An introduction to Strategic Environmental Assessment (SEA) for ...

July 10, 2007 An introduction to Strategic Environmental Assessment (SEA) for Danish International Development Cooperation 1. Introduction Strategic Environmental Assessment (SEA) is an emerging concept in Danish development cooperation. The purpose of this note is to introduce SEA and discuss how SEA can be applied in Danish international development cooperation. The note complements the Danida Environment Guide (December, 2006). It is a living document that will be updated as further clarification on concepts emerges and experiences of practical implementations are gained. The reasons for emphasis on the application of SEA in Danish international development cooperation are: − To enhance the level of participation and awareness on the environment in the development of national policies, plans and sector programmes. − To improve the environmental assessment and documentation of the outcome on the environment of development policies, plans and sector programmes. − To develop the capacity and tools to analyse the environment in policies, strategies and sector programmes and compare development alternatives. − To develop capacity of the partner countries to assess and mitigate environmental impacts or harness environmental opportunities at the strategic level in policies, plans and sector programmes. − To ensure that cost-efficient environmental measures are identified to improve the effectiveness of ODA delivery. Since the initiation of the Sector Programme Support in Danish development cooperation there have been some challenges in explicitly applying and documenting environmental assessment of Danida supported programmes. The available approach in the first Danida environmental assessment guidelines was Environmental Impact Assessment (EIA) with a focus on technical assessment of projects. The assessments of projects only partly corresponded to the sector programme approach and an emphasis on policies, plans and sector programmes. Subsequently the revised Danida environment guidance notes (1999) included an emphasis on Environmental Management Plans and Sector Environmental Assessments. The recent revision (2007) introduces SEA and Country Environmental Analysis (CEA). The SEA is filling a gap in the current Danida procedures for environmental assessment as well as for environmental assessment procedures in the partner countries. There is also scope for making environmental assessment more relevant to policy, governance and institutions in collaboration with development partners and in coordination with other donors. This will 1 An introduction to Strategic Environmental Assessment (SEA) for Danish International Development Cooperation require a further clarification of the SEA approach and demonstration of possible outcomes. A major constraint to SEA is that the concept and relevance is not well understood. A recent upgrade of the Danida Environmental Screening Note made provision for screening for SEA as well as previously for EIA. The mandatory environmental screening of Danida supported programmes is thus the entry point for assessing the scope for SEA. It is noted that the Danida Environmental Screening Note mainly addresses the Danida supported programmes while the scope for SEA in partner countries is much wider and include various policies, strategies and programmes. The SEA is thus not only part of the donor agency environmental assessment procedures but would be an integrated part of the regulation and procedures for environmental assessment of the partner countries. The SEA will often have a sector focus. At the national level including development plans the approach is a Country Environmental Analysis (CEA). For CEA and SEA alike the intention is that the donor community shall harmonise their efforts and jointly support common approaches and reporting lead by the partner country. National Development Plan, reforms etc. Country Environmental Analysis Sector Policy Sector Plan Sector Programme Strategic Environmental Assessment Environmental Screening Components/Projects Environmental Impact Assessment Figure 1: Application of EIA, SEA, CEA and ES (Environmental Screening) in the decision-making hierarchy 2 An introduction to Strategic Environmental Assessment (SEA) for Danish International Development Cooperation 2. What is Strategic Environmental Assessment (SEA)? Development cooperation is increasingly based on collaboration with support to a national policies, plans and sector programmes (figure 1). The SEA approach aims at integrating environment at the policy and programme level and to address environmental management in relation to the policy context, governance and institutions. While the SEA is applied to the policy and programme level the EIA mainly is applied for environmental risks and opportunities at the project level. SEA is thus not a substitute for but will complement the EIA, and the SEA includes the procedures and capacity for EIA carried out under a national system. Some differences between SEA and EIA are outlined in Annex 2. According to OECD/DAC1 the SEA refers to: “analytical and participatory approaches that aim to integrate environmental considerations into policies, plans and programmes and evaluate the inter linkages with economic and social considerations”. Hence, SEA type activities may already be part of several Danida supported sector programmes and national development of policies and strategies without being labelled as a SEA or documented separately as such. The