Strategic Environmental Vulnerabilities Assessment...

BY PAMELA STEDMAN-EDWARDS

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StrategicEnvironmentalVulnerabilitiesAssessment:Framework Paper

Acknowledgements

I would like to thank Mariana Manus, Jorge Ugaz andRachel Cleetus for their extensive work researchingand reviewing the case studies for this project as wellas for their contributions to the methodology. I wouldalso like to thank the researchers who carried out thecase studies in Peru, Vietnam and Bolivia. Work onstrategic environmental assessment and vulnerabilityissues by Pradeep Tharakan and Heike Mainhardt-Gibbs initiated the development of this methodology,and the MPO team provided valuable suggestionsalong the way.

Funding for this project was provided by the SwissAgency for Development and Cooperation and theSwedish International Development Agency.

© WWF Macroeconomics Program Office, July 2005

© 1986 Panda symbol WWF-- World Wide Fund For Nature(Also known as World Wildlife Fund)

Pamela Stedman-Edwards, PhD, has workedextensively on the relationship between governmentpolicies and natural resource use in the agriculturalsector. She has written numerous publications forWWF’s Macroeconomics for Sustainable DevelopmentProgram Office (MPO) including: The Root Causes of

Biodiversity Loss: An Analytical Approach (1998);Environmental Impact Assessment for Macroeconomic

Reform Programs (2001); and several papers on theimpacts of trade and agriculture on the environment.Additionally, she co-edited the book The Root Causes

of Biodiversity Loss (2000).

WWF–Macroeconomics Program Office, Month, Day, Year

TABLE OF CONTENTSINTRODUCTION ..................................................................... 1

FOCUSING ON VULNERABILITIES ........................................... 3

DEFINING THE VULNERABILITIES FILTER ................................ 5Vulnerable Places........................................................................... 5Vulnerable Peoples ........................................................................ 6Mapping .......................................................................................... 7

STRATEGIC ENVIRONMENTAL VULNERABILITIES ASSESSMENT FRAMEWORK .................................................. 8Step 1: Review of Proposed Development Policy ....................... 9Step 2: Vulnerabilities Filter........................................................ 12Step 3: Mapping Vulnerabilities ................................................. 14Step 4: Assessing the Impacts .................................................... 16

Developing the baseline ...................................................... 16Improving the map........................................................ 16Understanding the institutional context ..................... 16Review of experience .................................................... 17

Predicting the likely impacts .............................................. 17Toolkit............................................................................. 18

Evaluating the significance of the predicted impacts....... 20Toolkit............................................................................. 22

Step 5: Developing Recommendations ...................................... 22Monitoring ............................................................................ 24

LESSONS LEARNED AND NEXT STEPS .................................. 24

RESOURCES ....................................................................... 27

APPENDIX: INTERNATIONAL FINANCIAL INSTITUTION POLICIES ON SEAs.............................................................. 28

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Introduction

This paper presents a flexible analytical tool forupstream assessment of the impacts of macro-leveldevelopment policies and programs on vulnerableecosystems and vulnerable peoples. By anticipating thepotential environmental impacts and related socialimpacts of these broad policies, we can open a dialoguewith the relevant stakeholders, including the interna-tional institutions and national governments thatsupport these policies, and develop appropriateresponses to promote conservation and sustainabledevelopment in high-priority areas.

Several case studies have been carried out to developand test this strategic environmental vulnerabilitiesassessment tool. These studies reviewed the probable

impacts of a variety of development policies—includingnational development policies, World Bank CountryAssistance Strategies (CAS), and Asian DevelopmentBank projects—in Latin America, Asia and Africa. All ofthese policies aim to reduce poverty through economicdevelopment; some through broad economic develop-ment policies, others through projects directly targetedto specific economic sectors of varying relevancy to thepoor. Economic development is essential to povertyalleviation, and these policy approaches are havingmany positive impacts at the national level. However,these policies may be ineffective, or even counterpro-ductive, for the poor who are least equipped to takeadvantage of new opportunities and for the ecosystemsthat are most threatened by further disturbance.Anticipating these outcomes should allow WWF, othercivil society organizations (CSOs) and community

WWF–Macroeconomics Program Office, July, 2005

STRATEGIC ENVIRONMENTAL VULNERABILITIESASSESSMENT: FRAMEWORK PAPER

Pamela Stedman-Edwards

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organizations to begin addressing the environmentaland social issues early in the process of policy develop-ment and implementation.

The strategic environmental vulnerabilities assessment(SEVA) framework outlined here is intended togenerate the upstream analysis essential to developingan adequate response to the likely impacts of thesedevelopment policies. To ensure a focus on the mostcritical environmental impacts of the proposed policy,the approach uses a “vulnerability filter.” Each assess-ment will focus on the changes related to the economicsector(s) with the greatest impacts on the most vulner-able environmental resources and on the vulnerablehuman populations that rely on those resources.1 TheSEVA will provide two key types of information aboutpolicy impacts on priority places:

n A geographic understanding of the impacts of thepolicy; that is, where will the impacts be felt?

n An understanding of how the policy will affectresources; that is, how is the policy translated fromthe national government or international financialinstitutions (IFIs) to the local level?

This process of gathering information for the SEVA andcarrying out the analysis should secure the participa-tion of communities and environmental organizations indeveloping a dialogue among stakeholders and policy-makers about environmental impacts, developingappropriate recommendations and initiating responsesto the policy.

The next two short sections of this paper explain ingreater detail the concepts underlying the SEVA. Wethen provide a step-by-step guide to carrying out aSEVA, illustrated with examples from the test studies.The final section reviews some of the opportunities anddifficulties in using this methodology.

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1 The term “environmental resources” is used here to mean both natural resources (e.g., biodiversity, forests) and environmental services (e.g., watershed protection) that are provided by those resources.

Each assessment will focuson the changes related tothe economic sector(s) withthe greatest impacts on themost vulnerableenvironmental resources andon the vulnerable humanpopulations that rely onthose resources.

Each assessment will focuson the changes related tothe economic sector(s) withthe greatest impacts on themost vulnerableenvironmental resources andon the vulnerable humanpopulations that rely onthose resources.


Focusing on Vulnerabilities

Development organizations have taken major stepsforward in designing and implementing strategic envi-ronmental assessment (SEA) tools for broad macroeco-nomic and sectoral policies. SEA is a structured,upstream analysis of the impacts of proposed policiesconducted before their implementation. The emphasisof SEA is usually not on quantification of impacts butrather on undertaking a qualitative assessment of likelyenvironmental impacts of the economic activities thatwould be promoted by the policies or programs. SEAaims to assess direct, indirect, cumulative and multi-plier effects, and to evaluate them in terms of sustain-ability or environmental objectives. This ensures thatpolicies are designed and implemented with fullawareness of their consequences, both positive andnegative, and allows for the development of policy alter-natives that enhance opportunities for sustainabledevelopment and minimize environmental damage.Requirements for SEAs are in many cases quitecomprehensive and, if well implemented, will stronglysupport the mainstreaming of environmental issues.(See the appendix for a review of SEA policiesdeveloped by IFIs.)

Organizations such as WWF, however, need a tool forassessing the direct and indirect impacts of broad devel-opment policies on the particular habitats, species and

environmental services that are the focus of our work.This tool must be much more focused than a standardSEA. The reason for this lies in the vulnerability of theecosystems that WWF aims to protect and the vulnera-bility of the peoples who depend on them. By identifyingthese environmental vulnerabilities in conjunction withan upstream analysis of policies, it is possible to predictthe direct and indirect impacts of development policieson critical environmental resources.

Development policies, whatever their goals in terms ofpoverty alleviation, almost always target specificproductive sectors of the economy (e.g., extractiveindustries, agriculture, energy, forestry, infrastructure)for growth. This economic growth is expected tobenefit the national economy as a whole. However,these sectors are generally located in specificgeographic areas and make use of particular resources.Depending on the socioeconomic and environmentalcontext, growth in these targeted sectors could havepositive or negative impacts on the environment andthe poor in these places.

Although the broad impacts of new developmentpolicies are of great importance, the ecosystems andhabitats of concern often constitute only a small part ofthe area that will be affected. These places are oftenisolated and inhabited by peoples who are bothdependent on local natural resources and ill-equipped

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Organizations such as WWFneed a tool for assessing thedirect and indirect impacts ofbroad development policies onthe particular habitats, speciesand environmental servicesthat are the focus of our work.

Organizations such as WWFneed a tool for assessing thedirect and indirect impacts ofbroad development policies onthe particular habitats, speciesand environmental servicesthat are the focus of our work.


to take advantage of new opportunities created bydevelopment policies. For these reasons, the environ-mental impact of a macro-level policy on these placesand peoples may differ, qualitatively or quantitatively,from the national experience under the policy.

The assessment tool we offer here focuses specificallyon vulnerable places and the vulnerable peopleswho inhabit them. The tool is intended to help envi-ronmental CSOs and communities predict andrespond appropriately to the changes in resourceuse—either by local peoples or others—that may beinduced by development policies. It is not intended toreplace the SEAs done by international developmentagencies or national governments but rather tocomplement those assessments with a more focusedlook at particular places, resources or peoples thatmight be missed by a broader assessment. To reflectthe differences between the WWF-MacroeconomicsProgram Office (MPO) approach and broader SEAs,our assessment tool is called a strategic environ-mental vulnerabilities assessment.

