IMPROVING RESPONSES: INTERLINKAGES IN POLICY

OPPORTUNITIES FOR COST-BENEFIT ANALYSIS: THE VALUE OF ENVIRONMENTAL IMPACT ASSESSMENT

The interlinkages approach has the benefit of enabling policymakers to achieve a better grasp of the costs and benefits of their decisions.

A policy geared towards enhancing utility of the forestry sector by extending commercial logging, for instance, can be very costly to a biodiversity-rich country. For example, in Cameroon – one of the most ecologically diverse countries in Africa – intensive logging threatens the country’s tropical rainforests and the habitat of over 40 species of wildlife, including gorillas, elephants and the black rhinoceros, with extinction (Friends of the Earth 1999). According to research in the late 1990s, the number of logging enterprises increased from 194 to 351 in 1995, following the devaluation of the local currency in 1994. Timber exports grew by 49.6 per cent between 1995- 96 and 1996-97 (Friends of the Earth 1999).

The oil industry is another high-profile issue in which interlinkages between the environment and social and economic development are important. The benefits and costs associated with the industry are often contested. Although the oil industry has been linked to high levels of growth through increasing national income and employment, it can also be a cost on the environment, impacting negatively on coastal and marine environments and tourism, leading to long-term loss of jobs and thus slowing economic growth. In the Niger Delta region of Nigeria, SSA’s largest oil producer, oil extraction has caused severe environmental degradation due to oil spills and lax environmental regulations (Energy Information Administration 2003). Inadequate investment, social and governance policies have meant that growth has not benefited poor people. For many, oil refineries, wells and transportation activities are opportunities to increase and diversify trade relationships with other nations and to participate in the global economy. There is often controversy around oil extraction activities. For example, the US$3 700 million Chad-Cameroon Pipeline Project, which was approved by the World Bank in June 2000, has been the target of protests from environmental and human rights groups. They argue that the project would dislocate inhabitants along the pipeline route and harm wildlife in the rainforests through which the pipeline would pass. Oil pollution is a major issue in Africa with the chronic release of oil in ports through ship leakage, ship maintenance or mishandling (Energy Information Administration 2003). According to the US Energy Information Administration, the problem of oil discharge in ports is often ignored, even though cumulatively the oil may negatively impact the surrounding ecosystem, including seabeds, wetlands and mudlands, which are environmental resources of economic significance (Energy Information Administration 2003).

Various tools and policy-making processes seek to address the complex human-environment nexus and use interlinkages to do so. These include integrative assessment processes (discussed in Chapter 9: Genetically Modified Crops) and inclusive policy processes (discussed in Chapter 1: The Human Dimension and Chapter 9: Genetically Modified Crops). Environmental impact assessments (EIAs) are important tools which employ an integrated and interlinked approach to evaluating relative costs and benefits in diverse spheres – demonstrating the interlinkages between environmental, social and economic issues – and creating opportunities for deciding on appropriate development opportunities. They seek to produce early and adequate information about the likely environmental consequences of certain plans and projects, to propose alternatives and to establish measures to mitigate harm. Additionally, EIAs potentially bring a multiplicity of government agencies and institutions, organizations, experts and members of the public into the decision-making process. The need for an interlinkages approach is further demonstrated in Box 12, which considers the loss of energy in the oil production process that could be used to produce electricity. This lost opportunity is the result of a poorly developed natural gas industry. An interlinkages approach, such as through an EIA, would have helped identify these costs and benefits at an early stage and is, therefore, fundamental to identifying opportunities for development.

National oil industry practices, such as those raised above, may have a bearing on the implementation of several policy instruments, including MEAs such as the Convention on Biological Diversity (CBD), the Ramsar Convention on Wetlands (Ramsar) and the United Nations Framework Convention on Climate Change (UNFCCC), global targets such as the MDGs, and regional plans and programmes such as the NEPADEAP, as well as African regional conventions. Box 12 shows that local activities have impacts that may be felt at different scales. Thus, in developing responses to situations like that described in Box 12, it is crucial that the link to global and regional policy instruments be made. Additionally, for Africa to benefit from the oil industry and simultaneously avoid environmental impacts of global significance, capacity needs to be improved. This can be addressed by the global community making good its pledge at the WSSD to invest in industry and sustainable production methods.