OECD/DAC notes that SEA is context specific and therefore rejects blueprint guidelines. However, a rejection of blueprints should not rule out the inclusion of SEA tools or suggestions for reporting formats. SEA is not about introducing a new system or a technical approach, but the SEA can be based on available information, systems and capacity. SEA is a way of adding value to already existing systems for environmental integration in partner countries, and it improves the effectiveness by developing institutional capacity and improved environmental management systems. For further operational applications the SEA can be defined as the identification of additional measures taken by the partner country in collaboration with development partners to address the inclusion of environmental issues in a sector programme support considering sector policy and regulation, governance and institutions with the aim to cost-efficiently reduce environmental impacts and harnessing environmental opportunities. For Danida the challenges for applying and gaining experience with SEA are: To develop internal awareness on the purpose of SEA, i.e. to have an improved understanding among Danida staff of when SEA can be applied and the outcomes. This can for example be through examples. To improve internal knowledge on how to implement SEA, i.e. to have some understanding of the opportunities of applying a SEA approach and the tools that can be applied. This can for example be through training material. To identify the core elements of a feasible SEA that Danida in particular will focus on, e.g. as a check list of key topics. To simplify and make the SEA approach operational with tools that can be applied at Danish representations in collaboration with partners and other donors. The - - 1 OECD/DAC (2006): ”Good Practice Guidance on applying strategic environmental assessment (SEA) in development co-operation”, Note by the DAC network on Environment and Development Co-operation, 126 pp. 3 An introduction to Strategic Environmental Assessment (SEA) for Danish International Development Cooperation simplification should not compromise the effect of applying SEA but ensure that some action is feasible. The justification for SEA is the potential gains for development from harnessing environmental opportunities and mitigating environmental risks. An effective application of SEA may contribute to enhance the quality of the development cooperation by inclusion of the opportunities of the environment assessment at the policy and strategic levels. A reason for SEA is furthermore that the environmental impacts and opportunities often are outside the sector context. The environmental impacts are external, i.e. there are few incentives to reduce environmental impacts if the costs are borne elsewhere. Examples are downstream impacts of land use and industries, cross border impacts of trade and pollution, substitution effects of increased energy prices on wood fuel, and when environmental costs are postponed to future generations with accumulated health problems due to pollutants. 3. The entry points for SEA A distinction is made between the following situations for applying SEA: Ideal situation: The SEA approach initiated and managed by the partner country. Like for the EIA approach the longer term aim could be to institutionalise the SEA process in the national context. The opportunity for a donor is to support this process, e.g. by supporting the development of institutional capacity for SEA. Pragmatic situation: The SEA approach initiated and managed by the donor agency. At an initial stage with limited national capacity for environmental assessment the donor agency may have to take the initiative. Developing the SEA process as part of the development cooperation will respond to requirements for environmental assessment including the internal procedures and environmental standards of development cooperation required by the Danish Parliament and the public. The purpose is also to support initiatives that will add value in dialogues with the partner countries and other donors. - The SEA process will require an entry point in order to be initiated. In most cases the entry point is a process in itself that can include elements of SEA process. Examples of entry points are: Preparation of a national development plan or PRSP. Danida in collaboration with other donors can provide support to the partner country to apply a CEA or SEA to integrate environmental issues. This will be an option in particular in those countries where Danida is already supporting an environmental sector programme. Development of a sector policy, development plan and investment programme. The preparation of a sector policy and programme, for example, for health, education or transport, will have opportunities to address environmental issues at a strategic level. This can be done through a SEA. If Danida is already a partner in the sector it may be relevant to support the SEA process. A constraint may be that the environment is not the most pressing priority issue when a donor is trying to leave ‘finger prints’, for example, on an education or health sector policy or programme. - 4 An introduction to Strategic Environmental Assessment (SEA) for Danish International Development Cooperation - Changes in sector policies. Changes in energy sector policies, e.g. pricing structures of energy, the regulation of the agricultural sector, e.g. use of input factors and land reforms, and the forest sector, e.g. regulations for access and harvesting, and