Many studies of links between environmental degrada-tion and erosion of living standards have found that thesetwo phenomena tend to be highly concentrated in thesame vulnerable ecosystems. For the purposes of theSEVA, vulnerable ecosystems are those that have high

ecological importance (generally because of their rarity)and are either threatened or currently experiencing envi-ronmental degradation attributable to human activities.Vulnerable populations refers to rural poor, indigenouscommunities and other groups that are heavilydependent on natural resources and unable to responddynamically to economic change. These populationsfrequently depend on vulnerable ecosystems for theirlivelihoods. Any socioeconomic change that improves theability of these people to manage resources sustainablywill have environmental benefits; any socioeconomicchange that reduces their ability to manage resourcessustainably will strengthen the links between impoverish-ment and environmental degradation.

The purpose of the SEVA is to highlight the vulnerableenvironmental resources, habitats and services wherenational development policies are likely to have criticalimpacts and where intervention may be needed topromote greater sustainability, prevent degradation orensure conservation of species or habitat. This focusedanalysis should provide non-governmental organiza-tions (NGOs), CSOs and communities with the infor-mation they need to engage governments, developmentagencies, and local and national stakeholders in effortsto address any negative impacts of the policy reformand to contribute effectively to the overall success ofthe policy reform.

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The purpose of the SEVA is tohighlight the vulnerableenvironmental resources, habitatsand services where nationaldevelopment policies are likely tohave critical impacts and whereintervention may be needed topromote greater sustainability,prevent degradation or ensureconservation of species or habitat.

The purpose of the SEVA is tohighlight the vulnerableenvironmental resources, habitatsand services where nationaldevelopment policies are likely tohave critical impacts and whereintervention may be needed topromote greater sustainability,prevent degradation or ensureconservation of species or habitat.


DEFINING THE VULNERABILITIES FILTER

Vulnerability of ecosystems and vulnerability of humanpopulations are widely defined in the same terms:

n exposure to stresses, perturbations and shocks;

n sensitivity of people, places and ecosystems to thestress or perturbation, including their capacity toanticipate and cope with stress;

n resilience of the exposed people, places and ecosystems refers to their capacity to absorbshocks and perturbations while maintaining function (UNEP 2004, p.5).

The Millennium Ecosystem Assessment (MEA) hasadopted a “vulnerable peoples and places” approach, onwhich we have drawn heavily for the SEVA framework(UNEP 2004). Although the MEA recognizes the majorgaps that remain in our knowledge about the vulnerabilityof both ecosystems and human populations, and in partic-ular about the complex relationships between the two,2 itrightly puts the concept of coupled social-ecologicalsystems front and center. This reflects our understandingof the close links between vulnerable peoples and theenvironmental resources they depend on.

Vulnerable Places

The natural sciences have defined ecological vulnera-bility in terms of exposure to stresses, high sensitivityto change and lack of resiliency. The key factorscontributing to increasing ecosystem vulnerability—that is, the key drivers of ecosystem vulnerability—arehabitat loss and degradation, loss of biodiversity andclimate change. Various methodologies for prioritysetting have been developed by conservation organiza-tions (e.g., WWF, The Nature Conservancy,Conservation International, Birdlife International) thatassign priority according to one or more environmentalmeasures—species richness, rarity of species or

ecosystem, representativeness, role in determiningsurvival of the ecosystem assemblage, or intactness—in combination with the perceived threat from humanactivities (Miranda et al. 2003). Some methodologiesfocus primarily on biodiversity measures; others focuson ecosystem intactness. WWF is concerned with bothissues: ecosystems in which high levels of biodiversityor critical habitats are extant but are under threat.3 Butthe SEVA framework is not restricted to a focus onbiodiversity. To address the interests of other CSOs, itcould easily be expanded or reoriented to look atchanges in environmental services (such as cleanwater) or other key relationships between economicchange and the environment simply by using differentcriteria for identifying vulnerable areas.

The test studies carried out to develop this SEVAframework looked primarily at WWF priority areas.WWF’s ecoregional programs4 have identified priorityareas with regard to biodiversity measures, intactnessand vulnerability to destruction or degradation. Theecoregional-based analysis of environmental vulnerabilitybegins by defining areas of particular biological impor-tance and then assessing the threats to those areas asthe basis for setting conservation priorities on a regionalscale. These parameters are analyzed using two indices.The first is the Biological Distinctiveness Index (BDI),which is based on species richness, endemism andmeasures of ecological processes and evolutionaryphenomena.5 The BDI gives weight not only to the mostspecies-rich areas but also to ecosystems that are lessrich but are distinctive and representative of highlydiverse and complex regions. The second index, theConservation Status Index (CSI), is based on severalmeasures of intactness, including extent of remaininghabitat, habitat loss and degree of fragmentation, as wellas degree of protection and anticipated threats. Linkedtogether, these two indices provide a measure of theuniqueness and the threats to an ecosystem that servesas a useful proxy for vulnerability.

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2 Chapter 7 of the MEA (UNEP 2004) focuses on methods and tools for identifying and assessing vulnerability.

3 “Vulnerable ecosystems” could refer to systems in which a complete collapse of the natural system is likely. However, although these areas are of great concern tomankind, WWF focuses its work on areas where substantial biodiversity or habitats are still intact.

4 “Ecoregions” encompass distinct ecosystems that share broadly similar environmental conditions and natural communities; ecoregions are appropriate conservationunits for regional-scale assessments that include biological representation as a primary goal (Wikramanayake et al. 2002).

5 Biological criteria used to determine biodiversity importance include species of special concern; species richness; important feeding, breeding or nesting sites; seasonalmigrations; complete or unique habitat complexes; degree of representation; ecological processes; unique/endemic species; species assemblages or associations; intactbiota (including presence of top predators); and unique physical habitats and habitat features (WWF 2001).


Vulnerable Peoples

Human vulnerability is defined by the MEA as “thecapacity to be wounded by socioeconomic and ecolog-ical change.”6 Human populations that are exposed tosubstantial stress, are sensitive to change and lackresiliency are vulnerable to declining quality of lifebecause they will be unable to respond adequately tosocioeconomic change. Resiliency is in many ways theopposite of vulnerability: Human populations that areresilient have a variety of viable livelihood options opento them and are less dependent on a particular set ofnatural resources for their livelihoods. Vulnerablepeoples are constrained in how they can respond tochange by their economic, political, institutional andenvironmental contexts.

The central focus of the MEA and other efforts toassess vulnerability is on human vulnerability to envi-ronmental change. This includes both global or broadregional change (such as climate change) and local

change (such as soil erosion), both of which are oftencaused by human activity. A number of recent studieshave focused on the close links between poverty andvulnerability to ecological change, and have madesubstantial advances in understanding these complexissues. These have included studies on food and liveli-hood security, risk of natural disasters and desertifica-tion. The SEVA should consider these aspects of thepoverty-environment nexus, as well as factors that aremore exclusively related to biodiversity conservation,such as habitat destruction, overharvesting of wildlifeand degradation of other natural resources that areessential for ecosystem functioning. Much of this workhas identified indicators of human vulnerability toenvironmental change or natural disasters that areuseful at the national level.7 Less work has been doneon local indicators or indicators that describe humanvulnerability to economic policy change, despite thefact that many of the changes in the use of environ-mental resources, including environmental services,are a result of economic and development policies.

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6 A variety of definitions of vulnerability exist, but they have substantial overlap. Some are focused more on natural hazards and urban problems than the one we use here.For example, the United Nations Environmental Programme defines vulnerability according to exposure to hazard, coping capacity, population density and time (UNEP2000). Clark and others (2000) identify human vulnerability to environmental change as a function of exposure, sensitivity and resilience (cited in Miranda et al. 2003).

7 For example, the Global Environmental Change and Human Security Project of the International Human Dimensions Programme on Global Environmental Change adopt-ed a set of 12 indicators of vulnerability, including food import dependency ratio, water scarcity, energy imports as a percentage of consumption and access to safe water.

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Vulnerable peoplesare constrained inhow they canrespond to changeby their economic,political, institutionaland environmentalcontexts.

Vulnerable peoplesare constrained inhow they canrespond to changeby their economic,political, institutionaland environmentalcontexts.


At the local level, poverty is usually a good indicator ofhuman vulnerability because it reflects exposure tosocioeconomic and environmental stresses, high sensi-tivity to change and limited resiliency. Poverty is partic-ularly useful as a proxy for vulnerability when povertyis measured in terms of livelihoods or well-being ratherthan strictly in terms of income. It is now generallyaccepted that poverty is more than just a question oflow income; poverty is a “pronounced deprivation inwell-being” (World Bank 2000) resulting from a depri-vation of a multifaceted set of material goods, assets,conditions and opportunities (Reed 2001).8

Vulnerability of human populations is generally theresult of a combination of negative factors that areclosely related to economic poverty, including thefollowing overlapping factors:

1. Poverty—lack of access to cash, capital, employment, education, health services and/or natural resources.

2. Limited control over resources—uncertain tenureover the resources needed to sustain livelihoods,limited political power and/or lack of voice (partici-pation) in government or social institutions control-ling access to resources.

3. Limited opportunities—resulting from isolation(geographical or social); lack of access to capital,education and/or other resources; limited diversityof livelihood sources.

