Report No: 38984 ­ NP Nepal Country Environmental Analysis Strengthening Institutions and Management Systems for Enhanced Environmental Governance Environment and Water Resources Management Unit Sustainable Development Department South Asia Region Document of the World Bank ©2008 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved First published in March 2008 This volume is a product of the staff of the International Bank for Reconstruction and Develop- ment/The World Bank. The findings, interpretations, and conclusions expressed in this volume do not necessarily reflect the views of the Executive Directors of The World Bank or the governments they represent. The World Bank does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judg- ment on the part of The World Bank concerning the legal status of any territory or the endorsement or acceptance of such boundaries. Rights and Permissions The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone: 978-750-8400; fax: 978-750-4470; Internet: www.copyright.com. The World Bank favors the dissemination of its work and will usually grant permission to reproduce portions of it. All other queries on rights and licenses, including subsidiary rights, should be addressed to the Office of the Publisher, The World Bank, 1818 H Street NW, Washington, DC 20433, USA; fax: 202- 522-2422; e-mail: pubrights@worldbank.org. Design Cover and interior design by The Word Express, Inc. Illustration credits Front cover: Picture on the left hand side (Girl looking after ponies in Patan, Nepal), courtesy of Marianne Kilpatrick, Senior Transport Specialist, South Asia Sustainable Development Department, The World Bank. Picture on the bottom right (Public transportation and road condition in Baitaidi, Nepal), also courtesy of M. Kilpatrick. Table of Contents Acknowledgements ..............................................................................................vii Abbreviations and Acronyms................................................................................. ix Executive Summary.............................................................................................. xi Objectives and Process...................................................................................................................xii Environment Sector Overview: Linkages and Challenges to Growth,.......................................xiii Sustainable Livelihoods, and Poverty Reduction Growth and Environment: Moving towards More Sustainable Development ............................xv Urbanization and Service Delivery: Dealing with the Effects of .................................................xvi Increased Population Pressures Policies and Institutions: Moving towards Stronger Governance and Performance................ xix Rising to the Challenges: An Action Plan for a Way Forward.................................................... xxi 1. Background and Objectives ............................................................................. 1 Country Overview............................................................................................................................. 1 Environment Context...................................................................................................................... 2 Human Development Context........................................................................................................ 3 Nepal's Development Strategy and Core Development Policies .................................................. 4 Objectives of the Nepal CEA........................................................................................................... 5 Process and Methodology................................................................................................................ 7 Structure of the Report.................................................................................................................... 8 2. Growth and Environment: Ensuring Sustainable Development ............................. 9 Infrastructure Development............................................................................................................ 9 Role of the Environmental Impact Assessment ........................................................................... 11 Findings from the Case Study Analysis and Stakeholder Consultations .................................... 13 Harmonization with Donor Requirements .................................................................................. 22 Next Steps....................................................................................................................................... 23 3. Urbanization and Service Delivery: Meeting the Population Pressures ............... 25 Achieving Financial Sustainability to Provide Urban Environmental Services.......................... 26 Environmental Health................................................................................................................... 28 Solid Waste Management .............................................................................................................. 35 III IV NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Urban Air Quality Management ................................................................................................... 41 Industrial Pollution Management................................................................................................. 46 4. Policies and Institutions: Ensuring Strong Governance and Performance ........... 53 Overview of Policies, Legislation, and Institutions ...................................................................... 53 Environmental and Sector Policies: Gaps and Inconsistencies................................................... 55 Institutions: National ..................................................................................................................... 56 Institutions: Local........................................................................................................................... 62 Institutions: Capacity Building...................................................................................................... 64 Next Steps....................................................................................................................................... 68 5. Rising to the Challenges: An Action Plan for a Way Forward ............................ 71 Appendix A. Environment Sector Overview: Linkages and Challenges ..................... 77 to Growth, Sustainable Livelihoods, and Poverty Reduction Appendix B. Progress towards Achieving Millennium Development Goals ............... 89 Appendix C. List of Consultation Meetings and Workshops That ........................... 91 Contributed to the Nepal CEA Appendix D. Criteria Used for EA Case Study Selection........................................ 93 Appendix E. Comparison of World Bank, ADB, and Nepal Government .................. 95 Policies Relating to EIA Appendix F. Environmental Health in Nepal....................................................... 101 YSIS Appendix G. Estimating Environmental Health Costs .......................................... 119 NAL Appendix H. List of Environment-Related Laws and Other Measures of Nepal....... 129 A Appendix I. Key Environmental Institutions in Nepal.......................................... 131 AL Appendix J. Environment-Related Court Cases in Nepal ..................................... 133 Appendix K. Summary of Proposed Action Plan Recommendations...................... 135 Bibliography .................................................................................................... 137 NVIRONMENT Tables E Table 1.1 Gross Domestic Products by Sector.............................................................................. 3 Y Table 2.1 Details of Environmental Assessment (EA) of Case Studies..................................... 14 Table 2.2 Public Involvement in the Environmental Management Assessment Stage............ 19 Table 2.3 Timetable for EIA Clearance Process for Sample EA Documents........................... 21 OUNTR Table 3.1 Urbanization in Nepal................................................................................................. 25 C Table 3.2 Aggregate Environmental Health Costs for Nepal.................................................... 28 ­ Table 3.3 Sanitation Coverage in Nepal: Differing Estimates................................................... 29 AL EP N TABLE OF CONTENTS V Table 3.4 Estimated Urban Health Costs Due to Inadequate Water and Sanitation .............. 31 Table 3.5 Estimated Health Costs Due to Urban Air Pollution in Nepal................................. 33 Table 3.6 Estimated Urban Health Costs Due to Indoor Air Pollution in Nepal.................... 35 Table 3.7 Number of Industries by Sector (up to First Nine Months of 2005/06) ................. 46 Table 3.8 Pollution Load of Selected Industrial Sectors ........................................................... 47 Table 4.1 Strengths and Weaknesses of Various Environmental Institutional Models............ 58 Table A.1 Gross Domestic Products by Sector............................................................................ 78 Table A.2 Linkages between MDG Targets and Environmental Sustainability ........................ 79 Table A.3 Protected Areas............................................................................................................ 80 Table A.4 Urbanization in Nepal................................................................................................. 83 Table A.5 National Greenhouse Gas Inventory of Nepal 1994/95 (gigagrams)...................... 85 Table F.1 Aggregate Environmental Health Costs for Nepal.................................................. 101 Table F.2 Sanitation Coverage in Nepal: Differing Estimates................................................. 102 Table F.3 Estimated Health Costs Due to Inadequate Water and Sanitation in Nepal......... 105 Table F.4 Estimated Rural and Urban Health Costs Due to Inadequate ............................... 105 Water Supply and Sanitation Table F.5 Estimated Health Costs Due to Indoor Air Pollution in Nepal.............................. 111 Table F.6 Estimated Rural and Urban Health Costs Due to ................................................... 111 Indoor Air Pollution in Nepal Table F.7 Subsidy Policies to Promote Renewable Energy in Nepal ...................................... 113 Table F.8 Estimated Health Costs Due to Urban Air Pollution in Nepal............................... 117 Table G.1 Health Costs Due to Inadequate Water and Sanitation in Nepal........................... 122 Table G.2 Estimated Rural and Urban Costs Due to Inadequate Water and Sanitation ....... 123 Table G.3 Mortality and Morbidity Due to Indoor Air Pollution ............................................ 124 Table G.4 Estimated Rural and Urban Health Costs Due to .................................................. 125 Indoor Air Pollution in Nepal Table G.5 Urban Air Pollution Dose-Response Coefficients.................................................... 126 Table G.6 Estimated Health Costs Due to Urban Air Pollution in Nepal............................... 127 Table G.7 Aggregate Environmental Health Costs for Nepal.................................................. 127 Figures Map of Nepal.................................................................................................................................... x Figure 1.1 Nepal CEA Approach.................................................................................................... 7 Figure 2.1 Number of EIA Studies and Scoping Documents Approved by............................... 12 Sector as of July 2007 Figure 3.1 Public Opinion on Main Environmental Problems in Urban Areas........................ 26 Figure 3.2 Trends in Municipal Revenue 2000­2005.................................................................. 27 Figure 3.3 Concentration of Particulate Matter .......................................................................... 32 Figure 3.4 Activity Matrix for Air Quality Improvement............................................................. 45 Figure A.1 Nepal's Temperature Trend........................................................................................ 85 Figure F.1 Uneven Access to Sanitary Facilities......................................................................... 103 Figure F.2 Total Energy Consumption and Traditional Sources in Nepal .............................. 109 Figure F.3 Concentration of Particulate Matter ........................................................................ 115 VI NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Boxes Box 1.1 How Has Poverty Been Reduced in Nepal?..................................................................... 4 Box 1.2 Sector Growth Targets ...................................................................................................... 5 Box 2.1 EIA Guidelines for Public Consultations....................................................................... 20 Box 2.2 Recent Efforts by the Ministry of Environment, Science, and..................................... 23 Technology to Improve EIA Implementation Effectiveness Box 3.1 Air Quality Improvements in Kathmandu's Brick Industry ......................................... 44 Box 3.2 Past Experiences in Industrial Pollution Prevention in Nepal .................................... 49 Box 3.3 Incentives to Encourage Improved Environmental Management by Industries........ 50 Box 3.4 Thailand: Conflicting Mandates and Missions for Industrial Pollution...................... 51 Box 3.5 Local Government and Public Involvement in Environmental Compliance ............. 51 Box 4.1 Snapshot of the Institutions Responsible for Environmental Management............... 54 Box 4.2 Examples of Environmental Revenue Generation and Retention .............................. 57 Box 4.3 Case Study in Capacity Building of Local Governments .............................................. 65 Box 4.4 Civil Involvement in Environmental Management in Nepal ....................................... 68 Box 4.5 Examples of Citizen Involvement in Monitoring and Oversight................................. 68 Box A.1 Forestry and Linkages with Livelihoods ........................................................................ 81 Box A.2 Wetlands and Livelihoods............................................................................................... 82 Box A.3 Climate Change and Water Resources in Nepal........................................................... 87 Box F.1 Studies Estimating Health Impacts of Urban Air Pollution in Nepal........................ 117 Box G.1 Methodology.................................................................................................................. 120 YSIS NAL A AL NVIRONMENT E Y OUNTR C ­ AL EP N Acknowledgements T his report is the product of a collabora- pants from local governments, nongovernmen- tive effort between the World Bank and tal organizations, private sector representatives, the Government of Nepal, under the and donors at several meetings and workshops overall leadership of the National Planning held at various stages of the study are gratefully Commission and the Ministry of Environment, acknowledged. Science, and Technology. We would like to especially thank the Vice Chair of the Na- The World Bank team was initially led by tional Planning Commission, Mr. Jagadish C. Bilal Rahill and in the subsequent phase by Pokharel, the former Secretary of the Ministry Jane Nishida, and it included Tashi Tenzing, of Environment, Science, and Technology, Mr. Priti Kumar, Sumith Pilapitiya, Anjali Acharya, Bal Krishna Prasai, and the current Secretary Drona Ghimire, Tara Shrestha, Carla P. Vale de of the Ministry of Environment, Science, and Holguin, and Vinod Ghosh. Background sur- Technology, Mr. Narayan Prasad Silwal, for their veys and studies for this report were provided support and leadership throughout the study. by a team of consultants from Winrock Inter- We would also like to recognize the support national Nepal, led by Sameer Karki, and the and efforts of key officials from the Ministry of Environment and Public Health Organization, Environment, Science, and Technology, includ- led by Bhushan Tuladhar. Peer reviewers were ing Ms. Meena Khanal, Mr. Laxman P. Mainali, Poonam Pillai, Paul Martin, Peter Ellis, and Ste- Mr. Khum Raj Punjali, and Mr. Batuk K. Uprety. phane Guimbert of the World Bank. Valuable The team also acknowledges valuable inputs overall guidance was provided by Ken Ohashi, and collaboration from the various concerned Former Country Director for Nepal; Susan sector ministries and departments, including Goldmark, Country Director for Nepal; Jeffrey the Ministry of Forests and Soil Conservation; Racki, former Acting Director, South Asia Envi- Ministry of Industry, Commerce, and Supplies; ronment and Social Development Department; Ministry of Local Development; Ministry of and Karin Kemper, Sector Manager, South Asia Physical Planning and Works; Ministry of Water Sustainable Development Department, Envi- Resources; and Department of Health Services. ronment and Water Resources Management Significant contributions by numerous partici- Unit, World Bank. VII Abbreviations and Acronyms ADB Asian Development Bank IUCN World Conservation Union AEPC Alternative Energy Promotion FINNIDA Finnish International Development Center Agency ARI acute respiratory infection LPG liquefied petroleum gas CEA Country Environmental Analysis LRI lower respiratory infection CLTS community-led total sanitation MDG Millennium Development Goal COPD chronic obstructive pulmonary NEWAH Nepal Water for Health disease NGO nongovernmental organization DALY disability adjusted life year Nr(s) Nepalese rupee(s) DANIDA Danish International Development PCC pollution control certificate Assistance PM particulate matter DDC district development committee SDC Swiss Agency for Development and DGIS Directorate General for International Cooperation Cooperation of the Netherlands SEAM-N Strengthening of Environmental EIA environmental impact assessment Administration Management at the ENPHO Environment and Public Health Local Level in Nepal Organization SLTS school-led total sanitation ESAP Energy Sector Assistance Program SNV Netherlands Development ESPS Environment Sector Program Organization Support UNDP United Nations Development FAO Food and Agriculture Organization Programme of the United Nations UNFCCC United Nations Framework GBD Global Burden of Disease (project) Convention on Climate Change GDP gross domestic product UNICEF United Nations Children's Fund HCA Human Capital Approach UNIDO United Nations Industrial IBRD International Bank for Development Organization Reconstruction and Development USAID United States Agency for ICIMOD International Centre for Integrated International Development Mountain Development VDC village development committee IDA International Development WEPCO Women Environment Preservation Association Committee of Nepal IEE initial environmental examination WHO World Health Organization IX X NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS IBRD 33455 N° N° N° 30 28 26 To Saidpur To Jangipur E°8 E°8 ¯ Ilam Taplejun MECHI AL ¯ Dhankuta Dharan NEP m) nurA Everest KOSI ihsoK Biratnagar To Baruni Mt. (8848 ¯A H T¯A M R A G A S nuS Rajbiraj To Xegar Okhaldhunga E8° s Ramechhap To Baruni E8°6 86 Janakpur Kodan ¯ To TI JANAKPUR Baruni a THMANDU Sindhulimadi KA ¯ Gaur To Bhimphedi ¯¯¯ ¯ ANIY Faizabad y BAGMA Birganj ¯¯¯ Nuwakot Lalitpur Hetauda NARA ¯ CHINA a E° inayraN 84 Pokhara E8° Mustan¯I R I G A L AWA H DBaglung l GANDAKI 84 Jomsom ¯ To Faizabad a ¯ ilaK Butawal Miles 75 Kilometers YSIS LUMBINI Bhairawa m 100 Dunai 50 ¯ To 75 NAL ¯ Faizabad INDIA A ¯¯¯ i 50 ¯¯¯ 25 RAPTI Jumla 25 AL KARNALI E° H ¯ Sallyan 0 0 82 Tulsipur N° E° 26 82 Simikot BHERI Nepalganj To ilanraK Faizabad ¯ Birendranagar Bank. Chainpur Bank any SETI World or TOWNS To Silgadhi information Barga NVIRONMENT ¯I L¯A K A H A The World of other The territory, ¯ Lucknow AND AL BOUNDARIES Unit any of ilakahaM ¯ any part of ALS M Dhangarhi To and AL CAPIT Design the CITIES E Lucknow on status boundaries. TIONAL Map such CAPIT ROADS BOUNDARIES Dandeldhura the legal of imply, TIONAL Baitadi NEP by denominations the Y not Kanpur E° on SELECTED ZONE NA RIVERS MAIN RAILROADS ZONE INTERNA To do Nepal 80 Ranikhet colors, acceptance produced map judgment or of was this To on any map boundaries, N° N° Shahajahanpur This The shown Group, endorsement OUNTR Map 30 28 C SEPTEMBER 2004 ­ AL EP N and layer type this on a vince es Executive Summary 1. The Government of Nepal's Tenth Five- 3. Historically, Nepal's growth has depended Year Plan (2002­2007) puts forth a compre- on its natural resource base--in particular ag- hensive framework of development initiatives riculture, forestry, fisheries, and tourism--ei- and institutional reforms. The Plan is based ther directly or indirectly. Today's economic on four main pillars: (a) broad-based eco- growth is more broad based, with consequent nomic growth; (b) social sector development; implications for the nature and diversity of (c) good governance; and (d) social inclusion environmental impacts. There are new drivers and targeted programs. The Tenth Plan also of economic growth, such as the service sector recognizes that sustainable economic growth and small and medium-sized businesses in ur- must take into account environmental protec- ban and peri-urban areas. The modest growth tion and natural resource management, and achieved in recent years has come at a high therefore commits Nepal to taking action to environmental cost, and the prospect of more address a wide range of environmental man- rapid growth as one of the peace dividends will agement challenges. lead to even greater environmental pressures. Despite some progress from a few successful 2. Following the Second People's Movement policy initiatives and programs, the overall of April 2006 and the signing of a comprehen- environmental conditions in both rural and sive peace agreement in November 2006, Nepal urban areas are deteriorating, and, if left unad- is at a critical juncture in its growth and devel- dressed, will potentially impede the country's opment. After years of conflict and instability, reform agenda and growth prospects. Already, Nepal now faces what some have referred to as the aggregate environmental health costs asso- an "open moment" in which a brighter future ciated with poor environmental management for the country seems possible. To achieve the are estimated to reach close to 3.5% of gross full potential of this opportunity, one of the domestic product (GDP), representing a sig- greatest challenges for the new government nificant burden on Nepal's economy. will be to strengthen the capacity of institutions to deliver on the country's development and 4. The sustainability of poverty reduction ef- reform agenda, an agenda that requires and forts and the ability to deliver quick results will, relies on strong environmental management in large part, depend on how effectively institu- to support growth, sustainable livelihoods, and tions can practice cross-cutting approaches and poverty reduction. ensure an integrated delivery of the outputs and XI XII NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS services envisioned in the Plan. This will require to climate variability and change. This will be improving the performance of public sector in- addressed in a separate and detailed study. stitutions and prioritizing public interventions, developing alternative delivery mechanisms 6. The main objective of the CEA is therefore through devolution to local bodies, enhancing to identify opportunities for enhancing the the role of civil society, community-based orga- overall performance of select environmental nizations and the private sector in development management systems through improvements activities, and ensuring greater accountability in the effectiveness of institutions, policies, and through better monitoring mechanisms. processes. Specifically, the proposed outcomes of this exercise are as follows: Objectives and Process An analysis of the major gaps and shortcom- ings in the current policy and institutional 5. In approaching the very wide range of framework for implementation, and a better environmental issues and challenges fac- understanding of the institutional under- ing the country, and in consideration of the pinnings, to enable improved environmen- broad and complex post conflict agenda fac- tal management, performance, and compli- ing the Government of Nepal, it was agreed to ance; undertake a focused Country Environmental An identification of the major obstacles and Analysis (CEA), which would explore a select challenges in the implementation of the number of issues within the context of the environmental impact assessment (EIA) sys- country's growth and development strategy, tem and a better understanding of how to and the inherent institutional and capacity improve cross-sector integration in selected constraints prevailing in Nepal's public sector. priority sectors; YSIS These issues, selected in consultation with key A greater awareness of the major obstacles counterparts in the environmental and sec- and challenges facing local governments in NAL tor agencies, were based on a consideration the devolution of environmental responsi- A of (a) recent and emerging socioeconomic bilities, particularly as it relates to urban en- AL trends; (b) environmental pressures; (c) the vironmental management issues associated current status of knowledge of key environ- with solid waste management, air quality, mental issues; and (d) the potential scope to and industrial pollution; achieve improvements in the near term. The An identification of the implications and scope of the study recognizes that the coun- costs associated with urban environmental try faces many environmental priorities and health risks, particularly as they relate to ur- NVIRONMENT pressures, and considerable efforts by donors ban water supply and sanitation and urban E and nongovernmental organizations (NGOs) air pollution issues; Y have been focused on the natural resource Recommendations for policy and institu- and agricultural areas, but less attention has tional reforms and ways to improve public been given to other emerging drivers, such as sector performance and implementation ef- OUNTR infrastructure development and rapid urban- fectiveness, and to strengthen public partici- C ization. The CEA also recognizes that another pation in the environmental decision-mak- ­ important emerging challenge is adaptation ing process. AL EP N EXECUTIVE SUMMARY XIII 7. The comprehensive scoping exercise has alongside the more traditional natural resource resulted in a CEA built upon the following sectors, it is estimated that the total contribu- three primary study components: (a) an exam- tion of environment-related income to Nepal's ination of the environmental issues associated economy may well be over 50%. All environ- with infrastructure development, focusing on mental pressures, therefore, have the potential the EIA process in priority growth sectors; (b) to strain the country's environment-related an analysis of environmental issues linked to income and, in turn, the country's overall eco- rapid urbanization, focusing on the growing nomic and human development performance. problems of solid waste, poor air quality, and These pressures, which are on the rise, fall into industrial pollution, and the resulting impacts two broad areas: natural resource management on environmental health; and (c) an analysis and environmental pollution management. of the policy and institutional underpinnings related to key environmental management Natural Resource Management: systems at the national and local levels. Key Increased Burden on the Resource Base results and findings from these three study components are presented in more detail in 9. Nepal has five main categories of ecosys- the following chapters. They provide the basis tem--forests, wetlands, rangelands, agroeco- for a discussion of the challenges and options systems, and mountain ecosystems. Over 39% facing Nepal in regards to improving the per- of Nepal's total geographic area is classified as formance of key environmental management forest, of which at least 23% is forested. Under systems and institutions to support its growth Nepal's Forest Act (1993) patches of govern- and poverty alleviation agenda. ment forests have been handed over to com- munity forestry user groups and leaseholding forestry user groups. While community man- Environment Sector Overview: agement has brought positive signs of forest Linkages and Challenges to Growth, quality improvements, overall there has been a Sustainable Livelihoods, and Poverty trend towards declining forest cover and qual- Reduction ity, with certain regions of the country facing a more serious decline. It has been estimated 8. It is critically important to recognize the en- that one quarter of Nepal's forest area is heavily vironmental context, linkages, and challenges degraded, which has led to loss of biodiversity, that Nepal will face in achieving its sustainable increased landslides, and soil erosion. development and poverty reduction goals. Re- cent Government of Nepal studies suggest that 10. In spite of the existence of appropriate more than 38% of its GDP is derived from its en- polices, including the National Wetland Policy, vironment and resource sector, which includes ecosystems such as wetlands and rangelands agriculture, fisheries, forestry, and mining and have been subjected to growing degradation. quarrying. In addition, significant portions of A World Conservation Union (IUCN) rapid the power, water, manufacturing, trade, and assessment in 1998 showed that the Terai wet- tourism sectors are also dependent on the envi- lands faced several threats, including drainage, ronment in one form or another, directly or in- agricultural runoff, and overharvesting of re- directly. Taking these sectors into consideration sources. In 2004, an IUCN review found addi- XIV NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS source of environmental degrada- tion that has put increasing pres- sures on the traditional natural resource base. Environmental Pollution Management: Increased Pressures from Urbanization and Industrial Development 12.Although Nepal is one of the least urbanized countries in the world, its rate of urbanization has Himalayan village and rice field, Nepal. Photo by Pichugin Dmitry increased dramatically and now stands as the highest in South tionalthreatsfrominappropriateinfrastructure Asia. It is estimated that the total urban popu- construction, poor management of wetlands lation in 2006 had reached approximately 3.8 and surrounding areas, and the spread of inva- million of the total population of 25 million. sive alien plant species such as water hyacinth. The government predicts that by 2011, 24% At the same time, the IUCN review noted that of the total population will be living in urban wetlands play a significant socioeconomic role areas (NPC/MoPE 2003). While urbanization in Nepal. Rice and fish are some key wetland- itself has been a powerful driver of economic based agricultural products, and there are growth, the rapid increase in rural-urban mi- over 20 ethnic and caste groups--making up gration can, nonetheless, lead to more urban YSIS almost 11% of Nepal's population--that are poverty and greater exposure to unhealthy traditionally dependent on wetlands for their environmental conditions due to poor water NAL livelihoods. Awareness of the potential (and quality, lack of proper sanitation, and high lev- A vulnerability) of wetlands, including riverine els of air pollution. AL environments, has increased with the growth of water-based tourism (for example river raft- 13. Another source of urban environmental ing) and hydropower development. pressure is coming from industrial activity and industrial growth. While Nepal's industrial 11. The Nepal State of the Environment Report activity represents only 10% of its GDP, it is (UNEP 2001) also noted the loss of agricultural expected to double to 20% by 2020, as envis- NVIRONMENT diversity, decline of soil fertility, and increased aged in Nepal's Industrial Development Per- E use of agrochemicals as growing concerns. spective Plan. Furthermore, much of Nepal's Y Moreover, the lack of an overall land use policy industrial growth is likely to come from small has led to more forest and agricultural land and medium-sized industries concentrated being lost to expanding settlements and ur- in urban and peri-urban areas. Of the total OUNTR banization. This, combined with the effects of number of industries registered in the coun- C conflict, has led to a more rapid pace of urban- try, 1,579 (48%) are registered in Kathmandu ­ ization and a rapidly growing and relatively new district and 1,959 (59%) are registered within AL EP N EXECUTIVE SUMMARY XV the three districts in the Kathmandu Valley. Growth and Environment: Being close to basic amenities and infrastruc- Moving towards More ture gives industries greater access to markets Sustainable Development and saves in transportation costs. However, it also results in increased water and air pollu- 16. As Nepal pursues its growth agenda, in- tion from the dumping of industrial waste into vestments in infrastructure development will adjacent water bodies and the release of toxic increase in size and significance. Increased emissions into the air. investments in infrastructure will create addi- tional challenges for natural resource and envi- 14. Rapid urbanization and growth from the ronmental management. To adequately address industrial sector will create serious challenges these pressures, Nepal will require a strong EIA for all of Nepal's municipalities but will have a system, sound policy guidelines, and more ef- particularly marked effect on the Kathmandu fective management. Valley, given its already large population and concentration of industrial activity. The Infrastructure Development and Bagmati and Bishnumati Rivers are already Role of the EIA highly polluted with the increased effluent discharges from both population and indus- 17. On the infrastructure front, the two pri- trial growth, creating serious implications for mary growth areas are likely to be the hydro- public health. It is estimated that the top five power and road sectors, both of which have water-borne diseases already account for 9% received much emphasis in Nepal's develop- of all outpatient visits in health institutions na- ment strategy. The Tenth Plan has set targets tionwide. Continued rapid urbanization and for completing 36 hydroelectric projects and unchecked industrialization have the poten- starting 11 new projects during the Plan pe- tial to exacerbate the country's performance riod. Currently less than 1% of the country's on the environmental health front. Poor en- hydropower potential has been developed. In vironmental management could itself become term of transport infrastructure, Nepal's exist- a constraint to growth and limit the poverty ing road network is the least developed in the alleviation benefits associated with high levels region, with only 30% of the rural population of economic growth. having relatively easy access to all-weather roads. The Tenth Plan targets the realization 15. In an effort to better understand the im- of 20,000 kilometers of operational roads by plications of poor environmental management the end of the Plan period, which includes the to growth, sustainable livelihoods, and poverty annual construction of 1,200 kilometers of ru- reduction, this CEA explores the significance ral and agricultural roads. These development and implications of key issues associated with objectives represent significant environmental growing infrastructure development, rapid management challenges for the institutions urbanization, poor environmental health, and charged with their implementation and for the the need for more effective policies and insti- protection of Nepal's environment. tutions, which, if not properly addressed, will impede Nepal's ability to achieve its long-term 18. The main instruments for ensuring envi- development and reform agenda. ronmental sustainability in infrastructure de- XVI NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS velopment are the environmental impact as- Urbanization and Service Delivery: sessment (EIA) and the initial environmental Dealing with the Effects of Increased examination (IEE). These instruments were Population Pressures made mandatory through the enactment of the Environment Protection Act and Environ- 20. The rapid increase in urbanization is ment Protection Rules (1997) (Government bringing increased pressures on environment- of Nepal 1997). Over the past year, the Min- related services and environmental health, istry of Environment, Science, and Technol- particularly in the areas associated with solid ogy, in consultation with sector agencies, has waste, air quality, and industrial pollution initiated a review of the effectiveness of EIA management. However, local governments, implementation. The CEA supported this ef- faced with increasing demands for environ- fort through a case study analysis of the imple- mental services and improved environmental mentation effectiveness of several projects in conditions, lack the financial, technical, and the hydropower and roads sectors. The analy- human resources to properly deliver services sis found several policy gaps and implementa- and manage the various dimensions of the tion deficiencies in the EIA and IEE processes urban environment. that affected the attention and quality given to incorporating environmental concerns Environmental Health into the planning, design, implementation, and monitoring stages of projects. 21. Poor quality of drinking water, low cover- age of sanitary facilities, and heavy use of solid 19. One of the main concerns identified is biomass (primarily fuelwood) in kitchens is the apparent inadequacy of the screening increasing the burden of disease on Nepal's criteria, which currently consist of project population, both rural and urban. These envi- ronmental risk factors have resulted in prema- YSIS size, cost, and location, but do not include project impacts on the surrounding environ- ture death and disease, especially among the NAL ment. Another area of concern is the lack of poor and vulnerable groups, and are placing A site-specific information needed for several increased health costs and a significant eco- nomic burden on the country, estimated at AL critical components of the EIA process, in- cluding scoping, alternative analysis, and close to US$258 million or nearly 3.5% of the impact evaluation. And, despite mandatory country's GDP. requirements in the Environment Protec- tion Act and Rules for public consultation 22. In Nepal's urban areas, rapid and haphaz- and monitoring, there is little evidence of ard urbanization is exerting immense pressure NVIRONMENT effective implementation of these provisions. on the urban environment, particularly with E The Ministry of Environment, Science, and the growth in the number of slum and squat- Y Technology has revised the Environment ter settlements, with dismal living conditions, Protection Act and Rules to improve EIA ef- crowded poor quality housing, and minimal fectiveness (the resulting amendments are access to water and sanitation. With weak OUNTR published in the Nepal Gazette, August 2 capacities for environmental service delivery C 2997, Bhadra 3, 2064). These efforts are de- coupled with inadequate budgets, munici- ­ scribed in chapter 2. palities are struggling to keep pace with the AL EP N EXECUTIVE SUMMARY XVII demand. Environmental health costs in urban meet Nepal's Millennium Development Goals areas are estimated to be nearly US$51.2 mil- (MDGs). lion in 2005, which is 0.7% of Nepal's GDP. 25. Solid waste management. One of the great- 23. As urban populations grow, the demand est challenges facing local governments is to for environmental services such as water, generate sufficient revenue to provide basic sanitation, and sewerage fails to keep up urban environmental services, such as solid with the supply. Contaminated surface and waste management. The five municipalities in groundwater sources, poor feces disposal, and the Kathmandu Valley, together, spend approxi- inadequate sanitation and sewage disposal mately Nrs. 235 million (US$3.2 million) annu- continue to affect human health. Urban air ally on solid waste management. Kathmandu quality in the Kathmandu Valley--while still Metropolitan City alone spends approximately much higher than national and international 23% of its budget on solid waste management. standards--is starting to stabilize after recent With the growing amount of waste generated, government initiatives. Other urban areas are and the rising cost of salaries and fuel associated also experiencing the growing public health with waste collection and disposal, the cost of threat, with increases in respiratory infections, solid waste management is increasing rapidly. It and reports of chronic bronchitis in hospital appears that the current situation is unsustain- and health facilities. While indoor air pollu- able, considering that less than half of the solid tion from solid fuel use is primarily a rural waste generated gets collected. Yet one of the issue, household surveys reveal that around main sources of revenue for local governments, 35% of urban residents use biomass fuels for the local development fee, is being phased out cooking, resulting in exposure to smoke and by 2013, and, consequently, local governments particulates and increasing the incidence of will urgently need to explore new mechanisms respiratory infections, especially among the to bring in the necessary revenues to provide urban poor. financial sustainability in the future. 