the transport sector, e.g. tariffs on car imports and fuel pricing, are all examples of sector policies where SEA might help avoiding not loosing out on opportunities. The environmental impacts may often be second-order (indirect). Public sector and fiscal reforms. Tax reforms may have an influence on the use of resources, e.g. land use or imports. The SEA is used to assess the indirect or secondorder effects of changes in policy signals and market incentives. One approach would be to include the environment in reviews of public sector expenditure and revenue. Local government reforms and decentralisation. The delegation of responsibilities and resources to lower levels of the Government opens for new challenges concerning the governance of natural resources and environmental management. Decision making may be moving from a context of little capacity for environment to a context of no capacity. SEA applied to local government reforms is relevant for Danida if there is collaboration in the local government sector or other sectors that may be affected. Preparation of a Danida supported sector programme. The preparation of a Danida programme has mandatory requirements for environmental assessment. It is an opportunity for dialogue with the partner country and other donors on the status of strategic issues for environmental integration in the sector. The design of a programme opens the opportunity to provide funding for strategic environmental analysis and management. - - - In a Danida context an optional SEA process is initiated during the identification phase of the design of sector programme support. The process and follow-up actions are documented in the Environmental Screening Note and checked at the Appraisal stage. 5 An introduction to Strategic Environmental Assessment (SEA) for Danish International Development Cooperation What makes for successful Strategic Environmental Assessment? – the World Bank experience The detailed criteria used by the World Bank to guide the SEA implementation can be grouped into seven characteristics: 1. Integrated. A good SEA addressed the interrelationships of biophysical, social, and economic aspects and is tiered to policies, programs, and plans in both the environmental field and other relevant sectors and regions. Sustainability-led. The SEA identifies the available sustainable development options and proposals. Focused. The SEA concentrates on key issues and provides reliable, useful information for planning and decision making. Accountable. The leading agencies take responsibility for the SEA and make sure the process is professional and fair and is subject to independent checks and verifications. How decisions are made is clearly documented. Participative. Throughout the process, public and government stakeholders are involved and informed, and their concerns are documented and factored into decision making. The goal is to provide a forum for discussion and, if possible, to ultimately build consensus among stakeholders. Iterative. The assessment information is available early enough to influence decisions making and guide future choices. Influential. SEA improves the strategic decisions and its implementation and influences future policies by raising awareness and changing attitudes towards sustainable development. 2. 3. 4. 5. 6. 7. Source: Ahmed, K.; Merceir, J,R. & R. Verheem (2005): “Strategic environmental assessment – concept and practice”, Environmental strategy notes, World Bank. 4. Developing the SEA A SEA process can be tailor made to the relevant development context in which it is applied and should be designed to influence the policies, plans or programmes that are in preparation. As a starting point for the application of SEA in Danida a simple approach may be developed to pass the first hurdles of application. The approach will provide guidance and some structure to the Danida initiated SEA. The SEA process can be initiated by Danida in the Environmental Screening Note prepared during the identification phase of a sector programme support. However, the SEA process should ideally be vested with the national partner, though Danida may have to make a first move. The (suggested) five stages in the SEA following the environmental screening include: 1. Compile the key sector relevant regulation on the environment and sources of information that is direct relevant for environmental assessment and management of the national sector policy or programme. 2. Analyse the context and prepare a public environmental expenditure review of funding available for environmental issues, prepare a review of environmental regulation, and assess the institutional capacity and available procedures (tools) for the inclusion of environment in the sector. 3. Identify the main direct and indirect environmental impacts or changes as a result of the programme as well as the main opportunities for reducing environmental risks or gain environmental improvements. 6 An introduction to Strategic Environmental Assessment (SEA) for Danish International Development Cooperation 4. Develop a plan for specific actions to be initiated to implement the findings of the SEA. 5. Establish or enhance an existing environment monitoring system to assess the changes in the environmental status of the sector and to follow the implementation of the SEA. The effort going into each stage of the SEA process will have to be balanced with the potential gains for improvements in development and effectiveness of ODA delivery. The effort for a SEA should be balanced with the possible difference from its outcome. 