4. Food/livelihood insecurity—resulting from environ-mental factors such as soil erosion, desertificationand flooding, and from socioeconomic factors such aspoverty, discrimination and/or poor market access.

5. Exposure to natural disasters—as a result of socialand environmental factors.

The test studies used a variety of indicators for vulnera-bility, combining two or more when possible. Indicatorsincluded income levels, consumption levels, ethnicity,tenure status and the Human Development Index(HDI). The HDI takes into account life expectancy,education and standard of living, and thus bringstogether several measures of poverty.

The MPO’s use of the SEVA is premised on the beliefthat ensuring sustainable livelihoods for the peopleswho depend on the resources of these places is the bestway to ensure that vulnerable ecosystems are protected.The vulnerable peoples who are considered in the SEVAprocess are those who, because of local socioecologicalconditions, will benefit most from sustainable develop-ment and protection of environmental resources. This isnot to deny that some of the poorest, most vulnerablepeoples live in places where the natural environmenthas been very seriously degraded, such as heavilyurban areas, and where no environmental resiliencyremains. However, for the purposes of the SEVAprocess and the test studies carried out for its develop-ment, the vulnerable places of concern are those thatstill have the capacity to support biodiversity andhuman life. The opportunities and constraints faced bythe vulnerable peoples who depend on these places inadapting to economic or institutional change will affectthe long-term ecological well-being on which they andthe planet depend.

Mapping

Mapping is a very useful tool for identifying the coinci-dence of vulnerable places, vulnerable peoples andchanges in resource use induced by new policies. Forthe purposes of flexibility and speed, a simple approachto mapping is recommended here, using the vulnera-bility indicators discussed above. It begins with anoverlay of existing demographic data that indicatesvulnerable populations with maps of existing ecosystemor environmental vulnerabilities. This data is thencompared with possible policy impacts. (This process isdescribed in more detail under Step 3 on page 14.)

Various efforts have been made to map vulnerability.Most have focused on one or two particular humandimensions of vulnerability, such as water scarcity orpopulation growth. To a lesser extent, efforts have beenmade to map environmental vulnerability, includingbiodiversity vulnerability (Myers et al. 2000, Nelleman etal. 2001). These maps present snapshots of a limited setof threats or vulnerability indicators at a particular scale

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8 According to Reed (2001), “Reducing poverty, according to this perspective, requires providing economic opportunity to the poor through development strategies that pro-mote high-quality growth (IMF 1998), strengthening the political participation of the poor, and enhancing conditions that reduce the vulnerability of the poor (World Bank2000). These strategies have been difficult to put into effect, however, because poverty is often also a social relationship, reflecting “competition among individuals, socialgroups and the state in their pursuit of wealth and political power. In this perspective, poverty results from the competitive relationship in which a significant number ofpeople are unable to gain access to life-supporting assets, be they productive, environmental or cultural, while others secure the conditions for stable, productive lives”.


and a particular time (UNEP 2004). They are less usefulfor depicting cumulative or long-term risk, although itwould be feasible to devise such maps. It is also difficultto use these maps to link global or national scales withlocal environmental change that threatens the long-termresilience of human systems or ecosystems (UNEP2004). The SEVA will attempt to do this through theselection of concrete impacts of development policies—such as infrastructure construction, mining and agricul-tural development—that can be mapped along withhuman and ecological vulnerabilities.

STRATEGIC ENVIRONMENTAL VULNERABIL-ITIES ASSESSMENT FRAMEWORK

This section presents a framework for carrying out aSEVA. Because this type of assessment will need to bedone rapidly, often with limited data and by CSOs withlimited experience in policy analysis, we haveattempted to keep the framework simple and easy toadapt to a variety of situations.

Any SEA needs to characterize the major componentsof the context in question, identify key drivers of envi-ronmental change and threats and forecast the environ-mental and related social changes that are likely tooccur as a result of economic development activities.

On a national scale, this requires a comprehensiveanalysis. Narrowing the focus of the assessment to themost vulnerable places and peoples reduces thecomplexity of understanding the context, identifyingthe critical drivers and forecasting the impacts of policymeasures. This focused approach allows us to trace thedirect effects of policies that have clear implications forthe environment, such as land-tenure reforms. It alsofacilitates a fairly robust analysis of the indirect, moretenuous links with apparently distant and overarchingpolicies, such as devaluation of the national currency orreduction of tariffs.

Five key steps are discussed here:

1. Review of proposed development policy

2. Vulnerabilities filter

3. Mapping vulnerabilities

4. Assessing the impacts

5. Developing recommendations

Each step is defined in terms of its purpose and the keyconceptual questions that need to be answered. A set ofintermediate questions is suggested in each step tohelp move the assessment team toward the answer(s)to the conceptual questions. Analytical tools are

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Narrowing the focus of the assessment tothe most vulnerable places and peoplesreduces the complexity of understanding thecontext, identifying the critical drivers andforecasting the impacts of policy measures.

Narrowing the focus of the assessment tothe most vulnerable places and peoplesreduces the complexity of understanding thecontext, identifying the critical drivers andforecasting the impacts of policy measures.


described for several steps, and examples from the teststudies are provided along the way in the sidebar.

Step 1: Review of Proposed Development Policy

Purpose: To determine whether the assessment is necessary; to determine which economic andenvironmental sectors need to be considered by the assessment.

The SEVA should begin as early as possible in theprocess of policy development to ensure that thefindings can be considered in the policy design. Thefirst task is to identify the objectives and broad cate-gories of likely outcomes of policy implementation. Forexample, the objectives of a macro-level policy mayinclude poverty alleviation, increased export capacityand expansion of modern agriculture. To achieve theseobjectives, governments will carry out a variety of activ-ities that, depending on the policy objective, mayinclude promoting physical developments (e.g., roads,ports, pipelines); changing the way businesses andmarkets operate (e.g., privatization, liberalization,taxation and subsidy systems); changing the institu-tions or regulations governing the use of economicresources (e.g., changes in mining concessions or agri-cultural extension programs); or any combination ofthese. All of these policy inducements and investmentswill affect the way businesses, communities and indi-viduals use environmental resources.

To decide whether or not to carry out a SEVA, we mustfirst determine whether achievement of the policy goalsor implementation of the related activities is likely tosignificantly affect the environment.

Conceptual question:

Is the policy likely to induce change in theeconomic sectors that directly or indirectlydrive the use of environmental services andresources?

Intermediate questions:

What are the objectives of the policy, stated or unstated?

What changes in economic or productive behaviordoes the policy aim to induce?

What means (laws, regulations or activities) will thepolicy use to achieve those objectives?

Does the policy make specific provisions for the pooror for the environment?

What links have been identified between economicgrowth and the environment?

In many cases, policy or program documents will beexplicit about the economic sectors that will be boostedby the change. However, the outcome of broad macro-economic policy changes may not be so obvious. Forthe environment, the most important direct andindirect impacts stem from:

n changes in prices of natural resources that affectthe behavior of producers and consumers, and

n changes in access to resources that allow or promote commercial exploitation or limit use by traditional users.

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The test studies looked at poverty alleviation promotedby agricultural development in Vietnam; exportincreases promoted by infrastructure for agriculturalexports in Bolivia; export promotion through hydro-carbon development in Peru; increased commercethrough road construction in Laos; improved exportearnings through mining sector growth in Indonesia;and economic growth through mining promotion in thePhilippines.

The conceptual questions to be answered in this stepare designed to help the practitioner determinewhether it would be useful to carry out a SEVA for anew policy and, if so, what economic sector(s) andwhat geographic area(s) it should focus on. The inter-mediate questions are intended to help answer thelarger conceptual questions.

n The first question looks at whether there will beenvironmental impacts.

n The next questions look at where those impactswould occur.

n Answering the third question determines whether aSEVA should be carried out.


Macroeconomic reforms can lead to price changesacross the economy; sectoral programs also induceprice changes, though in a more limited way. Macro andsectoral policies can also alter access to naturalresources, either through changes in regulation or bythe creation of infrastructure. Certain macro policy

changes are more likely than others to drive changes inresource use. These include energy price reforms,natural resource price reforms, privatization of heavyindustry and changes in exchange rates, particularlythose designed for export promotion affecting naturalresources. Sectoral policies—such as infrastructureexpansion, land-tenure changes, agricultural growth,tourism expansion and fisheries growth—are alsohighly likely to induce changes in resource use. All

these policies are red flags for an SEA and probablywould benefit from an SEVA9 These changes are mostlikely to have detrimental environmental impacts whenthere are policy and institutional failures that affectnatural resources and the environment, including weakregulations, poor tenure systems, ineffective monitoringand enforcement, lack of funding, lack of political willand limited local participation in decision making.

Knowledge of the major economic trends in thecountry—such as the expansion of export agricultureor an increase in private investments in mining—willhelp define likely directions of change. The review canidentify critical economic sectors based on:

n past growth and potential future growth (such asnatural gas reserves, mineral deposits, agriculturalpotential, export potential, marketable timber);

n percentage share of gross domestic product (GDP)and exports; and

n major trends in growth, resource use and resource degradation.

