires systematic collection of relevant information. Risks Plans for economic growth may rely on unsustainable exploitation of natural resources. In these situations the benefits of growth may be unequally distributed. National policies may have unforeseen negative impacts on the environment as a result of poor planning or lack of information and capacity. They may also fail to take into account environmental hazards/natural disasters. National quality assurance and regulatory functions intended to ensure environmental sustainability should be in place to manage risks. CHECKLISTS AND EXAMPLE ENVIRONMENTAL SCREENING NOTES 27 Strategic environmental assessment (SEA) is an important tool that can be used to address both opportunities and risks associated with a PRS. In Ghana a number of donors are supporting the Environmental Protection Agency and the National Development Planning Commission in the conduct of an SEA of the PRS.ഊNational development plans Participatory Poverty Assessments (PPAs) Opportunities PPAs provide an excellent opportunity to understand environmental issues of importance to the poor. This requires an appropriate environmental input in the design, fieldwork and analysis so that researchers are sensitive to the issues and can interpret results appropriately for decision-makers. PPAs can be conducted specifically to focus upon environmental issues that are important to the poor (these are known as environmental PPAs). These enable a better understanding of poverty-environment links and their policy implications. PPAs help to improve understanding of gender and environment links and help to empower women to have a voice in national policy making. Risks Analysis of PPAs has shown that environmental issues are important to the poor. However, without appropriate analysis from people with an understanding of the breadth of poverty-environment links, key concerns may be overlooked in the interpretation of the PPA results. This can lead to PRSP plans and interventions that lead to environmental damage, and threats to livelihoods. DFID ENVIRONMENT GUIDE 28 In Uganda the government has undertaken a Participatory Poverty and Environment Assessment (PPEA), which has captured strong messages coming from the poor that the quality of the environment on which they depend for their livelihoods is declining. This in turn means they are less able to move out of poverty. Messages from the PPEA have helped to shape the content of the second Ugandan Poverty Reduction Strategy.ഊNational development plans Direct Budget Support (DBS) Opportunities Budget support is linked to poverty reduction strategies (PRSs) or national development plans, and is provided to help meet the targets set out in these strategies. Appropriate poverty-environment targets from the PRS should be included in the budget support monitoring framework. Plans for DFID budget support are often developed in conjunction with other donors, particularly the World Bank. Donors should work together to look at the integration of environmental issues into negotiation and implementation of this support (e.g. in the poverty reduction support credit agreement). It is often necessary, at an early stage of direct budget support, to carry out more data gathering and analysis in the form of a strategic environmental assessment, a country environmental analysis or other studies. Technical assistance is often provided to complement budget support. This could include capacity building for effective integration of environmental issues, and better environmental management. Environmental performance and impacts can be integrated into national accounting mechanisms to provide a more balanced analysis of the budget (this is known as ‘green’ accounting). Risks The nature of budget support – where the funds contributed by donors cannot be separated from the national budget – involves an inherent risk. The government may undertake development activities that are environ-mentally damaging, unsustainable, or threatening to the livelihoods of the poor. This is an issue to which donors need to be sensitive. There may not be a suitable environmental management framework in place to ensure that the PRS will be implemented in a way that promotes environmental sustainability. Key aspects of a suitable framework include: an autonomous national agency responsible for environmental management, an active parliament and civil society, suitable regulations and laws that can be enforced. CHECKLISTS AND EXAMPLE ENVIRONMENTAL SCREENING NOTES 29 In Uganda DFID has included, as part of its Budget Support, comprehensive support for poverty-environment analysis. This includes: an Environmental Participatory Poverty Assessment; development of a Budget Framework Paper for environment and natural resources; and the integration of environmental sustainability into agricultural modernisation and other major development programmes.ഊEconomic growth Fiscal reform and public expenditure management Opportunities Fiscal reform may increase tax revenues, improve social equity, improve the environment and reduce corruption. For example: improved revenue collection in forest and fishery sectors; removal of environmentally damaging subsidies e.g. on energy and water, whilst taking care to make safety-net provisions for the poor. Strategic environmental assessment of fiscal policy changes can identify the appropriate measures for a given country or sector. Fiscal reform provides an opportunity for improved communication and understanding between finance ministries and those institutions responsible for environmental protection and sustainable development planning. Risks Fiscal changes (e.g. subsidies or incentives) may encourage over-use of natural resources and environmental harm. Lack of policy and fiscal consistency across government may create conflicting environmental outcomes threatening the livelihoods of the poor. DFID ENVIRONMENT GUIDE 30 There is recognition in South East Asia of the need for governments to increase revenues generated from forests. This has proved complex given the vested interests involved, and the large revenues lost through illegal logging. DFID continues to build these concerns into its dialogue with international financial institutions and government partners.