24. While urban environmental health costs represent a smaller burden on Nepal's economy than the rural equivalent, these costs are expected to grow if current trends in urbanization and service delivery continue. While the gov- ernment is making good progress on interventions addressing these environmental health risks, much more attention to and allocation of resources for water supply coverage, drinking water quality, proper waste disposal, and im- Sign at the entrance to Sisdol Sanitary Landfill in Nepal providing basic design details. Photo by Sumith Pilapitiya, Lead Environmental Specialist, South Asia proving air quality are needed to Sustainable Development, The World Bank. XVIII NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS 26. Currently, much of the waste from Kath- Bull's trench brick kilns and the promotion mandu and Lalitpur is being landfilled in Sis- of the less polluting vertical shaft brick kilns dol, 28 kilometers from Kathmandu. The Sis- and fixed chimney kilns. The Ministry of En- dol landfill is expected to be filled in less than vironment, Science, and Technology has also two years. There are several landfill alternatives recently prepared a comprehensive Air Qual- that need to be explored, including placing ity Management Plan, but it has not been en- greater emphasis on recycling and compost- dorsed by the government nor developed into ing, given the high potential and feasibility of concrete actions with a defined schedule of recycling and composting a large portion of implementation. The Air Quality Management Kathmandu's waste. In addition, projects that Plan is an important beginning, but steps need recover and utilize landfill gas generated can to be taken to prioritize the menu of actions, be developed under the Clean Development based on feasibility and effectiveness, and in- Mechanism of the Kyoto Protocol in order to volve key stakeholders in its implementation. mobilize additional needed resources.1 29. Industrial pollution. Nepal is still in the 27. Air quality management. An air pollution early stages of industrial development. None- inventory conducted in the Kathmandu Val- theless, the pace of industrial development and ley found that the main sources of air pollu- growth of nonagricultural activity (such as con- tion in the valley are vehicle emissions, road struction) will increase as the country becomes dust, and emission from brick kilns. In 2005, less dependent on the agricultural sector. There vehicle emissions were responsible for 37% of are an estimated 3,300 large-, medium-, and the total PM10,2 the main source of air pollu- small-scale industries and 80,000 cottage indus- tion in the valley. Resuspended dust, which is tries registered in the country. Over 50% are also caused by vehicles, accounted for 25% manufacturing industries, such as tanneries and YSIS of the PM10, and brick kilns were responsible carpet and garment manufacturers, and a large for 11% of total PM10 emissions. Various stud- portion are small and medium enterprises. NAL ies, as well as the data from Kathmandu's Most of these industries are clustered in urban A six air quality monitoring stations, show that areas, close to energy, water, and transportation AL Kathmandu's air pollution, particularly the infrastructure, leading to increased discharges concentration of particulate matter, is already into urban water bodies and airsheds. several times higher than national and inter- national standards. While air pollution is most 30. While the total number of industries re- pronounced in the Kathmandu Valley, it is also mains relatively small, industrial pollution is of emerging as a growing public health concern NVIRONMENT in other large urban areas. E 1The Clean Development Mechanism "is an arrange- Y ment under the Kyoto Protocol allowing industri- 28. In recent years the government, as well alized countries with a greenhouse gas reduction as other key stakeholders, has initiated im- commitment (called Annex 1 countries) to invest in portant steps towards reducing air pollution projects that reduce emissions in developing coun- OUNTR tries as an alternative to more expensive emission in the Kathmandu Valley, resulting in some C reductions in their own countries" (Wikipedia). positive improvements. The most notable air 2 ­ PM10 is particulate matter of less than 10 microns pollution control measure was the banning of diameter. AL EP N EXECUTIVE SUMMARY XIX increasing concern because industries have not the most urgent challenge is in strengthening adopted adequate pollution control measures the capacity of various institutions to effectively and monitoring, and enforcement of indus- implement environmental policies and laws. trial pollution is weak and ineffective. There have been some attempts to control industrial National Government Institutions pollution through the introduction of cleaner technologies in certain sectors, but with limited 32. For the purposes of the CEA, six national success. The level of awareness about good agencies with environmental management environmental management practices and in- responsibilities were examined--the Ministry dustrial pollution issues is still very low among of Environment, Science, and Technology; the key stakeholders, including small industries Ministry of Forests and Soil Conservation; the and government regulators. Moreover, there Ministry of Water Resources; the Ministry of Lo- is a lack of clear mandates and of sufficient cal Development; the Ministry of Physical Plan- resources for compliance monitoring and en- ning and Works; and the Ministry of Industry, forcement by responsible agencies. Therefore, Commerce, and Supplies. The ability of these building greater awareness of pollution preven- agencies, particularly the Ministry of Environ- tion practices and environmental management ment, Science, and Technology, to fulfill their systems will be increasingly important as the statutory responsibilities for environmental industry sector grows. management is very constrained. This is due, in part, to the lack of sufficient resources--hu- man, technical, and financial--and the lack of Policies and Institutions: Moving formalized coordination mechanisms between towards Stronger Governance and environment and sector agencies and national Performance and local governments. One area of critical con- cern is in compliance and enforcement where 31. Nepal has adopted a fairly comprehensive there is little, if any, monitoring and enforce- set of environmental policies and laws that ment by either the Ministry of Environment, cover a broad range of environmental and sec- Science, and Technology or the sector agencies. tor issues. These policies and laws are generally This has affected the implementation effective- sound, although there are some policy gaps and ness of various environmental laws and environ- legislative inconsistencies that may exist and mental management systems, most notably the require clarification. One of the areas of legisla- EIA/IEE system. tive ambiguity can be found in the Environment Protection Act and Rules, with regards to the en- 33. Several organizational models have been forcement role of the Ministry of Environment, proposed for restructuring and strengthen- Science, and Technology in relation to other ing the Ministry of Environment, Science, and sector agencies. Another legislative ambiguity Technology, which now need to be considered can be found in the Local Self-Governance Act in the context of the current political desire to (1999), which mandates the transfer of environ- restructure government into a federal system. mental management responsibilities to local A strong environmental authority requires ad- governments, while sector policies retain au- equate staff resources, technical expertise, and thority at the national level. However, possibly dedicated financial resources to effectively dis- XX NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS charge its environmental responsibilities. Given Supplies has delegated IEE approval to the dis- the fiscal and resource constraints facing the trict cottage industries offices for certain types government, creative measures should be ex- of cottage industries. These initiatives are to plored to support agencies, such as outsourcing be applauded, but additional efforts need to technical functions and introducing pollution be made. With the new political shift in the charges. This is particularly important for the country, it can be expected that the push for environmental assessment process and indus- decentralization of power will accelerate and, trial pollution management, where the growth consequently, greater emphasis to simultane- demands and impacts will be the greatest. ously build local capacity and transfer func- tions to local governments will be required. Local Government Institutions Key Stakeholder Institutions 34. The Local Self-Governance Act requires the national government to delegate or devolve 36. National and local governments face serious responsibilities, including environmental man- capacity constraints, which impede their abil- agement and pollution control, to locally elect- ity to effectively and adequately perform their ed bodies. However, while the Act requires the environmental management responsibilities. decentralization of government functions, the There are many stakeholder groups in Nepal transfer of these responsibilities to local bod- with proven skills and experience that could as- ies and capacity building of local governments sist and support governments in environmental have been very limited. In addition, the nation- management. The Government of Nepal has al government continues to exert significant promoted many good policies and practices that authority over the administrative management engage communities as integral partners with of local governments by retaining control over government in conservation and development YSIS the executive officers of all municipalities. efforts, most notably the empowerment of com- munity forestry groups in forest conservation NAL 35. For the most part, national ministries have activities. In addition to local communities and A not developed plans for the orderly transfer civil society organizations, the private sector has AL of responsibilities to local bodies or dedicated entrepreneurs who have valuable experience appropriate resources for local capacity build- and who have promoted innovation in dealing ing. From a national government perspective, with environmental management problems the lack of capacity at the local level has been such as solid waste management. Greater stake- a deterrent to the transfer of responsibili- holder involvement in environmental manage- ties to local governments. But from the local ment should be strongly promoted throughout NVIRONMENT government perspective, it has been seen as the development process, including public con- E an excuse to retain exclusive authority at the sultation and citizen monitoring. Y national level. Recently, with donor support, the government has initiated a pilot project 37. While the principle focus of the institutional in eastern Nepal that devolves the responsi- analysis has been on the executive branch insti- OUNTR bilities for monitoring environmental compli- tutions, other branches of government will also C ance to two district development committees, have an increasingly influential role in ensuring ­ and the Ministry of Industry, Commerce, and improved environmental performance. The Su- AL EP N EXECUTIVE SUMMARY XXI preme Court in Nepal has delivered several im- 39. While the menu of reforms and actions portant court decisions that have directed the should be diverse and cover a broad range establishment of environmental standards and of options, the Government of Nepal should the clean-up of local water bodies. Parliament consider the following actions as top priorities will also play an important role in establishing in addressing the three thematic areas of this environmental policies and priorities through report--ensuring infrastructure development legislation and in the adoption of a new perma- is sustainable, meeting the pressures from nent Constitution, which may include the right rapid urbanization, and strengthening envi- to clean environment. The oversight role of ronmental governance and performance. the executive branch agencies could be further strengthened as the country moves towards a (a) Ensuring Infrastructure Development federal system of government. Is Sustainable Strengthen the EIA/IEE mechanism and ad- Rising to the Challenges: dress the policy gaps in the EIA/IEE regu- An Action Plan for a Way Forward lations. The EIA system is the primary tool for managing environmental impacts from 38. The benefits of stronger environmental infrastructure development and industrial management to growth, sustainable livelihoods, development. The Ministry of Environment, and poverty reduction need to be constantly Science, and Technology has initiated a re- promoted and reinforced as Nepal proceeds view, in conjunction with sector ministries, with the peace process and its ambitious de- of the gaps and inefficiencies in the EIA velopment strategy. The analysis supported by system. This effort should continue to be the CEA confirms that there are urgent needs supported through a dedicated working and significant opportunities for strengthening group approach that brings key government environmental management among various stakeholders into the review process. In institutions. In order to improve the overall particular, emphasis needs to be placed on performance of the country's environmental strengthening the screening criteria, proj- management systems, the Government of Ne- ect scoping, alternative analysis, and impact pal is encouraged to consider implementing identification and evaluation. Furthermore, a comprehensive set of cross-cutting reforms the Ministry of Environment, Science, and and actions that would focus on (a) updating Technology should take additional measures the policy and regulatory framework for envi- to improve the overall quality of EIA reports, ronmental management; (b) clarifying national taking the necessary steps to simplify the ad- agency roles and responsibilities; (c) strength- ministrative requirements for clearances. ening institutional capacity for environmental One way to provide greater clarity and guid- assessments and enforcement; (d) empowering ance in the EIA process is to utilize sector- local governments to assume greater responsi- specific manuals, such as the Department bilities; (e) expanding beyond traditional gov- of Electricity Development manual for the ernment institutions to enhance performance hydropower sector. and accountability; and (f) improving institu- Establish an environmental information tional capacity and access to information. clearinghouse to improve knowledge of XXII NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS site conditions and impacts. One of the revenue. While systemic solutions are likely major deficiencies identified in the EIA/ to take time to implement, shorter-term IEE process has been the lack of site-spe- measures should be pursued where possi- cific information to understand the scope ble. In order to diversify municipal sources of environmental conditions and predict of revenue, financing measures need to be potential environmental impacts from a explored, including introducing new taxes proposed project. Although considerable and fees and making a concerted effort to environmental information has been accu- utilize the Clean Development Mechanism mulated over the years, serious information more effectively. gaps exist and often data are haphazardly Address environmental pressures of urban- dispersed and difficult to access. A nation- ization through specific targeted interven- al information clearinghouse should be tions. While local governments face many established to collect, consolidate, and ex- environmental pressures, three areas of pand the database of relevant environmen- growing concern from rapid urbanization tal, sector, and local information needed to are solid waste, air quality, and industrial improve the quality and review of projects. pollution. Some programs have been creat- The clearinghouse could also be expanded ed to address these concerns, but more tar- to collect and disseminate information on geted emphasis is needed. For solid waste, other issues of concern, such as environ- alternatives to the current solid waste man- mental health, cleaner technology, and cli- agement system need to be explored, in- mate adaptation. cluding more aggressive source separation, recycling, and composting. For air qual- (b) Meeting the Pressures from ity, the draft Air Quality Management Plan Rapid Urbanization should be prioritized and implemented YSIS Work with municipalities to explore options based on expected impacts and implemen- for a more sustainable financial framework tation difficulties for each of the strategies. NAL that could support environmental services. Finally, regulatory and financial incentives A There are serious challenges with munici- to promote industrial compliance, such AL pal finances in Nepal. Substantive improve- as self-audits, reporting, and monitoring, ments will only be possible through addi- should be pursued with key growth indus- tional reforms, institutional development, try associations. and more effective decentralization, includ- (c) Strengthening Environmental ing that of revenue generation. The main Governance and Performance source of municipality funding, the local NVIRONMENT development fee, is scheduled to be phased Strengthen the role, responsibilities, and E out by 2013. This is happening at a time capacity of environment and sector agen- Y when the need and the demand for urban cies. The discharge of environmental man- services are increasing rapidly. Although agement responsibilities, particularly in municipalities' own sources of revenue are the area of monitoring and enforcement, OUNTR growing, this will not suffice to replace the has been uneven across the agencies and C local development fee. Smaller municipali- has led to serious gaps in compliance. A ­ ties have even fewer options to generate strong environmental agency is needed at AL EP N EXECUTIVE SUMMARY XXIII the national level to support the develop- waste management and, in particular, to ment, implementation, and enforcement street-sweeping activities. Specialized tech- of environmental laws and policies. Several nical training and targeted pilot programs organizational models for strengthening should be provided to local governments, the Ministry of Environment, Science, and including in the EIA/IEE system, landfill Technology have been proposed, which alternatives, and cleaner technologies. The should be given serious consideration. At capacity of local governments could also be the same time, given the current political strengthened by involving the private sector situation and the level of environmental and civil society in the promotion, delivery, management experience in the sector agen- and monitoring of environmental services cies, there are also significant returns to be and programs. achieved by increasing the environmental capacity in sector agencies through special- 40. The numerous development partners of ized environmental training, sector-specific the World Bank and Nepal can support the guidance manuals, improved information government in these efforts through technical management systems, and greater inter- assistance, institutional capacity building, and agency coordination. investment operations. This could be in areas Empower local governments to assume such as the EIA, investments in urban envi- greater environmental management func- ronment improvements such as air quality, or tions. The Local Self-Governance Act re- maximizing the use of Clean Development quires the devolution of responsibilities, Mechanisms for renewable energy, cleaner including environmental management, technologies, and solid waste management. to the local governments. However, with a Whatever the final course of action chosen, few exceptions, little has been done to ei- Nepal is at a critical juncture in its develop- ther build the technical capacity or transfer ment and there is currently an open moment, mandated functions to local governments. or window of opportunity, to successfully The extent of knowledge of urban environ- strengthen environmental management at the mental issues is limited primarily to solid national and local levels. Houses in Bhaktapur kathmandu. Photo by Tracy Hardy 1 Background and Objectives Country Overview ties such as paved roads, market centers, and health facilities. Life expectancy has increased 1.1 Renowned for its majestic Himalayas, Nepal to 60 years, but is still lower than in neighbor- is rich in its geographic, natural, and cultural ing South Asian countries. Life expectancy diversity. Nepal is divided into three broad geo- for women is lower than for men due to high graphic areas: the mountain region, the hill maternal mortality. Infant mortality rates are region, and the Terai region. Moving from east among the highest in the region. to west, the three regions lie parallel as con- tinuous ecological belts, and are bisected by the 1.3 For the past decade, Nepal's development country's river system. Nepal is a relatively small has been seriously constrained by political in- country, measuring roughly 650 kilometers long stability and violent insurgency. As a result of by 200 kilometers wide, with a total land mass political and security problems, there has been of 147,181 square kilometers. Situated between a major disruption of livelihoods for millions two Asian giants--China and India--Nepal has of rural households, a significant increase in been characterized as a "yam caught between population migration to urban areas, and a two rocks". Since it is a landlocked country, steady loss of economic productivity. During Nepal is heavily dependent on India for transit the 1990s the gross domestic product (GDP) facilities and access to the sea (Bay of Bengal) for delivery of its goods, even those coming from China. 1.2 Nepal has a population of 25 million, with approximately 85% of its population living in rural areas. The population is growing at a rate of 2.3% per year, and the ratio of population to arable land is one of the highest in the world. Poverty is worst in the remote mid- western and far-western districts of the country, where the population has limited access to basic ameni- City of Pokhara, Nepal. Photo by Pichugin Dmitry 1 2 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS growth rate averaged around 5%. However, to establish strong institutions that will be able since 2001, with the intensification of the con- to deliver on a development and reform agen- flict and slowed momentum in exports, the da--an agenda which will build on improving growth rate has been averaging only around the livelihoods of the country's poor and on 3%. Notwithstanding this, the Nepal Living ensuring that growth is environmentally sus- Standards Survey 2003/04 reports a significant tainable for future generations. decline in the incidence of poverty by 11% over the last eight years, with 31% of Nepalis classified as poor in 2004 compared to 42% in Environment Context 1996 (Central Bureau of Statistics 2004). 1.6 In Nepal, the linkages between the en- 1.4 Much of Nepal's growth has been histori- vironment and livelihoods have been well cally dependent on the direct and indirect use documented--forests supplying fuelwood, of its rich and diverse natural resource base-- compost used as fertilizers on farms, graz- agriculture, forestry, fisheries, and tourism. In ing areas for domestic animals, wetland and 2003, agriculture alone accounted for 40% of rangeland products used to secure the liveli- GDP, while industry and the construction sec- hood of local communities. Recent Govern- tor contributed 20% to the overall economy. ment of Nepal studies have found that Nepal's While still relatively small, the emerging driv- environment is critical to its development, as ers of growth are coming from the service sec- more than 38% of its GDP is derived from tor and small and medium-sized enterprises the agriculture, fisheries and forestry and the in urban and peri-urban areas. It has been mining and quarrying sectors (Ministry of Fi- estimated that the key drivers of growth over nance 2006). Equally importantly, significant the last year were construction, trade, restau- portions of the power, water, manufacturing, YSIS rants, and hotels. In this context of resurgent trade, and tourism sectors are also dependent growth, the policy and institutional framework on the environment in one way or another. NAL for environmental governance will play an When factoring this dependence in with the A increasingly important role in the country's more traditional natural resource sectors, it is AL development and reform agenda. likely that the total contribution of environ- mental income to Nepal's economy may well 1.5 Subsequent to the Second People's Move- be over 50%. A breakdown of the relative con- ment of April 2006 and the signing of a com- tribution of various sectors to Nepal's GDP is prehensive peace agreement in November provided in table 1.1. 2006, Nepal has embarked on a historic stage NVIRONMENT in the country's development. After years of 1.7 The global importance of Nepal's biodi- E conflict and instability, Nepal now faces what versity has been documented in several global Y some have referred to as an "open moment" in assessments of biodiversity hotspots (Critical which old social and political constraints have Ecosystem Partnership Fund for the Eastern been lifted by the momentous political shift. Himalayan Region, the Global 200 priority OUNTR A brighter future for the country now seems ecoregions of the World Wide Fund for Na- C possible. To achieve this possibility, one of the ture (WWF), and the Important Bird Areas of ­ greatest challenges for the government will be Birdlife International). As a consequence, a AL EP N BACKGROUND AND OBJECTIVES 3 Table 1.1 Gross Domestic Products by Sector Industry Millions of Nrs. 2005/06 % of overall GDP Agriculture, fisheries, and forestry 212,827 38.1 Mining and quarrying 2,669 0.5 Manufacturing 41,768 7.5 Electricity, gas, and water 12,508 2.2 Construction 56,558 10.1 Trade, restaurants, and hotels 56,139 10.1 Transport, communications, and storage 55,919 10.0 Finance and real estate 64,937 11.6 Community and social services 54,544 9.8 Total 557,869 100.0 Source: Ministry of Finance 2006. number of donors and nongovernmental orga- Human Development Context nizations (NGOs) have supported Nepal with environmentally related programs, particularly 1.8 With an average per capita GDP of US$270 targeting natural resource management in rural (2005), Nepal is the poorest country in South areas. While there have been some significant Asia and the twelfth poorest country in the successes in natural resource management, world. As noted above, over the last decade most notably programs in community forestry, Nepal has made considerable progress in re- the overall environmental conditions in both ducing poverty, with the poverty rate falling rural and urban areas are rapidly deteriorating. from 42% to 31% between FY1995/96 and The degree and nature of environmental deg- FY2003/04 (World Bank 2006c). Evidence of radation varies across the country, but negative improvements in the standard of living is also impacts on livelihoods and sustainable develop- confirmed by other indicators, including (a) ment have resulted from increased loss of wet- increase in agricultural outputs and owner- lands due to infrastructure construction, poor ship of durables; (b) increase in consumption water quality from unmanaged development, of luxury foods; (c) decline in number of and increased health problems from urban air households with inadequate food consump- pollution, among other factors. In addition, tion; and (d) improvements in the popula- Nepal's Initial National Communication to the tion's self-assessment of adequacy in housing, United Nations Framework Convention on Cli- clothing, health care, and education. Box 1.1 mate Change (UNFCCC) notes that there will illustrates some of the main factors involved be growing negative impacts on Nepal's ecosys- in the country's growth and poverty reduction tems and people's livelihoods with predicted in- progress. creases in temperatures and changes in rainfall patterns in the future (MoPE 2004). Appendix 1.9 In addition to consumption and income A gives an overview of the environment sector. gains, Nepal has been successful in demon- 4 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Box 1.1 How Has Poverty Been Reduced in Nepal? Nepal's decline in poverty has been driven by growth in per capita consumption expenditure and income that, in turn, has been driven by five main factors: (a) Increased remittances. With an estimated 1 million workers abroad in 2004 (primarily in India, the Gulf States, and East Asia), remittance inflows have soared from 3% to 12% of GDP. The share of households receiving remittances has also increased from 24% in FY1995/96 to 32% in FY2003/04. The increase in remittances is responsible for more than half (6.2%) of the overall reduction in the headcount poverty rate between FY1995/96 and FY2003/04. (b) Higher agricultural wages. Agricultural wages rose 25%, nonagricultural unskilled wages rose 20%, and skilled wages more than doubled. Increased aggregate demand, improved connectivity, and better access to markets stimulated entrepreneurial activities and allowed nonagricultural incomes to increase. Out-migration and availability of jobs outside the agricultural sector tightened local labor markets. This stimulated agricultural wages, improving the welfare of the agricultural laborers, who tend to be the poorest. (c) Increased connectivity. Between FY1995/96 and FY2003/04, Nepal's road network grew by 6.7% per year. The largest expansion occurred in roads classified as "district or rural roads", which grew 11% per year. This pro-poor expansion, along with improved modes of transportation, increased access to shops, markets, schools, and hospitals. Improvements in rural connectivity helped raise nonagricultural employment and incomes. (d) Urbanization. Urbanization has been a powerful driver of poverty reduction, moving workers from low-productivity jobs in rural areas to higher productivity activities in urban areas. Changes in the population shares across urban and rural areas and across regions accounted for about one fifth of the overall reduc- tion in the poverty headcount rate. Urbanization was also important for changing social relations between advantaged and disadvantaged ethnic population groups, as discrimination is less entrenched in urban areas. (e) A decline in the dependency ratio. The number of nonworking people per working adult fell between FY1995/96 and FY2003/04 as a result of the decline in fertility that began in the 1980s. In urban areas, the number of working males per household increased the most. Source: IDA 2007. strating significant progress towards achieving Nepal's Development Strategy and many of the human development targets of the Core Development Policies Millennium Development Goals (MDGs), such as education and gender equity targets. For 1.11 The Government of Nepal has adopted the Tenth Plan, which is, in effect, the country's YSIS example, as a result of significant increases in a number of education-related initiatives--in- Poverty Reduction Strategy. It presents a com- NAL cluding net enrollment and youth literacy-- prehensive framework of economic and insti- A the country is likely to meet the primary en- tutional reforms in a broad range of areas. The rollment and gender-related MDGs (appendix Plan focuses on four reform pillars: (a) broad- AL B). Despite this notable progress, the success based economic basic growth; (b) social sector in meeting other goals, such as integrating sus- development; (c) good governance; and (d) tainable development, has been much more social inclusion and targeted programs. From a difficult. sector-specific standpoint, the Plan proposes to (a) improve delivery of education and health services through community participation; (b) NVIRONMENT 1.10 As Nepal faces an "open moment" with E regards to its political future, so too does support decentralization through transfer of Y the country face an opportunity to set a new responsibilities and resources to local bodies; course for achieving its human development (c) expand electricity coverage through hydro- and environmental sustainability goals. A power and private sector involvement in power OUNTR fresh analysis of current approaches and new sector activities; (d) implement community-led C ways of linking growth, poverty reduction, and approaches for water and sanitation services; ­ environmental management is needed. (e) develop infrastructure and institutions AL EP N BACKGROUND AND OBJECTIVES 5 for solid waste management; and (f) improve ment into country policies and programs and industrial competitiveness through fiscal and reverse the loss of environmental resources". regulatory reform (box 1.2). 1.14 The World Bank's Country Assistance 1.12 The sustainability of poverty reduction ef- Strategy for Nepal also recognizes the im- forts and the ability to deliver quick results will, portance of environmental policies in the in large part, depend on how effectively institu- effective implementation of the Tenth Plan tions can practice cross-cutting approaches to and the Bank's assistance program in Ne- ensure the integrated delivery of outputs and pal. The Strategy also notes the large donor services as envisioned in the Plan. This will re- and NGO presence in Nepal's environment quire (a) improving the performance of pub- sector. In view of the above, and the Bank's lic sector institutions and prioritizing public limited involvement in Nepal's environment interventions; (b) developing alternative de- sector in recent years, it was proposed to livery mechanisms through devolution to local undertake a review of environmental issues bodies; (c) enhancing the role of civil society, and environmental management activities community-based organizations, and the pri- to better understand the current context. vate sector in development activities; and (d) The Nepal Country Environmental Analysis ensuring greater accountability through better (CEA) is designed, therefore, to highlight op- monitoring mechanisms. portunities for strengthening environmental management and governance. It will serve as 1.13 As part of the Tenth Plan, Nepal recogniz- the basis for a renewed dialogue on priority es that sustainable economic growth must take issues and for identifying desirable outcomes into account environmental protection, and for possible Bank support. it has committed to taking action to address a wide range of environmental management challenges. The Government of Nepal has also Objectives of the Nepal CEA committed itself to achieving the MDGs, in- cluding MDG 7, which requires governments to 1.15 In approaching the wide range of Ne- "integrate the principles of sustainable develop- pal's environmental challenges, it was agreed Box 1.2 Sector Growth Targets Some of the sector-specific outcomes and milestones of the Country Assistance Strategy support the Poverty Reduction Strategy. These include: Infrastructure development. In the power sector, improved efficiency of the National Electricity Authority (as measured by reduction in system losses), increased private sector participation, and an additional 30,000 households in remote areas served by community-managed hydropower (increasing access to electricity from 40% to 55%); in the roads sector, percentage of main road network in poor condition reduced to 10% and road access increased to 70 district headquarters. Agriculture. Overall agricultural growth of 4.1% along with irrigation reforms, market development, and agricultural diversification. Social sector development. In the health sector, essential health care services implemented in 25 districts with management transferred to communities and NGOs; in the education sector, 1,000 primary schools transferred to community management; extend rural water supply and sanitation services based on com- munity-driven approach in rural areas to 10% and 5%, respectively. Source: World Bank 2003. 6 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS with the Government of Nepal that the CEA overall approach for the CEA is illustrated in should focus on a select set of issues of par- figure 1.1. ticular concern in the context of growth and the current institutional framework. Recog- 1.17 The expected outcomes of the CEA nizing that the country faces a crowded and aim to better inform the government deci- complex agenda of environmental concerns, sion-making process and guide the support it was agreed that the current challenge is provided by the World Bank and other devel- to examine issues related to implementa- opment partners, so that they may more effec- tion performance in a select number of ar- tively address the environmental challenges eas where enhanced performance has the to poverty-reducing growth. Specifically, the potential to lead to improving environmen- expected outcomes are as follows: tal outcomes and which can be supported through a small menu of activities. The CEA An analysis of the major gaps and short- effort also recognizes that a number of do- comings in the current policy and institu- nors and NGOs have supported Nepal with tional framework for implementation, and environment-related programs, in particular a better understanding of the institutional in the area of natural resource management underpinnings, to enable improved en- in rural areas, but little assistance has focused vironmental management, performance, on institutional and performance-related is- and compliance; sues in infrastructure development and rapid An identification of the major obstacles urbanization, areas to be covered under the and challenges in the implementation of proposed Nepal CEA exercise. the EIA system and a better understanding of how to improve cross-sector integration 1.16 The main objective of the CEA is to in selected priority sectors; YSIS identify opportunities for enhancing envi- A greater awareness of the major obstacles ronmental governance and performance by and challenges facing local governments in NAL improving the effectiveness of institutions, the devolution of environmental manage- A policies, and processes in the implementa- ment responsibilities, particularly as they re- AL tion of the EIA system and urban environ- late to urban environmental management mental management. The CEA has three issues associated with solid waste manage- primary components: (a) an examination ment, air quality, and industrial pollution; of the environmental issues associated with An identification of the implications and infrastructure development, focusing on the costs associated with urban environmental EIA process in priority growth sectors; (b) health risks, particularly as they relate to ur- NVIRONMENT an analysis of environmental issues linked to ban water supply and sanitation and urban E rapid urbanization, focusing on the growing air pollution issues; Y problems of solid waste, poor air quality, and Recommendations for policy and institu- industrial pollution, and the resulting impacts tional reforms and ways to improve public on environmental health; and (c) an analysis sector performance and implementation OUNTR of the policy and institutional underpinnings effectiveness, and to strengthen the public C related to key environmental management participation in the environmental deci- ­ systems at the national and local levels. The sion-making process. AL EP N BACKGROUND AND OBJECTIVES 7 Figure 1.1 Nepal CEA Approach Sector Review Analysis of Policies and Institutions · Natural Resources · National · Pollution Management · Local · Environmental Health Inputs Improved Performance Urban Environment Review Analysis of EIA Implementation · Solid Waste Effectiveness · Air Quality · Hydropower Sector · Industrial Pollution · Road Sector Process and Methodology collect additional data. The case study analysis allowed for a deeper understanding of the bar- 1.18 The CEA was undertaken in close col- riers and contributors to EIA performance in laboration with the Ministry of Environment, practical terms at a project level. Science, and Technology and the National Planning Commission, the key counterparts, 1.19 Another important feature of this study and with the participation of local consultants. has been the extensive consultations and dia- The methodological framework followed by logue with the various government departments this study builds on previous sectorwide reviews, involved in the implementation of policies and environmental reports, environmental assess- programs and with the diverse stakeholders who ments, and other secondary data compiled or are impacted or concerned by the effectiveness of undertaken by the Government of Nepal and these institutions. These consultations involved the country's many development partners. It individual meetings, stakeholder surveys, round- takes into consideration Nepal's poverty re- table discussions, and workshops with represen- duction and development strategies as well as tatives from national and local governments, environmental and sector policies. In view of environmental organizations, private sector asso- the growth-environment nexus in Nepal's devel- ciations, research and academic institutions, civil opment strategy, the CEA covered a case study society organizations, and the media. The highly analysis of two key growth sectors--highways consultative process not only allowed for knowl- and roads--to evaluate the effectiveness of EIA edge sharing, but also for developing a common implementation in those sectors. This involved understanding of the challenges and the options a review of EIA reports and documentation, and for moving forward. The main consultation meet- field visits to project sites to verify information ings and workshops that have contributed to this collected, to interview key informants, and to study are presented in appendix C. 8 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Structure of the Report development and the role of the EIA system in regards to sustainable growth and to the 1.20 This report provides an analysis of the environment. Chapter 3 analyzes the effects cross-cutting issues and challenges for strong of rapid urbanization and increasing environ- environmental management and effective mental pressures from solid waste, air quality, implementation of Nepal's Tenth Plan. The and industrial pollution management. Chap- report is arranged in five thematic chapters. ter 4 analyzes the policy and institutional chal- Chapter 1 provides an environmental overview lenges at the national and local levels. Chapter and the linkages of environmental manage- 5 offers a way forward, proposing a menu of ment to poverty reduction and growth. Chapter options for strengthening environmental man- 2 examines the importance of infrastructure agement and institutional performance. YSIS NAL A AL NVIRONMENT E Y OUNTR C ­ AL EP N 2 Growth and Environment: Ensuring Sustainable Development Infrastructure Development gest that only 18% of Nepal's population has access to electricity. The quality of the electric- 2.1 As Nepal pursues its development agenda, ity supply is poor, with high system losses and growth in infrastructure will expand and frequent outages. Rapid urbanization and the potentially increase the pressures on natural increased growth rate in industries have also resources and threaten environmental quality, led to a steady rise in the demand for commer- notwithstanding the benefits it brings in terms cial energy. Nepal's power sector, however, is of poverty reduction. Much of Nepal's growth, hindered by a series of institutional problems even in times of armed conflict, has been in that constrain its efficient development and the power and roads sectors, while other sec- the mobilization of resources for future invest- tors have shown a decline (Ministry of Finance ments. As a result, the Government of Nepal 2006). As a consequence, the power and roads has adopted a strategy for developing its hydro- sectors have received a great deal of emphasis electric potential to serve the energy needs of in Nepal's Tenth Plan. It is therefore important its people and to pursue its export goals, a key to understand the opportunities for strength- development objective. ening environmental management in these strategic sectors. This can be accomplished 2.3 Nepal's Tenth Plan has set targets for com- through the more effective deployment of the pleting 36 hydroelectricity projects and starting main environmental management instruments 11 new projects in the Plan period. Nepal has promulgated by Nepali law, namely the EIA 83,000 megawatts of hydropower potential, of and IEE procedures. which the actual production is only 240 mega- watts, or less than 1% of the feasible output. If this natural resource were harnessed more Power Sector effectively, the country could meet its domestic 2.2 Based on the 2001 census, 40% of Nepal's demand for electricity as well as export hydro- households have access to electricity (Central power and potentially transform the economy. Bureau of Statistics 2002). However, there is a Currently, Nepal depends on biofuels, mainly large disparity between rural and urban area wood, to meet its energy needs. The high de- access to electricity. In rural areas, only about pendence on wood without an emphasis on 30% of the population has access to electric- replantation of trees has resulted in deforesta- ity, in contrast with roughly 90% of the urban tion, topsoil erosion, water pollution, flooding, population. More conservative estimates sug- and other environmental problems. 9 10 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS 2.4 The inadequate supply of and access to electricity is a major constraint to economic develop- ment and poverty alleviation. The challenge lies in how to harness Nepal's tremendous water resources into an environ- mentally sustainable source of energy. Nepal has taken steps in this direction with the adoption of the Hydropower Development Policy in 1992 and the enactment of the Electricity Act in 1992 and the Electricity Regulation Act in 1993. Donors have also offered Road on the way to Satbanjh, Nepal. Photo by Marianne Kilpatrick, Senior Transport the government support in devel- Specialist, South Asia Sustainable Development Department, The World Bank. oping its hydropower potential. Through a bilateral agreement with the Gov- tion of the road network seriously hinders the ernment of Nepal for a five-year (2001­2006) delivery of goods and services to the poor in hydropower program, the United States Agency remote areas, affecting both economic devel- for International Development (USAID) is pro- opment and sustainable livelihoods. viding technical assistance and training to (a) set up a streamlined legal and regulatory frame- 2.6 The environmental risks and challenges work and simpler licensing procedures; (b) associated with road construction and mainte- YSIS strengthen institutional capacity to address en- nance have both direct and indirect impacts on vironmental and social impacts; (c) implement growth. Some of the direct impacts from road NAL a new policy that promotes investment in both construction include soil degradation from A domestic and export markets; and (d) establish loss of topsoil, water quality degradation from AL a Power Development Fund, with World Bank changes in surface water and groundwater support, as a catalyst for energy investment.3 flows, and biodiversity impacts due to loss of wildlife habitat and plant species. The indirect impacts include forward linkages from changes Roads Sector in land use and settlement patterns from new 2.5 Because of Nepal's mountainous terrain roads and backward linkages from mining and NVIRONMENT and often difficult weather conditions, roads quarrying of roads material. In addition, rapid E and aviation are the major modes of transpor- urbanization and increased demands for ve- Y tation in the country. However, Nepal's total hicles in urban areas has led to increased air road network and density is the lowest in the pollution and traffic congestion. region. Only 30% of the rural population has OUNTR access to all-weather roads and more than 60% C of this network is concentrated in the lowland 3 ­ USAID Nepal web site: http://www.usaid.gov/loca- (Terai) areas of the country. The poor condi- tions/asia_near_east/countries/nepal/. AL EP N GROWTH AND ENVIRONMENT: ENSURING SUSTAINABLE DEVELOPMENT 11 2.7 In the Tenth Plan, the Government of infrastructure such as hydropower plants and Nepal has emphasized the role of roads and roads. The EIA process is designed to ensure other transportation infrastructure as an over- that development projects are constructed in arching objective in reducing poverty in the a way that avoids or minimizes adverse impacts country. The Tenth Plan has envisaged that on natural resources, such as wildlife habitats, 20,000 kilometers of operational roads will be and prevents or decreases risks to human completed by the end of the Plan period, and health or to ecosystems from environmental will include an annual construction of 1,200 pollution, such as water pollution. kilometers of rural and agricultural roads and 600 kilometers of earthen roads. The 2.9 As with environmental and sector policies Road Transport Policy, which included the in general, the Environment Protection Act development of a 20-year road master plan, and Rules have their strengths and weaknesses. was established in 2001. It has been estimated Over the past year, the Ministry of Environ- that Nepal will need to invest 2.5% of its GDP ment, Science, and Technology, in consultation (US$150 million) in developing its transport with the sector agencies, reviewed the effective- sector, which is double its present annual ness of the implementation of the Environ- spending (World Bank 2007a). Therefore, fu- ment Protection Act and Rules and identified ture investment in the road sector is expected several policy deficiencies and inconsistencies. to rise dramatically as a major component of Accordingly, the Ministry developed proposed the country's development strategy in order to changes to address these deficiencies and un- improve connectivity, to promote growth, and derwent a consultation process to review these to reduce poverty. changes with key stakeholders. The resulting amendments in Schedules 1 and 2 of the EPR have been published in the Nepal Gazette, Role of the Environmental Impact August 20, 2007, Bhadra 3, 2064. This study Assessment looked at the institutional performance and barriers to effective implementation of the EIA Use of EIAs and IEEs 2.8 One of the main tools for en- suring environmental sustainabil- ity in infrastructure development is the use of the environmental impact assessment and initial envi- ronmental examination (EIA and IEE), which was made mandatory by the Environment Protection Act and Environment Protection Rules of 1997 (Government of Nepal 1997). Quite often, the EIA is the only tool that is used to en- sure that environmental issues are addressed in the construction of Road to Gokuleshwor, Nepal. Photo by courtesy of Marianne Kilpatrick. 