The review should consider and identify recent changesand current trends in those sectors, as well as theknown environmental impacts, particularly the locationof the impacts. If possible, these locations should bemapped as an input to Step 3. Consideration should alsobe given to the national, regional or local capacity todeal with the environmental aspects of the expectedchanges in resource use. Note that this first step isintended to gather preliminary information in order to

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The study in Vietnam examines how policies intendedto promote expansion of agricultural exports changeagricultural production patterns in a vulnerable areathat is unsuited for agricultural expansion.

Policies that should raise a red flag:

n Natural resource price reforms, including energy-sector reforms

n Privatization of heavy industry or resource extraction

n Changes in exchange rates or export policies

n Infrastructure expansion

n Land tenure changes

n Agricultural growth promotion

n Tourism expansion

n Fisheries growth promotion

Several of the test studies looked at the impact ofinfrastructure creation on the environment. In bothBolivia and Laos, road construction was intended tofoster commerce. This construction was intended toboost use of agricultural resources.

9 The World Bank points to these kinds of reforms and to the institutional failures discussed below as red flags that should precipitate an environmental assessment(World Bank 2004a).

The test study in Bolivia looked at the impact oftransport infrastructure on the already occurringexpansion of soy production. Transport will serve bothto facilitate export from existing farms and to promotean ongoing increase in the acreage under soy.Deforestation and other negative environmental trendslinked with existing soy production will be aggravated.

All of the studies identified a variety of institutionalfailures that limit the implementation of environmentallaws and regulations.


decide whether or not to carry out an in-depth analysis.Much of the information gathered here will be revisitedin greater detail in Step 3 and Step 4.

Conceptual questions:

Which economic sectors are most likely toexperience policy impacts?

Which natural resources, regions or particular locations are most likely to experience policy impacts?

Does capacity exist for sustainable manage-ment of the relevant resources?


Will the policy or price change(s) affect the supply orproduction of a natural resource good (e.g., timber,minerals, oil, agricultural commodities)? What regions or locations will be suppliers?

Will the policy or price change(s) affect demand for anatural resource-based good? Where, geographically,will the demand arise? Where will it decline? Where will the supply increase/decrease occur?

What are the main economic growth sectors in thecountry? What sectors are shrinking?

Will the policy or price change(s) support or counterexisting economic and environmental trends?

Will the policy or price change(s) drive a change in the location of economic activity? Of human populations?

Will the policy affect areas that lack effective environ-mental or resource governance? Do relevant institu-tions have the capacity and the authority to act whenenvironmental or sustainability problems arise?

Will policy or price change(s) foster long-termchanges in productive activities?

All this information should be used to determinewhether an SEVA could provide useful information andprovoke a productive dialogue about development andthe environment. If the impacts will be significant, andif the SEVA can contribute to understanding thoseimpacts and to a dialogue about sustainability and theenvironment, it will be a worthwhile effort.


Will a SEVA provide useful information aboutpolicy impacts?

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Will patterns of resource use change significantly?

Do environmental and natural resource managementinstitutions exist to monitor the changes and promote sustainability?

Could an SEVA increase knowledge for stakeholdersand decision makers about the environmental andsocial consequences of the policy?

Could an SEVA contribute to better decision makingregarding the policy or to measures to reduce or miti-gate environmental impacts?

Step 2: Vulnerabilities Filter

Purpose: To determine which environmentallyvulnerable places are likely to be affected by the policy; to determine which vulnerable peoplesmay be affected by or contribute to these environmental changes.

The next step is to define the most vulnerable placesand peoples to look for overlap between probable policyimpacts and environmental priorities. The identificationof vulnerable contexts and the collection of baselineinformation can be based on a review of secondary

information (e.g., maps, databases and analysespertaining to the region) and discussions with localexperts and communities.

A rapid survey of major ecosystems, biodiversity andecosystem services, and areas designated as biologi-cally important and of threats such as expandingresource use (agriculture, irrigation, forestry) willidentify the vulnerable places. For WWF’s purposes,the SEVA is concerned with places that are consideredbiologically important or valuable and are still suffi-ciently intact to support a wide range of species.Various methodologies exist for identifying priorityareas; that is, those we should be most concerned withprotecting.10 For the test cases to develop the SEVA, we

12

In the Bolivia case, the area selected for the study wasfirst identified by the national government as a priorityarea for inclusion in the national system of protectedareas. When there were delays in this process, thelocal government designated it as a municipalprotected area. In addition, it retains substantial forestcoverage in an ecoregion considered a priority by WWF.Evidence also suggests that local communities relyheavily on non-timber forest products.

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Baseline maps describingthe vulnerable naturalareas are overlaid firstwith the location ofvulnerable social groups,then with relevant dataon economic activitiesand natural resource use.

Baseline maps describingthe vulnerable naturalareas are overlaid firstwith the location ofvulnerable social groups,then with relevant dataon economic activitiesand natural resource use.

10 See the discussion under Defining the Vulnerabilities Filter: Vulnerable places.


used priority areas already identified by WWF and, inseveral cases, by national and local governments. Wealso used protected area boundaries and extant forestcover. Ideally, communities should be involved in thedefinition of priority areas to reflect their use ofresources. For the purposes of the SEVA, protectedareas, indigenous territories, and priority regions iden-tified within ecoregions provided the most useful unitsof spatial analysis.

The most accessible indicators of the vulnerability ofthe identified regions are measures of the threats to theplace. Critical threats can be measured in terms ofeither the environmental degradation that is occurringor the activity that is causing ecosystem loss or degrada-tion. Threats can be measured in terms of loss of biolog-ical intactness, such as loss of critical habitat, decline ofkeystone species populations, localized extinctions,habitat disturbance or habitat degradation. Or they canbe measured in terms of the socioeconomic drivers ofenvironmental change: conversion of natural habitat foragriculture or mariculture, urbanization, land and waterpollution and siltation, overexploitation of livingresources or infrastructure construction.

Mapping both the biologically valuable places and theenvironmental threats is useful for analyzing vulnera-bility and environmental impacts. Different parts of theregion are likely to face different threats, or differentdegrees of threat, that must be considered in deter-mining vulnerability. For example, because the bound-aries of ecosystems or ecoregions reflect biogeographicpatterns, they often overlap with various politicalboundaries, including protected areas, indigenousareas, land-use planning units and state, provincial ormunicipal boundaries. These political boundaries maybe of major importance in determining differences inthreats and policy outcomes, and therefore in deter-mining vulnerability. Mapping these boundaries withthe biological information—such as BDI, CSI and land-use information—provides a useful analytical tool.

A parallel survey of socioeconomic data for thecountry—such as data on poverty levels, ethnicity andhunger, or HDI scores—will allow for the delineation ofvulnerable peoples. For the purposes of the SEVA, werecommend a rapid estimate of the vulnerability of thehuman population based on poverty level and, to theextent possible, the related characteristics discussedabove in the section on Defining the Vulnerabilities

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Filter. Many of the measures used will be numerical—incomes, percentage of families below the poverty line,percentage of families experiencing hunger, health andmortality statistics—but these measures indicate onlyone aspect of vulnerability. Some indicators, such as theHDI, provide a more comprehensive quantitativeestimate of vulnerability, but these are not alwaysavailable on an appropriate scale. In addition, a qualita-tive estimate that looks at the coincidence of the charac-teristics of vulnerability can be equally useful for theSEVA. For purposes of the SEVA, the degree of humanvulnerability is less important than the coincidence withenvironmental vulnerability. The assessment (Step 4)will look at how these populations use local resources.

Overlaying maps of socioeconomic and environmentaldata will show where human and environmental vulner-ability coincide with biological importance, which effec-tively identifies the most vulnerable contexts whereopportunity still exists for environmental sustainability.

Step 3: Mapping Vulnerabilities

Purpose: To develop a map of environmental andsocioeconomic data to support the identification of vulnerable contexts and to overlay probablepolicy impacts to further the analysis of environmental outcomes.

For the SEVA, at least three map overlays should bedone, if possible. Baseline maps describing the vulner-able natural areas are overlaid first with the location ofvulnerable social groups, then with relevant data oneconomic activities and natural resource use. Ideally,the information is plotted on a geographic informationsystem (GIS), but often the limitations of the availabledata mean that maps must be much more looselysketched. The scale of these maps should reflect notonly the availability of information but, more important,the scale at which policy responses and impacts occur.As the assessment is conducted (Step 4), information

14

In Vietnam, poverty maps were combined with maps ofminority ethnic groups and terrain maps (to showsteep, difficult-to-farm slopes) to produce a map ofvulnerable peoples in the province of Quang Nam in theCentral Annamites (Maps 1 and 2). These maps wereavailable at the district level, a fairly small unit ofanalysis, and could be overlaid with information aboutinfrastructure and priority environmental areas (Map 3).

Elevation (m)

Poverty Greater than 33%

1 - 300

301 - 700

701 - 3,000

Ethnicity

Poverty greater than 33%

Predominantly non-Kinh

Predominately Kinh

Map 1: Poverty and Ethnicity in Quang Nam Map 2: Indicators of Human Vulner


about probable policy impacts will be added to thismap. Examples are provided here from the Vietnamcase study.