5. The SEA tools The possible tools for SEA reflect the wide scope of the process. Adapted and expanded from OECD/DAC SEA guidance the following tool can be envisioned: Tools for predicting the environmental and socio-economic effects: Quantitative and spatial modelling and forecasting of direct and indirect environmental impacts Scenario and multi-criteria analysis Risk analysis, assessment and mitigation Economic analysis (social cost benefit analysis and cost effectiveness analysis) Environmental Impact Assessments and Environmental Management Plans Environmental Audits and Reporting Testing for environmental sustainability State of the Environment reporting and Environmental Action Programmes Institutional capacity assessment Stakeholder analysis Documentation and communication strategies Tools for policy and programme analysis and comparing alternatives: - Tools for mitigating environmental impacts: Tools for awareness and participation: Some of these tools are already employed in some Danida supported sector programmes. But in general the current efforts to analyse and document in relation to the environmental consequences (positive or negative) of development cooperation are limited. The application of social cost benefit analysis in the design of Danish development cooperation is not a regular practice. The SEA tools are means to improve information about the environment issues in a sector policy and programme with the aim to inform and influence decision making. The SEA process is closely linked to good governance in relation to the environment. 7 An introduction to Strategic Environmental Assessment (SEA) for Danish International Development Cooperation It is recommended to document the SEA process in a brief SEA report. The SEA report is a management instrument and a ‘log book’ for the SEA process. (Annex 1). 6. The actions and outcome of the SEA The concrete actions of a SEA might include: Analysis of regulation and capacity for environmental assessment. This action will be critical in several sectors with physical activities directly involving natural resources and the environment. The focus would not only be on mitigating environmental impacts as in infrastructure programmes but also to harness environmental opportunities as in social (health and education) sector programmes. Capacity to analyse and quantify the direct and indirect environmental impacts. The effects of policies and sector programmes on the environment and natural resources could be documented, e.g. through stakeholder analysis, models and risk analysis, based on available data. The purpose would be to adjust the policy and sector programme or to establish mitigating activities, Capacity for economic analysis. The development of national capacity for economic analysis of sector policies and programme including the quantification of environmental impacts and assessing the consequences of policy alternatives. ‘Climate proofing’ of development cooperation. The purpose of climate proofing development cooperation is to mitigate or adapt to the consequences of climate change. It is part of the risk analysis of a development programme. ‘Climate proofing’ of development cooperation can be considered an element of the SEA. - - - Some concrete examples on the application of SEA will be developed. There is already some Danida experience with SEA from Ghana (Annex 3). Other examples to be further developed are: Decentralisation and local government programmes. Optional actions identified through SEA in relation to the use of local government funding for multi-projects at local level. Rural infrastructure programmes: The capacity to assess and manage the indirect effects of rural electrification, rural roads or rural water supply. General budget support: The ability to assess and regulate the environmental impacts of general budget support. Social sectors: Assessment of resource use and opportunities to address environmental management and awareness. For example, there are opportunities from building of several schools, hospitals or dispensaries to address environmental management (location, choice of building materials, maintenance, sanitation and waste management and use of energy sources). Private sector development. Standards regarding resource use, waste management and occupational health. Incentives to use of cleaner technology. Environmental reporting and audits. - - 8 An introduction to Strategic Environmental Assessment (SEA) for Danish International Development Cooperation 7. Further information on SEA Further information on SEA can be found at OECD/DAC: www.seataskteam.net OECD/DAC (2006): ”Good Practice Guidance on applying strategic environmental assessment (SEA) in development co-operation”, Note by the DAC network on Environment and Development Cooperation, 126 pp. http://www.seataskteam.net/uploads/forums/237/SEA%20Guidance%20FINAL%20ENGL ISH.doc The World Bank SEA experience and toolkit: www.worldbank.org/sea International Institute of Environment and Development (2005): “Internal review of SEA experience and practice” - http://www.iied.org/Gov/spa/projects/intlreview.html 9 An introduction to Strategic Environmental Assessment (SEA) for Danish International Development Cooperation Annex 1: Draft format for SEA Report The purpose of the SEA report is to document the sector relevant policy and procedures for environmental management, the capacity for environmental management and assess sources of available data sources, e.g. for monitoring. The SEA report will