12 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS process by reviewing existing literature, hold- These were initiated in the early 1990s prior ing extensive stakeholder consultations, and to the enactment of the Environment Protec- analyzing selected case studies in the two prior- tion Act and Rules. A number of guidelines ity sectors mentioned above--the hydropower and manuals have also been prepared for the and road sectors. The general findings from hydropower sector by the Department of Elec- this EIA analysis, as well as selection criteria tricity Development to improve environmental for the case studies, are summarized below and assessment processes. Consequently, there is offer additional inputs for the Ministry of Envi- considerable experience in the environmental ronment, Science, and Technology to consider assessment of the hydropower sector compared in its review of proposed changes to improve to other sectors. In contrast, there has been less EIA effectiveness. experience in and focus on the environmental assessment process of the road sector. Of the 68 EIA studies that have been approved between Selection of EIA and IEE Case Studies 1997 and 3 July 2007 most projects have been 2.10 The hydropower and road sectors were in the hydropower sector and fewer in the selected for case study analysis because of their road sector (see figure 2.1). Although the Ru- importance in Nepal's Tenth Plan and because ral Access Program (supported by the United of their different levels of experience in envi- Kingdom's Department for International De- ronmental assessment and private sector par- velopment) has prepared a manual for the IEE ticipation. Some of the first EIA studies done of rural roads, there is generally less knowledge in Nepal included a number of hydropower and guidance when it comes to preparing and projects, such as the Arun III Hydropower Proj- reviewing EIAs of the road sector. In addition, ect and the Kaligandaki Hydropower Project. while the private sector is actively engaged in YSIS NAL Figure 2.1 Number of EIA Studies and Scoping Documents Approved by Sector as of July 2007 A AL 30 26 25 20 Approved of Reports 15 EIA 11 10 Number 7 6 5 4 4 4 3 3 NVIRONMENT E 0 1997­2007 Y Agriculture and forestry Drinking water Roads Health (hospital) Hotel and tourism development Hydropower generation Irrigation Industry Industrial waste treatment OUNTR & transmission & waste management C ­ Source: Data from Ministry of Environment, Science and Technology, 2007. AL EP N GROWTH ANDENVIRONMENT: ENSURING SUSTAINABLE DEVELOPMENT 13 hydropower development, it has not been in- plans were assessed for pragmatic mitigation volved, to date, in the road sector. measures and monitorable indicators. Sixth, the public participation process was reviewed 2.11 The specific case studies were selected to determine whether the public was mean- after extensive consultation with key ministries ingfully involved during project preparation. and stakeholders within the Government of Ne- Seventh, the clearance process was reviewed pal. The criteria for selecting these case studies to identify administrative streamlining proce- were developed and approved after careful con- dures between agencies. Finally, the monitor- sideration at a national stakeholders' workshop ing process of the projects was evaluated to in December 2006 (appendix D). assess how effectively it complied with EIA recommendations and enforced the EIA ap- 2.12 Based on the criteria, two hydropower proval. After this process, a comparative analy- sector and two road sector EIAs and one sis of Nepal's EIA program was conducted to hydropower sector and one road sector IEE assess consistency and harmony of safeguard were selected for case study analysis. All of provisions across donor organizations, spe- the road projects are government projects cifically the Asian Development Bank and the and two of the three hydropower projects are World Bank. private sector projects. Other key information about each of these projects is presented in Screening Process: Need for Clearer and table 2.1. Stronger Criteria 2.14 There are three screening criteria under Findings from the Case Study Analysis the Environment Protection Rules used to de- and Stakeholder Consultations termine EIA or IEE thresholds--project size, project cost, and project location (i.e. whether 2.13 There were eight key components or it is in an environmentally sensitive area). There stages in the EIA system; each component was are no criteria for project impact on the sur- analyzed in each of the case studies. First, it rounding environment. In terms of existing cri- was important to evaluate the project screen- teria under the Environment Protection Rules, ing process to determine whether the criteria what constitutes a "project" and what constitutes adequately indicated whether an EIA or IEE an "environmentally sensitive area" is unclear. It should be applied. Second, the scoping of the is also unclear whether the subprojects of sector project was examined to identify how envi- projects that involve a number of subprojects, ronmental issues and concerns were raised by such as the Road Network Development Proj- the project proponent and the stakeholders. ect, require environmental assessments. The Third, the alternative analysis was reviewed to Environment Protection Rules employ cost determine how effectively all project options, threshold limits, making it possible for a project including no-build, were analyzed. Fourth, the proponent to avoid an EIA by either downsiz- impact identification, evaluation, and predic- ing the project or by breaking the project below tion process was examined to assess how thor- the threshold limits. Also, the Rules make no oughly environmental impacts were consid- explicit provision for environmental assessment ered. Fifth, the environmental management of industrial estates, nor has it been updated 14 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS of provision provision provision provision provision provision Provision environment- related professional No No No No No No for uc- environ- detailed and detailed constr consultants for management and during stages consultants consultants national consultant consultants Consultant involved during design construction environmental management plan Domestic involved mental plan design tion No No Inter consultant No Local and national man national national contractors contractors Contractors involved Inter contractors (Ger Chinese) Inter contractors Inter contractors Local Domestic contractors Local for a private study a private mrfi of yr car mrfi in of EIA of consul- house Dept. to studies consultants company through out consultants through in consultants from study venture yingr venture consulting national and ts consulting engaged IEE-level Consultants involved EA Domestic involved joint consulting car Domestic involved joint companies Local Inter tants exper Roads Individual are out Local uction operation uction uction operation Project construction dates 2000 Under constr 2004 Under 2003 Constr completed 2006 Under constr 2000­2003 Under EA of earY approval 1999 2002 2002 2001 2000 2003 YSIS Studies study NAL EA EIA EIA EIA EIA IEE IEE A Case of funded AL funding Nepal private Japan JICA private (EA) of funding of Develop- Bank funded Bank Main source KfW/ NEA/ Govt. Domestic sector Govt. through Asian ment Domestic sector orldW Assessment MW MW Km Km Length/ capacity 69 7.5 39 96 MW4 Km 75 NVIRONMENT of of of E (NEA) Electricity developer private tment tment tment Y Environmental Proponent Nepal Authority Private Depar Roads Depar Roads National developer Depar Roads 2007a. of Nepal Road II) district Feeder Details Lamjung Project national OUNTR projects Project, of Project, Inter C Road 2.1 of Hydropower Marsyangdi VDC Sindhupalchok (Section Khola amghas Project ­ inrockW: ableT Name Middle Hydropower Udipur district Indrawati Project, district Banepa-Bardibas Project Basantapur-Chainpur- Khandbari Piluwa Hydropower Sankhuwasabha ansen-TT Road Source AL EP N GROWTH ANDENVIRONMENT: ENSURING SUSTAINABLE DEVELOPMENT 15 to include many types of industries that could be subject to an EIA: (a) the magnitude of the have adverse environmental impacts, such as project (such as a transmission line longer than garment industries and carpet industries. 10 kilometers); (b) the polluting potential of the project, regardless of the magnitude (such 2.15 The case studies found that all the select- as metal finishing or electroplating industries); ed road projects met the legal requirements of and (c) the environmentally sensitive location the Environment Protection Rules' screening of the project, regardless of size or polluting criteria. In large part, this may be due to the potential (such as in wetlands of concern). fact that the road projects were funded by in- Adopting similar criteria into the Environment ternational donors and were required to meet Protection Rules would provide coverage to a more stringent requirements. For the selected wider range of projects and would help to ad- hydropower projects, one project (Piluwa Kho- dress some of the concerns with the present la Hydropower Project) was screened for an screening process. IEE based on its size (5 megawatts); although if the cost of the project (Nrs. 30 million) were Scoping of Projects: Need for Greater considered, it would have had to undergo an Clarity and Specificity EIA. This was considered legally valid because the regulatory authority issued notification 2.17 The preparation of scoping documents that the cost threshold is only applicable for and terms of reference are the responsibility projects that are not listed based on project of the project proponent. These documents size. Additionally troubling is the fact that are reviewed and approved by the Ministry of Piluwa Khola's project design was significantly Environment, Science, and Technology in the altered after IEE approval (e.g. changes in case of EIA-level studies and the concerned cross-drainage structures) and a further envi- ministry in the case of IEE-level studies. ronmental analysis was not undertaken. More However, there are no guidelines under the problematic still is the fact that the capacity of Environment Protection Rules for the prepa- Indrawati Hydropower was increased from the ration of scoping documents and the extent size threshold of 5 megavolts to 7.5 megavolts of information required. For example, there after the IEE had been approved. Although an are no guidelines for the delineation of the EIA was subsequently carried out, there is no project influence area. As a result, projects use guidance in the Environment Protection Rules different methods for determining such areas as to the process to follow when significant and a true assessment of the potential scope project design changes occur after the EIA or of environmental impacts is made more diffi- IEE approval. cult. In addition, in a system where the project proponent prepares the terms of reference a 2.16 These case studies suggest that the screen- potential conflict of interest may be created ing criteria used in regards to project size, cost, and could lead to the avoidance of complex and location need to be made more stringent. environmental issues and poor follow-up on In addition, explicit provisions regarding sub- compliance. Site-specific information is also projects and project modifications should be required to more accurately identify and added. In some countries, the following criteria predict the proposed project's potential en- are used in determining which projects should vironmental impacts. Furthermore, the Envi- 16 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS ronment Protection Rules do not indicate a Alternative Analysis: Need for Site-Specific period of validity for the scoping documents, and Sector-Specific Application even though project designs or baseline condi- 2.20 The Environment Protection Rules re- tions could change after their approval. quire the EIA and IEE to undergo analysis in order to assess alternative project devel- 2.18 A review of environmental assessment opment options, such as alternative design, reports from the case studies found the infor- alternative project site, alternative time sched- mation in the reports to be variable--some ule, and the use of alternative raw materials. scoping documents were very brief and oth- The alternative analysis required for the EIA ers more elaborate. Only the Middle Marsy- also requires consideration of other factors, angdi Hydropower Project clearly delineated such as the short-, medium-, and long-term the project influence area and other issues impacts of project implementation and the required under the Environment Protection consequences of nonimplementation. While Rules. The other case study projects provided the Environment Protection Rules include only generic information in their scoping doc- a recommended alternative analysis format, ument for the environmental assessment. For it appears to be most suited to the industry example, the Banepa-Bardibas Road Project sector. The recommended format requires did not include information such as project in- an assessment of alternative raw materials, fluence area, impact identification, and priori- operation schedule, and alternative energy. tization of issues, as required in the EIA study. When other sectors have used this format to However, as a result of public consultations analyze alternatives, the information provided in Middle Marsyangdi and the Basantapur is less relevant for their particular sector and Khandbari Feeder Road Project, site-specific consequently less relevant in the consider- information was identified for these projects ation of sector alternatives. For example, a YSIS and incorporated into their environmental as- more suitable alternative analysis for the road sessment report. sector would include alternative routes, con- NAL struction technology, construction schedule, A 2.19 The lack of clear scoping guidelines can etc. Similarly, the alternative analysis required AL cause confusion and serious gaps when it comes for hydropower is different from that of either to accurately assessing the scope of the project road or industry projects. and its potential environmental impacts. Some sectors have developed good practice manuals 2.21 Review of the case studies once again and guidance tools that, if properly and regular- showed inconsistencies in the compliance with ly used, would improve the scoping of projects. and completeness of the alternative analysis NVIRONMENT For example, the Rural Access Program has de- requirement. Among the case studies, the E veloped an outline of clear recommendations Middle Marsyangdi Hydropower Project and Y for defining the influence area of a rural road Banepa-Sindhuli-Bardibas Road Project had project. Similarly, the Department of Electricity conducted the best alternatives analyses. How- Development has developed the Manual for Pre- ever, even the Middle Marsyangdi Hydropower OUNTR paring Scoping Documents for hydropower sector C Project did not compare the alternatives in projects. These manuals should be used as guid- terms of environmental costs and benefits. The ­ ance models in other sectors. Basantapur-Chainpur-Khandbari Road Project AL EP N GROWTH ANDENVIRONMENT: ENSURING SUSTAINABLE DEVELOPMENT 17 appeared to use the alternative analysis to jus- has been relatively poor. This is in large part tify its already selected site. It did not include due to the fact that impact identification and other analysis such as alternative design or con- predictions have relied on generic information struction methods, do-nothing alternatives, or and have lacked site-specific and quantifiable environmental cost and benefits. data. In addition, there is insufficient knowl- edge and appropriate tools, such as mathemat- 2.22 One way to address this inconsistency in ical models or overlay methods, to accurately alternative analysis is to develop sector-specific identify, predict, and evaluate impacts. guidelines. The Department of Electricity De- velopment has prepared a sector-specific man- 2.24 For most of the case study projects, im- ual for the hydropower sector that presents pact identification and predictions referred to guidelines for alternative analysis based on generic impacts, such as "landslide along the the needs and circumstances of the hydropow- road alignment", and did not quantify impacts er sector. Once again, sector-specific manu- in accordance with baseline conditions. While als or guidelines, such as the Department of the EIAs of the Middle Marsyangdi Hydropow- Electricity Development manual, are needed er Project and the Basantapur-Khandbari and to better inform and guide the alternative Banepa-Bardibas Road Projects all identified analysis process. and predicted impacts, they varied significantly in the quality and scope of their environmental assessments. The Middle Marsyangdi report not Impact Identification, Evaluation, and only included site-specific impacts, but also the Prediction: Need for Site-Specific Data nature of predicted impacts--such as direct or 2.23 Under the law, the requirements for im- indirect impacts and the extent, duration, and pact identification, prediction, and evaluation magnitude of impacts--during both the con- areveryextensive.TheEnvironmentProtection struction and operational stages of the project. Rules require that the EIA studies identify and This was accomplished by using appropriate predict positive and negative environmental tools, such as maps and surveys, for assessing impacts in terms of (a) social, economical, and land loss and changes in land use, loss of forest cultural impacts; (b) biological impacts; and products, and damage to community infrastruc- (c) physical impacts. It also asks that the EIA tures. On the other hand, the Banepa-Bardibas identify the magnitude, in terms of time and Road Project report only included a summary schedule, of possible impacts, as follows: (a) table describing the nature of impacts in terms the geographic area on which the implementa- of direct or indirect, magnitude, duration, and tion of the project is likely to have a positive or extent. It did not attempt to evaluate their level negative impact, and the time schedule of those of significance. impacts; (b) the impact of waste and pollution that will be emitted through the implementa- 2.25 One of the primary reasons for the poor tion of the project; and (c) the direct, indirect, quality of impact identification, prediction, and cumulative impacts of project implemen- and evaluation in the case studies is the poor tation on the environment. However, as with quality of environmental baseline information other provisions in the Environment Protec- and the lack of site-specific information. As tion Rules, compliance with this requirement mentioned, there is not enough knowledge 18 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS regarding scientific or mathematical models 2.28 Some of the reasons for the shortcomings or methods for the identification, prediction, in the environmental management plans are and evaluation of impacts. This informational the lack of experienced environmental pro- gap in site-specific conditions and technologi- fessionals, the allocation of limited resources cal methods underscores the critical need for by the proponent, and inadequate incorpora- establishing a strong center or system for ex- tion of pragmatic mitigation measures and panding the collection, storage, analysis, and monitoring indicators. EIA studies are nor- dissemination of environmental information. mally carried out by consulting firms based on the lowest cost; this often directly affects the quality of the environmental management Environmental Management Plan: Need plan. In order to strengthen the quality of the for Pragmatic Mitigation Measures and EIA reports and the environmental manage- Monitorable Indicators ment plans, the EIA team should be made up 2.26 The Environment Protection Act states of a proper mix of professionals, and should that the EIA study should include a "procedure specifically include an experienced environ- of monitoring the impact of the implementation mental professional. of the proposal on the environment". Similarly, the Environment Protection Rules require the Public Participation Process: Strengthen to IEE report to include "matters to be monitored Provide More Meaningful Involvement whileimplementingtheproposal".Environmen- tal management plans are intended to be used 2.29 The Environment Protection Rules by project proponents to ensure that mitigation make public consultation mandatory for EIA measures and environmental monitoring have and IEE projects. This requirement includes been adopted. publishing notices in a national newspaper, YSIS submitting notices to concerned village devel- 2.27 Of the six cases studies, only the IEE of opment committees (VDCs), district develop- NAL the Piluwa Khola Hydropower Project did not ment committees (DDCs), and municipalities, A include an environmental management plan. and in the case of EIAs, conducting a public AL The environmental management plan of the hearing at the project site. As required by Middle Marsyangdi Hydropower Project was law, almost all projects publish public notices found to be most complete and convincing, requesting the public's input for the scoping with clearly stated project activities, likely en- documents. However, in most instances, very vironmental impacts, mitigation measures to few comments are submitted by stakeholders be adopted, monitoring indicators, frequency in response to such notices. Similarly, with cer- NVIRONMENT of monitoring, and institutional arrangements tain exceptions, very few people attend public E for monitoring. The Indrawati Hydropower hearings during the environmental assessment Y Project and Basantapur-Khandbari Road Proj- stage of projects. From the public's perspec- ect environmental management plans did not tive, the reasons for this include low literacy have monitoring and auditing plans, while rates, poor understanding of the project's OUNTR the Tansen-Tamghas Road Project plan had impacts, inadequate notice time, and feeling C mitigation measures that did not match those that comments will not be taken seriously. At ­ presented in the IEE report. the same time, many project proponents have AL EP N GROWTH AND ENVIRONMENT: ENSURING SUSTAINABLE DEVELOPMENT 19 not made efforts to actively seek local partici- the project site, at the district headquarters, pation and inputs, believing that NGOs and resulting in limited participation from the local residents will present obstacles to project government and project officials and the implementation in terms of cost and time. study team members. One way to improve Public consultation is viewed as a burdensome the effectiveness of the public participation legal obligation and not as a helpful tool in process would be hold public hearings at the improving the understanding and quality of village level near the project site to the extent the project. However, it has been used as a possible. A summary of public involvement forum to collect site-specific information, as during the environmental assessment stage was demonstrated in the Middle Marsyangdi of each of the case study projects is found in Hydropower Project. table 2.2. 2.30 In the case studies, the public consulta- 2.31 The exception to the norm was the tion process was generally poor, with limited Middle Marsyangdi Hydropower Project; regu- participation from general stakeholders and lar public hearings were held throughout the affected VDC people. For a number of road project, both during the scoping preparation projects under consideration, the public and during the environmental assessment hearing was either absent or held far from stages of the project. In addition, one-on-one Table 2.2 Public Involvement in the Environmental Management Assessment Stage Environmental assessment stages Participants Minutes of Stakeholders Public Publication Comments & Public hearing in public meeting of recommen- consultation of notice suggestions locations hearing public hearing dations Middle Marsyang- Yes, in several Yes Attached, from One location 600 Yes Yes, from DDC di Hydropower locations DDC and VDCs and VDCs Project Indrawati Hydro- Yes, in one Yes Attached, from One location 58 Yes Yes, from VDCs power Project location NGOs and VDCs and NGOs Banepa-Bardibas No Yes One One location 32 Yes Yes, from VDCs Road Project Basantapur- Yes Yes Only DDC and One location 78 Yes Yes, from DDC Khandbari Road VDCs and VDCs Project Piluwa Khola n.a. Yes No n.a. n.a. n.a. n.a. Hydropower Projecta Tansen-Tamghas n.a. Yes (assumed) No n.a. n.a. n.a. n.a. Road Projecta n.a. Not applicable. a. These were IEE projects, so a public hearing was not required. Source: Winrock International Nepal 2007a. 20 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS and group meetings were held at the central, Box 2.1 EIA Guidelines for Public Consultations district, and village levels and involved diverse The Pakistan Environmental Protection Agency has adopted EIA Guidelines stakeholders, including political leaders, busi- for Public Consultation. These guidelines recommend that public consulta- ness leaders, NGOs, and farmers. At the final tion should go beyond simply listening to public concerns; it requires active engagement with the public in the development of acceptable solutions to public hearing, approximately 600 people were address their concerns. Specifically, it states, "Proponents should explain their in attendance. In part, this can be attributed to proposals clearly to affected communities, actively listen to the communities' the magnitude of the project, which covered responses, and make prudent changes to the proposal to avoid or mitigate adverse impacts." 12 VDCs and a population of over 19,000 The India Ministry of Environment and Forests recently published Draft people. However, it also reflected the project Notification for the Re-Engineering of the EIA Process. The draft notification proponent's proactive engagement to reach replaces "public hearing" with "public consultation", reflecting a paradigm shift in the expected outcomes. Public consultation aims to force project out to the public through many means other proponents to proactively seek the views of affected communities at various than the public hearing and to ensure inputs stages of project development and to integrate these concerns into the proj- from stakeholders with diverse interests. ect design. The public consultation process is also aimed at two different sets of interested people--consultations at the project site with persons having a plausible material stake in the project and consultations with persons having 2.32 One reason for the low level of public a plausible stake in the environmental aspects of the project. participation, by agencies and stakeholders, Sources: World Bank 2006a, 2006b. is that there is no guidance on what level of local participation constitutes meaningful public consultation. Nor is there any attempt to change attitudes towards the process. In an to 126 days to approve the scoping and terms effort to improve the public participation pro- of reference. Similarly, the time the Ministry cess, some countries, including neighbors in has taken for the review and approval of EIA the region, have recently adopted specific pub- documents has varied from 31 to 214 days for lic consultation guidelines (box 2.1). Whether road projects to 35 to 525 days for hydropower YSIS these public consultation guidelines will in projects. However, this estimation does not in- fact improve the effectiveness of the public clude the time that concerned sector agencies NAL participation process remains to be seen. But have taken for review and recommendations A they are at least a signal, and recognition by (Uprety 2003). AL some governments, of the importance of and necessity for ensuring more meaningful public 2.34 For the six projects considered in the participation in the decision-making process. case studies, the average time for clearance varied from 7 to 17 months (table 2.3), with clearance for hydropower projects taking Clearance: Simplification of Administrative more time than for road projects. As the case Processes between the Ministry of NVIRONMENT studies illustrate, the time taken for the EIA E Environment, Science, and Technology and process is generally longer than what has been Y Sector Agencies estimated under the clearance process. Some 2.33 A past study indicates that the Ministry of of the main reasons for the delays in clear- Environment, Science, and Technology takes ance are noncompliance of EIA documents OUNTR 14 to 40 days to approve the scoping documents with the legal provisions (e.g. noninclusion C for road sector projects. In the case of hydro- of 15 days public notice or proof of public ­ power sector projects, the Ministry has taken 9 hearing), and poor quality of EIA reports, AL EP N GROWTH AND ENVIRONMENT: ENSURING SUSTAINABLE DEVELOPMENT 21 Table 2.3 Timetable for EIA Clearance Process for Sample EA Documents Scoping document, terms of reference (months) EIA study (months) Total time taken in Name of project Estimated Actual Estimated Actual months Middle Marsyangdi Hydropower Project 3 5 8 12 17 Basantapur-Khandbari Road Project 2 4 6 9 13 Indrawati Hydropower Project 2 3 4 7 10 Banepa-Bardibas Road Project 2 3 3 7 10 Piluwa Khola Hydropower Projects 1 2 3 5 7 Tansen-Tamghas Road Project 2 3 3 4 7 Average in months 2 3.4 4.8 7.8 11.2 Source: Data from Ministry of Environment, Science and Technology, 2007. from which important information, such as ect proponent and the EIA team rather than baseline information, site-specific conditions, through the administrative channel of the impact identification, or mitigation measures, concerned ministry or department. Another is missing, sometimes even after the Ministry measure would be to hold regular review meet- of Environment, Science, and Technology (in- ings. These measures are expected to reduce cluding the Review Committee) has provided the time for clearance by approximately four comments and suggestions for improvements. months. This is reflective of the casual attitude of the sectoral agencies, which invest minimal efforts Monitoring and Enforcement: to complete the EIA as a procedural formality. Need for More Focused Attention Another reason for the delay is the time taken for administrative review processes in the 2.36 The Environment Protection Rules con- Ministry of Environment, Science, and Tech- tain provisions for environmental monitoring nology and in the sector agencies. Clearance and environmental auditing. However, the for hydropower projects seems to take longer rules do not explicitly define the roles and re- than for road projects because hydropower sponsibilities of the Ministry of Environment, projects undergo review at both the ministry Science, and Technology, or other ministries and department levels. with respect to these enforcement functions. While the Environment Protection Act does 2.35 Recently, the Ministry of Environment, include a section providing for environmental Science, and Technology has taken steps to inspectors in the Ministry of Environment, simplify the administrative requirements and Science, and Technology for environmental reduce the time taken for clearance without monitoring, it indicates, in this same section, compromising on compliance with legal provi- that concerned sector agencies are also re- sions or quality of the EIA report. One mea- sponsible for monitoring. This has led to con- sure would direct comments toward the proj- fusion; most sector agencies do not conduct 22 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS environmental monitoring, stating that it is for monitoring and enforcement; (b) dedi- the responsibility of the Ministry of Environ- cating resources to perform these functions, ment, Science and Technology. In addition, particularly for the Ministry of Environment, the Environment Protection Rules require Science, and Technology; and (c) developing a environmental auditing two years after imple- targeted and coordinated plan for environmen- mentation of a proposal has begun. However, tal monitoring among agencies. In addition, to date, no environmental auditing has been local governments and communities should be performed. utilized to support compliance monitoring. 2.37 In the review of the case studies, only two projects--Middle Marsyangdi Hydropower Harmonization with Donor Project and Tansen-Tamghas Road Project-- Requirements have been carrying out environmental moni- toring. In the Middle Marsyangdi Hydropower 2.39 Finally, the study also compared the en- Project, monitoring is being performed in vironmental safeguard policies of the World accordance with the environmental manage- Bank and the Asian Development Bank with ment plan that was presented in the EIA docu- the requirements of the Environment Protec- ment. In contrast, in the Tansen-Tamghas tion Act and Environment Protection Rules Road Project the environmental monitoring (see appendix E). This comparative analysis indicators that are being utilized differ from suggest that the current Government of Ne- those contained in the IEE report. In both pal policies generally comply with safeguard these projects, consultants have been retained requirements of the World Bank and the to ensure the monitoring of EIA recommen- Asian Development Bank with respect to the dations. However, the Middle Marsyangdi conduct of environmental assessment studies, YSIS Hydropower Project is also utilizing a Par- incorporation of mitigation measures, and ticipatory Environmental Impact Monitoring project planning, design, and construction. NAL Committee, which includes representatives However, there are major inconsistencies in A from local government, the local community, how EIA and IEE screening criteria are de- AL and other stakeholders. fined. Donor organizations primarily base cri- teria on the magnitude and the significance 2.38 The lack of monitoring by concerned level of environmental impacts. In Nepal the agencies and the Ministry of Environment, current practice is to base criteria on the size Science, and Technology makes it more likely or cost of the project. The Environment Pro- that instances of noncompliance with EIA and tection Act and Rules do not encourage the NVIRONMENT IEE recommendations during implementation use of strategic environmental assessments E stages will go undetected and unaddressed. In and the public participation provisions and Y addition, this can result in situations of no ac- monitoring systems envisioned in the legisla- countability should a project proponent make tion have not been effectively implemented. significant modifications in project design, and These gaps in policy and implementation OUNTR affect mitigation measures, after approval. Con- must be seriously addressed if Nepal's EIA sys- C sequently, priority attention should be given to tem is to be found in full harmony with donor ­ (a) clarifying agency roles and responsibilities requirements. AL EP N GROWTH AND ENVIRONMENT: ENSURING SUSTAINABLE DEVELOPMENT 23 Next Steps 2.41 As in many developing countries, the EIA system is the principal instrument for 2.40 The policy and implementation gaps in the ensuring environmental sustainability in EIA process have reduced the effectiveness of the development process in Nepal. Much of the EIAs and IEEs in ensuring that environmen- the potential for achieving environmental tal impacts from infrastructure development are outcomes will come from actions taken by minimized and mitigated. While some hydro- the sectors; mainstreaming environmental power and road projects have filed the EIA or concerns into sectoral policies and guidelines IEE report with due diligence, others have done is therefore essential. One way to do this is so more reluctantly, perceiving the EIA require- to utilize sector-specific guidelines for EIA ments as an unnecessary burden to growth and preparation and implementation, such as development rather than a sustainable tool to the environmental guidelines prepared for support it. In these cases, little attention is given hydropower projects. In addition, sectoral to addressing environmental concerns or to development policies should be reexamined incorporating them into the planning, design, to determine whether they have inadvertently or implementation of the project. In addition, established disincentives for improved en- there have been weaknesses in the monitoring vironmental management and how greater of compliance with EIA recommendations and incentives can be created to promote main- approvals by the Ministry of Environment, Sci- streaming of environmental considerations ence, and Technology and sector agencies. Rec- into the development process. There is also ognizing these weaknesses, the Ministry revised a need for training (possibly including ac- the Environment Protection Act and Rules re- creditation) on environmental impact analy- cently to improve EIA effectiveness (box 2.2). sis to EIA report preparers and orientation This effort is applauded and should receive to project developers and decision makers of priority attention. In particular, emphasis needs the concerned agencies about the benefits of to be placed on strengthening the screening cri- mainstreaming environmental management teria, project scoping, alternative analysis, and in sector operations in order to attain sustain- impact identification and evaluation. ability of investments. Box 2.2 Recent Efforts by the Ministry of Environment, Science, and Technology to Improve EIA Implementation Effectiveness · A policy decision has been taken by the Ministry to send comments and suggestions on the EIA directly to the proponent. The proponent can submit the revised report directly to the Ministry instead of going through the sectoral agency. · Preparation and publication of guides is being undertaken with assistance from the Royal Norwegian Government on (a) licensing and the EIA process; (b) EIA report approval process; (c) environmental management plan; (d) environmental monitoring; and (e) environmental auditing. · Revised terms of reference are being issued for several projects. · Amendments to Schedules 1 and 2 of the Environment Protection Rules are approved and have been published in the Nepal Gazette on August 20, 2007. · A policy decision has been taken by the Ministry to make the proponent bear the cost of public notice and the cost of the EIA report suggestion committee. · A study has been commissioned by the Ministry to introduce an accreditation process related to EIA preparation. · Ministry of Environment, Science, and Technology is pursuing environmental monitoring reports by project proponents in the spirit of the EPR 1997. · Procedures are being considered to undertake public disclosure of EIA-related decisions by the Ministry. Source: Personal communication with Batuk Uprety, Under-Secretary (Technical), Ministry of Environment, Science, and Technology, July 2007. 3 Urbanization and Service Delivery: Meeting the Population Pressures 3.1 While urbanization is a rela- tively new phenomenon in Nepal, the rate of urbanization, according to the 2001 census, is among the highest in South Asia (3.3 million people or 14.2% of the Nepalese population lived in 58 municipali- ties) (Central Bureau of Statistics 2002). Between 1991 and 2001 the municipal population increased by 94%, or 6.8% per year. Based on this, it is estimated that the total urban population in 2006 Rooftops of Kathmandu's Thamel region. Photo by Jason Maehl. was approximately 3.8 million of the total population of 25 million. The government predicts that by 2011, 24% 3.2 However, the rapid increase in urban pop- of the total population will be living in urban ulation is not matched by a similar increase in areas (NPC/MoPE 2003). This urbanization the provision of resources and knowledge to trend in Nepal is presented in table 3.1. effectively address the growing challenges of Table 3.1 Urbanization in Nepal Number of Urban population Urban population Average annual Year municipalities (millions) (%) increase (%) 1952/54 10 0.24 2.9 -- 1961 16 0.34 3.6 1.65 1971 16 0.46 4.1 3.23 1981 23 0.96 6.3 7.55 1991 33 1.70 9.2 5.89 2001 58 3.29 14.2 6.84 Source: Central Bureau of Statistics 2003. 25 26 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS urban environmental management. The World ago, problems associated with solid waste have Bank Report on Urbanization and Service worsened. On the other hand, while munici- Delivery in the Context of Decentralization palities have paid relatively little attention to (World Bank 2004) found that the population air quality and the issue does not rank as high pressures place enormous demands on housing in concern as other environmental problems, markets, infrastructure systems, and environ- such as solid waste and water pollution, the mental resources, and that the "Current urban levels of urban air pollution have risen and will land management and infrastructure service continue to rise. Finally, industrial pollution is policies and institutions are not positioned to an emerging area of concern, as the pace of in- meet the challenge, and need to be restruc- dustrial development in urban areas increases tured to avoid the worse case scenarios." without proper environmental management and monitoring. 3.3 For the purpose of this CEA, after exten- sive consultation with concerned government 3.4 Urban environmental issues also have to departments and key stakeholders, three areas be viewed within the context of the fiscal con- in urban environmental management were ditions faced by the municipal governments studied--solid waste management, air quality, and the environmental health implications and industrial pollution. Solid waste manage- for the urban population. For instance, some ment was chosen because in public opinion of the main factors preventing municipalities polls it is identified as the most pressing con- from delivering urban environmental services cern facing the general public. In a Central are the lack of funds and revenue generation, Bureau of Statistics survey in 1996, most urban their limited innovative financing, and the residents ranked solid waste as the number need to reduce unnecessary costs. One of the one environmental problem in their city (fig- most significant consequences of not manag- YSIS ure 3.1) (Central Bureau of Statistics 1997). ing the urban environment effectively is the Although this poll was conducted a decade intangible environmental health costs on NAL growth and development, especially for vul- A nerable populations such as children under AL five, women, the elderly, and the poor. There- Figure 3.1 Public Opinion on Main Environmental Problems in Urban Areas fore, understanding the broader context of fis- cal and environmental health costs can better inform decision makers about the integration Other of urban environmental management issues. Water Pollution 4% These issues are explored next in the chapter. 5% NVIRONMENT E Air Pollution 7% Solid waste Y 59% Achieving Financial Sustainability to Provide Urban Environmental Services Sewage 5% OUNTR 3.5 One of the overarching challenges facing C municipalities, whether it is in managing solid ­ Source: Central Bureau of Statistics 1997. waste, air quality, or industrial pollution, is the AL EP N URBANIZATION ANDSERVICE DELIVERY: MEETING THEPOPULATION PRESSURES 27 Figure 3.2 Trends in Municipal Revenue 2000­2005 3500 3000 2500 Nrs. 2000 Million 1500 1000 500 0 2000/01 2001/02 2002/03 2003/04 2004/05 Total Revenue Own Source Revenue Grants Source: ENPHO 2007. lack of adequate financial resources to provide grants accounted generally for 22% of the to- basic urban services. Most municipalities rely tal municipal budget. heavily on the local development fee, which will have to be phased out by 2013 because 3.6 The decentralization process in Nepal has it is considered a trade barrier by the World focused on devolving responsibilities to the Trade Organization.4 Other than the local de- local bodies, but not necessarily the resources velopment fee, sources of municipal revenue to take on these responsibilities. As effective include the house and land tax, business tax, urban environmental management programs vehicle tax, property rental, and fees or fines; will require sufficient and sustainable financial altogether these are termed "own source rev- resources for implementation, there is an ur- enue". Finally, there are government grants gent need to find creative revenue sources that on which the municipalities rely for fund- will support municipalities in delivering these ing. Despite the fact that municipalities' own programs. Some of the revenue-generating op- source revenue--property rentals and fees or tions to consider might include allowing inter- fines--is growing at about 7% per year, this governmental fiscal transfers, permitting local growth is not fast enough to replace the local governments to charge service fees or share development fee, and smaller municipalities in existing taxes, or increasing the tax rates. have an even more limited capacity to gener- ate revenue. While the municipal revenue has generally grown in the last five years, as 4This fee is collected from different custom points illustrated in figure 3.2, the local development of the country in addition to import customs by the central government, and it is redistributed to the fee accounted for more than 32% of the total 58 different municipalities on the basic of specific revenue for municipalities in 2004/05 and criteria. 28 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS None of these options are politically easy, but of pain and suffering from premature death with the phasing out of the local development and disease. fee, achieving financial sustainability is essen- tial for ensuring that basic municipal services 3.9 Overall, the analysis shows that Nepal's can be provided in the future. economic costs associated with lack of water and sanitation, and indoor and urban air pollution, amounts to US$258 million--or Environmental Health 3.5% of the country's GDP (table 3.2). This is comparable in range to other valuation stud- 3.7 Environmental health issues, such as in- ies on environmental health carried out in door and urban air pollution and inadequate the South Asia region. The detailed analysis water and sanitation, are of growing concern of environmental health and related costs for in Nepal. With expanding populations and Nepal is found in appendix F; the methodol- rapid urbanization, demand for environmen- ogy used to estimate environmental health tal services such as clean water, proper sanita- costs is set out in appendix G. The analysis in tion, and cleaner fuels is outstripping supply. this chapter draws on the data contained in As a result, vulnerable subgroups in the Nepali those appendices. population continue to fall sick and die from largely preventable diseases such as diarrhea 3.10 Urban environmental health. Rapid and and respiratory infections. haphazard urbanization has been exerting immense pressure on Nepal's urban environ- 3.8 Sickness and deaths attributed to environ- ment in recent years, particularly with the mental risk factors impose a significant eco- growth in the number of slum and squatter nomic burden on Nepal's economy. The costs settlements, with dismal living conditions, YSIS of these environmental problems have been crowded poor-quality housing, and minimal estimated in this report to help policy makers access to water and sanitation (ADB/ICIMOD NAL in Nepal appreciate the magnitude of these 2006). With weak capacities for environmen- A issues and better integrate environmental tal service delivery coupled with inadequate AL health considerations into economic develop- budgets, municipalities are struggling to keep ment decision making. These costs not only pace with the demand. As a result, many cities include the medical costs of treatment and in Nepal are facing environmental problems lost productivity due to sickness and care-giv- related to solid waste management, waste- ing, but also provide an estimate of the value water management, and drainage, and the NVIRONMENT E Table 3.2 Aggregate Environmental Health Costs for Nepal Y US$ (millions) % of GDP Indoor air pollution $147.3 ($110.4­$182.3) 2.0% (1.49­2.47%) OUNTR Lack of water and sanitation $89.2 ($78.4­$100.4) 1.21% (1.06­1.36%) C Urban air pollution $21.1 ($17.7­$24.6) 0.29% (0.24­0.33%) ­ Total $258 ($206.6­$307.3) 3.49% (2.79­4.16%) AL EP N URBANIZATIONAND SERVICE DELIVERY: MEETINGTHEPOPULATION PRESSURES 29 Table 3.3 Sanitation Coverage in Nepal: Differing Estimates Urban Rural Total Source % of population Central Bureau of Statistics 2002 78 41 47 UNDP/Government of Nepal 2002 80 25 30 UNDP/Government of Nepal 2005 81 30 39 WaterAid Nepal 67 19 27 Central Bureau of Statistics 2004 -- -- 39 -- Not available. consequent health impacts from exposure to pared, providing an indication of the success these risks. of programs and policies aimed at improving environmental health in Nepal's urban areas. 