The map should identify the following:

The most vulnerable ecosystems, ecosystem services or

species. In many cases, it will be possible to useexisting analyses (such as the WWF analyses basedon the BDI and the CSI that were used to identifythe Global 200 ecoregions (cite) and in the ecore-gional planning exercises to determine whereresources are threatened by expanded use. Otherorganizations and governments have conductedsimilar reviews and developed similar maps that canserve the same purpose. Information about theintactness of resources (such as forest cover or pro-tected areas) and the threats (such as encroachingroads, plantations or agricultural land) is essential.Particular consideration should be given to thoseresources that the poor rely on heavily, includingforests, water, fisheries and agricultural land.Commercially valuable resources such as timber,mining areas and farmland that may be overexploit-ed should also be shown on this map.

Vulnerable peoples and the natural resources they

depend on. The mapping exercise should indicateareas where poor populations are likely to either(a) see their livelihoods or quality of life threatenedby environmental degradation, or (b) contribute toresource exploitation and environmental degradationunder the policy change. Populations can be identi-fied on the basis of any relevant combination of theindicators discussed above. In addition to knowingwhere they live, it is important to consider wherethey are drawing natural resources from; this mayinclude legally recognized areas—such as communi-ty forests, indigenous areas and fishing zones—orsimilar unofficial areas of resource tenure.

Possible changes in resource use. The vulnerabilitiesmap should then be compared with a map identifyingbroad changes in economic activities likely to followimplementation of the proposed policy reform, usinginformation generated in the initial policy review(Step 1). Emphasis should be placed on economicactivities with known environmental impacts (e.g.,mining, logging or agricultural expansion); changesin control over natural resources (e.g., creation ofprotected areas, land-tenure laws); and changes inaccess to resources (e.g., infrastructure). Data suit-

15

#*

#*#*

#* #*

#*

#*#*

#*

#*

#* Proposed Dams

Rivers

Main Roads

Urban Areas

Existing Protected Areas

Priority 1 Areas

Priority 2 Areas

Song Thanh

Map 3: Conservation Priorities in Quang NamVulnerability: Poverty and Elevation in Quang Nam


able for mapping includes transport corridors; forest,mining or hydrocarbon concessions; land suitable foragricultural expansion; planned changes in landtenure; and dams and other infrastructure. This mapwill provide an initial assessment of where the mostimportant environmental impacts are likely to occur,and this area should be the primary focus of theassessment in Step 4. A key component of theassessment will be the reiteration of the mapping ofexpected changes in access to resources and pat-terns of resource use.

These three initial steps—review of the policy, identifica-tion of vulnerable places and peoples, and mapping—provide the background needed for the assessment stage.

Step 4: Assessing the Impacts

Purpose: To determine how the policy will affectthe environment in the vulnerable place(s); todescribe the role vulnerable peoples are likely toplay; to estimate the significance of these impacts.

The primary purpose of the analytic process outlinedhere is to indicate how the policy change is likely toaffect the environment, either positively or negatively,in the places (habitats, ecosystems) of environmentalconcern. This step comprises

1. further developing baseline knowledge,

2. identifying impacts, and

3. evaluating the significance of the identified impacts.

National policies, like other large-scale drivers ofchange, have different impacts in different places,depending on the socioeconomic, political, geographicand ecological conditions. The MEA states

Different components of the coupled social-ecological

systems may have quite different vulnerabilities and

experience exposure to stresses and perturbations

quite differently. Diverse impacts are likely as a

result; broad frameworks should not be taken as

reliable guides to local conditions. (UNEP 2004,

p. 16)

Given these differences, it is critical to understand thefull context in which the policy is implemented, thepath of the policy impacts and the significance of theoutcomes. The guidelines offered here are intended tohelp the assessment team ask pertinent questionsrather than to dictate the terms of the assessment. Theprocess described is purely qualitative. At times it ispossible to include quantitative data effectively, but toensure that these assessments can be carried outrapidly, the focus is on rapid qualitative evaluation. Thefollowing sections describe the three assessment steps,provide conceptual and intermediate questions anddiscuss some useful tools for each step.

Developing the baseline. Once the priority contextshave been identified, more detailed information on localor meso-level11 environmental issues, poverty and demo-graphic factors, governance capacity and current natural-resource-based economic activities and trends should becollected to construct a comprehensive baseline. Thisbaseline should provide a good understanding of whatwould happen without the policy change and the contextin which the policy will be implemented.

Improving the map. Information on poverty or otherindicators of vulnerability, population density, environ-mental features, political or institutional boundaries(such as indigenous areas or provinces), infrastructureand economic uses of resources (e.g., mining andfarming) should be mapped at a level of detail that willfacilitate the analysis. Whereas too much detail cancause confusion, sufficient local information is neededto understand the unique features of the area ofconcern. The review should look closely at currenttrends in resource use and economic growth. In somecases, this new information can be added to the maps.

Understanding the institutional context. Relevant lawsand institutions should be reviewed to understand theroles they will play in translating the policy to the local

16

In Indonesia, mining concessions that were granted inprotected areas are being honored for economic,political, and legal reasons. Thus when other factorspromote growth in the mining sector, these protectedareas will be among those affected.

11 The meso level may be state, province, ecoregion or another intermediate level between local and national.


level and in promoting sustainable or unsustainableresource use. The review should cover not only lawsand institutional responsibilities but also institutionalcapacity and political will for enforcement. Dependingon the particular case, a variety of institutions mayneed to be considered, including government institu-tions that regulate use of natural resources (e.g.,forests, parks, mines); land-tenure institutions; agricul-tural extension agencies; regional institutions thatregulate resource use; and community-based or localorganizations that govern resource use.

Review of experience. Environmental impacts of recentrelated policy reforms and the specific pathways thatlink those policies and their environmental impactsshould be reviewed. In many cases, this review willidentify past policy changes that are similar to thecurrent proposal. A rapid evaluation of the pathways orchannels linking past policy changes to direct andindirect environmental impacts, both positive andnegative, will provide a good understanding of localsocioecological relationships and likely policy impacts.This review might also take into account similar situa-tions in other regions or even other countries.

Predicting the likely impacts. With the baseline andvulnerabilities context established, the next step is toconduct a detailed assessment of the potential environ-mental impacts on the identified vulnerable places. Thisassessment should consider the full range of environ-mental impacts, including short-term and long-term,direct and indirect, and site-specific and cumulative. Thekey to assessing the impacts lies in considering thelikely channels or pathways through which the policy

package will affect local resource use and thus exertpressure on the environment. The policy may drivechanges in prices, quantities of production, productionmethods or access to resources or markets. Thepathway incorporates a chain of events shaped bypolitical, economic, social and cultural factors thatdetermine the likely environmental outcomes (seefigure 1). Predicting the pathway and the resultingimpacts of the proposed policy reform requires anunderstanding of the context that the baseline reviewprovides. National-level policies may have direct impactson local determinants of resource use, or the pathwaymay lead through the regional, state/provincial or localinstitutions that shape implementation. Figure 1 is aschematic illustration of the path of policy impacts.

Macro-scale development policies are often imple-mented in conjunction with other broad policies as partof a policy package. Thus, in order to present an inte-grated assessment of likely impacts, it is important toplace the policy in the context of relevant internationaland national plans, regional programs, assistance fromother donor initiatives, and environmental targets andstandards that are being concurrently implemented, asthey may influence the outcomes of the proposedreform package. This contextual understanding helpsidentify where cumulative impacts may arise orwhether mitigation activities have already beenproposed or implemented.

17

The Bolivia test study found that although recent andextensive decentralization in the country showedpromise of improving management of naturalresources, in some cases communities were unpre-pared for this task and environmental managementcapacity did not improve.

The Peru test study conducted a thorough review ofthe experience with design and construction of theCamisea gas pipeline in order to understand the likelyimpacts of further hydrocarbon development.

The Vietnam study reviewed impacts of an ongoingagricultural export policy that has already causedsubstantial agricultural impacts. Although thehighlands have been largely left out of the exportdrive, pressure on these lands has increased as thepopulation tries to meet subsistence needs on steeplysloping lands. Continuation of the policy is likely tocause more of the same.

In many of the test cases, government efforts toexpand valuable export sectors — hydrocarbons inPeru, mining in the Philippines, agriculture in Bolivia —offer the promise of improved services to vulnerablepopulations, but also threaten the natural resourcesthat they depend on.


18

Figure 1: Model for Analyzing Impacts of Macroeconomic Policies Using a Vulnerabilities-based Approach.

Drivers

New Development

Policy

Current Trends

Context

Social Factors

Economic Factors

Direct/Indirect Impacts

Political Factors

Vulnerabilities

Vulnerable Ecosystems

Vulnerable Populations

Impact

Response

Outcomes

Environment

Poverty

ToolkitBecause of the complexity of the links among macro-level policy reform, regional context and local environ-mental impacts, a variety of tools may be useful incarrying out the analysis, including checklists, networkdiagrams and maps.

■■ Checklists. Checklists are simply lists of environ-mental resources that may be affected or environ-mental impacts that may occur. The SEVA team canreview the checklist and focus on the issues that meritdetailed investigation. A checklist could include suchitems as likely policy impacts on

n use of nonrenewable resources

n use of renewable resources

n conservation of wildlife, habitats, landscapes,protected areas

n quality of soil, water and other local environmental resources

n poverty alleviation

n local or public participation in decisions aboutresource use and sustainability issues

n access to information and judicial redress foraffected communities

■■ Network diagrams. Network diagrams are useful toillustrate both direct and indirect links among policiesand environmental impacts. Such a diagram is a “map”of the policy pathway, tracing the impacts of the policythrough the economic, social and political spheres.