ഊEconomic growth Privatisation and reform of State-owned enterprises (SoEs) Opportunities Reform of state-owned enterprises often brings environmental benefits as these enterprises are frequently inefficient, costly, under resourced, under-regulated and a source of significant environmental problems. Privatisation offers opportunities to improve, amongst other things, corporate governance, resource efficiencies, environmental and social standards. Strategic environmental assessment of an entire sector to be privatised can determine environmental opportunities and risks and recommend measures to manage them cost-effectively. An SEA also represents an excellent entry point for broader social issues (e.g. health and safety, child labour), and should maximise the proceeds to government from privatisation. There may be a need to review environmental legislation to ensure it is adequate to manage environmental issues associated with privatisation. Environmental opportunities and risks can be integrated into responsible business and manufacturing practices e.g. through adoption of an environmental management system (EMS). Demonstration projects illustrate how improved environmental management can save costs through minimising waste or energy-use, cleaner technology and other ‘win-win’ situations. Support can be provided so that civil society groups can engage with the private sector and monitor industry-related environmental issues. Risks Change of ownership should involve ‘due diligence’ activities which include identifying and quantifying environmental liabilities (e.g. through an environmental audit). Existing environmental and human health damage can result in claims against new owners and threaten the viability of a project and its dependent jobs. Past and present pollution can pose long-term threats to surface and ground water resources, with possible indirect effects such as reduced agricultural production and health problems. Lack of environmental management and occupational health protection can prejudice long-term growth prospects, employment opportunities, and deter potential investors. Increased production as a result of privatisation, without adequate environmental management, can lead to increased natural resource depletion, pollution and other adverse impacts. CHECKLISTS AND EXAMPLE ENVIRONMENTAL SCREENING NOTES 31 In China, DFID’s State-owned Enterprise and Enterprise Reform Project is helping to develop models of how enterprises can become more effective and profitable. This includes how improved management systems should address improved environmental management and responsibility, leading to environmental improvements and business benefits.ഊEconomic growth Reform of the financial sector and support to small and medium enterprises (SMEs) Opportunities Financial intermediaries – institutions which provide loans directly to SMEs – provide an opportunity to support environmentally beneficial activities. For example, loan criteria could encourage more efficient manufacturing or production processes that both reduce waste and save money. Financial intermediaries could be supported in management of environmental aspects of their loans through provision of advice on environmental hazard-ranking, health and safety etc. This might include training for staff and production of information for borrowers. Environmental management capacity-building for the private sector, including SMEs, can be provided through support for local chambers of commerce and industry. Environmental impact questions should be included in monitoring procedures e.g. asking about water, waste disposal and health and safety aspects. Training may be needed to facilitate this. Risks Financial intermediaries need to integrate some form of environmental screening into their loan approval process to avoid financing environmentally damaging projects. SMEs can be a major source of pollution and other environmental damage – particularly when collected together. This issue should be addressed, without damaging poor people’s employment and income opportunities. Drives to remove red tape and reduce regulations may result in the removal of important environmental and social protection measures. Since impacts may be indirect, it is important that social and environmental appraisals of regulatory reforms are conducted. DFID ENVIRONMENT GUIDE 32 In Bangladesh DFID has launched a five year multi-donor project for developing a conducive business environment for small and medium enterprises, with a focus on improving competitiveness. Environmentally and socially responsible approaches are recognised as an important component in order to ensure long-term sustainability. Resources have been set aside to recruit appropriate staff to take this forward.ഊEconomic growth Trade and foreign direct investment Opportunities Foreign direct investment, and the introduction of new products, skills and technology through trade, may bring environmental benefits, e.g. through the replacement of polluting or wasteful processes. Good environmental management can facilitate or directly increase market access. This can be through increased efficiencies in resource use, as well as adding value to the commodity through improved quality or adherence to standards that increase their value in competitive global markets. To access the higher value markets that environmental standards can bring requires support to the private sector, especially small and medium enterprises. Such support includes improved dialogue and information exchange with their own government and with OECD private sector importers. Sustainability impact assessment of trade initiatives is a tool used to identify risks and benefits and