identify key strategic actions that can improve the environmental management and mitigation of environmental impacts of the sector programme. The SEA report is an action plan for follow-up activities. The SEA report is a management paper and shall be brief (< 15 pages). SEA report for [sector] in [country] 1. Introduction to the sector and the programme support Brief overview to the key elements of the government programme for the sector Brief presentation of the proposed Danida programme support with emphasis on the components with potential environmental impacts. Summary of the findings of the Environmental Screening Overview of existing environmental assessment and management procedures relevant for the sector Regulation, procedures, and capacity for Environmental Impact Assessment Use of economic analysis of environmental impacts and regulation Available data sources, State of the environment reports, etc. Capacity in public and private sector for environmental management Awareness and communication on the environment Resources available including budgets for environmental assessment and management Identification of driving factors in the sector with potential impacts on the environment (public and private reforms, subsidies, land and natural resource policy and reforms, etc.) Indirect environmental impacts and proposed mitigation action. Opportunities for improved environmental management (no and low cost options) Activities with strategic relevance for the sector programme (policy and regulations, institutional support, development of tools and procedures, strategic assessments, etc.) Process action plan and budget. 2. Context for environment assessment and management in the sector - 3. Institutional capacity assessment 4. Environmental impacts and opportunities - 5. Identified key strategic actions 10 An introduction to Strategic Environmental Assessment (SEA) for Danish International Development Cooperation Annex 2: Comparing SEA and EIA EIA Applied to specific and relatively short-term (life-cycle) projects and their specifications. Takes place at early stage of project planning once parameters are set. Considers limited range of project alternatives. Usually prepared and/or funded by the project proponents Focus on obtaining project permission, and rarely with feedback to policy, plan or programme consideration. Well-defined, linear processes with clear beginning and end (e.g., from feasibility to project approval). Preparation of an EIA document with prescribed format and contents is usually mandatory. This document provides a ‘baseline reference’ for monitoring Emphasis on mitigating environmental and social impacts of a specific project, but with identification of some project opportunities, off-sets, etc. Limited review of cumulative impacts, often limited to phases of a specific project. Does not cover regional-scale developments or multiple projects. Source: OECD DAC Guidelines on SEA (draft 2006) SEA Applied to policies, plans and programmes with a broad and long-term strategic perspective. Ideally, takes place at an early stage in strategic planning. Considers a broad range of potential scenarios Conducted independently of any specific project proponent. Focus on decision on policy, plan and programme implications for future lowerlevel decisions. Multi-stage process with feedback loops. May not be formally documented (but it is recommended some documentation is done) Emphasis on meeting balanced environmental, social and economic objectives in policies, plans and programmes. Includes identifying development outcomes at the macro-level. Inherently incorporates consideration of cumulative impacts 11 An introduction to Strategic Environmental Assessment (SEA) for Danish International Development Cooperation Annex 3: Example of SEA from Ghana Applying SEA in the water and sanitation sector in Ghana In Ghana, Strategic Environmental Assessment (SEA) has been successfully introduced in the water and sanitation sector. The SEA activities were designed to be an integral part of two components of the Water and Sanitation Sector Programme Support, and consisted of three outputs: 1. Capacity building to apply SEA tools in promoting environmental sustainability principles in water policies and programmes. Initiated in the Ministry of Water Resources, Works and Housing in January 2005. It contained among other things an environmental sustainability test of the draft National Water Policy with all important stakeholders in Ghana and development of specific SEA tools to be collected in a manual for the sector, including a tool for costbenefit analyses. It will also provide training of relevant staff in the ministry and water sector institutions. 2. Integration of the SEA principles and process tools in water and sanitation planning Implemented in the Ministry of Local Government and Rural Development and consisted of training of staff in the ministry, regions and districts. Furthermore, tools for integrating health data in the district water and sanitation planning were prepared. In addition, the National Environmental Sanitation Policy was tested for environmental sustainability at a seminar with high ministerial officials and representatives from regions and districts. 3. Introduction of SEA principles in the Integrated Water Resources Management Planning process. Again sustainability tests and cost-benefit analyses will be applied. This output has not been finalized yet. The tools will be made available on the Danida Water Network, when they have been finalized. 12