Networks can be qualitative (descriptive) or quantita-tive. When impacts are identified in a diagram, thelevel of detail can vary. In some cases, it may bepossible to give substantial detail and draw specific,quantitative conclusions about the impacts; in othercases, it may be possible only to predict the likelydirection of change. Even this limited knowledge,however, can be very useful if it pertains to areas ofgreat environmental vulnerability, where inaction couldmean permanent loss.

■■ Maps. The vulnerabilities map prepared for the SEVA isa key analytic tool for determining the geographic locationof environmental change, including the location of vulner-able peoples who are likely to be most affected. The mapshould clearly identify possible changes in resource usefollowing implementation of a policy. Maps can bedesigned to illustrate various types of qualitative or quan-titative data, such as agricultural production levels;logging, mining or hydrocarbon concessions; nontimberforest product reserves; land-use zoning; or infrastructureplanning. It is important to be as clear as possible aboutthe coincidence of changing resource use and areas ofbiological importance and vulnerable peoples. If it isaccurate, such a map is a valuable tool for

n rapid evaluation of the significance of the policy change,

n development of appropriate solutions and recommendations, and

n presentation of the results to stakeholders and policymakers.


Although the focus of the analysis is on vulnerable envi-ronmental resources, primary consideration must begiven to the relationship between the vulnerable popu-lations and environmental degradation or conservation.Not all—perhaps not even most—environmentaldamage is caused by vulnerable peoples. However,these are the peoples we must be most concerned with,

because they are dependent on the availability of envi-ronmental resources and they often have little capacity(capital, access or knowledge) to develop sustainablelivelihoods when they face a scarcity of theseresources. Less vulnerable peoples—those who arewealthier or have greater access to resources orpolitical power—have more options if economic, institu-tional or environmental conditions force a change intheir livelihoods. Vulnerable peoples who are heavilyreliant on environmental resources have the most togain from sustainable management and may makereliable partners in efforts to protect the environment.


What will be the critical environmentalimpacts of the policy, particularly those perti-nent to vulnerable peoples?

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The Laos study points out that local populations relyheavily on non-timber forest products and firewood.Forest degradation will clearly worsen their situation.While community forest management experimentshave been successful, they have been rare. Landtenure programs are promoting sedentarization,although the land is more suited to existing swiddenagricultural patterns that allow for long fallow periods.

In Bolivia’s dry forests, land titling programs are fallingbehind the push to expand commercial agriculture,with threatens the livelihoods of communitiesdependent on small-scale agriculture.

In Laos, road construction, which will promote forestdegradation, is in direct conflict with the government’sambitious goal of increasing forest cover to 70%.

Agricultural pressure in the highlands of Quang Nam inVietnam threatens not only biodiversity and forests,but is causing soil erosion and degradation thatdirectly affect the impoverished population of theregion. As these conditions worsen, pressure on theforests will only increase.



What is the predicted path of impacts?

— Describe the process/pathway by which this changewill take place: price change, change in access toresources, economic change, institutional reform,infrastructure construction and so on.

— What will happen to the vulnerable populations?What role will they play?

How will the policy contribute to or lessen existingtrends toward environmental degradation? Will therebe an increase in the use of natural resources—land,biodiversity, timber, minerals, water, fisheries, air orwater pollution and so on?

How will the policy reduce or aggravate poverty inthe area? Will some populations be affected morethan others?

— What mechanisms or opportunities exist for localgovernance of resource use?

— How will local people respond, particularly interms of changes in resource use, in the short andlong term?

What mitigating factors, if any, are in place (e.g.,safety nets, legal protections, protected areas, econom-ic opportunities, agricultural extension programs,institutional brakes, industry best practices, commu-nity management systems or monitoring systems)?

What mechanisms or institutions are in place to pro-mote or ensure sustainable use? Is there knowledge ofbest practices that could increase sustainability?

Are there adequate laws and enforcement to governnatural resources in the vulnerable places? Are thereadequate institutions to govern natural resources?

Evaluating the significance of the predictedimpacts. Estimating the likely significance of theimpacts is important in deciding how to respond to thepolicy change. The significance of the predictedimpacts can be evaluated in terms of a variety ofmeasures: for example, magnitude of change, directionof change, reversibility, probability or risk of environ-mental impacts, costs versus benefits and availability ofmitigation measures. Significance can also bemeasured against the stated environmental objectivesof the national or local government or the community;against the objectives of CSOs or NGOs such as WWF;or in terms of the impact on human or environmentalvulnerability. It is important to consider whether theproblems and benefits identified are likely to be uniqueto the location or will be similar in other places.Knowing the scale of the impacts is important for devel-oping recommendations.


How significant are the predicted environmen-tal impacts of the policy?


Will the change in resource use threaten the long-termsustainability of ecosystems, species, environmentalservices, livelihoods or commercial exploitation?

Will the policy create opportunities for improving sus-tainability or will it increase the threat to priorityecosystems or endangered species?

Does the policy contribute to the community’s sustain-able development and environmental goals or makethem more difficult to achieve? Does it increase com-munity control over resources?

Does the policy contribute to the country’s stated sus-tainable development and environmental goals ordoes it run counter to those goals?

Will the policy contribute to poverty alleviation, par-ticularly among the most vulnerable populations?Will it do so in a way that promotes sustainability?

20

The assessment step is the most difficult, requiringthe practitioner to determine what changes will occurwhen the policy is implemented. While implementationof new policies is based on a set of assumptionsabout their impacts, these may or may not beaccurate. Even when they are in large part accurate,additional impacts may occur, or particular places orgroups of peoples may experience different impacts.The conceptual questions in Step 4 are intended topromote careful thinking about the likely impacts andtheir significance. Answering the intermediatequestions should lead to the answer to the larger,conceptual question. The tools provided here likewiseshould facilitate the analysis.

n The first question looks at the impacts.

n The second question asks for reflection on therelative importance of those impacts.


21

In terms of level of pro-poor: (directly solve a problemfaced by the poor, reduced vulnerability, food secu-rity) +++ pro-poor++ mixed result + unsure/not pro-poor

In terms of level of environmental implication:+++ high ++ medium+ low

In terms of scale of the implication: L large scaleM medium scaleS small scale

Figure 2.Evaluating the Impacts of Agricultural Development Policies on Vulnerability in Quang Nam, Vietnam

Forestry — Positive but con-strained by currentpolicy on forestry

++ S — Positive on forest— Would require policy

changes to succeed

++ S

Extension service — Short-term contribu-tion to food security

+ L — Negative on landand water

— Promotion of high-yield varietiescould lead to moresoil erosion

+++ L

Irrigation development — Indirectly contributeto food security

++ S — Negative on forestand water

— Level of impacts onforest and land issubject to the size of dams

+ S

Large-scale agriculturalproduction

— Little contribution tolivelihoods of theextremely poor

+ M — Negative on land— Increased soil

erosion

+++ S

Cash crop promotion(maize, cassava)

— Little contribution ormay even destabilizefood security ofextremely poor

+ M — Negative on forest,land and water

— Increased soil ero-sion if large planta-tions are established

— Increased pesticide use

+++ M

Paddy rice expansionand intensification

— Positively contributeto food security ofthe poor; however,the scale is small

— Mixed between poorand non-poor

++ S — Negative on water— Increased soil ero-

sion (when convert-ing land)

— Increased pesticideand chemical use fornew crops

++ S

Major agriculturaltrend promoted bygovernment policies

Implication for vulnerable peoples

Type of impact

Level of pro-poor Scale

Implication for environment

Type of impact Level Scale

This matrix for evaluating predicted impacts of agricultural development policies is an illustration of the matricesdescribed in the Toolkit on page 22.


Or will it aggravate poverty or unsustainableresource use?

Have alternatives been considered that might be more sustainable and pose less significant risks for the environment?

What are the risks of unexpected outcomes?

Step 5: Developing Recommendations

Understanding the geography of the impacts, thepathways of change and the environmental signifi-cance of the policy change provides the informationneeded to develop recommendations. To be successful,the development of recommendations must be drivenby the stakeholders, including the vulnerable peoplesof the region, and must involve policymakers early inthe process. The SEVA team can promote this consulta-tive process by making some preliminary recommenda-tions. These preliminary recommendations should betailored to the specific conditions of each country—including socioeconomic conditions, environmentalassets and national environmental and developmentobjectives—and to local conditions and priorities.

The assessment may recommend a variety ofmeasures, such as support for best practices, tech-nology choices, fiscal measures, regulatory changes,infrastructure planning, payment for environmentalservices, resolution of tenure issues, development ofcommunity-based management options and support forprotected areas. If the overall impacts of proposedpolicies are expected to be positive, recommendations

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Toolkit■■ Matrices. The significance of the predicted impactscan be evaluated using matrices. In a matrix, theimpacts of each proposed policy measure can bematched against a set of sustainability/developmentobjectives or against the status quo, to evaluate thesignificance of potential impacts. Matrices can bequalitative or quantitative. They are flexible and canbe refined and modified as more informationbecomes available. Information can be provided invarious ways in a matrix: short descriptions; symbols(ticks, crosses and questions marks to representvarious impacts); or qualitative or numerical informa-tion that can be used to measure environmentalimpacts and weigh costs and benefits. The examplein figure 2 is from the Vietnam test study. The tableillustrates the impact of the policies in terms ofhuman and environmental vulnerability and in termsof the status quo.