3.11 For urban areas in Nepal, the analysis estimates environmental health costs to be Inadequate Water and Sanitation nearly US$51.2 million in 2005, which is 0.7% of Nepal's GDP. While these estimates appear 3.12 Nepal has the poorest drinking water and to be relatively low (when compared to rural sanitation coverage in South Asia. Varying esti- environmental health), growing urbaniza- mates of the coverage, using different criteria, tion is expected to translate into increasing make it more difficult to ascertain the true ex- environmental problems and accompanying tent of this problem (table 3.3). On the whole, disease burdens, especially for the urban poor. water and sanitation access figures for urban Environmental problems are often more criti- areas are seen to be much higher than those cal in larger municipalities; Kathmandu, for in rural areas. However, these spatial averages example, is suffering from extremely poor air for water and sanitation coverage hide the in- quality, severe degradation of rivers, and im- tra-urban inequalities that exist within Nepali proper management of waste. With increasing cities and towns. urbanization, smaller municipalities will also soon face major problems of environmental 3.13 Water coverage and quality. Most urban management and they have even less resources centers in Nepal have piped water supply sys- to deal with these challenges. Therefore, urban tems. According to the 2001 census, 67% of the environmental health is an important issue that urban population has access to piped drinking needs to be addressed immediately to improve water, while 26% depends on handpumps and the quality of life of a growing urban popula- tubewells (Central Bureau of Statistics 2002). tion and boost the economic productivity of Even within urban areas, there is a significant urban centers. The economic costs attributed variation in coverage: a 2002 survey of nine to environmental health risks for urban areas municipalities outside Kathmandu showed presented in this report then set a benchmark piped water coverage varying from 7% to 65% against which future estimates can be com- of households (ADB/ICIMOD 2006). In addi- 30 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS tion, the demand for drinking water in urban age systems, 55% discharge into septic tanks, areas far exceeds the available supply. For and the remaining 10% into open drains and example, in the Kathmandu Valley, the water ditches (FCM/MuAN 2002). There are five demand is over 200 million liters per day, but municipal wastewater treatment plants in the the Nepal Water Supply Corporation is able to Kathmandu Valley to treat a small portion of supply only about 90 million liters per day dur- the wastewater generated within the valley, but ing the dry season, and even this is irregular. among these, four are either not functioning or only partially functioning. 3.14 The quality of drinking water from both surface water and groundwater sources is also 3.16 Health impacts. In urban areas in Nepal, of increasing concern in urban Nepal. The contamination of drinking water with fecal co- Bagmati River, which is the major surface wa- liform bacteria is widely prevalent, caused by ter body for the Kathmandu Valley, is heavily inadequate protection of water source areas, polluted, with some 21,000 kilograms of do- open defecation in water sources, poor protec- mestic sewage discharged into its waters daily tion of waterways, and poor maintenance lead- (ADB/ICIMOD 2006). Additionally, while ing to cross-leakage of sewers and water pipes. groundwater levels in the valley are dropping Diarrheal diseases, intestinal worms, gastritis, ty- due to overextraction for drinking water pur- phoid, and jaundice are the top five water-borne poses, poor sewage and feces disposal practices diseases and constitute 9% of all outpatient vis- are also contaminating the groundwater aqui- its in Nepal's health institutions (Department fers. As a result, many Kathmandu residents of Health Services 2006). Poor sanitation and depend on alternative means, such as private improper hygiene practices (such as poor hand dug wells and tankers, to meet their water and food hygiene behaviors) also lead to both needs. Although the Nepal Water Supply Cor- skin and diarrheal diseases. YSIS poration has water treatment systems in the Kathmandu Valley, the water that reaches the 3.17 Economic damage. Inadequate access NAL consumers is often contaminated. According to water and sanitation leads to premature A to studies done by ENPHO, almost half of the deaths and disease, which in turn impose costs AL water that is supplied is deficient in chlorine on Nepal's economy. These costs include the and is microbially contaminated. expenses incurred to treat illness from dis- eases attributed to poor water and sanitation. 3.15 Sanitation. Urban sanitation, including Other costs include lost productivity from access to toilets, wastewater management, when adults fall sick and stay home from work, and drainage, is a major problem in all mu- or when primary care-givers have to take care NVIRONMENT nicipalities in Nepal. Only 76% of the urban of sick children (and potentially lose wages). E population has access to toilets, while 24% Furthermore, the pain and suffering from Y uses open spaces such as riverbanks and fields premature death and illness is also valued (by for defecation. Even among people who have calculating the burden of disease in Disability toilets, many practice open defecation for Adjusted Life Years (DALYs), and costing these OUNTR convenience and maintenance cost reasons. DALYs at the GDP per capita). Only diarrheal C In terms of feces disposal, it is estimated that disease was included in these cost calculations, ­ 35% of the toilets are linked to drainage or sew- which therefore represent an underestimate AL EP N URBANIZATION AND SERVICE DELIVERY: MEETING THE POPULATION PRESSURES 31 of the total costs attributed to inadequate wa- 3.20 Innovations in technology and service ter and sanitation in Nepal. delivery in urban areas are working in tan- dem to find new ways to access water, improve 3.18 The analysis shows that in urban areas in water quality, and dispose of feces. For ex- Nepal, every year, about 175 children under the ample, ENPHO is working with NGO Forum age of five are estimated to die due to lack of wa- for Urban Water and Sanitation to promote ter and sanitation. Nonfatal cases of diarrhea in rainwater harvesting in water-stressed areas, urban areas have been estimated to be just over such as Kathmandu. In sanitation technology, 1 million per year in children and about 1.8 more than 100 Ecosan toilets--dry toilets that million in adults. The total number of DALYs conserve water, and separate out feces to be lost per year is about 6,400. The monetary es- used as organic fertilizer--have been adopted timate of these health impacts is obtained by in the peri-urban areas of Kathmandu. For valuing a DALY as equivalent to GDP per capita household water treatment in urban areas, (US$272). This translates into an annual cost filters, chlorine disinfection solutions (such of about US$12.2 million in 2005 (table 3.4). as Piyush), and solar disinfection technologies are being promoted. 3.19 Financing and technology options. Drink- ing water and sanitation projects have been Urban Air Pollution prioritized by the Government of Nepal. One such ambitious project to supply drinking wa- 3.21 Air pollution is emerging as a major ter to the Kathmandu Valley is the Melamchi problem in Nepal's urban centers, particularly inter-river basin transfer, being undertaken by in the Kathmandu Valley and large cities. The the government. In urban as well as rural areas, Kathmandu Valley's bowl-shaped topography, drinking water supply and sanitation projects which restricts air movement and traps pollut- are being subsidized by the Fund Board, as well ants, and its climate, make it especially vulner- as through a Sanitation Revolving Loan Fund. able to air pollution. This problem is further Nepal Water for Health (NEWAH) programs compounded by the rapid and haphazard provide varying amounts of subsidies for differ- growth leading to dense settlements, the ent drinking water and sanitation systems, for mushrooming of polluting industries, a poor example gravity flow schemes (80%), tubewells road network, and a largely unmanaged trans- (85%), and school latrine projects (87%). portation system. Various studies and the data Table 3.4 Estimated Urban Health Costs Due to Inadequate Water and Sanitation Type of costs Est. cost (US$) Costs of diarrheal deaths potentially averted by water supply/sanitation interventions 3,388,683 Costs of diarrheal cases potentially averted by water supply/sanitation interventions 269,669 Costs of illness (medical costs + lost productivity costs) 8,542,690 Total costs due to inadequate water supply and sanitation 12,201,042 Total costs as % of GDP 0.17% 32 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Figure 3.3 Concentration of Particulate Matter 350 300 ) 3 250 200 (micrograms/m 150 10 PM 100 50 0 `02 `03 `03 `03 `03 `04 `04 `04 `04 `05 `05 `05 `05 Nov Feb May Aug Nov Feb May Aug Nov Feb May Aug Nov Month Putali Sadak TU Kirtipur Patan Bhaktapur Thamel National Std. Maysyagaon coming from Kathmandu's six monitoring valley. Resuspended dust, which is also caused stations show that Kathmandu's air pollution, by vehicles, accounted for 25% of the PM10, and particularly the concentration of particulate brick kilns were responsible for 11% of total matter (PM), is already several times higher PM10 emissions. Himal Cement was the main than national (figure 3.3) and international industry causing air pollution in Kathmandu, YSIS standards. Similarly, the few sporadic studies but it has now been closed. Air pollution from done in other urban areas of Nepal indicate vehicles is generally due to poor fuel quality, NAL that air pollution is also a problem in other poorly maintained vehicles, inadequate trans- A cities, such as Birgunj and Biratnagar. Studies port-related infrastructure, and lack of proper AL have also indicated that the high pollution land use and transport planning. A combina- level, particularly in the dry season, is having tion of all of these factors is causing the air serious adverse impacts on the health of the quality to deteriorate in Nepal's cities. citizens and the economy as a whole. 3.23 Health impacts. High levels of exposure to 3.22 The main sources of air pollution in ur- air pollutants produce symptoms of both upper NVIRONMENT ban areas are vehicles, industries, resuspended and lower respiratory tract irritation and can re- E road dust, and burning waste. An air pollution sult in severe respiratory diseases, such as asth- Y inventory done in the Kathmandu Valley in- ma and chronic bronchitis. Air pollutants may dicates that the main sources of air pollution also affect other systems in the body, such as the in the valley are vehicle emissions, road dust, cardiovascular system and the central nervous OUNTR and emission from brick kilns. In 2005, vehicle C emissions were responsible for 37% of the total 5 ­ PM10 is particulate matter of less than 10 microns PM10,5 the main source of air pollution in the diameter. AL EP N URBANIZATION AND SERVICE DELIVERY: MEETING THE POPULATION PRESSURES 33 system. In Nepal's urban areas, especially in the restricted activity days, and emergency visits, Kathmandu Valley, outdoor air pollution typi- have been assessed. In the absence of proper cally consists of a complex mixture of multiple data on treatment costs, informed estimates pollutants including suspended particulate mat- have been provided by medical experts in ter (dust, fumes, mist, smoke) and gaseous pol- Kathmandu. lutants (sulfur compounds, carbon monoxide, nitrogen compounds, organic compounds such 3.26 Urban air pollution in Nepal is estimated as hydrocarbons, volatile organic compounds, to have caused nearly 7,000 premature deaths and polycyclic aromatic hydrocarbons). in 2005, and about 2,106 new cases of chronic bronchitis. Annual hospitalizations due to ur- 3.24 No long-term epidemiological studies have ban air pollution are estimated at 4,764, while been conducted to assess the health impacts of emergency room visits are at around 93,400. As- Kathmandu's air pollution, but a few studies sessing these health impacts conservatively by have undertaken a one-time medical examina- using GDP per capita (US$272), this translates tion of an exposed population or have used into an annual cost of about US$19 million. dose-response relationships to indicate that the health impacts of Kathmandu's air pollution 3.27 In addition, the costs of illness may be can be quite severe. Records from major hospi- calculated based on estimates of treatment tals in the Kathmandu Valley also indicate that for chronic bronchitis and other morbidity, the number of chronic obstructive pulmonary obtained from medical experts in Kathmandu disease (COPD) inpatients in the Kathmandu and based on average treatment costs at pri- Valley hospitals has increased significantly. vate hospitals (to get real costs, as opposed to subsidized costs at public hospitals). The cost 3.25 Economic damage. Increasing air pollu- of illness burden related to hospitalization tion in Nepal's urban areas, especially in the and outpatient visits from exposure to par- Kathmandu Valley, is imposing a negative eco- ticulate matter is estimated to be about US$2 nomic impact from premature deaths, illness, million. Altogether, the total economic costs medical costs, and lost productivity. Costs of of urban air pollution in Nepal are estimated health impacts from particulate matter, includ- at about US$21 million, or 0.29% of Nepal's ing premature mortality, hospital admissions, GDP (table 3.5). Table 3.5 Estimated Health Costs Due to Urban Air Pollution in Nepal Type of cost Est. cost (US$) Costs of premature mortality from particulate matter (PM2.5) 15,186,923 Costs of morbidity endpointsa from particulate matter (PM10) 3,903,578 Costs of illness (medical costs + lost productivity costs) 2,012,000 Total costs attributed to urban air pollution 21,074,932 Total costs as % of GDP 0.29% a. Includes chronic bronchitis, hospital admissions, emergency room visits, restricted activity days, lower respiratory illness in children, and respiratory symptoms. 34 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS 3.28 The Nepal Government has had some focused mostly on rural areas. Acute lower re- success in initiating programs to address the spiratory infection (LRI), chronic obstructive urban air quality problem in Kathmandu, pulmonary disease (COPD), and tuberculosis notably the ban on the import of new three- are the three most common diseases associat- wheelers and two-stroke two-wheelers, new ed with indoor air pollution in Nepal. These tailpipe emission standards and inspections, mainly occur due to prolonged exposure to and the import of unleaded fuel. With the smoke and dust (ADB/ICIMOD 2006). In support of international agencies and na- Nepali cities and towns, about 35.4% of the tional NGOs, Kathmandu now has a good population still uses biomass fuels for cook- air quality monitoring system. More recently, ing, resulting in exposure to smoke and con- with the closure of the Himal Cement factory, sequent respiratory infections (Central Bu- and the ban on polluting Bull's trench brick reau of Statistics 2004). Another major source kilns, the air pollution level around Kathman- of indoor air pollution is tobacco smoking, du has begun to stabilize over the last three which further compounds the health impacts years. However, the rapid growth in traffic of biomass use. congestion and very high levels of PM10 in the valley's air clearly indicate the need for more 3.31 Economic damage. Results from the action. valuation analysis reveal that in 2005 indoor air pollution led to about 336 child deaths in urban areas of Nepal. In terms of morbid- Indoor Air Pollution ity in young children (LRI) and the impact 3.29 A large majority of Nepali households on women (LRI and COPD), a total of 2,990 use biomass for cooking, especially firewood DALYs are lost to indoor air pollution every and agricultural residues. The smoke created year. With a value per DALY assigned to be YSIS from burning these fuels causes increased equivalent to GDP per capita of US$272, this respiratory infections and subsequent deaths, translates into an annual cost of about US$81 NAL especially among young children and women. million. The total cost of indoor air pollu- A However, most of the use of biomass for cook- tion is therefore calculated to be US$17.9 AL ing is concentrated within rural areas, with million, equivalent to 0.24% of Nepal's GDP increased usage of cleaner fuels, such as liq- (table 3.6). uefied petroleum gas (LPG), being found in urban areas, including the Kathmandu Valley. 3.32 Numerous rural energy programs have This makes indoor air pollution primarily a been launched and are currently ongoing in rural issue; however, the growing numbers Nepal; their goal is to provide the rural areas NVIRONMENT of urban poor ­especially those living in city with a broad range of technology options and E slums--remain exposed to smoke from tradi- service delivery approaches. These broadly Y tional stoves, poor ventilation, and congested include rural energy access programs, pro- settlements. grams on improved cookstoves and biogas, and renewable energy projects. Recognizing OUNTR 3.30 Health impacts. Information on indoor the rural focus of these energy programs, it C air quality through exposure monitoring in is also important for the government to con- ­ Nepal is limited, and the few studies have sider energy options for the growing numbers AL EP N URBANIZATION AND SERVICE DELIVERY: MEETING THE POPULATION PRESSURES 35 Table 3.6 Estimated Urban Health Costs Due to Indoor Air Pollution in Nepal Type of cost Est. cost (US$) Costs of LRI deaths from indoor air pollution (children < 5 and women) 8,516,718 Costs of COPD deaths from indoor air pollution (women > 15) 1,954,894 Costs of LRI/COPD cases from indoor air pollution (children < 5 and women) 1,707,075 Costs of illness (medical costs + lost productivity costs) 5,671,067 Total costs due to indoor air pollution 17,849,754 Total costs as % of GDP 0.24% of the urban poor in Nepal, with appropriate Solid Waste Management subsidies and access to cleaner fuels and im- Legacy of Centrally Driven Solid Waste proved cookstoves. Management Promotion 3.34 In 1980, a major project was launched with Next steps bilateral assistance to reorganize and manage 3.33 Children and the poor living in cities and solid waste in the Kathmandu Valley. Although towns in Nepal continue to fall sick and die the project was successfully implemented and from largely preventable diseases attributed to had several strengths, including efforts to pro- inadequate coverage and quality of water and mote recycling and public awareness, it relied sanitation facilities, and indoor and urban air on a centralized waste management system. The pollution. While urban environmental health project created the Solid Waste Management costs represent a smaller burden on Nepal's and Resource Mobilization Center to manage economy (than the rural equivalent), these the solid waste problem and did not work direct- costs are expected to grow if current trends ly with the municipalities, although solid waste in urbanization and service delivery con- management was a statutory responsibility of tinue. While the government is making good the municipalities. While there were advantages progress on interventions addressing these of economies of scale in a centralized system, environmental health risks, much more atten- there were a few drawbacks. These included (a) tion and resources for water supply coverage, a lack of municipality capacity building for solid drinking water quality, proper waste disposal, waste management; (b) the absence of a formal- and improving air quality are needed to meet ized institutional structure for continuing a cen- Nepal's MDGs. Within the urban space, this is trally managed solid waste management system; especially important for children under five and (c) an overdependency on international years of age, women, the elderly, and slum expertise, machinery, and finance. dwellers. In addition, capacities and budgets of municipalities need to be enhanced and 3.35 Since the project ended, the role of mu- strengthened in order for them to effectively nicipalities in solid waste management has in- address these environmental health concerns creased and in 1999, with the introduction of in the long run. the Local Self-Governance Act, municipalities 36 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS in the Kathmandu Valley took over all solid waste management respon- sibilities from the Solid Waste Man- agement and Resource Mobilization Center. The role of the Center, which still lacks clarity, was limited to developing new landfill sites and co- ordinating matters between munici- palities or between municipalities and local communities living around landfill sites. Photo by Sumith Pilapitiya, Lead Environmental Specialist, South Asia 3.36 Most recently, the Japanese Gov- Sustainable Development Department, The World Bank. ernment has championed the Clean Kathmandu Valley study, whose ob- jectives are to formulate action plans for recy- development of landfills; relatively little atten- cling and waste collection in the respective mu- tion was paid to the issue of waste processing nicipalities and to pursue technology transfer and recycling. At present, less than half of for solid waste management in the Kathmandu the solid waste generated gets collected and Valley. In order to benefit from economies of almost all of the collected waste is dumped scale, the study has proposed a facility develop- haphazardly. According to a survey done by ment plan within an umbrella concept for solid the Solid Waste Management and Resource waste management. The Kathmandu Valley Mobilization Center, 21 municipalities dump would share resources for the development of their waste on riverbanks, 19 municipalities YSIS solid waste treatment and for disposal facilities dump waste in open piles, and 10 municipali- and establish an institutional arrangement with ties have some sort of dumping site. The coun- NAL the Solid Waste Management and Resource try has only three engineered landfill sites, one A Mobilization Center and the municipalities to for Kathmandu, one for Pokhara, and one for AL coordinate its operation. The Clean Kathman- Tribhuwannagar. Notwithstanding the prevail- du Valley study project, like its predecessor, has ing poor practices, it is widely recognized that proven to be very successful, but there are some the potential for using solid waste as a resource weaknesses that will require municipality atten- and for improving waste management systems tion in the future, particularly with regards to in the country is high. sustainable financing of solid waste manage- NVIRONMENT ment service provision. 3.38 Although most of Kathmandu's waste can E be recycled, and the government's policy is to Y maximize recycling, very little of Kathmandu's Waste Processing: Need for Greater waste is actually being recycled. Since recycling Collection Efficiency and Recycling is economically driven, the recycling rate is par- OUNTR Alternatives ticularly low for those materials whose market C 3.37 The Clean Kathmandu Valley study fo- value is low. This includes organic waste, some ­ cused primarily on technology transfer and types of plastics, and broken glass. Organic AL EP N URBANIZATION AND SERVICE DELIVERY: MEETING THE POPULATION PRESSURES 37 waste recycling is a major concern because more stable and less polluting residue for final few private entrepreneurs are interested in disposal. Studies have shown that composting this waste stream as it is difficult to handle and of the organic fraction of the waste results in the market value for the finished product is a 90% decrease in the pollution potential of very low. Furthermore, because organic waste leachate in the resulting residue. This would en- is by far the largest component of the waste able landfill sites for residue disposal to be con- stream, and it tends to cause problems such structed with a lower level of containment than as smell and the generation of leachate and that required for sites where mixed municipal methane in landfills, initiatives for expanding solid waste is landfilled. Since the construction organic waste recycling are urgently required. of disposal sites for the residue would result in However, because almost two thirds of the significant cost savings without compromising waste that is generated in Nepal is organic, environmental quality, municipalities should composting of this waste could significantly be encouraged to engage in composting not reduce the cost and environmental impacts of only as a resource recovery measure but also waste management. There is a great potential to reduce capital costs of disposal site construc- for using this organic waste as a resource, as tion. Although odor problems are traditionally most of this waste is recyclable by using simple associated with municipal solid waste compost- technologies. In many places municipalities ing plants, there are plants in India and Sri are now promoting household composting, Lanka operating successfully with no odor community composting, and recycling, to a problems, which demonstrates that compost certain extent. For example, Kathmandu and plants can be operated in such a way that they Lalitpur municipalities are providing compost are odor free. bins at subsidized rates and providing regular training to community groups, while Kirtipur Limited Financial Resources: Exploring has initiated a program to collect recyclable New Mechanisms to Ensure Financial plastics from households. These innovative Sustainability programs are important in reducing the amount of municipal solid waste requiring 3.40 The Clean Kathmandu Valley project as- disposal and need to be further promoted and sisted in the development of the Sisdol landfill expanded. The national government, particu- site as an engineered site for the disposal of larly through the Solid Waste Management solid waste. In the process, it has significantly and Resource Mobilization Center and the Ministry of Local Develop- ment, should assist the municipali- ties in this process. 3.39 Organic waste is also the main component in the waste stream that contributesmostsignificantlytowards the pollution potential of the leach- ate. Stabilization of organic waste Leachate pond at Sisdol Landfill. Photo by Sumith Pilapitiya, Lead Environmental through composting will result in a Specialist, South Asia Sustainable Development, The World Bank. 38 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS raised the cost of solid waste management in mately US$35.50 per ton on solid waste man- Kathmandu because of the high transporta- agement, which can be considered on the high tion costs related to the Sisdol landfill site. Un- side even for some developed countries with fortunately, the project did not address how to much better and sophisticated waste manage- identify and implement measures to maintain ment systems. This shows that municipalities the site and to reduce the overall cost of solid such as Kathmandu Metropolitan City may waste management. have opportunities for improving their solid waste management by better or more efficient 3.41 There is a critical need to find financially allocation of the existing resources within the sustainable long-term solutions for waste man- different units of operation that comprise the agement. The five municipalities in the Kath- solid waste management system. mandu Valley together spend approximately Nrs. 235.55 million (US$3.2 million) annually 3.42 Street sweeping and waste collection on solid waste management and Kathmandu together form the largest expense for munici- Metropolitan City alone spends approximate- palities. Therefore, these activities need to be ly 23% of its budget on solid waste manage- made more efficient and cost effective. Simi- ment. With the growing amount of waste gen- larly, as the cost of secondary transportation erated and the rising cost of salaries and fuel has gone up significantly with the operation associated with waste collection and disposal, of the Sisdol landfill, serious efforts need to be the costs of solid waste management are in- made to reduce the amount of waste requir- creasing. With the high cost of operation and ing landfilling. There are several options to maintenance, municipalities not only need reduce solid waste management costs through to reduce solid waste management costs but improvements in collection efficiency and also to explore mechanisms that would raise more revenue generation. On the collection YSIS revenues to provide financial sustainability in efficiency side, one option to reduce cost is the future. There may be opportunities for to promote source separation and household NAL optimizing the use of financial resources that composting. It is estimated that the cost of A are being acquired at present. In 2004/05, waste collection per household can be reduced Kathmandu Metropolitan City spent approxi- AL from Nrs. 78 to Nrs. 19 by introducing source separation and household compost- ing (Bhattarai 2003). At present, Kathmandu Metropolitan City is promoting household composting by selling compost bins and vermi NVIRONMENT compost kits at subsidized rates. E While this program is an excellent Y first step, Kathmandu Metropolitan City should be more aggressive in expanding its program to promote OUNTR household composting. This would C require the continuation of its subsi- ­ Vermi composting and compost chamber at Teku, a waste transfer station in Kath- mandu. Photo by S. Pilapitiya dy program, together with increased AL EP N URBANIZATION ANDSERVICE DELIVERY: MEETING THE POPULATION PRESSURES 39 public awareness, marketing, and after sales about Nrs. 50 million per year from this tax, service. The potential for a centralized or which is passed on to three DDCs within the semicentralized composting facility within the Kathmandu Valley. However, the revenue col- Kathmandu Valley or at the transfer station lected is not spent on solid waste management- should be explored as a means of reducing related activities. At a minimum, the tax rev- transportation costs of waste disposal at the enues should target the improvement of solid Sisdol landfill site. Since this would result in waste management activities in the municipali- a reduction of up to 60% of the waste requir- ties either by expanding existing activities or ing final disposal, there could be significant by introducing new recycling and composting cost savings in transportation costs. While it programs. Alternatively, the scrap tax should is well known that finding adequate land for be repealed and substituted with tax incentives centralized or semicentralized composting to encourage further recycling and to promote facilities within the Kathmandu Valley is dif- new market opportunities. ficult due to population density, considering the potential for transportation cost savings, 3.45 Utilization of the private sector in waste this option should be seriously looked at prior collection can also reduce municipality costs. to rejection. Private sector operators are generally more ef- ficient than the municipalities and if they are 3.43 At present, Kathmandu Metropolitan allowed to collect fees for their services, experi- City has not done much to facilitate the col- ence has shown that they can provide efficient lection of inorganic recyclable waste, items services to the municipal residents and, at the such as metals, plastics, paper, and glass that same time, ease the administrative and finan- are being separated from the waste stream cial burden to the municipality. Private sector by scavengers and iterant waste buyers. It is involvement in waste collection has been tested estimated that this informal sector of waste in several Kathmandu Metropolitan City wards pickers is contributing Nrs. 371 million annu- and has resulted in a one third reduction in ally to national income and providing employ- the number of municipal staff required for ment to 6,000 people through the collection this service. It is projected that if this model and selling of recyclable materials. A formal is used in 60% of the municipalities and 40% mechanism of source separation is needed as a of the waste is taken to the Balaju transfer sta- means to reduce the amount of waste entering tion rather than to the Teku transfer station, the landfill. Source-separated collection is not Kathmandu Metropolitan City could save Nrs. only an efficient way of collecting recyclable 83.7 million or 36.3% of the total cost of solid materials, but it can also prevent the contami- waste management. However, private sector nation of these materials and thus raise their participation should be formalized. The service market value. provider should be chosen through a competi- tive selection process, and the service should 3.44 On the revenue side, at present the gov- be managed through contract documents with ernment is levying a scrap tax on people who performance standards and penalties for non- collect recyclable materials. This could in fact compliance. The first step in this direction is serve as a disincentive to recycling. The tax the preparation of model contract documents rates are high and the government collects for use by all municipalities. 40 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Limited Landfill Capacity: in costs for the public. The project could also Exploring Alternatives be developed as a Clean Development Mecha- nism project in order to mobilize additional 3.46 Currently, wastes from Kathmandu and resources.6 This would also address the prob- Lalitpur are being landfilled in Sisdol, which lem of final waste disposal and would lower is 28 kilometers from Kathmandu. Because the cost of waste management further, ad- of the long hauling distance, the cost of solid dressing two of the most pressing solid waste waste management has increased significantly management problems in Nepal. in the past few years. With the Sisdol landfill expected to be filled in less than two years, a 3.48 However, at this point it appears that the new solution needs to be developed urgently. Sisdol landfill site may reach capacity before a The government is currently conducting an suitable alternative is in place. Therefore, while EIA of the Banchare Danda landfill located longer-term options are being debated and about 2 kilometers west of Sisdol. This assess- evaluated, immediate steps have to be taken ment has to be done quickly and then other to ensure that the life of the Sisdol landfill site options also need to be established, especially can be extended, in the interim. An option for since the Banchare Danda landfill will be very extending the life of the Sisdol landfill is to com- costly to operate. Small municipalities such as post the waste as a volume reduction and waste Bhaktapur and Madhyapur Thimi are unlikely stabilization measure so that the volume of waste to be able to afford to take their waste to this requiring disposal will be less than 50% of what landfill, at least in the short to medium term. is disposed of at present. A second option worth considering is to redesign the final profile of the 3.47 There are several landfill alternatives to existing landfill site to be compatible with the Banchare Danda. Among these, one option surrounding terrain, which is hilly. This option would be to establish a compost plant and a YSIS could increase the volume of void space from the landfill at Taikabu, east of Bhaktapur. This site present design volume quite significantly. These has been identified as a good site for a land- NAL options should be considered immediately, pref- A fill and having a compost plant there would erably in combination, so that the life of the Sis- bring several benefits, such as a reduction in AL dol landfill can be extended until a longer-term the cost of waste management, a reduction in solution is agreed upon and available for use. the capital and operations cost required for landfill, a reduction in the landfill's environ- mental impacts, an increase in the life of the Next Steps landfill, and benefits for local communities 3.49 Since financial sustainability is the key to in terms of jobs and compost availability. The NVIRONMENT successful solid waste management programs in E investment requirements and risks can be significantly reduced by involving a private Y company in developing the compost plant. 6The Clean Development Mechanism "is an arrange- Based on the experience of the private sector ment under the Kyoto Protocol allowing industri- in waste collection in the Kathmandu Valley, alised countries with a greenhouse gas reduction OUNTR commitment (called Annex 1 countries) to invest in C the cost of operating the compost plant could projects that reduce emissions in developing coun- ­ be significantly lower than if operated by the tries as an alternative to more expensive emission public sector, resulting in an overall reduction reductions in their own countries" (Wikipedia). AL EP N URBANIZATION ANDSERVICE DELIVERY: MEETING THEPOPULATION PRESSURES 41 municipalities, the Government of Nepal should clearly shown its benefits in the Kathmandu immediately initiate a program to assist in explor- Valley. A more organized and formal structure ing options for revenue enhancement. This is to further encourage private sector participa- especially urgent as municipalities will be losing tion is urgently needed to maximize the benefit the local development fee by 2013. The heavy from private sector involvement. For this, the reliance of municipalities on the local develop- preparation of model contract documents for ment fee requires urgent action to ensure that use by municipalities is urgently needed. The there will not be a breakdown or a significant re- alternatives suggested in this report for the duction in the quality of local service provision development of future landfill sites for waste in 2013. The present costs to most municipali- disposal should be considered by the govern- ties in the Kathmandu Valley show that there are ment based on a cost-benefit analysis. Large- opportunities for improving solid waste manage- scale composting of the organic fraction of the ment by better or more efficient allocation of waste stream should be seriously considered, the presently used resources. This is an essential as it will not only reduce the quantity of waste first step to ensure that improvements in solid requiring disposal, but it will also reduce the waste management are sustainable. Municipali- level of containment required at the landfill ties should also seriously consider user charges site. At the same time, immediate steps should as an alternative, as residents in certain areas are be taken to increase the life of Sisdol landfill already paying for waste collection. site, such as composting the waste to reduce the volume requiring disposal and reengineering 3.50 Waste management costs can be reduced the final profile of the landfill to accentuate the by source separation and home composting surrounding terrain, as the implementation of programs, as shown by Bhattarai's studies in any of the desired longer-term alternatives for 2003. A concerted effort to introduce home waste disposal will take much longer than the composting in residential areas, where space projected life of the Sisdol site. is not a constraint, will also reduce the overall costs of waste collection, transport, and dis- posal. The scrap tax is a serious disincentive Urban Air Quality Management to the increase of waste recycling in the valley. Air Quality Management: Policy and Furthermore, the funds collected by the tax are Institutional Framework not earmarked to improve solid waste manage- ment.TheGovernmentofNepalshouldexplore 3.51 One of the primary constraints in air qual- ways of ensuring that this tax does not serve as a ity management in Nepal has been the lack of disincentive to recycling. Considering the pres- clear and coordinated policy and an effective ent expenditures in managing municipal solid institutional framework for addressing the main waste in the valley, incentives to encourage re- drivers and impacts of poor air quality manage- cycling and to expand market opportunities for ment. While the Environment Protection Act recycled products are imperative. If the scrap and Environment Protection Rules provide legal tax is to be continued, a mechanism for divert- authority to prevent and control pollution that ing at least a portion of the collected revenue may cause significant adverse impacts on the en- for improving solid waste management should vironment and public health, the law is generic be explored. Private sector participation has and does not specifically address air pollution. 