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Preface Annex 1
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.
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.