appropriate policy responses. Risks Changes in trade patterns can create major shifts in demand and production. For example, the expansion of monocultures, increased use of fertilisers and pesticides, and pressure on water and marine resources. These can have significant effects on local livelihoods, increase pressure on scarce natural resources and impact on biodiversity, water and soil quality. Adverse impacts often have disproportionate impact on the poor. The concerns of the poor are often missing from international debates on trade. The poor may not be able to articulate how policies are impacting on their livelihoods and the resources on which they may depend. Simplifying licence and tax regimes to stimulate industrial investment can result in environmental costs through increased pollution, especially if environmental legislation/policy is weak. Trade in out-dated technology (e.g. pesticides banned in Europe) can bring environmental risks. CHECKLISTS AND EXAMPLE ENVIRONMENTAL SCREENING NOTES 33 In Russia DFID undertook a review of the environmental opportunities and risks of Russia’s accession to the WTO as part of wider support to Russia to tackle issues raised by WTO. DFID’s International Trade Department is funding assistance by UNCTAD to governments and private sector exporters in Asia and Latin America around the opportunities and risks to market access from environmental concerns. Many countries are interested in increasing their exports of organic products.ഊHuman development Health Opportunities The inclusion of environmental issues in health programmes can be a cost-effective way of improving health outcomes. For example, environmental health education can be provided for primary healthcare workers. Access to safe water and sanitation brings major environmental health benefits, particularly when combined with hygiene education. Indoor air quality can be improved, for example by use of clean fuels, improved household ventilation, and improved cooking methods. There is a particular benefit for women and children. Other environmental health improvements include initiatives to reduce injuries at home, at work and on the road, as well as improving hazardous clinical waste management, reducing exposure to environmental contaminants (such as pesticides and heavy metals) and the distribution of pesticide-impregnated bed nets etc. There may be an opportunity to focus on providing healthy environments for children, particularly in areas where they live or go to school. Issues to consider include urban/ambient air pollution, road accidents and hazardous waste. Engagement with health ministries provides the opportunity to consider more cost effective construction technology, particularly for primary health clinics. This should include improving resilience of buildings to environmental hazards, more efficient maintenance and energy-management practises. Other issues that can lead to efficiencies and cost-savings include health transport and fuel management. Risks Health programmes may focus on curative interventions. Failure to address environmental health conditions (and occupational health) may compromise long-term sustainability and cost-effectiveness. Proposed disease control programmes may not adequately provide opportunities for environmental or biological control of vectors, for example malaria-carrying mosquitoes. Proposed health programmes may not tackle the need for safe disposal of clinical and other health-care waste. Proposed environmental and energy programmes may not identify and prioritise potential health benefits. DFID ENVIRONMENT GUIDE 34 An environmental health scoping study in Uganda has shown that 30% of ill health is due to environmental factors, particularly lack of sanitation, indoor air pollution and an alarming increase in traffic accidents. The report also highlighted the lack of good quantitative information. The report has led the government to consider its approach to environmental health. Similar work in Bangladesh has also concluded that 30% of the country’s health burden is attributable to environmental causes.ഊHuman development HIV/AIDS Opportunities HIV/AIDS-affected communities often benefit from livelihoods interventions, which may have an environmental component. This may include advice on farming/land management with lower labour inputs, and employment or income generation activities for survivors and carers. HIV/AIDS support can be included in integrated environmental health/reproductive health/health care programmes. Physical environmental health initiatives can help reduce the spread of HIV/AIDS, for example improving access to needle exchange programmes for drug users, and safe needle and clinical waste disposal. In some countries the problem of mother to child transmission through breast milk has led to an increase in use of infant milk powder formulations. However, to make up the formulation requires a source of clean water, which may require accompanying interventions related to water supply and sanitation. Risks DFID-funded initiatives may ignore their potential for exacerbating HIV/AIDS problems (e.g. major construction projects, road improvement projects, humanitarian aid). Often an environmental assessment will pick this up as part of socio-economic impact analysis. HIV/AIDS programmes may ignore the possible benefits of including primary healthcare activities, reproductive health activities or environmental health improvements. In some countries, HIV/AIDS related morbidity in the work force may have significantly adverse impacts on attempts to build capacity – including capacity for environmental management. Realistic assessments of staff replacement rates should be undertaken as part of baseline data analysis. HIV/AIDS renders communities more vulnerable to environmental hazards, such as recurrent drought, as their coping strategies will already be stretched. CHECKLISTS AND EXAMPLE ENVIRONMENTAL SCREENING NOTES 35 In Ghana a programme that included social ma