42 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS There are standards for vehicle emissions, but are made. Also required are serious commit- there are no ambient air quality standards that ment from the government and initiatives from exist and are available for enforcement. the Nepal Oil Corporation to promote cleaner fuels such as liquefied petroleum gas, low-sulfur 3.52 The Ministry of Environment, Science, and diesel and ethanol-blended petrol. Technology has the environmental responsibili- ties under the Environment Protection Act and 3.54 Similarly, the Department of Transport Rules, but there are also several sectoral agen- Management, which falls under the Ministry of cies with roles and responsibilities for managing Labor and Transport Management, is respon- critical aspects of urban air quality. Currently, the sible for registering vehicles, conducting fitness main air quality management work being done tests on vehicles, conducting emission tests on by the Ministry is the operation of the six moni- vehicles that were registered after 2000, and al- toring stations in the Kathmandu Valley. The locating routes for public transport. Given the Ministry has recently developed a comprehensive large contribution of vehicle emissions to air Air Quality Management Plan, but the challenge pollution, the Department of Transport Manage- remains in its implementation. As noted above, ment has an important air quality management the Ministry is not the only agency responsible role. However, even though it has a larger man- for air quality, but it needs to take the lead in date to implement the National Transport Policy, coordinating efforts among various agencies and the Department's role has mainly been limited to stakeholders in formulating and implementing routine work such as registering vehicles and is- policies and programs that address the impacts suing driving licenses and route permits. The De- of air quality on public health. partment does not have an overall plan for trans- portation and air quality management, nor does 3.53 Furthermore, improvements in air qual- it have the expertise or resources for planning YSIS ity are determined not only by the effective- and implementing an efficient and environmen- ness of environmental policies, but also by tally friendly transportation system in the valley. NAL the integration of environmental impacts and If the government is serious about improving air A consequences in the development of sectoral quality, the Department should be provided with AL policies in transportation, energy, and industry, the human and financial resources to effectively among others. For example, the Nepal Oil Cor- discharge its mandate, particularly with regard to poration is responsible for petroleum products, conducting emission tests on vehicles. but it has not been able to ensure the supply of good quality petroleum. In order to ensure the 3.55 Municipalities also play an important quality of petroleum, the Corporation needs to role in environmental management, including NVIRONMENT import petroleum fuels that are less polluting, transport and air quality, but so far they have E such as low-sulfur diesel, and there should be done very little in this sector. All municipalities Y a system whereby quality tests are done by a are involved in solid waste management and third party. In addition, action should be taken some municipalities are also maintaining ur- against vendors of adulterated petroleum. The ban roads, but they are not actively involved in OUNTR Government of Nepal should ensure that the transport management. In Kathmandu, Mad- C costs of externalities are taken into account hyapur Thimi, and Bhaktapur trolleybus sys- ­ when decisions on importation of petroleum tems are operating, but are not managed well. AL EP N URBANIZATION ANDSERVICE DELIVERY: MEETING THE POPULATION PRESSURES 43 However, municipalities can play a role in air air quality standards within five years. It has not, quality management in other ways, such as ban- however, been endorsed by the government nor ning the ad hoc disposal of waste and storage of has it been implemented into concrete actions. construction materials on the streets, in order The plan proposes a long list of activities relat- to reduce resuspended dust and facilitate traffic ing to different sectors, such as vehicle emission flow. Air quality management has cross-cutting control, industrial pollution control, solid waste implications that require a multidisciplinary management, land use planning, and institu- approach and the involvement of diverse envi- tional strengthening. This draft action plan is ronmental and sectoral agencies at the central a good start, but the challenge is to prioritize and local levels. The multitude of stakeholders actions and begin implementation of the plan. results in the need for an effective coordina- It should be noted that Kathmandu has had at tion mechanism and the government's serious least two prior air quality management action commitment to want to improve the air quality plans in the past, which were not implemented. situation in the Kathmandu Valley. Reasons for this may have included lack of po- litical will, inadequate financial resources, and no effective institutional arrangements for ad- Air Quality Management Action Plan: dressing air quality management. The question Need for Implementation is how to overcome a similar fate of inaction with 3.56 Over the years the government, as well as the latest Ministry plan. Urgent action should other key stakeholders, has initiated important be taken by the government in this regard. steps towards controlling the air pollution in the Kathmandu Valley. This has led to some 3.58 To achieve this, the activities in the plan positive improvements. The most notable air need to be prioritized based on the level of diffi- pollution control measure was the ban of the culty in their implementation and their expect- Bull's trench kilns and the promotion of the ed impacts. Also, the Ministry should identify less polluting vertical shaft brick kilns and fixed the resources required for each activity within chimney kilns. In addition, the government and outside government, and the level of public has banned three-wheeler diesel vehicles and awareness needed to create the political will for adopted vehicle emission standards and ambi- action. High-impact activities that can be imple- ent air quality standards. Government actions mented easily and with limited resources should have a good track record of yielding substan- immediately become implementation priori- tive results, but more needs to be done. Since ties. Some of these activities could include the the government has demonstrated the political removal of road and sidewalk encroachments, will to take action to implement difficult deci- the promotion of electric vehicles, and the pro- sions to improve the air quality situation in the motion of cleaner production in industries. Kathmandu Valley, taking further steps should not be difficult. But action is needed urgently. Institutional Capacity: Need for Increased Awareness and Support for 3.57 Recently, the Ministry of Environment, Public Involvement Science, and Technology prepared a draft Air Quality Management Plan. The plan is compre- 3.59 One of the main challenges in air quality hensive and strives to meet the national ambient managementisthelackofaproperinstitutional 44 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS framework and generally weak institutional ca- ity has been the public. Continuous pressure pacity. Currently, the Ministry of Environment, from local communities and NGOs convinced Science, and Technology is the main agency the government to take action against the responsible for air quality management, but brick manufacturing industry, which was at the Ministry's effectiveness is limited due to one time contributing 31% of suspended par- the lack of adequate human, technical, and ticulate matter and 27% of PM10 pollution in financial resources. Although there have been the Kathmandu Valley (box 3.1). In addition, some efforts to increase the awareness of air the media, through organizations such as the quality issues within the Ministry, this process Nepal Forum of Environmental Journalists, has been moving slowly, particularly with re- also galvanized public awareness and applied gards to implementation of control measures. political pressure for air quality improve- Other institutions, such as the Department of ments. Recently, over sixty individuals from Transport Management, industries, and mu- various organizations have formed the Clean nicipalities, also play a key role in improving Air Network Nepal, which will act as a citizens' air quality, but their awareness of and response forum to promote and organize public cam- to this problem have been minimal. The pri- paigns for cleaner air. vate sector also contributes to the air quality debate through vehicle importation, transpor- Next Steps tation and auto repair services, and the supply of petroleum products, which can all have an 3.61 The deteriorating urban air pollution adverse impact on air quality. situation in Kathmandu warrants immedi- ate action by the government. With multiple 3.60 The greatest motivator, and perhaps stakeholders responsible for different aspects most effective player, in improving air qual- that could contribute towards a deteriorating YSIS NAL A Box 3.1 Air Quality Improvements in Kathmandu's Brick Industry Brick manufacturing is a major industry and also one of the main sources of air pollution in the Kathmandu Valley. Currently about 115 brick kilns in the valley AL produce about 520 million bricks and consume about 100,000 tons of coal per year. According to an emission inventory from 1993, brick kilns were responsible for 27% of PM10 and 31% of suspended particulate matter in the Kathmandu Valley. Since 2004, however, the brick industry has gone through a major transformation as the whole industry switched over from the polluting moving chimney Bull's trench kilns to the cleaner fixed chimney and vertical shaft kilns. The transformation of Kathmandu's brick industry and its positive impact on the valley's air quality can be a useful case study from which lessons can be drawn for air quality management in other sectors. The first step to improving the brick industry came with the protests of local people suffering from the pollution from brick kilns. In the late 1990s, several local groups in areas such as Jhaukhel in Bhaktapur and Tikathali in Lalitpur started raising the issue of pollution from the brick kilns with local government authorities NVIRONMENT as well as with the industrialists through letters, meetings, and protests. Later, they were supported by local NGOs, who carried out scientific studies to justify their E claims. The studies found that the pollution level in areas with brick kilns were about three times higher than in control areas. The children studying in a school near brick kilns in Tikathali suffered more from respiratory problems than similar children from a control area. The results of the environmental and public health studies Y and the persistent and passionate agitation by the local communities were highlighted by the local media. Continuous pressure from local communities and NGOs finally forced the government to take action against brick kilns. Initially, several illegal kilns were shut down and later the government took the bold decision to completely ban Bull's trench kilns. Although the implementation of the decision was delayed by a year, the government went ahead and implemented the decision despite pressures from industrialists. At the same time, DANIDA and the Swiss Agency for Development and OUNTR Cooperation (SDC) supported the decision by demonstrating cleaner technologies for brick production. Ultimately the industrialists agreed to shift to a new technol- C ogy. By 2005, all the polluting moving chimney brick kilns in the Kathmandu Valley had been replaced by cleaner kilns. ­ Source: ENPHO 2007. AL EP N URBANIZATION AND SERVICE DELIVERY: MEETING THE POPULATION PRESSURES 45 airshed, an effective institutional mechanism industry is evidence that with political will, sig- to coordinate action required for improving nificant advances can be made. Therefore, a the situation is the most urgent need. Al- first step would be for the Ministry to prioritize though the Ministry of Environment, Science, the actions recommended in the plan, based and Technology has made an excellent start by on their difficulty in implementation and their developing a comprehensive Air Quality Man- expected impacts. The activity matrix in figure agement Plan, its ability to improve the air 3.4 is a good starting point. Thereafter, govern- quality situation in the Kathmandu Valley will ment endorsement of the plan with an agreed depend on the government's endorsement of time frame for implementation is essential. the plan and the level of political commitment However, government endorsement needs to to implement it. The experience in the brick be backed with the allocation of adequate re- Figure 3.4 Activity Matrix for Air Quality Improvement Difficulty in implementation Quadrant I Quadrant II Relatively easy to implement but with limited impacts on air Difficult to implement and will probably have limited impacts on pollution air pollution improvement · Promote LPG vehicles · Control fuel adulteration · Introduce ethanol quality · Review standards for new and in-use vehicles air on Quadrant III Quadrant IV Relatively easy to implement and will probably have significant Difficult to implement but will probably have significant impacts on air impacts impacts on air quality improvement quality improvement · Promote electric vehicles · Introduce high-quality fuel · Discourage diesel vehicles · Conduct research and, if feasible, introduce alternative fuels · Weed out gross polluters such as compressed natural gas, biodiesel, and hydrogen · Promote proper vehicle maintenance · Control number of vehicles and improve emission testing system · Promote cleaner production and energy efficiency · Control and manage urban growth programs in brick industries and boilers · Improve road network · Clarify institutional responsibilities and coordinate activities · Manage traffic-generating activities · Raise funds for air pollution control through fuel tax · Improve public transportation · Improve information collection and management system · Promote nonmotorized transportation · Involve key stakeholders in planning and decision making · Pedestrianize core areas · Control resuspended dust by paving all streets · Develop and implement necessary legal framework · Build capacity of institutions · Establish scientific decision support system with regular monitor- ing, pollution inventories, and other studies · Conduct effective public awareness/behavior change campaigns 46 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS sources to commence implementation. High- Industrial Development Perspective Plan of impact activities that can be implemented Nepal targets an increase in the contribution fairly easily with limited resources should im- of the industrial sector to the GDP from the mediately become a priority for implementa- present 10% to 20% by 2020. tion. With the focused attention on improving public awareness, the public can be expected 3.63 Currently, there are over 3,300 regis- to play a role in providing the policy makers tered large-, medium-, and small-scale indus- with a political base for making decisions that tries (table 3.7). Large- and medium-scale will have long-term benefits, with the possibil- industries are registered with the Department ity of short-term costs. This should be coupled of Industries, while approximately 2,100 small with a program to increase institutional capac- and 80,000 cottage industries are registered ity in the Ministry of Environment, Science, with the Department of Cottage and Small In- and Technology and in other sector agencies dustries. Of the medium and small industrial and local governments. sector, over 50% are manufacturing industries such as carpets, garments, leather tanning, and handicrafts. The registered industries employ Industrial Pollution Management an estimated 338,665 people, of which almost 64% are in the manufacturing sector. 3.62 Although the industrial sector only contributes 10% of Nepal's GDP, the pace 3.64 Most industries are clustered in indus- of industrial development in urban areas is trial or urban areas close to energy, water, increasing as the country moves to expand and transport infrastructure or highways. Of beyond its heavy reliance on the agricultural the total number of industries registered in sector. Industrial investment is also expected the country, 1,579 (48%) are registered in YSIS to rebound, contingent upon whether the the Kathmandu district and 1,959 (59%) are current political situation remains stable. The registered within the three districts in the NAL A AL Table 3.7 Number of Industries by Sector (up to First Nine Months of 2005/06) Number of industries Category Example Large Medium Small Total Agro based Tea, grain mill 0 0 0 0 Construction Housing 0 0 0 0 NVIRONMENT E Energy based Solar, hydropower 20 10 0 30 Y Manufacturing Garment, carpets, jute, leather, paper 124 380 1,249 1,753 Mineral Quarry 1 1 2 3 Service Information technology, entertainment 63 259 501 823 OUNTR C Tourism Travel agencies, hotels, restaurants 54 124 331 509 Total 276 848 2,178 3,302 ­ Source: ENPHO 2007. AL EP N URBANIZATION AND SERVICE DELIVERY: MEETING THE POPULATION PRESSURES 47 Table 3.8 Pollution Load of Selected Industrial Sectors Wastewater BOD COD Solid waste Sector Production m3/yr tons/yra tons/yrb tons/yr Soap and chemical Soap 12,543 42.4 320.6 -- Wool processing Dying 318,000 146.3 524.7 125 Washing 750,000 6,000 600 n.a. Fermentation Distillery 181,410 181 272 -- Brewery 292,620 42,096 23,702 -- Leather tanning Chrome tanning 1,368,000 410.4 6,024 11,832 a. BOD = biological oxygen demand. b. COD = chemical oxygen demand. -- Not available. n.a. Not applicable. Source: Unpublished baseline studies conducted by Environment Sector Program Support and Ministry of Industry, Commerce, and Supplies. Kathmandu Valley. Being close to basic ame- 70% of the total volume of industrial effluent nities and infrastructure provides industries in the country. However, a more recent study with greater access to markets and savings in of the pollution load from selected industries transportation costs. However, it also results indicates that the impact of industrial pollution in increased water and air pollution from the on the environment is much higher than ear- dumping of industrial waste into adjacent wa- lier estimates (table 3.8). ter bodies and the release of toxic emissions into the air. Industry Regulation and Enforcement: Mixed Results 3.65 Although the number of industries in Nepal is relatively small, industrial pollution is 3.66 Pursuant to the Environment Protec- of growing concern because industries have ad- tion Act and Rules (1997) and the Industrial opted virtually no pollution control measures Enterprises Act (1992), the Ministry of Envi- and the effective monitoring and enforcement ronment, Science, and Technology and the of industrial pollution is weak. An inventory of Ministry of Industry, Commerce, and Sup- industrial pollution in 1997 found that the total plies are entrusted to regulate the discharge volume of wastewater generated by industries of industrial effluent to the surface waters or was estimated to be around 8.5 million liters, land. Industries have been classified into two with an annual loading of 5,741 tons of biologi- categories--highly polluting industries, which cal oxygen demand and 9,597 tons of total sus- are prohibited within the Kathmandu Val- pended solids from over 2,000 water-polluting ley and within 10 kilometers of other urban industries (Devkota 1997). It is estimated that centers (Category A) and industries that are the Bagmati and Bishnumati rivers in the Kath- prohibited within 5 kilometers of towns and mandu Valley were receiving industrial wastewa- densely populated areas (Category B). Several ter from 1,224 industries, which accounted for pollution control standards have been promul- 48 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS gated, including generic effluent discharge Zoning of Industries: Creating standards, nine sector-specific standards to Unintended Consequences control water pollution, and a recently drafted 3.68 The government has established nine in- brick kiln emissions standard. In addition, any dustrial districts in various parts of the coun- industry whose pollution level is deemed to try and formulated rules regulating the type be less than the prescribed national standards of industries that can be established in the shall receive a pollution control certificate Kathmandu Valley and other municipalities. (PCC) valid for three years. In 2002, after The attempt to concentrate industries has its the publication of five industry-specific efflu- benefits; it allows the realization of external ent discharge standards, the Department of economies of scale, for example through pro- Industries made an attempt to monitor indus- vision of common treatment facilities; it en- trial pollution and issue PCCs. However, this ables separation of industries from residential practice was stopped because the process for areas; and it creates conditions for easier mon- issuing these certificates was not clearly de- itoring of facility compliance. However, there fined and differences in interpretation arose are problems that arise from the establish- between the Department of Industries and the ment of industrial districts. Due to infrastruc- Ministry of Environment, Science, and Tech- ture constraints, most industrial districts are nology. While this problem could have been established within urban areas. More people resolved by clarifying the regulations this has are therefore exposed to pollution generated not been done to date, and subsequently no from these districts. In addition, many inves- PCCs have been issued to industries. In any tors prefer not to establish industries within event, it is unclear how effective certification industrial districts because the land must be or licensing programs would be without strong rented and cannot be purchased, so it cannot monitoring and compliance programs, as well be used as collateral for financing. As a result, YSIS as incentives and awareness programs. many plots within industrial districts are lying vacant while industries are being randomly NAL 3.67 One of the main weaknesses in indus- A located in residential areas or along highways. trial pollution control has been the lack of an The government has also not been very effec- AL effective system for monitoring and compli- tive in motivating industries to stay away from ance. Consequently, although the number of environmentally sensitive areas, in part due industries is small and most industries are not to lack of planning and in part due to lack very polluting, little monitoring and enforce- of supporting infrastructure in designated ment takes place, particularly in the small and industrial districts. medium enterprise sector. It is estimated that NVIRONMENT compliance of industries with environmental E standards is extremely low at around 5­10%, Lack of Knowledge and Y and that too was only in industries that re- Compliance Incentives ceived DANIDA-funded Environment Sector 3.69 One of the main barriers to compliance Program Support (ESPS). In the absence of is the lack of human and financial resources. OUNTR effective monitoring and enforcement pro- C Other barriers are deficient knowledge man- grams, there is neither accountability nor in- ­ agement and lack of credible compliance de- centives for industrial compliance. terrents and incentives. From the knowledge AL EP N URBANIZATION AND SERVICE DELIVERY: MEETING THE POPULATION PRESSURES 49 Box 3.2 Past Experiences in Industrial Pollution Prevention in Nepal Nepal has received assistance on industrial pollution control from several donors. From 1996 to 1998 UNIDO assisted in establishing a central effluent treatment plant and a chrome recovery unit for three tanneries in Birgunj, and a separate effluent treatment plant and chrome recovery unit for a large tannery processing over 500 hides per day. The objective was to set up a reliable model for pollution control in tanneries. The industries contributed the cost of civil work, while the cost of machinery and software was borne by the project. A self-monitoring and reporting system for the participating tanneries and a central testing laboratory for waste analysis was also established in the regional office of the Nepal Bureau of Standards and Metrology in Birgunj. However, after a while the tanneries stopped using both effluent treatment plants, including the chrome recovery units. The reason cited was loss of competitiveness in the market in comparison to other tanneries that operated with no treatment facilities. The DANIDA-supported ESPS constructed a central effluent treatment plant for the 45 operating industries of the Hetauda industrial district, the largest industrial estate in the country. A treatment plant with a series of stabilization ponds was constructed by the project. Polluting industries, such as leather tanning, soap, ghee, and bone processing, were then requested to set up pretreatment units to bring their pollution load within prescribed Nepal standards for discharge into the public sewer system. In order to motivate the industries, the project also provided access to soft loans and technical assistance. However, in spite of the support from the project, the industrialists have not set up the pretreatment facilities and the effluent treatment plant is not functioning as designed. A legal case filed by the local communities against the pollution is pending. Some success has been observed in industrial energy efficiency projects. In 1994, the World Bank supported a Government of Nepal project that focused on energy audits and energy-saving options in industrial boilers, industrial equipment, and hotel lighting. This project was carried forward as a component of the ESPS in 2000 and has achieved good results through sustained use of low-cost, energy-saving options. Source: ENPHO 2007. management perspective, most small and the United Nations Industrial Development medium enterprises lack information on envi- Organization (UNIDO) and DANIDA, have ronmental management practices and cleaner supported pilot projects to promote cleaner processes, including cleaner technologies. In technologies that have had limited success many cases, small and medium enterprises are (box 3.2). Although some industries have not even aware of the environmental impacts demonstrated the positive impacts of cleaner associated with their activities. In addition, they production, overall there is still a serious lack are usually low-investment operations and face of access to information on pollution preven- financial barriers related to access to capital tion and cleaner technologies, particularly in for investments in cleaner technologies. The the case of small and medium enterprises. In- result is that small and medium enterprises dustries are therefore yet to see the long-term can be more polluting to the surrounding en- benefits for them from better environmental vironment and utilize energy and raw materi- management. In India, the Ministry of Envi- als more inefficiently than large industries. ronment and Forests, in collaboration with industrial associations, has adopted programs 3.70 In recent years, some externally funded to provide targeted technical information to projects have promoted pollution prevention small and medium enterprises on different and control in industries. The Technology environmental technologies and alternative and Environmental Division of the Ministry approaches to pollution prevention, which of Industry, Commerce, and Supplies has could be replicated in Nepal. However, in the been involved in organizing programs on absence of effective enforcement, it is unlikely environmental awareness, pollution preven- that the access to environmental management tion, and energy efficiency through the ESPS. knowledge will be enough to see any signifi- In addition, donor organizations, such as cant improvement in the situation. 50 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Box 3.3 Incentives to Encourage Improved agement and enforcement of compliance with Environmental Management by Industries emission or effluent standards is carried out by the regulatory environmental organization, In India, the Gujarat Pollution Control Board has adopted regulatory incentives to promote industries that choose to design and implement such as the central or state pollution control environmental management systems, such as ISO 14001. These incentives boards in India. However, in the case of Nepal, include giving priority environmental approvals within 45 days and extend- ing water consents by one year. Industry-specific guidelines for certain there is no dedicated environmental regulato- sectors, for example the aluminum, cement, and paper industries, have also ry agency and industrial pollution monitoring been developed. is carried out by the ministry of the concerned The West Bengal Pollution Control Board, with support from the India- industry sector, for example the Ministry of Canada Environment Facility, has created a package of incentives to assist small and medium enterprises in their conversion to cleaner technologies. Industry, Commerce, and Supplies, with an A fund was created to provide a matching grant of 50% of capital costs for oversight role for the Ministry of Environ- companies willing to meet higher standards and convert from coal to less polluting oil-fired burners. In addition, technical assistance on how to meet ment, Science, and Technology. A potential standards is provided. conflict of interest could arise, as the Ministry of Industry, Commerce, and Supplies is mainly Source: World Bank 2006a. responsible for the promotion of industrial development on the one hand, and the en- forcement of industrial pollution standards 3.71 In addition, self-monitoring and report- on the other hand. Because of this conflict- ing systems also need to be more strongly ing mission, the Ministry may be perceived as promoted and institutionalized. In the ab- biased when it comes to enforcing standards, sence of a strong government-led monitoring such as the closure of a polluting facility. In system, institutionalization of industry-led Thailand, a similar situation existed with the self-monitoring systems, particularly among Ministry of Industry, which monitored and en- the highly polluting industries, can play an forced environmental standards for industry, YSIS important role. Although self-monitoring and with the Ministry of Natural Resources exists in Nepal, one of the main reservations and Environment, which was responsible for NAL of the industry sector, as in many countries, ensuring industrial compliance with environ- A is the fear that the data submitted could be mental standards (box 3.4). AL used against them. To overcome this con- cern, other countries have adopted both reg- 3.73 One proposal to resolve this conflict of ulatory and financial incentives to encourage agency missions in Nepal is to create an inde- greater voluntary compliance (box 3.3). The pendent environmental enforcement agency Ministry of Industry, Commerce, and Sup- and transfer all of the environmental enforce- plies should consider introducing similar in- ment functions to this agency. At a minimum, NVIRONMENT centives to encourage voluntary compliance greater coordination between the Ministry of E by industries. Environment, Science, and Technology and Y the Ministry of Industry, Commerce, and Sup- plies is needed to ensure effective compliance Institutional Responsibility for and enforcement of regulations for polluting OUNTR Enforcement: Unclear Mandates industries. This would involve regulatory re- C 3.72 In many countries, including those in forms such as developing a scheduled plan ­ the region, industrial pollution control man- for monitoring facilities, a system for the ex- AL EP N URBANIZATION AND SERVICE DELIVERY: MEETING THE POPULATION PRESSURES 51 Box 3.4 Thailand: Conflicting Mandates and Missions for Industrial Pollution One of the most challenging issues Thailand faces in protecting its environment is that several different agencies administer and enforce the environmental laws. This fragmented authority creates overlapping jurisdiction and responsibilities and different implementation standards. As a result, while the delegated agency, the Ministry of Natural Resources and Environment, is responsible for developing national pollution standards, policies, plans, and pollution control regulation, other ministries are often responsible for the implementation and enforcement of standards and regulations. The most notable overlapping of authority exists between the Department of Industrial Works and the Pollution Control Department, which both have legal oversight over factories. The Department of Industrial Works, however, is the primary agency responsible for promoting business enterprises, while also enforcing the laws against such enterprises. As a regulator, the Department has almost absolute power over permitting and enforcing effluent standards. Such competing missions create conflict within the agency. The Pollution Control Department, on the other hand, is the national pollution control agency, but it only has indirect authority over industries. It issues no permits or licenses; it only sets national effluent and ambient standards. The Pollution Control Department can advise the Department of Industrial Works to take remedial or enforcement action against polluting facilities; however, it cannot directly enforce against regulated entities, except in rare circumstances when the Department of Industrial Works fails to act. Source: USAID 2004. change of compliance information, and pro- vironmental compliance and recommending moting joint inspections where appropriate. pollution control certificates to the two DDCs of Morang and Sunsari. In these districts, committees with representation from munici- Role of Local Governments and Civil Society palities, industries, and civil society have been Organizations in Compliance Monitoring formed for the purpose of involving multiple 3.74 Local bodies, such as DDCs and munici- stakeholders in environmental monitoring and palities, can play an important role in compli- voluntary enforcement. Although it is too early ance monitoring and enforcement, but so far to evaluate this project, it may pave the way for they have not been involved. Recently, with ensuring environmental compliance through support from FINNIDA, the government has local initiatives with communities (box 3.5). initiated a pilot project in Eastern Nepal that In addition, civil society has been actively en- devolves the responsibilities for monitoring en- gaged in raising awareness in environmental Box 3.5 Local Government and Public Involvement in Environmental Compliance In 2001, FINNIDA started the Strengthening of Environmental Administration and Management at the Local Level in Nepal (SEAM-N) project for the industrial cor- ridor between the municipalities of Biratnagar and Dharan. The area consists of one submetropolis (Biratnagar), two municipalities (Ithari and Dharan), and seven VDCs from two districts (Morang and Sunsari). The corridor has 390 industries (216 in Morang and 174 in Sunsari), of which 59 have been identified as major polluting industries. The project provided assistance to industries in introducing and implementing environmental management tools such as cleaner technology, environmental management systems, and self-monitoring and reporting systems. The project has also provided some grants to industries for implementing resource conservation measures. The approach taken by FINNIDA was to involve citizens on a local level, including schoolchildren and communities, in order for all stakehold- ers to have a shared role and responsibility in environmental monitoring and voluntary enforcement of the environmental legislation. In June 2006, in response to initiatives taken by local bodies, municipalities, and chambers, and pursuant to Environment Protection Act and Rules provisions re- garding the delegation of power, the Ministry of Environment, Science, and Technology delegated all of its powers to the Ministry of Local Development as a special pilot test project. The Ministry of Local Development, in turn, delegated all of this power to two DDCs in Morang and Sunsari. This has led to the formation of local committees with representatives from DDCs, VDCs, municipalities, and the private sector in Morang and Sunsari to coordinate efforts at ground level. Although this pilot is in its initial stage, it would seem that engaging local governments and the public in the environmental management and compliance of industrial corridors can become an effective way to meet compliance requirements. Source: ENPHO 2007. 52 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS problems and imposing changes in the opera- gram where self-monitoring and reporting, tion of industrial polluters. In the Kathmandu with the requisite safeguards built in to pre- Valley, civil society played a critical role in the vent abuse, should be explored. These would introduction of cleaner brick technology, and build on the experiences gained in the pilot on a smaller scale, women from the Jhyalun- programs funded by DANIDA, UNIDO, and taar Community Forest User Group instigated others. Greater accountability of the indus- the relocation of a polluting stone-crushing trial sector is possible if environmental com- industry that was operating in their forest. pliance monitoring includes committees with civil society representation at the local level. Local bodies such as DDCs and municipalities Next Steps should also play an increasingly important 3.75 There are several initiatives that can be role in compliance monitoring as their capac- taken by the Government of Nepal to improve ity is strengthened. Underpinning the success the industrial pollution management situa- of initiatives to improve industrial pollu- tion in the country. An initial step should be tion management is the need for increasing to clarify the roles between the Ministry of awareness among stakeholders of the need Environment, Science, and Technology and for better environmental management. The the Ministry of Industry, Commerce, and Sup- cornerstone of improved industrial pollution plies in environmental regulation and moni- management should be pollution prevention toring, with clear lines of accountability and and cleaner production. A pilot program in a coordination. Thereafter, the Government of limited geographic area to explore alternative Nepal should ensure that adequate financial institutional mechanisms for environmental and human resources are provided for both management and monitoring, financial and institutions to discharge their mandate. In an regulatory incentives to encourage compli- YSIS environment where institutional capacity in ance, and greater participation of civil society government agencies is generally weak, a top- in environmental compliance monitoring NAL down regulatory approach to industrial pol- would be a first step towards improving indus- A lution management is less likely to succeed. trial pollution management in Nepal. Once AL Therefore, the regulatory framework should this model is tested and refined based on the also include incentives to encourage compli- pilot experience, a program of scaling up with ance. Financial and regulatory incentives for the aim of implementing a countrywide pro- industries to participate in a regulatory pro- gram should follow. NVIRONMENT E Y OUNTR C ­ AL EP N 4 Policies and Institutions: Ensuring Strong Governance and Performance 4.1 Policies and institutions establish the overall management of its natural resources "rules of the game" that enable a society to and to address the growing environmental collectively solve a variety of problems, to al- problems facing the country. The major na- locate benefits arising from a set of actions, tional environmental policies include the and to assign responsibilities for paying their National Conservation Strategy (1987), the costs (Ostrom 1998). Laws and policies are the Nepal Environmental Policy and Action Plan formal rules that govern institutions, with laws (1993), the Sustainable Development Agenda being legally binding and policies as guiding (2003), and Nepal's Tenth Five-Year Plan (or principles. Institutions can also be influenced Poverty Reduction Strategy) (2002­2007). The by informal rules of behavior, traditional ap- Tenth Plan requires the Government of Nepal proaches, and attitudinal relationships. For to ensure the environmental sustainability of institutions to govern well, they must be able economic growth and take action to address a to manage and adapt within these formal and range of environmental challenges. The 1990 informal rules. In the environmental manage- Constitution also mentions that the State shall ment context of Nepal there are several other give priority to the protection of the environ- factors that must be considered, including the ment. More significantly, the Interim Constitu- content and implementation of environmental tion of Nepal, 2006, has recognized the fun- and sector policies, the mandates and relation- damental "right to clean environment", which ships of national and local institutions, and will have far-reaching implications for future the practical capacities and resources of insti- policy decisions and the ability of citizens to tutions. This chapter will therefore examine hold government accountable for its actions or all these factors in analyzing the governance inactions in protecting the environment. framework and the institutional performance for effective environmental management. 4.3 The main environmental legislation, which establishes the overall environmental manage- ment framework in the country, is found in the Overview of Policies, Legislation, Environment Protection Act (1997) and the and Institutions Environment Protection Rules (1997). Under the Environment Protection Act and Rules, the Policies and Legislation primary tools for ensuring the protection of 4.2 The Government of Nepal has enacted sev- natural resources are the environmental impact eral important policies and laws to govern the assessment (EIA) and the initial environmental 53 54 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS examination (IEE), which are analyzed in more Institutions detail in chapter 2 of this report. The other ma- 4.5 There are multiple institutions in Nepal jor focus of the Environment Protection Rules that play an important role in delivering or is the prevention and control of pollution; it influencing environmental results and perfor- prohibits anyone from creating pollution that mance. These institutions represent both the would cause significant adverse environmental public and private sectors and are involved at impacts or threats to public health and be con- the national and local levels. They are graphi- trary to prescribed standards. cally represented in appendix I. 4.4 Other sector policies and legislation, such 4.6 For the purposes of this study, six principle as the Industrial Enterprises Act (1992) and national agencies with environmental man- the Water Resources Act (1992), have also agement responsibilities were examined--the been adopted to address concerns that are Ministry of Environment, Science, and Tech- specific to a sector but have significant envi- nology, the Ministry of Forests and Soil Con- ronmental implications (see appendix H). servation, the Ministry of Water Resources, the Another significant law relating to environ- Ministry of Local Development, the Ministry of mental management and pollution control Physical Planning and Works, and the Ministry is the Local Self-Governance Act (1999). This of Industry, Commerce, and Supplies. Nepal Act gives locally elected bodies--VDCs, DDCs, also has a two-tier system of local government. and municipal governments--responsibilities The lower level consists of VDCs and munici- for a number of local development issues, in- palities; the second tier consists of DDCs. A cluding the environment and waste and pollu- brief description of each institution's roles tion management. and responsibilities is provided in box 4.1. YSIS Box 4.1 Snapshot of the Institutions Responsible for Environmental Management NAL A The assignment of responsibility for various aspects of environmental and natural resource management and pollution control is as follows: · National Planning Commission has overall responsibility for formulating national development plans and policies, including monitoring and evaluation of agency AL plans, policies, and programs relating to the environment. · Ministry of Environment, Science, and Technology is responsible for the formulation and implementation of policies, plans, and programs pertaining to the environment. · Ministry of Physical Planning and Works is responsible for developing the national transportation and road network, and improving access to water supply and sanitation facilities. · Ministry of Industry, Commerce, and Supplies is responsible for promotion and implementation of industrial and commercial policies, including those pertaining to industrial pollution and mineral exploration. NVIRONMENT · Ministry of Forests and Soil Conservation is responsible for rangeland management (with overlapping responsibility for livestock and pasture development with E the Ministry of Agriculture), mountain biodiversity management, biodiversity, soil conservation, and forest resources. Y · Ministry of Water Resources is responsible for utilization and management of water resources, including large dams and hydropower projects, irrigation systems, and natural disaster management. · Ministry of Local Development has overall responsibility for strengthening local governance and capacity of local governments, including for solid waste management. · District development committees (DDCs) are responsible for environmental management at the district level; there are 75 DDCs. OUNTR · Village development committees (VDCs) are responsible for environmental management at the village level; there are 3,913 VDCs. C · Municipalities are responsible for environmental management at the municipality level: there are 58 municipalities. ­ Source: Government of Nepal data. AL EP N POLICIESAND NSTITUTIONS I : ENSURING STRONG GOVERNANCE AND PERFORMANCE 55 4.7 Legislative. Three Parliamentary com- community forest user groups that are manag- mittees exist with legislative authority for set- ing community forests pursuant to the Forest ting environmentally related policies: (a) the Act. The community forestry program is widely Natural Resources and Means Committee, for acknowledged to be one of the most successful water resources and agriculture policies; (b) examples in Nepal of devolving environmental the Environment, Communication, and Tech- management to community-based user groups nology Committee, for environment, science, (see appendix A). and technology policies; and (c) the Physical Infrastructure and Development Committee, for construction, transport, and development Environmental and Sector Policies: policies. In addition, the legislature will play a Gaps and Inconsistencies key role in other important governance poli- cies that can strengthen government account- 4.10 Nepalhasadoptedafairlycomprehensive ability and transparency, such as the Right to set of environmental policies and laws, which Information Act (2005). cover a broad range of environmental and sec- tor issues. These policies and laws are gener- 4.8 Judiciary. Although Nepal does not have ally sound, but there are some policy gaps and "green bench" in the judiciary to deal with en- legislative inconsistencies that may exist and vironmental issues, the court has played a key create confusion regarding roles and respon- role in establishing environmental policies. sibilities for implementation. One of the areas The Supreme Court has issued several impor- of legislative ambiguity that may sometimes tant court decisions directing executive branch create confusion relates to the allocation of agencies to adopt appropriate environmental roles and responsibilities between the Minis- standards and measures (appendix J). These try of Environment, Science, and Technology include orders for setting standards for air, wa- and other sector agencies responsible for the ter, and noise pollution, and the government monitoring and enforcement of environmen- has since issued standards for ambient air qual- tal conditions. Under the Environment Pro- ity and drinking water. At the same time, other tection Act and Rules, the responsibility for court orders, such as halting of discharge of the environmental monitoring of EIAs and untreated waste and effluents into local water IEEs lies with the concerned ministry related bodies, have not been enforced. to the project proposal, but with overall over- sight by the Ministry of Environment, Science, 4.9 Civil society. According to data pro- and Technology. Under the Water Resources vided by the Social Welfare Council, 1,035 Act, the Ministry of Water Resources is autho- nongovernmental and three international rized to enforce water pollution regulations. nongovernmental organizations are working However, the Ministry of Water Resources on environmental management and conser- believes that the Environment Protection Act vation efforts. The highest number of NGOs and Rules have effectively transferred these is based in Kathmandu (429), followed by pollution control responsibilities to the Minis- Chitwan (41), and only two districts (Manang try of Environment, Science, and Technology. and Rukum) do not have any registered envi- As a consequence of this confusion, monitor- ronment-related NGOs. There are also 14,337 ing and enforcement of water pollution regu- 56 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS lations have often fallen through the cracks. gaps in addressing media-specific pollution In some sector agencies there is a perception problems, such as air pollution. Although Ne- that as the Ministry of Environment, Science, pal has sector policies and legislation related and Technology has primary responsibility for to environment, transportation, energy, and the enforcement of the Environment Protec- industry that have implications for air qual- tion Act and Rules, they need not assume re- ity, separate legislation to comprehensively sponsibility for ensuring compliance with EIA manage the many diverse sources affecting or IEE approvals and conditions. This is the air quality does not exist. Consequently, while case despite the fact that there are statutory the National Transport Policy has several pro- provisions in the Environment Protection Act visions related to vehicle emissions, it ignores and Rules that would hold the issuing sector other significant aspects of vehicle emission agencies accountable for the environmental control, such as clean fuels, inspection and enforcement of EIAs and IEEs. maintenance systems, and transportation de- mand management. The Ministry of Environ- 4.11 Another significant legislative inconsis- ment, Science, and Technology has prepared tency revolves around the question of who a draft Air Quality Management Action Plan should ultimately be responsible for environ- for the Kathmandu Valley, but it is yet to be mental management in the context of the endorsed by the government and therefore government's commitment to decentralized has not been implemented. While progress governance. This question will grow in prac- can be made by utilizing existing acts and tical importance as the new government is regulations, given the complex and growing expected to focus greater attention on sup- problem of air pollution, a comprehensive porting local rule and autonomy. The Envi- Clean Air Act will be needed in the foresee- ronment Protection Act and other sector leg- able future. YSIS islation were promulgated prior to the Local Self-Governance Act and therefore do not re- NAL flect decentralized governance nor recognize Institutions: National A the role for local governments in environmen- National Environmental Agency: the Role of AL tal management. For example, the Industrial the Ministry of Environment, Science, and Enterprises Act does not give any authority to Technology local bodies in industrial pollution manage- ment and the role of local bodies is limited 4.13 As noted earlier, there are multiple agen- to site verification. Similarly, the Solid Waste cies and institutions at the national level that Management and Resource Mobilization Act have a role in environmental management. Ide- NVIRONMENT was enacted before the Local Self-Governance ally, a strong national environmental agency is E Act and does not clearly delineate the role for needed to serve as the central authority to ensure Y local governments, although local govern- the overall implementation and enforcement of ments have assumed primary responsibility environmental laws and policies. This agency for solid waste management. should have the power to set the standards for OUNTR environmental performance and ensure the C 4.12 In addition to these legislative ambigui- compliance of environmental standards and laws ­ ties in existing statutes, there are also policy of public and private institutions. The Ministry AL EP N POLICIES AND NSTITUTIONS I : ENSURING STRONG GOVERNANCE AND PERFORMANCE 57 of Environment, Science, and Technology was the department may have more convening created in 2005 when the environment functions and policing power as a government agency. of the previous Ministry of Population and Envi- A third option, as Nepal is in the midst of de- ronment were