Box 12: Flaring: lost opportunities and environmental costs
The Hassi Messaoud oilfields, Algeria.
Source: K. D. Francke/Still Pictures

In Nigeria, Angola, Cameroon and Gabon, due to limited gas infrastructure, natural gas which is released during oil production is often burned off, or “flared”, rather than captured for use. Flaring in Africa alone could produce 200 Terawatt hours (TWh) of electricity annually, which is about 50 per cent of the current consumption of the region. This is also equivalent to more than 10 per cent of committed emission reductions by developed countries under the Kyoto Protocol for the period 2008-2012.

Flaring also has environmental impacts. It has been described as “a significant source of carbon emissions” in Africa. Nigeria is the world’s highest natural gas flaring country with 42.6 per cent of its total annual natural gas production being flared. In December 2004, the government announced that the country had reduced its natural gas flaring by 30 per cent. It has been estimated that Africa every day flares gas equivalent to 12 times the energy that the region uses.

Flaring in Africa is, therefore, not only a major economic loss and a missed opportunity for development, but also a contributor to greenhouse gas emissions. An interlinkages approach would have helped identify these costs and benefits at an early stage and thus is fundamental to identifying opportunities for development. Seizing the opportunities from this process requires investment in industry and access to technology.

Sources: Joseph 2004, Energy Information Administration 2003

Environmental impact assessment tools are more useful in understanding the complexity of the issues at stake than traditional cost-benefit analysis, which sets out to add up in monetary terms the benefits of a public policy and compare them to the costs. There are major challenges in cost-benefit analysis. More often than not it involves comparing aspects that are fundamentally different and whose range of values cannot be reduced to purely monetary terms. The environment has both use and non-use values. (see Chapter 1: The Human Dimension for a discussion of the diverse values of environmental resources). Non-use values are particularly hard to quantify in monetary terms. Costbenefit analysis cannot overcome its fatal flaw: it is completely reliant on the impossible attempt to price the priceless values of life, health, nature and the future (Heinzerling and Ackerman 2002).

Despite the value of EIAs as a decision-making tool, the region faces various challenges in fully implementing this approach, particularly the lack of capacity in human, financial and technical areas. Box 13 looks at how IUCN – the World Conservation Union (IUCN) and the governments in Eastern Africa are working together to enhance EIA capacity.

Box 13: Building partnerships for Environmental Impact Assessments: Eastern Africa

Environmental impact assessment is an important tool for development planning and decision making. Their use ensures that potential environmental impacts are identified, assessed and taken into account at the project design phase and thus unnecessary costs are avoided.

Despite the undoubted importance of EIA as a planning tool, there are many issues and constraints related to its application in SSA. The major constraint to implementation is that there are few institutions equipped to conduct environmental impact assessments. Some countries lack established EIA systems and the resources required to train managers in EIA. The vast majority of countries with existing EIA systems have problems in implementing them due to insufficient human, technical and financial resources.

Since the African Ministerial Conference on the Environment (AMCEN) of 1995, in Durban, South Africa, the IUCN’s Eastern Africa Regional Programme (IUCNEARP) has been instrumental in facilitating consultative meetings aimed at developing a programme for EIA enhancement in Africa. This programme, which falls under the umbrella of environmental planning and assessment, is designed to raise EIA capacity in each of the ten countries covered by IUCN-EARP through the:

  • Establishment and enforcement of EIA systems;
  • Enhancement of capacity to effectively manage EIA;
  • Encouragement of private sector participation;
  • Development of expertise specific to the region;
  • Integration of biodiversity in development; and
  • Creation of financial stability for EIA systems.

This programme of work was designed through a consultative process with stakeholders, practitioners and experts from government agencies, research and training institutions and the private sector. IUCN coordinates this effort, and linkages are currently being made with related initiatives in Africa such us the Network for EIA in the Great Lakes Region and similar programmes in Southern Africa and Madagascar.

Sources: Joseph 2004, Energy Information Administration 2003