To be successful, the development ofrecommendations must be driven by thestakeholders, including the vulnerable peoplesof the region, and must involve policymakersearly in the process.

To be successful, the development ofrecommendations must be driven by thestakeholders, including the vulnerable peoplesof the region, and must involve policymakersearly in the process.


will focus on strengthening or ensuring that positiveimpact. If negative impacts are likely, the assessmentwill identify alternative development policies or supple-mental policies or programs to ensure that poverty andsustainability objectives are met.

The large scale of these development policies does notrequire a new set of tools to resolve the problems;however, it is important to determine the scale of theproblem and at what level (local, regional, national) itneeds to be addressed. If the evaluation has found thatthe problems will be specific to the vulnerable area,solutions should be developed that target this area.However, even if the problem is manifested locally, thesolution will often need to be implemented where theproblem originates—which could be at the national,regional or local level. If the impacts are not specific tothe vulnerable area(s) considered by the study but arelikely to be more widespread, a broader solution shouldbe sought at the regional or national level. The analysis ofthe pathway or channel of change is a critical input here.

In designing the recommendations and initiating adiscussion or advocacy process, we need to focusclearly on the ecosystem values we are trying toprotect, how we can ensure that vulnerable peoples willbenefit from conservation and how we can avoid envi-ronmental degradation without sacrificing the benefitsof the development policy. At the same time, we mustcarefully consider the audience for the recommenda-tions. Whereas environmental organizations may haveone set of objectives, different stakeholders will have avariety of objectives, among which conservation andsustainability may have little standing. And policy-makers will not want to jeopardize national policy objec-tives for the sake of local conservation goals. Awell-conducted SEVA and wide debate on its recom-mendations can make a major contribution to resolving

these differences by clarifying the trade-offs and therealistic options.


What adaptations could be made to ensureenvironmental sustainability while maintainingthe benefits of the new policy?


What recommendations can be made to capitalize onthe environmental benefits of the policy for the mostvulnerable places and resources?

If negative impacts exist, at what level should they beaddressed: local, regional or national?

What recommendations can be made to reduce thenegative environmental impacts of the policy for themost vulnerable places, resources and peoples?

What can environmental NGOs, other CSOs andcommunities do to ensure a positive outcome?

What further research or analysis should be donebefore proceeding with the policy?

What places, peoples or sectors need to be carefullymonitored during implementation?

23

In Vietnam, economic growth policies are driving amajor drop in poverty levels. However, the localimpacts in the Quang Nam highlands are not positive.Recommendations therefore focus not on changing theoverall policy but on considering a different strategy forthe steep slopes of Quang Nam, one that makessustainable use of the forests the center of thepoverty alleviation effort.

In Laos, where the road-building program threatens theexisting forests, solutions must take into account thereliance of local people on non-timber forest productsand traditional swidden agriculture. The importance ofresolving land tenure issues in a way that does notcompromise traditionally sustainable use, and ofpromoting community forest and resource manage-ment rather than centralized controls, are raised by therecommendations.

In designing the recommendations and initiating adiscussion or advocacy process, we need to focusclearly on the ecosystem values we are trying toprotect, how we can ensure that vulnerablepeoples will benefit from conservation and how wecan avoid environmental degradation withoutsacrificing the benefits of the development policy.


Stakeholders, including local communities, are bestplaced to develop viable recommendations if they havebeen involved throughout the SEVA. They candetermine the roles different groups can play in devel-oping appropriate responses, advocacy, participation,implementation and monitoring. Well-designed recom-mendations can foment productive discussion amongstakeholders and policymakers; they also promoteadvocacy and alliance building and increase manage-ment capacity for natural resources and ecosystems.Stakeholders should be closely involved in the develop-ment of monitoring tools.

Monitoring. The recommendations should highlightgaps in data and monitoring systems, and should suggestindicators that could be monitored to track the impact ofthe policy. Monitoring is essential to evaluate the actualimpact of the policy and of any mitigating programs, thespeed with which change is occurring, and the capacityof both people and the environment to adapt.

Indicators are measures chosen to reflect importantaspects of changes taking place in a particular place.They are a condensed measure of a much largersocioenvironmental dynamic. To track the impact ofnational development policies on vulnerable places, theindicators should be organized along the pathway ofpolicy impact identified by the SEVA. Indicators forlong-term monitoring should include environmentalstatus indicators such as resource quantity and qualityindictors (e.g., forest cover) and rates of resource use,degradation or improvement (e.g., logging rates,changes in land cover). The indicators also shouldcapture the evolving relationship between the vulner-able peoples and the environmental resources. Thisrelationship can be understood through:

n demographic factors (e.g., population growth,poverty rates, unemployment rates);

n access to resources (e.g., per capita availability ofresources, difficulty of collecting resources, per-centage of income used for environmentalresources); and

n level of vulnerability, including exposure to andimpact of natural disasters (e.g., incidence of floodor drought) and declining or improving environ-mental quality that directly affects quality of life(e.g., incidence of environment-related diseases).12

The appropriate indicators must be determined foreach case on the basis of the environmental resourcesof concern, local use of environmental resources andexpected policy impacts. The indicators should bedesigned to be useful to both policymakers and vulner-able peoples. To the extent possible, relevant stake-holders should participate in the design andimplementation of a monitoring program to ensure thatthe indicators track not only the factors of greatestconcern to environmental organizations but also factorsof concern to local resource users.

LESSONS LEARNED AND NEXT STEPS

The test case studies carried out for the developmentof this assessment framework contributed substantiallyto the design of the methodology. They were initiatedbefore the methodology was fully drafted and took avariety of approaches, some of which were moreproductive than others. We drew upon this experiencein designing the SEVA framework. Some of the positiveresults and the problems revealed by the test casestudies are discussed below.

On the positive side, the vulnerabilities filter was auseful tool for identifying the coincidence of some ofthe most vulnerable peoples and places and forpinpointing areas where policy impacts could runcounter to policy objectives or environmental objec-tives. Although availability of GIS data was limited,existing maps were usually sufficient to present astrong geographic picture of policy impacts. Thepathway analysis was useful for identifying both thepositive and negative impacts of policies and for identi-fying the places and peoples that would benefit and

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The conceptual question for Step 5, and theintermediate questions that will help with developingthe answers, is asking “What recommendations couldbe made?”

12 For a more complete discussion of the role of indicators, see Reed and Tharakan 2004.


those that would pay the costs of economic change.Several of the studies produced maps and matrices thatgave a clear picture of the costs and benefits of partic-ular development policies or projects.

However, the SEVA is limited by the short time framein which it usually must be conducted, by theconstraints on both environmental and social data, andby the complexity involved in understanding andpredicting the relationship between people and environ-mental resources. The test studies looked at broadmacroeconomic policies (such as promotion of exports)and at large development projects (such as roadconstruction). In both cases, the socioeconomic andenvironmental situations were very complex. Althoughdirect environmental impacts were relatively easy toidentify, the complex relationship between poor peopleand the environment was more difficult to understandand predict. All the studies would have benefited fromgreater understanding of the local relationship betweenpeople and environmental resources. Several of thestudies looked at policies/projects that are alreadyunder way. Although it is useful to understand theimpacts of these projects, it was too late to proposesubstantial changes.

We have learned several lessons from this experience.First, to be effective, the analysis should begin veryearly in the process of policy development; however,this requires governments to provide information earlyon in the process and that CSOs take a very proactiveapproach to participating in policy development.Second, the analysis requires intelligent use of existingdata and careful selection of additional data to becollected, as time limits will prevent extensive datacollection. Third, the analysis requires the participationof people who have a very good understanding not onlyof the impacts of national policy decisions but also ofhow people in particular places are likely to respond tochanging opportunities and limits.

Although several of the test studies benefited fromlocal data collection, none was able to involve the localcommunity in the process of data collection, analysis ordevelopment of recommendations. The importance ofinvolving these communities cannot be overstated—itis essential for fully understanding the current situationin these vulnerable places, for accurately predictinglikely responses, and for developing recommendationsthat will be locally beneficial and widely accepted.

Likewise, it is desirable to engage policymakers, inregional and national governments and internationaldevelopment agencies, early in the process. This willencourage an open dialogue and exchange of informa-tion rather than an antagonistic approach. The SEVAshould be complementary to other SEA work andshould aim to promote policy benefits while preventingdegradation of the most biologically important places inthe world.

MPO considers this methodology a work in progress. Theframework was developed as the test studies were carriedout and has benefited greatly from the lessons derivedfrom these studies. However, we hope to improve upon itas we refine these studies and carry out additional ones.Any and all comments are welcome.

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RESOURCES

Asian Development Bank (ADB). 2005. “Environment Policy [draft].”

www.adb.org

Clark, W.C., et al. 2000. Assessing Vulnerability to Global Environmental

Risks. Cambridge, MA: Harvard University, Blefer Center for Science

and International Affairs.

Hamilton, Kirk, and Muthukumara Mani. September 2004. “Toolkit for

Analyzing Environmental and Natural Resource Aspects of

Development Policy Lending [draft].” World Bank, Environment

Department.