transferred to the then Ministry veloping a new Constitution, is to establish a of Science and Technology, but unfortunately it new constitutional body for the environment. has not yet been able to fully achieve these dual The center proposed under the first option functions of setting environmental standards and could be likened to the Nepal Agricultural ensuring environmental compliance. Research Center, which has been established as an autonomous body under Nepal's legisla- 4.14 There are currently three organizational tion; and the department proposed under the models under consideration for restructur- second option could be likened to the Depart- ing and strengthening the Ministry of Envi- ment of Standards and Metrology. Depending ronment, Science, and Technology. A study on the legislative and policy mandates of a commissioned by an environmental support national environmental agency, the strengths project (MSG Environmental Services 2002) and weakness of these various institutional recommended the establishment of an en- models are provided in table 4.1. vironmental promotion and conservation center as an autonomous organization under 4.15 Whether or not any of these organi- the administrative purview of the Ministry zational models are chosen, the Ministry of of Environment, Science, and Technology. Environment, Science, and Technology's cur- One of the strongest advantages of such an rent institutional capacity is very constrained, autonomous organization would be its ability impeding its ability to discharge its regulatory to generate and retain revenues to operate responsibilities as an environmental agency. and meet agency mandates, a system that has The Ministry has been given the regulatory au- proven to be very effective in other countries thority to approve EIA documents, including in the region (box 4.2). A second option, cur- scoping documents, terms of reference, and rently favored by the Ministry of Environment, EIA reports, as well as environmental moni- Science, and Technology, would establish an toring and auditing reports. In addition, the Environment Department within the Ministry. Environment Protection Act and Rules legally This option would be less autonomous, but provide for the appointment of environmental Box 4.2 Examples of Environmental Revenue Generation and Retention In India, the Water Cess Act of 1977 authorizes the state pollution control boards to charge industries and municipalities a water cess calculated on the volume of water consumed and for consent fees. The fees collected are sent to the central government, but 80% of the fees are to be returned to the state pollution control boards. Staff costs for compliance monitoring and enforcement activities are funded in large part by revenues from the water cess, although this varies from state to state depending on the financial conditions and needs of the state. In some states, like Maharashtra and Karnataka, the state pollution control boards have greater resources and consequently stronger environmental programs, due to the high revenues collected from the water cess. In the Philippines, the Lake Laguna Development Authority instituted an environmental user fee or pollution charge system for corporations as an economic incen- tive to encourage compliance. The user fee applies to all enterprises within the Laguna de Bay region, including commercial and industrial establishments, agro-based enterprises, clustered developments, and domestic households. The revenue generated has provided the Lake Laguna Development Authority with the necessary resources and flexibility to pursue its environmental management, water quality monitoring, river rehabilitation, and public outreach programs. Sources: OECD/USAID 2006; Laguna de Bay Masterplan web site http://www.llda.gov.ph/masterplan.htm. 58 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Table 4.1 Strengths and Weaknesses of Various Environmental Institutional Models Autonomous Government department Criterion environmental center within MoESTa Constitutional environmental body Degree of More autonomous and flexible ­ can Less autonomous and less flexible Not part of government executive body so very powerful autonomy focus on assigned task ­ may be influenced by other im- ­ decision has to be implemented by all government bodies but mediate priorities of government may have less direct involvement in ministry-level forums and may have less involvement and influence on different sectors on day-to-day basis Salary incentive Can offer competitive salary and Potentially less political interference Members hired through hearing, including a public hearing (so attract high-caliber people but more ­ must stick to government salary less political interference), so highly professional person likely opportunity for political interference scales, which may not be a strong to be hired but changes are only possible through change in the motivator of staff performance Constitution, so could be more difficult to change or adapt the body. Can make rules and regulations and can implement them but must stick to government salary scales, which may not be a strong motivator of staff performance Staffing Staff numbers could be adjusted Changes in staff numbers may more easily and may not be influ- take longer time to adjust (and enced by government staff cutting will be governed by government commitment to reduce overall staff numbers) Career and job Career civil servants may not be Staff could have more career Can hire own staff or can get government staff on deputation mobility interested in working in such centers growth options and can move into as it could limit their career and different government institutions movement across government institutions Revenue potential May be able to retain revenue gener- Generated revenue must go to the Cannot generate revenue ated by itself Central Treasury Enforcement May not have any clout in policing More clout in policing and it can Strong authority, as good as Supreme Court or Commission for capacity compliance as cannot have semiju- have semijudiciary role by law the Investigation of Abuse of Authority YSIS diciary role (such as given to Department of Standards and Metrology, who can NAL fine offenders on the spot etc.) A Horizontal and Less inter-sector policy influence and Could have more inter-sector policy Coordination can be poor and authority cannot be easily decen- vertical linkages may not have the clout to delegate influence and delegate some re- tralized to local authorities ­ more centralized organization (e.g. AL responsibilities to other institutions sponsibilities to other government to DDC) institutions Research and May have better role in research, May have less effective role May seem like development and environment are disparate development development, and extension-related in research, development, and activities extension-related activities than an independent center Role for civil Civil society representatives can be Formally, civil society may not Formally, civil society may not have a role NVIRONMENT society involved in the center's governance have a role in the governance of E through bodies such as a council government department Y aMoEST = Ministry of Environment, Science, and Technology. Source: Winrock International Nepal 2007a. OUNTR C ­ AL EP N POLICIESAND NSTITUTIONS I : ENSURING STRONG GOVERNANCE AND PERFORMANCE 59 inspectors so that the Ministry can discharge its one of the weakest ministries and possesses duties. Section 8(1) of the Act states: "In order only a small cadre of technical staff. Second, to effectively carry out or cause to be carried the Ministry should develop standard operat- out the acts of the mitigation, avoidance or ing procedures and performance guidelines control of pollution or the acts required to be for environmental compliance, including carried out in accordance with the Initial Envi- requirements for reporting and inspections. ronmental Examination or the Environmental The Ministry should also assist sector agencies Impact Assessment report, the Ministry may, in formulating sector-specific technical guide- by fulfilling the procedures prescribed by the lines for the review and approval of EIAs and Public Service Commission appoint Environ- IEEs. Finally, the Ministry should develop a mental Inspectors or designate any employee strategic long-term plan that prioritizes the ar- to carry out functions of such Inspectors." eas where capacity could be strengthened with increased internal resources and training, or 4.16 However, environmental inspectors have where outsourcing of functions to the private not been allocated or appointed, leaving sector or delegating to local governments the Ministry with a serious resource gap in could supplement capacity gaps. These prior- fulfilling its responsibilities, particularly with ity areas should include EIA review and ap- regards to enforcement of EIAs and IEEs. For provals, environmental impact and data analy- example, environmental auditing is supposed sis, compliance monitoring and enforcement, to be carried out after two years of a project's information management and dissemination, commission, but no auditing has been under- and public education and consultation. taken to date. In terms of addressing control of pollution, the Ministry's role has been Compliance and Enforcement: The Role of limited to addressing referred complaints, Environment and Sector Agencies as the primary jurisdiction for industrial pol- lution management falls with the Ministry 4.18 Despite statutory provisions that require of Industry, Commerce, and Supplies. And monitoring and the enforcement of environ- while complaints related to EIA and pollution mental standards and laws, most government control issues are referred to the Ministry of agencies have not been able to completely Environment, Science, and Technology, it is fulfill these responsibilities for a number of legally unclear whether the Ministry or the reasons. One of the reasons most often cited is sector agency has the ultimate responsibility the lack of adequate staff resources to perform for resolution of these complaints and the ini- compliance monitoring and inspection. As tiation of enforcement actions. noted above, the Ministry of Environment, Sci- ence, and Technology has been legally autho- 4.17 In order to address these institutional rized to appoint environmental inspectors to shortcomings, the capacity of the Ministry of monitor and audit EIA compliance, but these Environment, Science, and Technology needs positions have never been allocated or filled. to be seriously strengthened. First, increased At the same time, sector agencies are legally resources should be allocated to the Ministry, mandated to monitor project compliance with particularly for environmental monitoring EIA approvals, but resources for monitoring and enforcement. Currently, the Ministry is have not been provided in the overall agency 60 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS budget unless the project budget specifically 15(d) and (e)). There is no evidence that the allocates it (usually this applies to government- Ministry of Industry, Commerce, and Supplies implemented projects). The exception to this has utilized this provision to close a facility; general rule is the Ministry of Forests and Soil whether this is because of inadequate facility Conservation and its departments, which spe- monitoring or the reluctance to close a facility cifically provide for monitoring programs for is uncertain. Similarly, the Water Resources Act those projects that they implement. (1992) allows for the imposition of water pollu- tion fines and compensation for damages (Wa- 4.19 Even where projects themselves under- ter Resources Act, Section 22(1)). However, take monitoring, such as hydroelectricity proj- there have not been prosecutions under this ects, monitoring reports are often not sent to act; this may be due in part to the confusion the concerned agencies for review and action. regarding the roles of the Ministry of Water In cases where a project has been implemented Resources and the Ministry of Environment, in a forest or protected area by another institu- Science, and Technology in the enforcement tion, there is often no attempt made to involve of regulations regarding water pollution and the concerned agency, namely the Ministry of in part due to the lack of documented viola- Forests and Soil Conservation and the Depart- tions and enforcement strategies. ment of Forest. Most agencies do not have a formal reporting mechanism to receive, review, Judiciary and Parliament: Role in and address compliance or noncompliance of Environmental Compliance EIA and IEE recommendations and other pol- lution-related issues. When a complaint is re- 4.21 All three main branches of government ceived--whether through a local government are important for environmental governance agency, nongovernmental agency, or member in Nepal--the executive (including the Office YSIS of the general public--there is little, if any, of the Prime Minister, the ministries, and the documentation of the complaint and follow- NationalPlanningCommission),thelegislative NAL up. Because there are no structured or formal (House of Representatives and the National A reporting mechanisms for project proponents, Assembly), and the judiciary (including the AL or complaint mechanisms for the public, there national and local courts). While the principle is little feedback, transparency, and account- focus of the institutional analysis has been ability in compliance and enforcement. targeted at the executive branch institutions, other branches of government have played an 4.20 In addition to the lack of formal report- increasingly important role in ensuring envi- ing and complaint mechanisms, agencies ronmental compliance. The Supreme Court NVIRONMENT often do not exercise the penalty powers that in Nepal has delivered several court decisions E are prescribed to them under the existing laws that have established significant policies on Y when violations are found. For example, the environmental management and enforcement Industrial Enterprises Act (1992) empowers (see appendix J). In the area of air pollution, the government to issue directives to prevent the Supreme Court has issued directives for OUNTR and mitigate environmental pollution and even the introduction of air quality standards, vehi- C close industries for noncompliance with such cle emission testing and certification, and pol- ­ directives (Industrial Enterprises Act, Sections lution fees for petrol and diesel products sold AL EP N POLICIESAND NSTITUTIONS I : ENSURING STRONG GOVERNANCE AND PERFORMANCE 61 in the Kathmandu Valley. Similarly, in the area in this report, there are existing statutes that of waste pollution, the Court directed Pokhara may require a clarification of legislative intent Sub-Metropolitan City not to dump untreated regarding respective roles and responsibilities waste in the Seti River and Kathmandu Met- for environmental management, and there ropolitan City and Lalitpur Sub-Metropolitan are growing areas of environmental concern City to use scientific measures to manage waste that may require enactment of new laws. In instead of dumping it on the banks of the Bag- addition, Parliament will be adopting a perma- mati River. Although these court orders have nent Constitution in which the "right to clean created significant legal precedents for envi- environment" is an important provision under ronmental policies, many of these decisions consideration, with far-reaching implications. have not been adequately implemented and While Parliament does not currently have a judicially enforced. reporting requirement for agencies regarding the enforcement of legislative mandates, this 4.22 Unlike India, an activist environmental should seriously be considered. There are cur- bench or "green bench" has not yet evolved rently three Parliamentary committees with in Nepal. In India, the courts have assumed a some environmental jurisdiction--the Natural powerful role in judicially mandating environ- Resources and Means Committee, the Envi- mental policies and actions by both public and ronment, Communication, and Technology private institutions in order to improve perfor- Committee, and the Physical Infrastructure mance. For many, the courts are perceived as and Development Committee. These commit- filling the vacuum left by the executive branch tees could provide legislative oversight of the agencies in ensuring environmental compli- implementation of statutory mandates, such ance and enforcement. A similar situation as compliance with the EIA and IEE require- may develop in Nepal as the various minis- ments. In discussions with Parliamentarians, tries and departments struggle to fulfill their it was also pointed out that Parliament could monitoring and enforcement responsibilities. serve a role in facilitating communication be- The Interim Constitution also establishes an tween agencies and communities in the moni- important fundamental right for citizens, the toring of development projects and improving constitutional "right to clean environment". If the public consultation process within local adopted, this constitutional right will increase communities. the critical role of the courts, through public interest litigation, as a way to ensure citizen Interagency Coordination: Formal enforcement of environmental policies and Mechanisms to Improve Performance laws. Consequently, ways to enhance the envi- ronmental awareness and the effectiveness of 4.24 In addition to establishing a strong na- judicial orders and citizen enforcement should tional environmental agency and having over- be explored. sight by the judiciary and Parliament, there should be a formal mechanism to coordinate 4.23 Parliament has a critical role in estab- institutional roles and performance among lishing environmental policies and priorities agencies. The National Planning Commis- through the enactment of legislation, but it can sion is the highest-level government body also play an important oversight role. As noted for the formulation of development plans 62 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS and policies, including the incorporation of of Industry, Commerce, and Supplies, and environmental management issues. While the Ministry of Labor and Transport Man- the National Planning Commission provides agement and their respective departments. important policy guidance and interagency For the most part, these ministries have not coordination, its role in the environment is developed an adequate plan or dedicated ap- by necessity limited, given its broader policy propriate resources for capacity building and responsibilities. The Environment Protection transfer of mandated responsibilities to the Council was formed to serve the environmental local governments. There are several reasons coordination function, but has not met for sev- for the slow progress towards devolution of eral years and therefore has been ineffective. responsibilities. As environmental management issues grow in significance and complexity, the need for 4.26 One of the primary reasons cited for the interagency and intergovernmental coordina- slow progress in devolution is the local govern- tion will be increasingly important. While the ments' lack of capacity. This can, in part, be Ministry of Environment, Science, and Tech- attributed to the years of conflict, which have nology could take the lead in coordinating the created political instability and a vacuum in environmental activities of various ministries, local leadership. This, in turn, has created a its cabinet-level status is not as strong com- situation where local bodies have had limited pared to other ministries, which could under- access and ability to build broader capacity in mine and limit its convening power. Meaning- areas such as environmental management. For ful coordination will require the highest level national and local governments, the progress of government leadership, whether through towards devolution has been a "chicken or the National Planning Commission or a reac- egg" dilemma. From a national government tivated Environment Protection Council, and perspective, the lack of capacity at the local YSIS a demonstration of political commitment to level has been a deterrent to the transfer of improving environmental performance. responsibilities to those governments. But, NAL from the local government perspective, it is A seen as an excuse to retain exclusive author- AL Institutions: Local ity at the national level. With the new political shift in the country, it can be expected that Devolution of Responsibilities to Local the push for decentralization of power will ac- Governments: From Goal to Reality celerate. Consequently, greater efforts will be 4.25 The Local Self-Governance Act requires required to simultaneously build local capacity the devolution of responsibilities, including and transfer functions to local governments. NVIRONMENT environmental management, to the local gov- An analysis of capacity needs for local govern- E ernments. However, the implementation of ments will be discussed later in this chapter. Y this has not been fully realized. At the nation- al level, the responsibilities of environmental 4.27 With regards to the orderly transfer management are spread among the Ministry of environmental functions to local govern- OUNTR of Environment, Science, and Technology, the ments, the national government will need C Ministry of Local Development, the Ministry to establish a clear protocol to set forth the ­ of Physical Planning and Works, the Ministry preconditions for delegation and the require- AL EP N POLICIESAND NSTITUTIONS I : ENSURING STRONG GOVERNANCE AND PERFORMANCE 63 ments for maintaining delegation. The pre- 4.29 The main responsibility of the Ministry conditions for delegation should include ap- of Local Development is to coordinate with propriate technical capacity, adequate staffing local governments and administer the distri- resources, and demonstrated political com- bution of local development fees and grants. mitment by the local government. Once pro- The Ministry is also authorized to deputize the grams are delegated, the national government executive officer of each municipality, who is should also establish reporting, monitoring, then designated as the secretary of the mu- and performance requirements to ensure that nicipal board and is responsible for the overall national laws and policies are being enforced. day-to-day management of the municipality. If national laws and policies are not being ad- The municipalities, including the mayors, are equately enforced, then the national govern- given no authority or input into the selection ment should have the power to intervene and of the executive officers, even though they will either take independent enforcement actions head the day-to-day administration of their or withdraw authority from the noncompliant municipality. Since the executive officer is ap- local government. pointed by the Ministry of Local Development from among its staff, the executive officer is usually more responsive and accountable to- Local Autonomy and Governance: wards that Ministry than towards the mayor Constraints and Challenges and the other elected local representatives. 4.28 At the local level, the DDCs, the VDCs, Also, while the municipalities are free to hire and the municipalities are the main institu- other necessary staff, human resource recruit- tions responsible for environmental manage- ment is guided by the national hiring rules and ment. For urban environmental management as a result there is limited flexibility in staff re- issues, the municipalities are the main gov- cruitment and management. In addition, since erning institutions. Municipalities are guided the Ministry of Local Development distributes by the Local Self-Governance Act and are led the local development fee and grants, it exerts by locally elected mayor, deputy mayor, ward significant influence and control over munici- chairpersons, and ward members. In the past palities, most of which, particularly the smaller four years, the process of urban environmental ones, depend heavily on the Ministry for re- management has been affected by the lack of sources. These two factors often cause difficult elected representatives in the municipalities. management and administrative problems for Unlike the central government, Nepal's mu- local governments. nicipal governments have historically been more stable. Elected officials served their full 4.30 The Local Self-Governance Act requires term and were considered by many to be more local governments, in formulating a village or accountable and responsive to people's needs. municipal plan, to give priority to "projects that However, in recent years, due to the absence can contribute to protect and promote the en- of elected representatives, municipalities in vironment". However, there are no indications general have not been able to effectively man- of how, and if, this is being practically applied in age as before or to respond as quickly to the the VDCs and in the municipalities. The Local people's concerns. With the peace process, this Self-Governance Act provides for the establish- situation is expected to improve. ment of environmental committees under lo- 64 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS cally elected VDCs, DDCs, and municipalities, one end of the spectrum, the Ministry of For- but it is unclear how many of the local govern- ests and Soil Conservation has a high number ments have actually constituted environmental of technical staff trained in natural resource committees and how effective these commit- management and conservation, including envi- tees have been in delivering environmental ronmental assessment. In the Ministry of Water services or improving environmental quality at Resources, the staff capacity for environmental the local level. An assessment of seven VDCs in assessmentvariesamongdifferentdepartments. Nepal's eastern Terai was conducted by SEAM- In the Ministry of Industry, Commerce, and N in 2002. It was found that five VDCs did not Supplies, staff with environmental responsibili- have such committees and only two of them ties have received training on environmental planned to constitute such a committee. The assessments under the Industrial Environmen- study also found that VDCs were implementing tal Management Project, but have not received very few projects to "protect or promote the training in industrial pollution management. environment" (Karna 2002). The overall staff capacity for dealing with envi- ronmental issues in the different departments 4.31 In order to effectively meet their man- of the Ministry of Physical Planning and Works dates under the Local Self-Governance Act, lo- is generally weak, as in some other ministries. cal governments need to be given and assume Efforts to build capacity are hindered by the greater authority in fulfilling their responsibili- divergence in the agencies' primary missions: ties. This will require a greater role and flex- in the Ministry of Forests and Soil Conserva- ibility in the selection of the executive officer tion the primary mission is to protect natural and staff, increased funding for environmental resources, whereas in the Ministry of Industry, services, and the establishment of environmen- Commerce, and Supplies the primary mission tal committees to assist in the effective delivery is to promote industrial development. Another YSIS of environmental services. reason for the different levels of technical pro- ficiency of agency staff is variations in donor NAL assistance in capacity building. For example, A Institutions: Capacity Building the Department of Electricity Development re- AL ceived support from USAID for strengthening Sector Agencies: environmental assessment. Consequently, the Need for Technical Expertise staff has greater technical capacity and higher 4.32 There are multiple agencies at the na- awareness of environmental issues. tional level with some responsibility for en- vironmental management in their mandate, 4.33 To compound this problem, most sector NVIRONMENT but the number of staff, technical expertise, agency staff members do not have a strong in- E and resources for effectively fulfilling their centive to build their capacities on environmen- Y environmental responsibilities vary among the tal issues. Nepalese civil servants are categorized institutions. Generally it is estimated that less into two main service groups--technical and ad- than 1­2% of technical staff within sector line ministrative. Technical groups are divided into OUNTR ministries have environmental skills, which is a different subgroups--for example engineering C serious shortcoming, as environmental compli- or medicine--which are further subdivided. ­ ance is the responsibility of these sectors. On There is no technical group on environment. AL EP N POLICIES AND NSTITUTIONS I : ENSURING STRONG GOVERNANCE AND PERFORMANCE 65 Training on issues, such as environmental sci- urban environmental management issues has ence, that are not considered to contribute to been limited to solid waste management, and the staff member's core competency does not then only to employment of street sweepers to count towards their promotion. Reform of the clean the streets and then dump the waste at civil service categories has been suggested, convenient locations. There are, of course, ex- but it is a long-term option. In the short term, ceptions to this, and some municipalities have training in environmental assessment should introduced innovative solid waste management be made mandatory for all environmentally re- programs. However, in regards to other envi- lated units in the sector agencies. The scope of ronmental challenges, such as air quality and in- this training can range from establishing an un- dustrial pollution, local governments have little, derstanding of the preconditions for EIA and if any, knowledge and capacity to address these IEE approval to the auditing and monitoring of issues. It should also be noted that outside the EIA and IEE recommendations. In addition to Kathmandu Valley there is even less knowledge training, supporting capacity measures could and capacity in local governments to handle include the development of sector-specific environmental management challenges and good practice manuals, guidance and informa- provide basic services. tion exchange, and skill transfers with other EIA and IEE professional networks, both within 4.35 Strengthening the environmental man- and outside government. agement capacities of local governments should, therefore, be considered a top priority for national government and donors. A pilot Local Governments: project for strengthening the environmental Need for Technical Expertise management capacity of local governments has 4.34 At the local level, DDCs, VDCs, and mu- been supported by the Government of Canada nicipalities are the main institutions responsible in partnership with the Ministry of Local Devel- for environmental management, but they gen- opment and the Ministry of Environment, Sci- erally lack the necessary capacity and resources ence, and Technology (box 4.3) and could be to fulfill their responsibilities. For the most used as a model to expand capacity building in part, the extent of municipal involvement in other functional and geographic areas. Box 4.3 Case Study in Capacity Building of Local Governments A pilot project for strengthening local environmental management capacities and actions has been implemented in a number of VDCs in four districts of Nepal. This pilot program is supported by the Canadian Government in partnership with the Ministry of Local Development, and in collaboration with the Ministry of Environ- ment, Science, and Technology, the National Planning Commission, other relevant ministries, and selected DDCs, municipalities, and VDCs. The project helped to establish a village environmental development fund in each VDC project. This fund is locally managed by a village-level management team and the project supported the preparation of village environmental development plans and their implementation. The stress was on helping local people learn about their own environment, prioritize local actions, and implement initiatives. Local communities, VDCs, DDCs, and other stakeholders were encouraged to partner and to contribute to these initiatives. Ultimately, the project's contribution only constituted about 23% of overall local investment, as other resources were mobilized by local communities. Over 500 local initiatives were prioritized and implemented by local communities, the majority being drinking water and sanitation projects. The project notes that "The quality of environmental assessment carried out and reviewed locally might be modest in terms of quality of report, but it is more practical, efficient in the implementation and monitoring phases." Source: ENPHO 2007. 66 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Environmental Information Management: waste minimization, pollution prevention, Improving Knowledge and Accessibility and cleaner technologies would assist indus- trial efforts to improve environmental perfor- 4.36 Another major challenge in environ- mance. mental management is the lack of knowledge of and information sharing in environmental 4.38 There is also a need to further strength- conditions, problems, and solutions. This is en the knowledge base on the emerging chal- particularly true in the area of EIAs. The case lenge of climate change and adaptation, in study analysis of the EIA process found that particular sector impacts and adaptation op- most projects relied on generic information tions. To date, most work on climate change and lacked site-specific information essential has been on knowledge development, with a for identifying and predicting environmental major focus on the water resource sector, in- impacts. Private sector projects had poorer site cluding water-induced disaster management. information than the projects being funded Work in other key sectors, such as human by international funding agencies, because health, forestry and biodiversity, and agri- of their reliance on secondary information culture, is only just starting. There is also a sources and poor resource allocation for in- need to strengthen the awareness of climate formation collection. Only one project, the change issues outside the Kathmandu Val- Middle Marsyangdi Hydropower Project, was ley, particularly among local governments able to present numerical values on air, water, and affected sectors. To increase awareness, and noise-related information. None of the the Ministry of Environment, Science, and projects had undertaken trend analysis, which Technology and the Climate Change Net- is the change in baseline conditions without work should work with the DDCs to encour- project implementation. age the inclusion of climate change issues in YSIS their development plans and with national 4.37 Similarly, many small and medium en- federations such as the NGO Federation, the terprises face significant challenges in envi- NAL Federation of Community Forestry Users Ne- A ronmental compliance, in large part because pal, and the National Federation of Irrigation they lack the knowledge of environmental AL Water Users. standards, pollution control measures, and cleaner production alternatives. It is esti- 4.39 Informed decision making, particularly mated that compliance with environmental with complex environmental issues, requires laws and regulations by small-scale industries that the decisions be formed and based on is extremely low, at around 5­10% of the esti- accurate and updated data and information. mated 2,000 small and medium enterprises in NVIRONMENT The demand for environmental information E Nepal. At the same time, the pollution load is escalating and key stakeholders, such as from industries is a growing concern. One Y project proponents, civil society organiza- of the key impediments to complying with tions, and the media, are demanding more environmental standards is the inability of informed decision making. Although over the small and medium enterprises to understand OUNTR years considerable environmental data have C environmental problems, their impacts, and been accumulated in the country by govern- the possible solutions. Access to information ­ ment and nongovernmental institutions, do- on environmental management systems, AL EP N POLICIESAND NSTITUTIONS I : ENSURING STRONG GOVERNANCE AND PERFORMANCE 67 nor projects, and individual researchers, gaps the political will for institutional action in in essential information still exist. Also, the improving air quality management, such as data are often dispersed and not easily acces- the government ban on the use of old moving sible. The need for a consolidated and cen- chimney Bull's trench kilns in the Kathmandu tralized database, where information can be Valley. Civil society organizations and NGOs widely shared and easily accessed, is critical. have also played an important role in actively Initially, existing data and information can be improving environmental services such as systematically collected from the various in- solid waste management by promoting com- stitutions and verified as to their quality and posting alternatives, recycling at household reliability. Then, information management and community levels, and public education systems need to be linked and integrated campaigns (box 4.4). In several countries, to help facilitate the exchange and transfer government agencies have utilized citizens of knowledge of environmental conditions, to support compliance monitoring and to trends, and best practices at the national and supplement limited enforcement resources local levels. (box 4.5). Greater involvement of civil soci- ety organizations and local communities in environmental management activities, such Stakeholder Groups: Partners in as public awareness campaigns and citizen Environmental Management monitoring, should be actively promoted. 4.40 National and local governments face se- rious capacity constraints, which impede their 4.41 In addition to local communities and ability to effectively and adequately perform civil society organizations, the private sec- their environmental management responsi- tor has entrepreneurs who have valuable bilities. There are many stakeholder groups experience and have promoted innovation in Nepal with proven skills and experience in dealing with environmental management that could assist and support governments problems such as solid waste management. in environmental management. The Gov- The Solid Waste Management Association of ernment of Nepal has promoted many good Nepal estimates that there are over 50 private policies and practices for involving communi- solid waste management providers in the ties as integral partners with government in Kathmandu Valley with total monthly transac- conservation and development efforts, most tions of Nrs. 8 million and employing 2,500 notably the empowerment of community for- staff. However, these private companies are estry groups in forest conservation activities. not widely recognized or consulted, particu- Community forestry groups have played an larly by local governments, even though they important role in conserving and protecting can provide helpful environmental services forest resources. At the same time, these pro- and can supplement government resources grams have allowed forestry group members that are often strained by lack of technical ca- to keep a substantial portion of their income pacity and inadequate staffing. Similarly, pri- from forests and to share in protected area vate consultants and academic and research royalties with relevant buffer zone communi- institutions have environmental expertise that ties. The role of civil society was also a critical could be outsourced or utilized in an advisory factor in creating the public pressure and capacity in areas requiring technical or spe- 68 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Box 4.4 Civil Involvement in Environmental their actions or inactions. In the past, media Management in Nepal associations have played an influential role in Nepal by voicing environmental concerns on The Women Environment Preservation Committee (WEPCO) is a nonprofit organization established in 1992 by a group of women from Lalitpur in different issues and in different venues. For response to growing threats to the environment in the Kathmandu Valley. example, the Nepal Forum of Environmental WEPCO has been involved in waste management, composting, paper Journalists was instrumental in raising public recycling, and education campaigns for more than 15 years and has received several national and international organizational awards for its efforts. awareness of the air quality in the Kathmandu The Nepal Pollution Control and Environment Center is providing waste Valley, which led to the Supreme Court deci- collection to over 10,000 households and is also operating composting plants sion on controlling vehicle emissions in the in Ward 5 of Kathmandu and at the Central Zoo. It has also expanded its services to other cities in Nepal. valley. Similarly, it has been suggested that the National Environmental Pollution Control Nepal is providing waste collec- media can play a future role in promoting the tion services in several cities, including Lalitpur, Kirtipur, and Dhulikhel. importance of the EIA process in ensuring environmental sustainability of development Source: ENPHO 2007. projects and holding project proponents ac- countable for complying with environmental Box 4.5 Examples of Citizen Involvement in Monitoring and Oversight guidelines. In India, Development Alternatives, an NGO, is working in 78 cities on community-based monitoring of particulate matter, sulfur monoxide, and nitrogen oxide parameters with air quality kits provided to local students and Next Steps local NGOs. The data from these kits are shared with the Central Pollution Control Board, which validates the data collected. The data are used by cities 4.43 An overarching theme that emerges to help develop city-level action plans. Similarly, the Banwasi Sewa Ashram citizen monitoring project, supported by the Central Pollution Control Board, throughout this report is the need to improve invites polluting industries to the table to discuss initiatives they have taken environmental governance by strengthening for mitigation and control. institutions and incentives with regards to en- In the Philippines, the concept of multipartite monitoring has been YSIS introduced. Under this approach a monitoring team consisting of representa- vironmental management and compliance. tives from the Department of Environment and Natural Resources, the project Strengthening environmental institutions NAL proponent, NGOs, and local community residents may jointly undertake com- in Nepal will require actions on a number of A pliance monitoring of a licensed facility. The Department of Environment and Natural Resources is creating regional community advisory and monitoring fronts--enhancing the leadership role of the committees in each regional office, which will involve NGOs and the private AL Ministry of Environment, Science, and Tech- sector in all phases of EIA, including compliance monitoring. nology, strengthening environmental manage- Sources: World Bank 2006a; International Network for Environmental Compliance and ment capacity in sector agencies, increasing the Enforcement web site, http://www.inece.org/. role of local governments, and widening the involvement of civil society and the private sec- tor. While the policy and legislative framework NVIRONMENT cialized expertise. One area where technical for environmental management is generally E assistance is urgently needed is the EIA/IEE sound, stronger clarification of roles and re- Y process, particularly for the review and moni- sponsibilities is needed, particularly the relative toring of environmental assessments. roles of the Ministry of Environment, Science, and Technology and sector agencies in the en- OUNTR 4.42 There is also a role for the media in both forcement of the Environment Protection Act C raising public awareness of environmental is- and Rules and sector laws. Priority should also ­ sues and holding government accountable for be placed on strengthening compliance and AL EP N POLICIESAND NSTITUTIONS I : ENSURING STRONG GOVERNANCE AND PERFORMANCE 69 enforcement procedures and systems, includ- governments and gradually transferring re- ing focusing on the role that other branches of sponsibilities through hands-on and targeted government, the judiciary and Parliament, can demonstration projects in environmental play in ensuring compliance. management. Finally, it is important to recog- nize that utilization of community groups and 4.44 Another important policy objective private entrepreneurs can expand the resourc- regarding institutional strengthening is the es and capacity of government institutions and devolution of responsibilities to local govern- at the same time provide greater transparency ments pursuant to the Local Self-Governance and accountability in environmental gover- Act, which has not been fully realized but can nance and institutional performance. More be expected to accelerate under the new gov- specific actions are proposed for institutional ernment. Here, priority needs to be placed strengthening at the national and local level in on building the technical capacity of local chapter 5. 5 Rising to the Challenges: An Action Plan for a Way Forward 5.1 Nepal faces a broad range of environmen- to enhance performance; and (f) improving in- tal challenges, which have had a major bear- stitutional capacity and access to information. ing on the country's development and reform The menu of proposed reforms and actions agenda articulated in its Tenth Plan. This should be diverse and cover a broad range of report provides an important analysis of the options in addressing the three thematic areas links between growth and environment, par- of this report--ensuring infrastructure devel- ticularly the role of the EIA process in ensur- opment is sustainable, meeting the pressures ing sustainable infrastructure development in from rapid urbanization, and strengthening key growth sectors. The report also examines environmental governance and performance. the effects of rapid population growth in ur- The Government of Nepal should consider an ban areas on the urban environment, delivery action plan (summarized in appendix K) that of environmental services, and environmental could include the following options: health. Finally, the report provides a better understanding of the policy and institutional Strengthening the EIA/IEE System to framework required for improving environ- Ensure Sustainable Development mental management and compliance at the national and local levels. 5.3 The Government of Nepal has enacted the Environment Protection Act and Environment 5.2 It is clear from this report that stronger Protection Rules, which generally serve as a environmental performance measures will be sound legal foundation for the EIA/IEE sys- required to address Nepal's many environ- tem. However, there are important policy gaps mental challenges to sustainable development and implementation inconsistencies that create and poverty reduction. This will involve a com- confusion about the necessary elements and prehensive set of cross-cutting reforms and responsibilities for ensuring that infrastructure specific actions that would be focused on (a) development projects proceed in an environ- updating the policy and regulatory framework mentally sustainable manner. The EIA/IEE for environmental management; (b) clarifying system needs to be strengthened as follows: national roles and responsibilities; (c) empow- ering local governments to assume greater re- Address the policy gaps in the EIA process. sponsibilities; (d) strengthening institutional The primary tool for managing environ- capacity for credible enforcement; (e) expand- mental impacts of growth sectors is through ing beyond traditional government institutions the EIA process. However, key policy provi- 71 72 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS sions should be clarified and strengthened, could also be collected and disseminated including screening criteria, project scop- on other issues of concern, such as cleaner ing, alternative analysis, and project identi- technology and climate adaptation. fication and evaluation. Develop sector-specific guidelines for EIA. Clarifying National Roles and A review of environmental assessment re- Responsibilities for Environmental ports and case study analysis found incon- Management sistencies in the application and imple- mentation of EIA requirements. Where 5.4 There are multiple national agencies, en- agencies, such as the Department of Elec- vironmental and sectoral, with important roles tricity Development, have prepared sector- and responsibilities in environmental manage- specific manuals that outline guidelines ment, but their responsibilities for EIA or en- based on the particular needs of the sec- vironmental enforcement are often unclear. tor, environmental performance has been Institutional responsibilities could be clarified enhanced. by considering the following actions: Require comprehensive training on the EIA process. Training in environmental Create an independent environmental en- assessments should be provided for all en- forcement agency. Environmental author- vironmentally related units in sector agen- ity at the national level that is fragmented cies and local governments. It should cover creates confusion and should be centralized a broad range of issues, including the ben- into a single and strong environmental agen- efits of the EIA process for sustainability, cy. There are several organizational models conditions for approval, project alterna- for strengthening the Ministry of Environ- tives and mitigation measures, post-moni- ment, Science, and Technology currently YSIS toring, and auditing of projects. In addi- under review that should be considered. In tion, supporting capacity measures should any organizational model, the environmen- NAL include development of sector-specific tal authority should be given the power to A manuals and accreditation mechanisms, not only set standards for environmental AL guidelines for public participation, and performance but also ensure enforcement information exchanges within and outside of environmental standards and laws. government. Clarify the agency roles in monitoring and Establish an environmental information enforcement. One of the areas of legislative clearinghouse. Although considerable ambiguity in the Environment Protection Act environmental information has been ac- and Rules and in other sector legislation con- NVIRONMENT cumulated over the years, serious informa- cerns the role of the Ministry of Environment, E tion gaps exist and data are haphazardly Science, and Technology in relation to other Y dispersed and difficult to access. A national sector agencies, particularly with regards to information clearinghouse should be es- the monitoring and enforcement of envi- tablished to collect, consolidate, and ex- ronmental conditions. While sector agencies OUNTR pand the database of relevant environmen- clearly have a role in compliance monitoring, C tal, sector, and local information needed it should be clarified that the Ministry has pri- ­ to improve the EIA system. Information mary responsibility for enforcing regulations AL EP N RISINGTO THECHALLENGES: AN ACTION PLAN FOR A WAY FORWARD 73 related to environmental assessments, indus- du Valley. In addition to the need for a more trial pollution, and water pollution. sustainable financial framework to support Dedicate resources for monitoring and en- solid waste management in the longer term, forcement. Although the laws explicitly there are other opportunities available to provide for environmental monitoring and improve sustainability. These include pur- enforcement, agencies are constrained be- suing greater collection efficiencies, mini- cause of insufficient resources. Additional re- mizing waste volumes through more ag- sources should be provided to the Ministry of gressive source separation, recycling efforts Environment, Science, and Technology and and composting of biodegradable materi- sectoral agencies for compliance monitoring, als, and examining lower-cost alternatives particularly of EIAs and IEEs. This could in- to landfilling at Banchare Danda through a clude resources from increased budget allo- comprehensive cost-benefit analysis. cations or introduction of creative dedicated Provide a legal framework for improving air sources of funding, such as fees for EIA and quality. While the Ministry of Environment, IEE processing, water consumption fees, and Science, and Technology has prepared a industrial pollution charges. draft Air Quality Management Action Plan, Establish mechanisms for reporting and it has not yet been endorsed by the govern- documenting compliance and enforce- ment nor has any action been taken to im- ment. Most agencies do not have formal plement it. The plan needs to be prioritized mechanisms for the reporting and review based on the expected impacts and on the of, and response to, performance compli- difficulty in implementation. In the long ance or environmental violations. Incen- term, the plan needs to be given a binding tives for self-auditing and environmental legal authority through the adoption of a management systems should be introduced comprehensive Clean Air Act. for project proponents and industrial facili- Create regulatory and financial incentives ties, such as expedited reviews or financial to promote industry compliance. Given assistance for good performance. Struc- the generally weak capacity of government tured procedures for the documentation of regulators in Nepal, a top-down regulatory and response to public complaints should approach to industrial pollution manage- be instituted and be easily accessible to the ment is less likely to succeed. Financial and public, including what referrals and actions regulatory incentives to comply are neces- were taken on the complaints. sary, such as self-monitoring and reporting with requisite safeguards to prevent abuse. Successful donor-supported industrial Enhancing Service Delivery to Meet the management pilot programs should be Pressures of Urbanization replicated and scaled up. 5.5 A number of actions may be taken in re- sponse to the environmental threats posed by Empowering Local Governments to Assume increasing urbanization: Environmental Management Functions Explore alternatives to the current solid 5.6 The Local Self-Governance Act requires waste management system in the Kathman- the devolution of responsibilities, including en- 74 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS vironmental management, to the local govern- propriate oversight. Successful donor proj- ments. Greater efforts are needed to simultane- ects that are aimed at strengthening the ously build stronger local capacity and gradually capacities of local governments in environ- transfer functions to local governments by pur- mental management (such as the Village suing the following: Environmental Development Fund Project supported by the Canadian International Increase funding sources to provide for Development Agency) should be replicat- environmental services. Most municipali- ed and scaled up in other functional and ties have relied heavily on the local devel- geographic areas. To the extent possible, opment fee, but this will be phased out pilot projects should also promote commu- by 2013 and municipalities' own source nity-based environmental management. revenue will not grow fast enough to re- Provide specialized training in environmen- place it. Measures are needed to diversify tal management. In general, the extent of the municipal revenue base, which could local government knowledge of environ- include allowing intergovernmental fiscal mental management issues has been very transfers, permitting local governments to limited. Two immediate areas where local charge service fees or share in existing tax- governments should receive environmen- es, or increasing or introducing new taxes tal training are in the environmental assess- and fees. In addition, local governments ment process and solid waste management. should explore opportunities for bundling The environmental assessment training small-scale project activities under Clean should focus on building local govern- Development Mechanisms. ment capacity to assume IEE approvals for Provide greater flexibility in the hiring of small-scale projects. Municipalities should municipal staff. Municipalities, including receive specialized training in solid waste YSIS elected mayors, are currently given no au- management strategies and options, in- thority in the selection of their executive cluding solid waste collection, recycling, NAL officers, even though they will head the and landfill alternatives. A day-to-day administration of the municipal- AL ity. This has created difficult management Expanding the Institutional Stakeholders to and administrative problems for the deliv- Enhance Performance and Accountability ery of local services. Local governments should be given greater authority in the 5.7 The role of civil society has been a critical hiring and management of local staff, with factor in creating public pressure and politi- appropriate reporting to and supervision cal will for institutional action in improving NVIRONMENT by the Ministry of Local Development. environmental management. While the tradi- E Develop and implement pilot programs tional focus on the role of government has Y for local environmental governance. There been limited to the executive branch institu- has been very limited delegation of envi- tions, the judiciary and legislative branches ronmental functions to local governments. also play an important role in pursuing en- OUNTR More needs to be done to identify func- vironmental compliance. The role of these C tions (such as IEE approvals) that could institutions can be strengthened by the fol- ­ be delegated to local governments with ap- lowing actions: AL EP N RISING TO THECHALLENGES: AN ACTION PLAN FOR A WAY FORWARD 75 Increase civil society involvement in envi- tion. These institutions should consider ronmental management. Local communi- measures to strengthen their oversight ties are the most affected by project devel- role, such as requiring agencies to report opment and government regulation, but to parliamentary committees on the status often the least informed and least involved of compliance with environmental laws or in environmental decision making. First imposing legal sanctions on agencies for and foremost, the public consultation pro- noncompliance of court directives. cess needs to be strengthened by actively in- volving the public as early as possible in the 5.8 A number of environmental challenges planning and design of projects through in- considered in this report are being addressed formal community mechanisms and aware- through a range of thematic and sector-specif- ness measures. Civil society organizations, ic initiatives that are either already under way the media, and other nongovernmental or are being planned. This CEA will provide organizations can also be instrumental in opportunities for Nepal to discuss possible raising awareness of the importance of the areas of cooperation with its numerous devel- EIA process and increasing public account- opment partners, including the World Bank. ability for compliance with EIA standards. Discussions on potential areas of cooperation Promote the use of the private sector in could include technical assistance for institu- delivering environmental services. Private tional capacity building of the Ministry of En- sector entrepreneurs have demonstrated vironment, Science, and Technology, sector valuable experience and innovation in agencies, and local governments in key areas dealing with environmental management of environmental management, such as EIA problems such as solid waste management. implementation; utilization of Clean Develop- The private sector has generally proven ment Mechanisms to supplement financing more efficient in delivering services and of the country's environmental management could help ease the administrative and fi- strategies in renewable energy, cleaner tech- nancial burden on local governments. Mu- nologies, and solid waste management; and nicipalities should formalize private sec- scope for further analytical work or specific tor participation in solid waste collection sector reforms to support the integration of through a competitive selection process, stronger environmental policies within the with standards for performance and provi- context of broader country reforms. sions for public education. Strengthen the oversight role of the judi- 5.9 All of the proposed activities outlined ciary branch and Parliament. The Supreme above would help the Government of Nepal Court has issued several court decisions fulfill its strong commitment to achieving the that have established significant policies MDGs as reflected in its Tenth Plan. The CEA on environmental management, but many provides an important roadmap in develop- of these decisions have not been enforced. ing a renewed and stronger engagement Parliament has also played a critical role between the Government of Nepal and the in establishing environmental policies World Bank in the support of sustainable through legislation, but to date has had growth and human development in relation little oversight over policy implementa- to the environment. Urbanization in Kathmandu. Courtesy of Karin E. Kemper, Sector Manager, South Asia Environment and Water Resources Management Unit, The World Bank. A P P E Environment Sector Overview: N D I Linkages and Challenges to X Growth, Sustainable Livelihoods, A and Poverty Reduction A.1 Looking ahead, it is important to under- supporting services."7 World Resources 2005 has stand the environmental challenges that the also noted that "Environmental risks such as un- Government of Nepal is facing, and will con- clean water, exposure to indoor air pollution, tinue to face, in its efforts to achieve its sustain- insect-borne diseases, and pesticides account able development and poverty reduction goals for almost a quarter of the global burden of under the Tenth Plan. Although the strategic disease, and an even greater proportion of the framework and plans for meeting these goals health burden of the poor" (WRI 2005). The have varied across the sectors, a common and connection between environmental sustain- growing concern has been the impacts of de- ability and poverty reduction is also recognized velopment, both positive and negative, on the by the international community, with a specific country's environmental resources. In order to commitment in Goal 7 of the Millennium De- effectively integrate and mainstream environ- velopment Goals (MDGs) to "integrate the mental management in the implementation of principles of sustainable development into these sector plans, it is important to reinforce country policies and programs and reverse the the linkages between strong environmental loss of environmental resources".8 management performance and growth, sus- tainable livelihoods, and poverty reduction. A.3 In Nepal, the linkages between the envi- ronment and livelihoods have been well docu- mented--forests supplying fuelwood, com- Strong Environmental Management post used as fertilizers on farms, grazing areas Performance: Why It Is Essential for for domestic animals, wetland and rangeland Growth, Sustainable Livelihoods, and products used to secure the livelihood of local Poverty Reduction communities. Recent Government of Nepal studies have found that Nepal's environment A.2 The linkages between natural ecosystems is critical to its development, as more than and human well-being (including public 38% of its GDP is derived from the agricul- health, provision of basic goods and services, ture, fisheries and forestry, and mining and social well-being, and security) are globally rec- ognized. The Millennium Ecosystem Assessment 7See Millennium Ecosystem Assessment web site: (2005), for example, states that "Ecosystems http://www.maweb.org/en/index.aspx. are essential for human well-being through 8See United Nations Millennium Development Goals their provisioning, regulating, cultural, and web site: http://www.un.org/millenniumgoals/. 77 78 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Table A.1 Gross Domestic Products by Sector Industry Millions of Nrs. 2005/06 % of overall GDP Agriculture, fisheries, and forestry 212,827 38.1 Mining and quarrying 2,669 0.5 Manufacturing 41,768 7.5 Electricity, gas, and water 12,508 2.2 Construction 56,558 10.1 Trade, restaurants, and hotels 56,139 10.1 Transport, communications, and storage 55,919 10.0 Finance and real estate 64,937 11.6 Community and social services 54,544 9.8 Total 557,869 100.0 Source: Ministry of Finance 2006. quarrying sectors (Ministry of Finance 2006). A.5 Aspects of Nepal's environment sector are Equally importantly, significant portions of explored through three cross-cutting areas: the power, water, manufacturing, trade, and (a) the impacts of current growth and de- tourism sectors are also dependent on the velopment on the natural resource base; (b) environment in one form or another. When the consequences of unmanaged pollution; factoring this dependence in with the more and (c) the emerging challenges of climate traditional natural resource sectors, it is likely variability and change. A preliminary over- YSIS that the total contribution of environmental view of these areas is given here to provide a NAL income to Nepal's economy may well be over contextual framework in which to understand A 50%. A breakdown of the relative contribution the specific environmental management of various sectors to Nepal's GDP is provided challenges associated with growth and envi- AL in table A.1. ronment, rapid urbanization, environmental health, and policies and institutions that are A.4 The linkages between a majority of the detailed in the report. MDG targets and environment sustainabil- ity are strong in Nepal because of its largely agrarian rural society. This is particularly true NVIRONMENT Natural Resource Management: E for poverty reduction and health improve- Increased Pressures on the Y ments, as illustrated in table A.2. For example, Resource Base reducing child mortality, MDG 4, will require addressing the environmental challenges of A.6 The global importance of Nepal's biodi- OUNTR water and air pollution, as much of the child versity has been documented in several global C mortality in Nepal has been attributed to poor assessments of biodiversity hotspots (Critical ­ drinking water and poor indoor air quality. Ecosystem Partnership Fund for the Eastern AL EP N APPENDIX A: ENVIRONMENT SECTOR OVERVIEW 79 Himalayan Region, the Global 200 priority ecosystems. In addition, Nepal's legally desig- ecoregions of the World Wide Fund for Na- nated protected areas have been considered a ture (WWF), and the Important Bird Areas of separate category. Birdlife International). Nepal's Biodiversity Strategy (2002) classified the country's eco- A.7 As noted earlier, a number of donors and systems into five categories: forests, wetlands, NGOs have supported Nepal with environ- rangelands, agroecosystems, and mountain ment-related programs, particularly targeting Table A.2 Linkages between MDG Targets and Environmental Sustainability MDG Targets Linkages to environmental sustainability Goal 1: Target 1: Between 1990 and 2015, halve the Nepal's environment is critical to its development, as more than 38% its GDP is derived Reduce poverty proportion of people whose income is less than from the agriculture, fisheries and forestry, and mining and quarrying sectors. It is esti- and hunger US$1 a day mated the total trade in nontimber forest products in Nepal is approximately US$18 million per year and that harvesters receive about 30% of the total value of this trade (Ministry of Finance 2006). Significant portions of the power, water, manufacturing, trade, and tourism sectors are also dependent on the environment and it is likely that the total contribution of environmental income to Nepal's economy may well be over 50%. Target 2: Between 1990 and 2015, halve the The linkages between the environment and livelihoods in Nepal are well documented. For- proportion of people who suffer from hunger ests, wetlands, and rangelands provide important resources that support the livelihoods of local communities. The environment supplies fuelwood, timber, nontimber forest products, leaf litter, fodder and grazing for domestic animals, and uncultivated foods. Goal 2: Target 3: Ensure that, by 2015, children Local forest degradation and water source depletion in some localities has meant that Achieve universal everywhere, boys and girls alike, will be able to women and girls spend longer hours collecting forest-related products and water from primary education complete primary schooling further distances. In some cases, this has resulted in households not allowing their children, particularly girls, to attend school. Studies have found that a girl's level of educational attainment, in poor households, dropped as fodder and water availability decreased. This suggests that additional household labor falls to school-age girls (Cooke 1998). Goal 3: Target 4: Eliminate gender disparity in primary As above. Promote gender and secondary education, preferably by 2005, equality and and in all levels of education no later than 2015 empower women Goal 4: Target 5: Between 1990 and 2015, reduce the Much of child mortality in Nepal has been attributed to poor environmental health condi- Reduce child under-five mortality rate by two thirds tions, such as the poor supply of quality drinking water and sanitation services, and indoor mortality and outdoor air pollution. Goal 5: Target 6: Between 1990 and 2015, reduce the Women are more exposed to indoor air pollution in rural Nepal than men. Improve maternal maternal mortality ratio by three quarters health Goal 6: Target 7: By 2015, have halted, and begun to Environmental health linkages. Combat reverse, the spread of HIV/AIDS and other major HIV/AIDS, diseases malaria, and other diseases Target 8: By 2015, have halted, and begun Poor access to good water and sanitation services and poor air quality has been found to to reverse, the incidence of malaria and other cause several diseases and cases of ill health in Nepal. major diseases Goal 7: Target 9: Integrate the principles of sustainable All of the above. Ensure development into country policies and programs, environmental and reverse the loss of environmental resources sustainability 80 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS the area of natural resource management A.9 Nepal's protected areas have been im- in rural areas. As a result, programs on com- portant in preserving many of its threatened munity forestry, watershed management, and animal species, including the tiger and the wetland conservation have received significant one-horned Asian rhinoceros populations. In attention by government ministries, such as addition, one assessment of the Terai forests the Ministry of Forests and Soil Conservation, reports that forested areas inside the Terai and several prominent NGOs, including the protected areas have actually increased be- WWF, the World Conservation Union (IUCN), tween 1990/91 and 2000/01 (Department and the International Centre for Integrated of Forest 2005). However, an assessment of Mountain Development (ICIMOD). While Nepal's protected areas management pro- there have been notable successes in natural gram, conducted jointly by the WWF and the resource management, there are increasing Department of National Parks and Wildlife pressures on the natural resource base that will Conservation in 2005 (Nepali et al. 2006), affect its long-term sustainability. found that the protected areas face a growing number of challenges. These challenges in- clude illegal settlements, dam building, illegal Protected Areas harvesting of timber, overcutting of fuelwood, A.8 Nepal's protected areas include a number hunting, and grazing of domestic animals in- of national parks, wildlife reserves, conserva- side protected areas. Another important chal- tion areas, and a hunting reserve. Nepal has lenge has been the armed conflict, which has nine national parks, three wildlife reserves, one restricted the mobility and presence of the hunting reserve and three conservation areas protected areas' staff. (table A.3). The total area of protected lands constitutes just over 18% of Nepal's territory. A.10 The report also discussed the impacts YSIS Eight national parks (excluding Shivapuri) of protected areas on sustainable livelihoods and all three wildlife reserves also have legally and poverty reduction. The pressures faced NAL designated buffer zones around them. If these in conservation areas are lower than in other A areas are included, the total protected area in protected areas due to the local community's Nepal exceeds 19% of the total land area. AL involvement in decision making regarding resource use and in deterring illegal resource use. Except for protected areas in the Terai, Table A.3 Protected Areas people can live and carry on their traditional livelihoods inside all of Nepal's protected ar- Protected Hills and areas Terai mountains eas. An estimated 111,893 households, with a NVIRONMENT total population of 714,178, live in the 11 buf- National parks Chitwan, Bardiya E Sagarmatha, Khaptad, Makalu-Barun, Shivapuri, Rara, fer zones. Also, the protected areas in Nepal's Y Langtang, Shey-Phoksundo mountains are major tourism destinations for Wildlife reserves Shuklaphanta, trekking and for mountain climbing; this gen- Parsa, Koshi Tappu erates some local economic income, though it OUNTR Conservation area Annapurna, Manaslu, has primarily been limited to the employment C Kanchenjunga of porters and guides. ­ Hunting reserve Dhorpatan AL EP N APPENDIX A: ENVIRONMENT SECTOR OVERVIEW 81 Forests A.13 Pursuant to the Forest Act, many patches of government forests have been handed over A.11 The Department of Forest estimates about to local communities for management as 5.83 million hectares, or 39.6% of the total community forests. By the end of 2005, over geographic area, to be "forest area". The Food 1.2 million hectares of forest lands had been and Agricultural Organization of the United given to 14,337 community forest user groups Nations (FAO) estimates that Nepal has 27.3% to manage. Degraded forest lands have also forest cover (3.9 million hectares), of which a been leased to poor households to raise their quarter is heavily degraded. livelihood standards through production of fodder, forage, and medicinal plants. Nepal's A.12 The FAO notes that Nepal's forest cover community forestry program is widely ac- dwindled by 1.8% annually from 1990 to 2000. knowledged as one of the most progressive An assessment of forest cover changes in and proven examples of devolving manage- the Terai districts for the period 1990/91 to ment over forest resources to community- 2000/01 found that there was an overall loss based user groups (box A.1). of 13,278 hectares of forest, although there was a net gain of 4,227 hectares of hill forest (Department of Forest 2005). A recent analysis Rangelands by Winrock International (2005) for the World A.14 Nepal's rangelands cover about 1.75 mil- Bank's Program on Forests concluded that "If lion hectares, or nearly 12% of the country's well-managed and acknowledged, forests can total land area. Nearly 80% of the rangelands play an even more important role. If managed are located in the high mountains and in the for specific products, forests can yield signifi- high Himal areas. The key issues for rangeland cant revenue and can greatly contribute to pov- management include overgrazing, conversion erty alleviation." Box A.1 Forestry and Linkages with Livelihoods The links between the environment and livelihoods have been well documented in Nepal. The links between farm and forestry--forests as a source of fuelwood, fodder and grazing areas for domestic animals, and forest leaf litter and compost as fertilizers on farms--are strong in the country. Much of subsistence agriculture depends on these linkages to maintain soil productivity. Additionally, the collection and use, or sale, of nontimber forest products is also important to the livelihoods of many Nepali households. Nepal's community forestry and leasehold forestry management areas have increased in many parts of the mid-hills and Terai districts. The total trade in nontimber forest products in Nepal is estimated at US$18 million per year, with the harvesters getting about 30% of the total value (Kanel 1999). The poor are more dependent on communal resources for their livelihoods. In a central Nepal watershed, upper zone households were unable to meet their an- nual food requirements from their small and poor-quality landholdings. Of these households, 81% were engaged in nontimber forest product collection to supplement their livelihoods. In more accessible lower zones, only 37% of households were engaged in nontimber forest product collection. They possessed relatively larger and better quality landholdings and access to other sources of income than upper zone households (Pandit and Thapa 2004). Notwithstanding the positive benefits of community forestry on forests and community development, several studies have found that community forestry practices often marginalize poorer households and their access to benefits has been low. Studies from Nepal, one of the first countries to make a serious attempt to devolve forest management, show that the lack of access to information and the elite control of forest user groups have cut many of the poor out of benefits from community forestry programs, particularly women (WRI 2005). Further, these studies suggest that participatory forestry programs, while conserving the forests, still have to find effective ways to move from the community to the individual households, or targeted groups within communities, in order for them to play a meaning- ful role in poverty alleviation (Chhetri, Sigdel, and Malla 2001). Source: Winrock International Nepal 2007b. 82 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS to agriculture, invasion of undesirable spe- runoff, and overharvesting of resources. Also, cies, and drying of alpine meadows through the IUCN review of 2004 found additional climate change. Rangeland management ef- threats from inappropriate infrastructure con- forts in the past have included promotion of struction, poor management of wetlands and different forage grass species. However, over- surrounding areas, and the spread of invasive all work on rangeland management has been alien plant species such as water hyacinth. At limited. the same time, the IUCN review noted that wetlands play a significant socioeconomic role A.15 An assessment of grassland ecology and in Nepal (IUCN 2004) (box A.2). management in protected areas of Nepal has shown that grasslands in the Terai and in the Agroecosystems mountains are important for local livelihoods. The study reported that, in Terai's protected A.18 Agricultural land occupied about 28% areas, the "effects of disturbances, particularly of Nepal's total area in 2000, an increase from cutting and burning" on grasslands was not 23.5% in 1986 (ADB/ICIMOD 2006). Agri- known (Peet et al. 1999). In the high mountain culture, combined with forestry and fisheries, areas, degradation of grasslands was observed accounts for more than 38% of the country's in many parts, such as on the upper slopes of GDP. In the agroecosystems, soil fertility de- Sindhupalchok (Rayamajhi et al. 1999). cline, loss in agrobiodiversity, and increasing use of agrochemicals have been identified as growing concerns. Nepal's State of the Environ- Wetlands ment Report (UNEP 2001) notes that the agri- A.16 An IUCN review of the status of and cultural sector is adversely affected by the loss threats to wetlands in Nepal estimated that of fertile topsoil due to soil erosion, landslides, YSIS total wetland area in the country exceeds 5% and floods. of the country's total area, but the full extent NAL is not yet known (IUCN 2004). Nepal wetlands A are freshwater inland wetlands, both natural Box A.2 Wetlands and Livelihoods AL and artificial. IUCN's rapid assessment of Terai wetlands (Bhandari 1998) lists 80 natural lakes, Wetlands have a significant socioeconomic role in Nepal (IUCN 2004). Rice 55 important floodplain areas, and 12 marshes, and fish are examples of key wetland-based agricultural products. Over 20 as well as reservoirs and canals. The country ethnic and caste groups, making up almost 11% of Nepal's population, are traditionally dependent on wetlands for their livelihoods. Studies have also also has approximately 6,000 rivers and rivu- shown that poorer households are more dependent on products from com- lets, including permanent and seasonal rivers, munal wetlands to supplement their food intake and for income generation. Awareness of the potential (and vulnerability) of wetlands, including riverine NVIRONMENT streams, and creeks, as well as 24 geothermal E environments, has increased with the growth of water-based tourism (for springs, marshes, alpine and tundra-type wet- example river rafting) and hydropower development. Several community- Y lands, and approximately 6,000 hectares of managed micro-hydropower programs have benefited communities, and have even helped in meeting some MDGs. However, the experience with fishponds. large hydropower projects in Nepal has been mixed. Some studies provide evidence of imposition of costs on local people through displacement, loss OUNTR A.17 The IUCN rapid assessment (Bhandari of livelihoods, degradation of natural resources, and erosion of social capital C (Upadhyaya 2002). 1998) showed that the Terai wetlands faced sev- ­ eral threats, including drainage, agricultural Source: Winrock International Nepal 2007b. AL EP N APPENDIX A: ENVIRONMENT SECTOR OVERVIEW 83 A.19 The significant acceleration of soil ero- the impaired water quality in the country's river sion and fertility losses, which are of particular systems. In moving ahead, development strate- concern to the agricultural sector, has been at- gies will not only have to address the challenges tributed to poor land management. In several of natural resource management, but also the watersheds--particularly in areas where there constraints and barriers associated with the ef- has been market-oriented agricultural produc- fective management of urban and industrial tion, such as in the Jhikhu Khola watershed near sources of pollution. the Kathmandu Valley--soil erosion and other nutrient losses occur as a result of agricultural Rapid Urbanization intensification. Also, the fact that Nepal lacks a general land use policy has meant that while A.21 While urbanization is a relatively new some forest and rangelands are being converted phenomenon in Nepal, the rate of urbaniza- to agricultural land, some prime agricultural tion, according to the 2001 census, is among land is being lost to expanding settlements and the highest in South Asia (3.3 million people urbanization, such as in the Kathmandu Valley. or 14.2% of the Nepalese population lived in 58 municipalities) (Central Bureau of Sta- tistics 2002). Based on the rate of urbaniza- Pollution Management: Pressures tion between 1991 and 2001, it is estimated from Urbanization and Industrial that the total urban population in 2006 was Development approximately 3.8 million of the total popula- tion of 25 million. The government predicts A.20 Urbanization and industrialization in that by 2011, 24% of the total population will conjunction with poor environmental manage- be living in urban areas (NPC/MoPE 2003). ment have led to deteriorating environmental According to census data, between 1991 and and health conditions. The combination of in- 2001 the municipal population increased by adequate sanitation and wastewater treatment 94%, or 6.8% per year (Central Bureau of Sta- facilities and the lack of effective pollution con- tistics 2002). This urbanization trend in Nepal trol measures have been major contributors to is presented in table A.4. Table A.4 Urbanization in Nepal Number of Urban population Urban population Average annual Year municipalities (millions) (%) increase (%) 1952/54 10 0.24 2.9 -- 1961 16 0.34 3.6 1.65 1971 16 0.46 4.1 3.23 1981 23 0.96 6.3 7.55 1991 33 1.70 9.2 5.89 2001 58 3.29 14.2 6.84 Source: Central Bureau of Statistics 2003. 84 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS A.22 Different factors have caused a dramatic A.25 Growth in the industrial sector will have increase in both the number of urban settle- significant environmental consequences in ments and the urban population. One of the terms of air pollution, water pollution, and main reasons for the high rate of urbanization hazardous wastes from production processes is migration from the villages. Due to extreme and waste disposal. Much of Nepal's industrial poverty, lack of economic opportunities, and, growth will come from small and medium more recently, insurgency in rural areas, many enterprises, which generally pollute more be- people, especially the young, are migrating to cause they have limited knowledge of and ac- cities in search of opportunities for employ- cess to cleaner technologies, treatment facili- ment, education, health, and security. While ties, and environmental management systems. the poverty level in urban areas is lower than In the Kathmandu Valley, where most of these in rural areas, increasing rural-urban migra- enterprises are located, industry has contrib- tion is leading to more urban poverty and un- uted to the increase of effluent discharges employment, two emerging issues for Nepal. into the rivers and to the increase of particu- late matter emissions. Their contribution to A.23 Experiences in other countries show the total pollution load in the valley, however, that rapid urbanization will often lead to in- is less compared to other pollutants such as creases in urban poverty, particularly in slum municipal wastewater and vehicle emissions. and squatter settlements, which are usually crowded and unhygienic. The urban poor are also more vulnerable. They have fewer coping Emerging Challenges: Adapting to skills to deal with environmental and health Climate Variability and Change problems associated with poor sanitation and water quality, increased air pollution, and A.26 Currently, Nepal's greenhouse gas emis- YSIS poor solid waste management. sions are extremely small in global terms and its overall potential for mitigation measures NAL that could have global impacts is limited. A Industrial Development Nepal's Initial National Communication to AL A.24 The industrial sector plays an important the United Nations Framework Convention role in economic development, employment on Climate Change (UNFCCC) showed that generation, and poverty reduction. Although its total greenhouse gas emission in 1994/95 the industrial sector only contributes 10% to was equivalent to 39,306 gigagrams of carbon Nepal's GDP, the pace of industrial develop- dioxide (CO2) (table A.5). Land use change ment is increasing as the country moves to and the forestry sector were the main sources NVIRONMENT expand beyond its heavy reliance on the ag- of CO2. The energy sector is the second largest E ricultural sector. Also, industrial investment emitter of greenhouse gases (MoPE 2004). Y is expected to rebound, contingent upon whether the current political situation remains A.27 While its contribution to greenhouse gas stable. The Industrial Development Perspec- emissions is tiny, Nepal will face a significant OUNTR tive Plan of Nepal has targeted an increase in challenge in responding to the effects and C the industrial sector's contribution to the GDP impacts of climate variability, climate change, ­ from the current 10% to 20% by 2020. and extreme weather events. Available data AL EP N APPENDIX A: ENVIRONMENT SECTOR OVERVIEW 85 Table A.5 National Greenhouse Gas Inventory of Nepal 1994/95 (gigagrams) Greenhouse gas (source and sink categories) CO2 emission CO2 removal Methane emission N2O emission 1. Energy 1,465 71 1 2. Industrial processes 165 3. Agriculture 867 29 4. Land use change & forestry 22,895 ­ 14,778 Total emission and removal 24,525 ­ 14,778 938 31 Net emission 9,747 938 31 Source: MoPE 2004. suggest that there was an average increase in variability in rainfall patterns, with decreased the mean annual temperature by 0.06ºC per winter precipitation and higher-intensity mon- year between 1977 and 1994 (figure A.1). This soon rains. As a consequence, Nepal's Initial rapid warming has undoubtedly contributed National Communication to the UNFCCC to the reported increase in the melting rate of notes that with predicted increases in temper- Himalayan glaciers. The projected tempera- atures and changes in rainfall patterns, there ture change above the baseline average is es- will be significant negative impacts on Nepal's timated at 1.2ºC for 2030, 1.7ºC for 2050, and ecosystems and people's livelihoods. Specifi- 3.0ºC for 2100. Furthermore, climate change cally, there will be negative impacts on public models in Nepal have predicted that with health, forestry and biodiversity, agriculture, increased temperatures there will be more and water resources (MoPE 2004). Figure A.1 Nepal's Temperature Trend 21.0 20.5 20.0 (°C) 19.5 emperatureT 19.0 y = 0.039x + 19.335 R2= 0.5973 18.5 18.0 1975 1977 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 Year Source: Baidya 2007. 86 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Public Health Implications important drivers of biodiversity loss. It men- tions that "Climate change is projected to ex- A.28 While the impacts of increased tempera- acerbate the loss of biodiversity; increase the tures on public health have not yet been fully risk of extinction for many species, especially studied, it has been predicted that there may those that are already at risk due to factors be an increased range of lower-altitude disease such as low population numbers, restricted or vectors, such as mosquitoes, with the warming of patchy habitats and limited climatic range; and higher altitudes. As a result, these vectors could adversely impact ecosystem services essential spread diseases such as malaria, kala-azar, and for sustainable development." Japanese encephalitis in the lower regions (Alam and Regmi 2004). Several estimates of the poten- A.31 In the case of Nepal, the Initial National tial distribution of malaria have been produced, Communication noted that vegetation patterns using different climate change scenarios. These would be altered by changes in temperature projections indicate that, in the future, malaria and precipitation, which in turn would affect is most likely to extend its range into the fringes the biodiversity of forests. Nepal has a striking of established endemic areas and affect unpre- variety of species, including 60 that are cur- pared or nonimmune populations (Martens et rently endangered. One study has found that al. 1995). The vulnerability of these populations 2.4% of biodiversity may be lost with climate to diseases is significantly increased by growing change (MoPE 2004). However, no study has population densities and poor sanitation. been done on the possible impacts of climate change on biodiversity and ecosystems in Ne- A.29 It is also predicted that increased in- pal. In addition, the threat of climate change cidence of malaria associated with climate to biodiversity has not been internalized in the change may significantly strain the economies Nepal Biodiversity Strategy (2002). of many countries of the region. Picard and YSIS Mills (1992) estimated losses of five working days for infected persons, during the period NAL Agricultural Implications A from infection to recovery, in two districts in A.32 Nepal's agricultural sector is highly Nepal. Mills (1994) found that the economic AL dependent on the weather, particularly on consequences of malaria could be high in the rainfall. Given the low productivity increase areas without malaria control programs. The of the last few years compared to population current lack of primary health care for signifi- growth, climate change is likely to have seri- cant numbers of the population will also con- ous consequences for Nepal's agriculture. tribute to their vulnerability to future climate Most of the population is directly dependent change. Additional health impacts are also NVIRONMENT on a few crops, such as rice, maize, and wheat. E expected from climate's impacts on agricul- The predicted decrease in precipitation from ture (reduced nutrition) and water resources Y November to April would adversely impact (reduction in availability). the winter and spring crops, threatening food security. OUNTR Forestry and Biodiversity Implications C A.33 With the dependency on agriculture, over ­ A.30 The Millennium Ecosystem Assessment has 80% of all water in Nepal is used for irrigation. noted that climate change is one of the most AL EP N APPENDIX A: ENVIRONMENT SECTOR OVERVIEW 87 Higher temperatures, increased evapotranspi- A.35 The rapid rate of snowmelt in the high ration, and decreased winter precipitation may Himalayas is also expected to create or ex- bring about more droughts in Nepal (Alam pand glacial lakes and initially increase river and Regmi 2004). Increased water evaporation flows. The potential increase in disasters from and evapotranspiration may also mean that glacial lake outburst floods is perhaps the crops will require more water through irriga- most relevant climate change-related threat tion. Competition between alternative water for many parts of Nepal (Raut 2006). Out uses will then increase, especially with an in- of 2,323 glacial lakes in Nepal, 20 have been crease in population. Nepal's Initial National found to be potentially dangerous because Communication identifies both positive and of their apparent potential for glacial lake negative impacts of climate change on agricul- outburst. With limited opportunities for safe ture (MoPE 2004). and sustainable livelihoods in the mountains, population densities are growing within the river valleys, where the vulnerability to glacial Water Resource Implications lake outburst floods increases. The growth in A.34 Increased temperatures are expected to population means that there are now more affect water resources in a number of ways. people exposed to glacial lake outburst floods Analysis of the mean monthly river discharges, and other climate-related disasters. This is for example, shows that global warming would compounded by the expansion of infrastruc- melt snow cover on the mountain tops earlier, ture and settlements in the vulnerable areas thereby shifting the peak discharge month (MoPE 2004). from August to July. This could lead to in- creased flooding as well as more pronounced variations in water availability throughout the Summary year (MoPE 2004). The changes in tempera- ture and precipitation will alter the hydrologi- A.36 It is clear that Nepal's growth, sustain- cal cycle and water resources. In some areas, able livelihoods, and poverty reduction efforts drought could become a problem (MoPE rely heavily upon the country's environment 2004) (box A.3). and natural resource sectors. While there is Box A.3 Climate Change and Water Resources in Nepal The analysis of climate data from four recording stations representing the inner Terai, mid-mountains, from the early 1970s to 2000, and one for the high moun- tains from 1988 to 2000, has shown that there has been a clear warming trend in Nepal. The maximum temperatures were increasing faster than the minimum temperatures, indicating a widening temperature range. Though there was no clear change in the precipitation trend, there was a decrease in the number of rainy days and an increase in the number of higher intensity rainfall events. In addition, the hills and mountains were found to be warming faster than the plains, i.e. the warming rate was increasing with altitude. A rise in temperature will have a substantial impact on the water balance, including soil moisture, atmospheric wa- ter, and surface runoff. Likewise, a temperature increase will reduce the glacier ice reserves and ultimately could reduce the total water availability in Nepal. Poor people and subsistence farmers would be hardest hit by a temperature rise. Similarly, the hydropower potential of Nepal would also be reduced due to decreased water availability in the Himalayas. However, because of the diverse topographical, physical, and environmental characteristics of the basins, the impact may vary from basin to basin. Though the higher-altitude areas are more sensitive to climate change, less information is available from those regions due to poor accessibility and the fact that there are fewer climate stations there. Source: Chaulagain 2006. 