Iannariello, Maria Pia, Pamela Stedman-Edwards, Robert Blair

and David Reed. Environmental Impact Assessment for

Macroeconomic Programs. Washington, DC: WWF-Macroeconomics

Program Office (WWF-MPO).

Interamerican Development Bank (IADB). 2005 “Environment and

Safeguards Compliance Policy [draft].” www.iadb.org/sds/doc/

DraftEnvPolicy.pdf.

International Human Dimensions Programme on Global Environmental

Change (www.ihdp.org).

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Washington, DC: IMF.

Johnston, N. 1995. Biodiversity in the Balance: Approaches to Setting

Geographic Conservation Priorities. Washington, DC: Biodiversity

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Millennium Ecosystem Assessment (www.millenniumassessment.org).

Miranda, Marta, Philip Burris, Jessie Froy Bingcang, Phil Sherman,

Jose Oliver Briones, Antonio La Viña and Stephen Menard. 2003.

Mining and Critical Ecosystems: Mapping the Risks. Washington, DC:

World Resources Institute.

Myers, N. 2000. “Biodiversity Hotspots for Conservation Priorities,”

Nature 403 (24): 853–8.

Nellemann, C.2001. GLOBIO: Global Methodology for Mapping Human

Impacts on the Biosphere. UNEP/DEWA/TR.-1-3. Nairobi, Kenya:

UNEP-DEWA.

Reed, David. 2001. Poverty Is Not a Number; The Environment Is Not a

Butterfly. Washington, DC: WWF-MPO.

Reed, David. 2004. Analyzing the Political Economy of Poverty and

Ecological Disruption. Washington, DC: WWF-MPO.

Reed, David, and Pradeep Tharakan. 2004. Developing and Applying

Poverty Environment Indicators. Washington, DC: WWF-MPO.

UNEP. 2000. “Increasing Vulnerability to Environmental Changes

[draft].” Sioux Falls, SD: UNEP/GRID.

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Trends Assessment. Chapter 7: Vulnerable Peoples and Places [draft].”

UNEP.

Wikramanayake, Eric, et al. 2002. Terrestrial Ecoregions of the Indo-

Pacific: A Conservation Assessment. WWF-US/Island Press.

World Bank. 2000. World Development Report 2000. New York: Oxford

University Press.

World Bank. February 2004a. “Good Practice Note: Environmental and

Natural Resource Aspects of Development Policy Lending [draft].”

www.worldbank.org

World Bank. October 2004b. “Issues in Using Country Systems in Bank

Operations [draft].” Operations Policy and Country Services.

www.worldbank.org.

WWF. April 2001. Proceedings of the Eastern African Marine Ecoregion

Visioning Workshop. Mombasa, Kenya: WWF.

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Washington, DC: WWF.

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APPENDIX: INTERNATIONAL FINANCIALINSTITUTION POLICIES ON SEAS

This appendix briefly reviews the positions of the AsianDevelopment Bank (ADB), Inter-AmericanDevelopment Bank (IADB) and World Bank onstrategic environmental assessment (SEA) and countryenvironmental analysis (CEA). The general definition ofSEA is similar across all three institutions and, tovarying degrees, SEAs are mandated by the social andenvironmental policies of these institutions.

ADB

The ADB’s environmental policy (ADB 2005) seeks tointegrate environmental considerations into operationsthrough “systematic application of procedures for (i)environmental analysis for country strategy andprogramming; (ii) environmental assessment of projectloans, program loans, sector loans, loans involvingfinancial intermediaries and private sector loans; (iii)monitoring and evaluation of compliance with environ-mental requirements of loans; and (iv) implementationprocedures for environmentally responsible procure-ment” (ADB 2005).

The CEA is a tool for preparation of “upstream sectorroad maps and thematic analyses” that would feed intothe country strategy and program. The policy specifi-cally requires CEAs for ADB operations.

SEAs are defined by the ADB as “assessments ofpolicies, plans and programs.” The ADB (2005) identi-fies the following types of SEAs:

(i) “Policy impact assessment” or “policy EIA [envi-ronmental impact assessment]”— the assessmentof policies being planned, proposed or already in place.

(ii) “Sectoral environmental assessment”—“theprocess of examining potential environmental andsocial implications of all or most of the potentialprojects proposed for the same sector.”

(iii) “Area-wide or regional assessment”—assessmentsfor policies, plans and programs related to particu-lar jurisdictions (e.g., land-use plans for cities) ornatural areas (e.g., river basin development plans).

(iv) “Programmatic” environmental impact state-ments—a term used primarily in the United Statesto refer to assessments prepared for federal andstate plans and programs, such as land-use plansand herbicide spraying programs.

SEAs are not specifically required but are defined interms of assessments of project, program, sector andfinancial intermediary loans.

IADB

The IADB is currently revising its environmentalpolicy. The Draft Environment and SafeguardsCompliance Policy (2005) states

“Bank operations whose environmental impacts cannot

be identified ex-ante as part of the screening process,

such as policy-based loans…require alternative analyt-

ical tools to determine their level of safeguard risks

and requirements for environmental management.”

Policy-based loans that may have significant directimpacts on environmentally sensitive sectors such asforestry, energy, transportation, agriculture, mining,water and natural resources will be required to carryout, as appropriate, sector-level analytical assessmentsto determine policy and institutional enabling condi-tions needed to promote long-term social and environ-mental sustainability. The Draft Policy states

“Preparation of environmental assessments (EAs)

and associated management plans and their imple-

mentation are the responsibility of the borrower. The

bank will require compliance with specified

standards for environmental impact assessments

(EIAs), strategic environmental assessments (SEAs)

and environmental and social management plans

(ESMPs), as defined in this policy and detailed in

the Implementation Handbook approved by

Management.” (This handbook was not available atthe time of writing.)

Category A operations (defined as “high” safeguardrisk) require an EIA in the case of investment opera-tions or an SEA in the case of programs and otherfinancial operations that involve plans and policies. AnEIA or SEA is also required for highly complex opera-

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tions or those that may pose significant human safetyrisks and potentially sensitive environmental or associ-ated social concerns.

Category B operations (those with “moderate”safeguard risks) require an EA focusing on specificidentified issues and an action plan presenting specificenvironmental provisions that are reported in an ESMP.

n The SEA process must include the following steps:understanding the nature of the proposed pro-grams, plans or policies; defining the overall con-text within which the assessment is to be carriedout, agreeing on its objectives and designing anadequate process; defining a participatory approachfor effective public and institutional involvement;scoping major associated strategic environmentalissues and alternatives; assessing environmental,social and economic outcomes and benefits; andestablishing priorities for action.

n The ESMP must include a presentation of the keydirect and indirect impacts and risks of the pro-posed project; the proposed social/environmentalmeasures to avoid, minimize and mitigate the keydirect and indirect impacts and risks; the institution-al responsibilities to implement these measures; theschedule and budget allocated for the implementa-tion and management of such measures; the consul-tation or participation program agreed upon for theproject; and the framework for monitoring socialand environmental impacts and risks throughout theexecution of the project, including clearly definedindicators, monitoring schedules, responsibilitiesand costs. The ESMP should be reviewed duringthe analysis mission for the operations, and its man-agement plan should be prepared to the satisfactionof the Bank prior to loan approval.

In addition to these requirements, country strategieswill “incorporate, as applicable, verifiable indicators totrack country-level environmental performance.”

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World Bank

The World Bank SEA approach originated in 1993 withguidance notes on sectoral environmental assessmentsthat complemented project-specific EIAs. In 1996, theWorld Bank developed a regional environmental assess-ment tool to help design investment strategies as wellas programs and projects for entire regions. There iscurrently no formal guidance for the use of SEAs.

The World Bank has developed a toolkit to analyze thelinks between development policy operations and theenvironment; the toolkit includes both quantitative andqualitative analysis. Current requirements (World Bank2004a) for development policy lending are limited to:

n Carry out due diligence in “determining the likeli-hood of significant effects” on the environment andnatural resources;

n Assess country systems to determine whetherthere is appropriate environmental managementcapacity to handle potential effects; and

n Recommend actions within or outside operation, withemphasis on building required institutional capacity.

The World Bank has increased its emphasis on countryand sector analytical work on the environment.However, these tools are relatively new, and the Bank isstill developing, refining and integrating them intopolicy lending operations.

The CEA is a country-level diagnostic tool designed to“enhance the World Bank’s knowledge of the environ-mental aspects of client countries’ development andtheir environmental management framework, capacityand performance.” It focuses on the major environ-mental and natural resource issues in a country, reviewsthe policy and institutional framework, assesses institu-tional capacity to implement the framework and makesrecommendations for priority reforms. This analysis isusually conducted at the national level or, in largecountries such as India, at the state level. The CEA is arelatively new approach. To date, five full CEAs havebeen delivered to clients (World Bank 2004b).

SEA is currently being tested as part of a directedlearning program, with some 25 examples of applica-tion in the World Bank’s work to date. SEA looks at thepolicy and institutional framework for dealing with envi-ronmental issues within the sector and assesses institu-tional capacity. It may make recommendations forreforms of policies or institutions (World Bank 2004b).

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Washington, DC 20037-1175, USA

Phone: (202) 778 9752

Fax: (202) 293 9211

E-mail: [email protected]

Website: http://www.panda.org/mpo

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