88 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS some evidence of improvements to the health water quality and air pollution, particularly of some natural resource ecosystems, Nepal's in urban areas. To understand the implica- overall environment is facing increasing pres- tions of poor environmental management in sures and challenges from a number of dif- relation to growth, sustainable livelihoods, ferent sources. The effectiveness of natural and poverty reduction, this report will pro- resource management and pollution man- vide an in-depth analysis of the significance agement efforts to deal with these pressures and implications of key issues associated with and challenges has been mixed. For example, growing infrastructure development, rapid community forestry efforts are touted to have urbanization, poor environmental health, improved sustainable use of forest resources and effective policies and institutions, which, and forest conservation efforts. However, if not properly addressed, will impede Nepal's the consequences from ineffective pollution ability to achieve its long-term development management have resulted in deteriorating and reform agenda. YSIS NAL A AL NVIRONMENT E Y OUNTR C ­ AL EP N A P P E N D I X Progress towards Achieving B Millennium Development Goals MDG MDG targets Nepal's current position Prospects and issues Goal 1: Eradicate Between 1990 and 2015, The poverty headcount rate declined dramatically There is a likely chance that poverty goals will be extreme poverty halve the proportion of from 42% in FY1995/96 to 31% in FY2003/04. met. Nepal needs to improve the developmental and hunger people living in extreme Some progress in reducing malnutrition with impact of remittances and jump start improvements poverty and hunger prevalence of stunting among children three years in agriculture. Given that the prevalence of stunting of age or younger dropping by 11% between 1996 is still high at 43%, and the problem of underweight and 2001. and wasting prevalence has not improved (45­55% and 10­15% respectively), it is unclear if malnutri- tion goals can be met. Goal 2: Achieve Achieve universal primary Net attendance rate of primary-aged children rose The quality of primary education remains a concern, universal primary education by 2015 from 57% (FY1995/96) to 72% (FY2003/04), as the system is characterized by high repetition education net enrollment ratio rose from 69% to 84%, and rates, high dropout rates, and low completion rates. youth literacy from 56% to 73%. These are signifi- Given the current level of achievements, attainment cant gains that bode well for meeting the primary of universal primary education remains a challenge. enrollment MDG. Goal 3: Promote Progress towards gender Access of girls to education has improved as the gen- Growth in completion rates by girls has outpaced gender equality equity and empowering der parity index (ratio of net enrollment of girls to that for boys. If the trend continues, gender parity in and empower women by eliminating boys) increased from 70% in FY1995/96 to 86% primary education will be reached by 2010. women gender disparity in primary in FY2003/04. Females have been the biggest and secondary education beneficiaries of the increase in literacy rates. by 2005 Goal 4: Reduce Reduce infant and child The infant mortality rate has been declining at 3.7% Given current trends, there is a good chance of child mortality mortality rates by two thirds per year since the mid-1980s, with a drop from attaining the child mortality target. Progress in between 1990 and 2015 79 per 1,000 live births in FY1995/96 to 51 in reducing infant mortality has been slow and the rate FY2005/06. Child mortality fell more sharply from will have to accelerate to meet the MDG. Progress 118 to 65 in the same period mainly due to greater in reducing child and infant mortality in eastern and coverage in immunization, and disease prevention far-western regions has been slow and will not meet and treatment. the target. Goal 5: Improve Reduce maternal mortal- Maternal mortality remains high (394 per 100,000 Prospects of achieving the maternal mortality MDG maternal health ity rate by three quarters live births in 2006). More than 6 out of every 10 are unclear due to lack of comparable data over between 1990 and 2015 deliveries are not assisted by skilled attendants. time. Goal 6: Combat By 2015, have halted and TB-related deaths have fallen from 15,000­18,000 Prospects for curbing TB are positive but there are HIV/AIDS, begun to reverse the spread (1994) to 8,000­11,000 annually, and TB cases two challenges: (a) coinfection with HIV and TB malaria, and of HIV/AIDs, incidence of have been declining (301 per 100,000 in 2000 cases could render detection and treatment more dif- other disease malaria, and other major to 258 in 2003). The prevalence rate of HIV/AIDS ficult; and (b) an increase in incidence of multidrug- diseases in the general population is unknown, although it resistant forms of TB. Data gathering and estimation has been estimated that 62,000 are living with HIV of HIV/AIDS rates are still at an early stage. infection (2003). (continued on next page) 89 90 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS (continued) MDG MDG targets Nepal's current position Prospects and issues Goal 7: Ensure Integrate the principles of There are issues ­ e.g. depletion of soil nutrients and There is a less likely chance of achieving goals per- environmental sustainable development arsenic contamination in the Terai ­ that show that taining to sustainable management of environmental sustainability into country policies and environmental sustainability remains a problem. But resources. There is a better chance of attaining water programs, and reverse other initiatives, in drinking water and forestry, show supply and sanitation coverage goals. Deforestation the loss of environmental positive progress. Nepal has a national sustainable remains a serious local problem in many mountain resources development strategy and a sound policy framework and hill areas. There are also increasing commercial for environmental management. pressures on biodiversity resources. Poor environmen- tal management in urban and peri-urban areas is an emerging concern. Goal 8: Promote Develop a global partnership Exports/GDP has stagnated at around 16% since Nepal's growth and poverty reduction prospects global partner- for development FY2001/02 due to weakening external demand hinge on its ability to restore stability, under which ships and competitiveness. Nepal is dependent on foreign development can proceed and the country can under- assistance to meet its investment needs. The fiscal take structural reforms and appropriate investments, deficit is financed mostly by grants and concessional as well as confront the issues of the lagging regions aid. Public external debt stands at 43% of GDP. and disadvantaged ethnic and caste groups. Sources: Adapted from: Central Bureau of Statistics 2004; World Bank 2006c; Ministry of Health 1996, 2001; NPC/UN 2005. YSIS NAL A AL NVIRONMENT E Y OUNTR C ­ AL EP N A P P E N D I List of Consultation Meetings X and Workshops That C Contributed to the Nepal CEA Date Consultation 21 June 2006 Workshop on the role of NGOs and private companies in solid waste management in Kathmandu 25 June 2006 Roundtable on solid waste management with five municipalities of Kathmandu and the Solid Waste Management and Resource Mobilization Center 28 June 2006 Donor's roundtable meeting 28 June 2006 Presentation and discussion of draft Air Quality Management Plan prepared by Ministry of Environment, Science, and Technology with air quality professionals associated with Clean Air Network Nepal 29 June 2006 First national workshop and stakeholder consultation July 2006 Half-day workshop with environment and sector agencies on EIA implementation 21 August 2006 Interaction with industrialists at Balaju industrial district 22 August 2006 Interaction with Municipal Association of Nepal 21 September 2006 Roundtable at Ministry of Environment, Science, and Technology regarding organizational structure 31 October 2006 Workshop on environmental compliance by industries 15 January 2007 Second national workshop and stakeholder consultation 16 January 2007 Thematic workshop on environmental health issues in Nepal with government and donors focusing on the valuation of environmental health costs exercise 17 January 2007 Interaction with the Parliamentary Committee on Environment and Supreme Court Justices 18 January 2007 Thematic workshop on climate change and adaptation organized in collaboration with Ministry of Environment, Science, and Technology 19 January 2007 Interaction with Environment Improvement Coordination Committee at Hetauda municipality 91 92 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS YSIS NAL A AL NVIRONMENT E Y OUNTR C ­ AL EP N A P P E N D I X Criteria Used for D EA Case Study Selection Criteria Reasons for choosing the criteria Environmental assessment done after 1997 To assess if the environmental assessments follow the Environment Protection Act and Rules. Cases from road and hydropower sectors Road and hydropower sectors have huge potential for expansion, large investments, and significant environmental impacts. Project information easily available To facilitate analysis in the short time available. Mix of donor-funded, private sector, and To analyze if effort and quality varies and to identify good practices. solely government funded projects Mix of under-construction and To analyze how completed projects have included EIA recommendations/mitigation measures and their effectiveness operational projects and to see what implementation mechanisms are in place in ongoing activities for incorporating EIA recommendations. Environmental assessment largely To learn lessons on current local capacity and future needs, and encourage less dependence on foreign experts. undertaken by national experts None of the team members were involved To avoid any biases. in the environmental assessment studies 93 A P P E N D I Comparison of World Bank, X ADB, and Nepal Government E Policies Relating to EIA Asian Development Government of Contents World Bank policies Bank policies Nepal policies Remarks Mandatory The World Bank's Safeguard Policy Environmental Policy (5b) The Environment Protection Act, Prevailing government of requirement of EA OP 4.01 clearly indicates that the of the Asian Development which is the umbrella legislation for Nepal policies match the for development Bank requires environmental assess- Bank (ADB) integrates environmental conservation, indicates requirements of Bank and project ment (EA) of projects proposed for environmental consideration in Section 3 that a proponent shall ADB policies of conduct of Bank financing to help ensure that into ADB operations. Lending have to carry out an IEE and EIA of EA studies and incorporate they are environmentally sound and operations make manda- the proposals as prescribed. Section the mitigation measures in sustainable, and thus to improve de- tory provisions to conduct EA 4 of the Environment Protection Act project planning, design, cision making for sector investment studies of all loans, program also states that upon the commence- construction, and operation lending, financial intermediary lend- loans, sector loans, sector ment of this act, no one shall imple- to ensure the integration ing, emergency recovery projects. development program loans, ment or cause to be implemented a of environmental concerns financial intermediation proposal without getting it approved into development The World Bank's BP 4.01 indicates loans, and private sectors by the concerned agency or the endeavors. that EA for a proposed Bank-financed investment operation. This ministry. Environment Protection Act, operation is the responsibility of policy also states that the Section 18, also indicates that in No provision for sector the borrower. Bank staff assist the borrower is responsible for case any person carries out any act environmental assessment borrower, as appropriate. carrying out EA studies and without the approval of EA or any act for, as per Environment implementing the EA recom- contrary to the approved proposal, Protection Act, the EA mendation. The ADB also the prescribed authority may close studies can be made only monitors the implementation down such act immediately, and if for project-level studies. of the agreed environmental any person or organization has done measures by the borrowers. such an act, may, according to the degree of offence, punish that person with a fine up to Nrs. 100,000. EA requirement for OP 4.01 of World Bank requires EA ADB Environment Policy re- The Environment Protection Rules No provisions of EA for types of lending, studies for sector investment lending, quires EA studies for program 1997 of the Government of Nepal sector projects or plans are projects, programs financial intermediary lending, loans, sector loans, sector and other sector legislation make made in prevailing policies. emergency recovery projects. development program loans, mandatory the provision of EA and private sector investment studies for private projects, for operations. government projects, and for projects funded by domestic as well as international funding. Environmental Bank screening criteria for EA studies screening/classi- include: Category A: A proposed fication project is classified as Category A if it is likely to have significant adverse environmental impacts that are sensitive diverse, or unprecedented. These impacts may affect an area broader than the sites or facilities (continue on next page...) 95 96 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS (...continued) Asian Development Government of Contents World Bank policies Bank policies Nepal policies Remarks subject to physical works. EA for a ADB screening criteria for EA The Government of Nepal's prevailing Screening criteria of Bank Category A project examines the studies include: legislation classifies in accordance and ADB are primarily on project's potential negative and Category A (with potentially with Schedules 1 and 2 of the the basis of magnitude positive environmental impacts, significant environmental Environment Protection Rules 1997. and significance level of compares them with those of feasible impacts); environmental impacts. alternatives (including the "without Category B (with potentially Projects requiring EIA: All projects No threshold has been project" situation), and recommends less significant environmen- listed in Schedule 2 are required to recommended for the any measures needed to prevent, tal impacts); Category C undergo thorough EIA-level studies. classification of a project minimize, mitigate, or compensate (unlikely to have significant requiring EIA and IEE, nor for adverse impacts and improve environmental impacts); Projects requiring IEE: All projects EA studies. Government environmental performance. For a Category FI (credit line listed in Schedule 1 are required to of Nepal policy screening Category A project, the borrower is for subprojects through a undergo thorough IEE-level studies. criteria are mainly based on responsible for preparing a report, financial intermediary, or eq- thresholds. The implication normally an EIA (or a suitably com- uity investment in a financial Projects not requiring EA studies: Proj- of the provisions may prehensive regional or sector EA). intermediary). ects that are not listed in Schedule allow small projects with Category B: A proposed project is 1 and 2 do not require any EA-level significant adverse impacts classified as Category B if its poten- A project's environment studies and they are allowed to be to be implemented without tial adverse environmental impacts on assessment category is implemented without incorporating EA studies and incorporation human populations or environmen- determined by the category EA recommendations. of environmental mitigation tally important areas--including wet- of its most environmentally measures. Similarly, large lands, forests, grasslands, and other sensitive component, includ- The Environment Protection Rules projects with minimum or natural habitats--are less adverse ing both direct and indirect provide the criteria on the basis of no adverse impacts require than those of Category A projects. impacts. An IEE is required for thresholds limits. The thresholds EA studies, resulting in These impacts are site specific; few, Category B projects, and an are determined on the basis of the project implementation if any, of them are irreversible; and EIA, requiring greater depth following basic criteria: delays and additional cost in most cases mitigation measures of analysis, for Category A from EA studies. can be designed more readily than projects. No environmental + size of the project for Category A projects. The scope assessment is required for + location of project (sensitive areas, of EA for a Category B project may Category C projects, although etc.) vary from project to project, but it their environmental implica- + project cost YSIS is narrower than that for Category tions nevertheless need to be A. Like Category A, it examines reviewed. NAL the project's potential negative and A positive environmental impacts and recommends any measures needed to prevent, minimize, mitigate, or AL compensate for adverse impacts and improve environmental performance. The findings and results of Category B are described in the project docu- mentation. Category C: A proposed project is classified as Category C if it is likely to have minimal or no adverse NVIRONMENT environmental impacts. E Beyond screening, no further EA Y action is required for a Category C project. Category FI: A proposed project is classified as Category FI if it involves investment of Bank funds OUNTR C through a financial intermediary, in subprojects that may result in adverse ­ environmental impacts. AL (continue on next page...) EP N APPENDIX E: COMPARISON OF WORLD BANK, ADB, AND NEPAL GOVERNMENT POLICIES RELATING TO EIA 97 (...continued) Asian Development Government of Contents World Bank policies Bank policies Nepal policies Remarks Environmental WB OP 4.01 indicates the definitions ADB's Policy 5(b) indicates Environment Protection Rules 1997 EA requirements of Bank assessment/ of EA-related elements covering EIA, the important considerations indicate the IEE and EIA formats in and ADB are similar. preparation of environmental audit, environmental for conducting EIA and IEE Schedules 5 and 6 respectively. The However, the Government reports management plan, hazard assess- studies for Category A and B EIA requirement includes name and of Nepal's EA report is more ment, project influence area, risk projects, including assessment address of proponent, executive focused on industry-related assessment, sector environment of induced, indirect, and summary, basic information relating projects, which sometimes assignment. cumulative impacts, examina- to project, identification of impact, creates confusion for the tion of alternatives, achieving alternative analysis, measures to study team when carrying WB OP 4.01 provides the requirement environmental standards, reduce impacts, environmental man- out EA studies for infrastruc- of EIA studies and report contents: design of least-cost measures, agement plan, review of policy and ture-related projects. executive summary, policy, legal and development of environmental legislations, monitoring, references. administrative framework, project de- management plan, monitoring scription, baseline data, environmental requirement, formulation of impacts, analysis of alternatives, institutional arrangement, and environmental management plan, and meaningful consultation. The appendices. report format is flexible but in- cludes a matrix describing the environmental consequences and mitigation measures. Environmental The Pollution Prevention and Abate- The ADB does not have The Government of Nepal has The Government of Nepal standards and ment Handbook, which contains environmental standards. also developed and published has published only six emission level pollution prevention and abatement However, ADB policy indicates environmental standards for industry- standards. EIA should measures and emission levels, has that the ADB will follow the related projects (six standards). EIA follow the international been published for Bank-related standards and approaches should adopt Government of Nepal standards, depending upon projects. Taking into account borrower laid down in the World Bank's standards as well as Bank standards. the guidelines of funding country legislation and local condi- Pollution Prevention and agencies. tions, the EA may recommend alterna- Abatement Handbook. tive emission levels and approaches to pollution prevention and abatement for the project. The EA report must provide full and detailed justification for the levels and approaches chosen for the particular project or site. Public consultation WB OP 4.01 states that for all ADB policy requires public Environment Protection Rules make Provision of public consulta- Category A and B projects proposed for consultation and access to mandatory provision for public tion is adequately covered IBRD or IDA financing, during the EA information in the EA process. consultation: in Government of Nepal process, the borrower consults project- For Category A and B projects, IEE-level studies: Section 7 of the policies. However, they are affected groups and local NGOs about the borrower must consult Environment Protection Rules make not very effective due to the project's environmental aspects with groups affected by the mandatory provision for public various reasons: and takes their views into account. The proposed project and local consultation as follows: lack of public meetings borrower initiates such consultations NGOs. The consultation should A 15-day notice should be published required as per legislation; as early as possible. For Category A be carried out as early as in the national newspaper requesting and public notices are not projects, the borrower consults these possible in the project cycle so the comments, suggestions, and con- very effective. groups at least twice: (a) shortly after that the views of the groups cerns; these concerns and suggestions environmental screening and before to be affected by the project are to be incorporated in IEE studies. the terms of reference for the EA are are adequately taken into The proponent shall send the notices finalized; and (b) once a draft EA account in the design of the to concerned VDCs, DDCs, health report is prepared. In addition, the project and environment posts, and municipalities describing borrower consults with such groups mitigation measures. Such the project and the potential envi- throughout project implementation as consultation will also take ronmental impacts, and requesting necessary to address EA-related issues place during project implemen- that the concerned stakeholders and that affect them. tation to identify and help individuals submit their concerns and address environmental issues suggestions. The concerned stakehold- (continue on next page...) 98 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS (...continued) Asian Development Government of Contents World Bank policies Bank policies Nepal policies Remarks that arise. For Category A ers should submit the comments and projects, the borrower will suggestions within 15 days of the ensure that consultation will publication of notices. take place at least twice: (a) For EIA-level studies, the proponent once during the early stages shall publish a notice in any national- of EIA fieldwork; and (b) once level newspaper, requesting that the when the draft EIA report is VDC or the concerned municipality, as available, and prior to loan well as the schools, hospitals, health appraisal by the ADB. posts, and concerned individuals or institutions of that area, offer, in writing, their suggestions concerning the possible environmental impact of the proposal. After the publication of a notice, pursuant to subrule (1), anyone who wishes to offer opinions and suggestions to the concerned pro- ponent in connection with the proposal may do so within 15 days from the date of publication of such notice. The comments and suggestions obtained from this process will be included in the scoping documents. The next step in public consultation is the public hearing, which obliges the proponent to conduct a public hearing at the project site after the preparation of a draft EIA report with the intent of providing opportunities for the local communities and stakeholders to express their additional concerns. The YSIS issues brought forth at this hearing should be incorporated in the final NAL EIA report. A The Environment Protection Rules also oblige the proponent to submit the recommendations of concerned AL VDCs or municipalities along with the EIA report. Information WB OP 4.01: When the borrower ADB policy-environmental The Environment Protection Rules Public disclosure system is disclosures officially submits a Category A or assessment reports for ADB 1997 state that the IEE draft report adequately provisioned in Category B EA report to the Bank, projects are intended to be shall be made public for comments and policies. However, they are the Region places a copy of the accessible to interested parties, suggestions. Evidence of publication of not very effective. full report in the project file. It and the general public. The notices and comments and suggestions NVIRONMENT also sends the English-language summary EIA and IEE reports are to be affixed with IEE documents E executive summary of a Category A are required to be circulated for approval. In the absence of such EA report to the Board Operations Di- worldwide, through the de- documents, the IEE report will not be Y vision, Corporate Secretariat, under pository library system, and are accepted for approval. cover of a transmittal memorandum placed on the ADB web site. confirming that the executive The full EIA or IEE reports are Similarly for EIA-level studies, the summary and the full report (a) also made available to inter- Environment Protection Rules provide OUNTR have been prepared by the borrower ested parties upon request. The that after the submission of the EIA C and have not been evaluated or ADB's 120-day rule requires report, the Ministry of Environment, ­ endorsed by the Bank; and (b) are that the summary EIA, or in Science, and Technology should publish subject to change during appraisal. relevant cases the summary a public notice for a one-month period, AL (continue on next page...) EP N APPENDIX E: COMPARISON OF WORLD BANK, ADB, AND NEPAL GOVERNMENT POLICIES RELATING TO EIA 99 (...continued) Asian Development Government of Contents World Bank policies Bank policies Nepal policies Remarks The results of a Category B EA, IEE, is made available to the general and open the EIA report to the when there is no separate report, public at least 120 days before public for review. are summarized in the Project Board consideration of the loan, or Information Document. The EA in relevant cases, before approval is also disclosed through the of significant changes in project Bank's Infoshop website (www. scope. The 120-day rule applies to worldbank.org/infoshop) all public and private sector Category A and selected Category B projects deemed to be environmentally sensitive. To facilitate the required consultations with project-affected groups and local NGOs, the borrower will provide relevant information on the project's environmental issues in a form and language(s) accessible to those being consulted. Implementation of During project implementation, Category A and environmentally The Environment Protection Act Provision of noncompliance EA recommend- the borrower reports on (a) com- sensitive Category B projects require, 1997 indicates that in the case of EA recommendations ations/ pliance with the measures agreed as part of the environmental as- of any person carrying out any is mentioned in the environmental upon with the Bank on the basis sessment process, the development act without getting a proposal Environment Protection Act management plan of the findings and results of the of environmental management approved under Section 6 or 1997. However, it is not a EA, including implementation of plans that outline specific acting contrary to the approved very effective tool to force any environmental management mitigation measures, environmental proposal, the prescribed authority proponents to abide by the plan, as set out in the project monitoring requirements, and may close down such an act EA recommendations. documents; (b) the status of related institutional arrange- immediately, and any person mitigation measures; and (c) the ments. Loan agreements include or organization that has done findings of monitoring programs. specific environmental covenants such an act, may, according to The Bank bases supervision of the that describe environmental require- the degree of the offence, be project's environmental aspects ments, including the environmental punished with a fine of up to Nrs. on the findings and recom- management plans. The provisions 100,000 mendations of the EA, including for the plans must also be fully measures set out in the legal reflected in the project administra- agreements, any environmental tion memoranda. To ensure proper management plan, and other and timely implementation of the project documents. environmental management plans and adherence to the agreed environmental covenants, the ADB requires, for all Category A projects and all environmentally sensitive Category B projects, that (a) bor- rowers/executing agencies submit semiannual reports on implementa- tion of environmental management plans, and this requirement is reflected in the loan agreements; and (b) annual environmental re- view missions from the ADB conduct a detailed review of environmental aspects of projects to ensure that the borrower/executing agency is implementing the environmental management plans and fulfilling the environmental covenants. (continue on next page...) 100 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS (...continued) Asian Development Government of Contents World Bank policies Bank policies Nepal policies Remarks Institutional capacity When the borrower has inadequate To improve environmental The Environment Protection Act The prevailing institutions development of legal or technical capacity to carry governance, the ADB will 1997 also provides for institutional are not capable enough to borrowers out key EA-related functions (such as support and encourage the capacity development, which covers undertake the responsibili- review of EA, environmental monitor- strengthening of legislative the establishment of an environmen- ties as stated in the policy ing, inspections, or management of and regulatory frameworks, tal protection council, recruitment of documents. mitigation measures) for a proposed and will provide demand- environmental inspectors, etc. project, the project includes compo- driven technical assistance nents to strengthen that capacity. to strengthen the capacity of environmental management agencies to deliver core functions such as EIA review, environmental monitoring, setting and enforcing of en- vironmental standards, and environmental awareness and training. YSIS NAL A AL NVIRONMENT E Y OUNTR C ­ AL EP N A P P E N D I X F Environmental Health in Nepal F.1 Environmental health costs represent a and urban air pollution, amount to US$258 significant burden on Nepal's economy. While million, or 3.5% of the country's GDP (table good progress is being made on interventions F.1). This is comparable in range to other such to address environmental risks, much more at- valuation studies on environmental health car- tention and resources need to be invested in ried out in the South Asia region. water supply coverage, drinking water quality, proper waste disposal, and improving air qual- F.3 Thecostsoftheseenvironmentalproblems ity in order for Nepal to meet its MDGs. This have been estimated in a report to help policy is especially important for the most vulnerable makers in Nepal appreciate the magnitude of subgroups of Nepal's population, including these issues and better integrate environmen- children under the age of five, women, the tal health considerations into economic de- elderly, and the poor. velopment decision making. These costs not only include the medical costs of treatment F.2 As the evidence shows, the environmental and lost productivity due to sickness and care- health implications of poor water supply and giving, but also provide an estimate of the sanitation as well as indoor and urban air pol- value of pain and suffering from premature lution dramatically impact Nepal's ability to death and disease. This analysis only covers a achieve targets for reducing child mortality, limited number of diseases attributed to the improving maternal health, combating dis- three environmental risk factors in question; eases, and other MDGs. Overall, the analysis it therefore underestimates the economic shows that Nepal's economic costs associated burden these environmental risk factors place with lack of water and sanitation, and indoor on Nepal. Table F.1 Aggregate Environmental Health Costs for Nepal US$ (millions) % of GDP Indoor air pollution $147.3 ($110.4­$182.3) 2.0% (1.49­2.47%) Lack of water and sanitation $89.2 ($78.4­$100.4) 1.21% (1.06­1.36%) Urban air pollution $21.1 ($17.7­$24.6) 0.29% (0.24­0.33%) Total $258 ($206.6­$307.3) 3.49% (2.79­4.16%) 101 102 NEPAL -- COUNTRY ENVIRONMENTAL ANALYSIS Inadequate Water and Sanitation were found to have arsenic content above the WHO standards (10 parts per billion) and 2.4% F.4 Nepal has the poorest drinking water and had levels above the national interim standard sanitation coverage in South Asia. Varying esti- (50 parts per billion) (National Arsenic Steer- mates of the real coverage make it difficult to ing Committee, as of June 2006). ascertain the true extent of this problem. While the 2001 census notes that 82% of Nepal's F.6 Inadequate sanitation. As with water supply, population have access to drinking water from sanitation coverage remains poor. According improved sources, WaterAid Nepal claims only to government statistics, about 47% of house- 48% have access to such sources within a 15- holds (78% urban; 41% rural) in Nepal have minute walk. The 2001 census also reports that access to toilet facilities, of which half are mod- more than 53% of the population has access ern flush toilets. Other sources show national to safe (piped) water, while the Nepal Living estimates ranging between 27% and 39% ac- Standards Survey of 2003/04 puts this figure at cess to sanitation, with only 19% to 25% found 44% (Central Bureau of Statistics 2002, 2004). in rural areas (table F.2). The Nepal Living Standards Survey 2003/04 reports that about F.5 Contamination of water sources. Most of 39% of households have access to toilets, 12% the drinking water supplied in Nepal is unfit for have access to sanitary systems (primarily sew- consumption. In the Kathmandu Valley, 40% of ers, sewage disposal), and only 8% have access the water available through wells, spouts, and to proper garbage disposal facilities. Sewage pipes were found to have a high contamination and garbage disposal system coverage in the of fecal coliform bacteria (Central Bureau of rural areas is only 3.7% and 0.8% respectively Statistics 2005). In a test of 67 gravity flow water (Central Bureau of Statistics 2004). Access to supply schemes, 91% were contaminated with a sanitary system (sewage disposal), garbage YSIS bacteria (of which 64% were highly contami- disposal, and toilets is also lowest among the nated). In the Terai region, iron, manganese, NAL poorest population and is better in the richer A and coliform contamination were found to be quintiles of the population. Figure F.1 displays above World Health Organization (WHO) stan- the huge gap in access to sanitary facilities be- AL dards (Central Bureau of Statistics 2005). Also, tween that available to the poorest population over 11% of tubewells tested in 20 Terai districts and the national average. Table F.2 Sanitation Coverage in Nepal: Differing Estimates NVIRONMENT E Urban Rural Total Y Source % of population Central Bureau of Statistics 2002 78 41 47 UNDP/Government of Nepal 2002 80 25 30 OUNTR C UNDP/Government of Nepal 2005 81 30 39 WaterAid Nepal 67 19 27 -- Central Bureau of Statistics 2004 39 AL EP N APPENDIX F: ENVIRONMENTAL HEALTH INNEPAL 103 Figure F.1 Uneven Access to Sanitary Facilities is highly unrealistic. WaterAid Nepal, which has more conservative estimates for both water and sanitation, estimates that 11,300 additional 40% households have to be connected to improved 35% drinking water sources and around 14,000 30% households have to be connected to improved 25% toilet facilities per month from 2000 to 2015 to 20% meet the MDG targets. 15% F.9 Resource gaps. Different sources claim 10% that between US$1 billion and US$2 billion in 5% additional resources will be needed to meet the 0% MDGs in the drinking water and sanitation sec- Sanitary System Garbage Disposal Toilet tors. The Water Resources Strategy estimates Poorest Nepal that Nrs. 184 billion (US$2.6 billion) would be spent on the Water Supply and Sanitation Program over the 10th to 14th Plan periods (2003­2027), of which two thirds will be for F.7 Apart from the rural-urban differential, water supply. The majority of this expenditure, there is also a wide variance in coverage by however, will go towards developing urban region. The far-western region, for example, water supply and sanitation infrastructure. At has the lowest percentage coverage of overall the national level, the government reports an sanitary services. Sewage and garbage disposal increase of 8% in the water and sanitation sec- system coverage is lowest in the mountains (1% tor between the 10th Plan and the 14th Plan and 0.3% respectively), while toilet coverage is periods. Even so, less than 5% of public ex- lowest in the Terai (30%). penditure goes towards the drinking water and sanitation sector. Furthermore, such expendi- F.8 Difficulty meeting targets. For drinking tures are heavily biased towards water supply, water quality, the Tenth Five-Year Plan (Poverty with under a quarter spent on sanitation pro- Reduction Strategy Paper) targets 85% cover- grams (especially in the rural and small towns age by 2007, and a 25-year National Water Plan programs). At the local level, too, less than 5% (2002­2027) targets 100% coverage by 2017. of VDCs' and DDCs' own resources go towards Despite a significant improvement in drinking drinking water and sanitation facilities. water coverage from 1990 to 2000, the cur- rent rate of progress, especially in rural areas, F.10 Health impacts. Poor water quality and makes reaching the MDG target ambitious. On poor sanitation are major sources of environ- sanitation, the country's Tenth Five-Year Plan mental risks to human health. Diarrheal dis- goal of providing access to improved sanitation eases, intestinal worms, gastritis, typhoid, and to 50% of households by 2007 looks difficult jaundice are the top five water-borne diseases to achieve in the rural areas. Meanwhile, the (Department of Health Services 2006). Poor National Water Plan goal of providing every- sanitation and improper hygiene practices one with access to sanitation facilities by 2017 (such as poor hand and food hygiene behav- 104 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS iors) also lead to both skin and diarrheal dis- when adults fall sick and stay home from work, eases. Poor sanitary conditions also provide or when primary care-givers have to take care breeding grounds for mosquitoes and flies, of sick children (and potentially lose wages). which spread disease such as malaria, kala-azar, Furthermore, the pain and suffering from pre- filariasis, and viral encephalitis. Over 23,000 mature death and illness can also be valued by cases of malaria have been identified in the calculating the burden of disease in disability last three years, with the most new cases found adjusted life years (DALYs), and costing these in Nepal's far-western region. Kala-azar is en- DALYs at the GDP per capita. Only diarrheal demic in 12 Terai districts of Nepal, with over disease was included in these cost calculations, a thousand cases and 17 deaths recorded in which therefore represent an underestimate of 2004/05 alone. the total costs attributed to inadequate water and sanitation in Nepal. F.11 Vulnerable groups. Children under five years of age are the most vulnerable to diar- F.13 Estimates from one study suggest that rheal diseases; about 22% of this subgroup suf- providing access to water and sanitation to fers from various diarrheal diseases. UNICEF the entire population in the WHO subregion estimates that about 13,000 children under the of SEAR-D (to which Nepal belongs) would age of five died from various diarrheal diseases reduce the cases of diarrhea by nearly 18.3%. in 2005. Deaths and illness from diarrheal dis- This figure is used as a proxy for Nepal, with eases are reported to have increased in the last additional data and assumptions on popula- three years (Department of Health Services tion, disease incidence and duration, and 2006). The poor are also disproportionately treatment costs. It has been estimated, using impacted--the Nepal Living Standards Survey Global Burden of Disease (GBD)9 methodol- found that 20% of the poorest people suffer ogy, that every year 2,174 children under the YSIS from diarrheal diseases; this correlates with age of five die due to lack of adequate water their poor access to quality drinking water, and sanitation. Nonfatal cases of diarrhea NAL as only 3% of such households have access have been estimated to be about 13 million A to piped water (Central Bureau of Statistics per year in children and about 14.4 million AL 2004). Diarrheal diseases are also more com- in adults. The total number of DALYs lost per mon among rural residents and their occur- year is nearly 78,000. The monetary estimate rence is highest in the mid-western region of of these health impacts is obtained by valu- the country. ing a DALY between US$245 and US$300, an estimate centered in the GDP per capita of F.12 Economic costs. Inadequate access to US$272 (see table G.1 in appendix G for ex- NVIRONMENT water and sanitation leads to premature deaths planation of lower and upper bound values). E and disease, which in turn impose costs on This translates into an annual cost of about Y Nepal's economy. These costs include the US$21million. expenses incurred to treat illness from dis- eases attributed to poor water and sanitation, 9 OUNTR incorporating doctor fees, laboratory tests, The Global Burden of Disease project (GBD) is a C worldwide collaboration of over 100 researchers, drugs, and bed charges when hospitalization is ­ sponsored by WHO and the World Bank and based needed. Other costs include lost productivity at the Harvard School of Public Health. AL EP N APPENDIX F: ENVIRONMENTAL HEALTH INNEPAL 105 Table F.3 Estimated Health Costs Due to Inadequate Water and Sanitation in Nepal Type of cost Est. cost (US$) Costs of diarrheal deaths potentially averted by water supply/sanitation interventions 19,983,973 Costs of diarrheal cases potentially averted by water supply/sanitation interventions 940,205 Costs of illness (medical costs + lost productivity costs) 68,276,642 Total costs due to inadequate water supply and sanitation 89,200,821 Total costs as % of GDP 1.21% F.14 In addition, the costs of illness can be million. In urban areas, with far better access calculated based on estimates of the costs of to water, sanitation, and sewage disposal facili- treatment for diarrheal diseases, from the use ties, economic costs are estimated to be about of oral rehydration salts for mild cases, to the US$12.2 million (table F.4). However, even costs of doctor visits and hospital stays (for se- though urban coverage figures are much bet- vere cases). The cost of illness burden related ter, intra-urban and urban-rural inequalities to the lack of water and sanitation is estimated are often masked in the averages--in terms of to be about US$68.3 million. Altogether the access to environmental services, slum dwell- total economic costs due to inadequate water ers and the urban poor are often far worse off and sanitation are estimated at about US$89.2 than higher-income urban dwellers, as well as million (ranging from US$78.4 to US$100.4 being worse off than the rural poor. million), or 1.21% (ranging from 1.06% to 1.36%) of Nepal's GDP (table F.3). F.16 Programs and policies. Drinking water and sanitation projects have been prioritized by the F.15 Since access to water and sanitation government. Eighteen drinking water and sani- varies considerably between rural and urban tation priority projects plan to meet basic levels areas in Nepal, these costs have also been of service (NPC/UNICEF 2006). In rural areas disaggregated spatially. In rural areas, the to- of Nepal, over 26,000 water points have been tal costs from inadequate access to water and established; most of the technologies promoted sanitation are estimated to be about US$74 for drinking water are gravity flow for stream Table F.4 Estimated Rural and Urban Health Costs Due to Inadequate Water Supply and Sanitation Estimated cost (US$) Type of cost Urban Rural Costs of diarrheal deaths potentially averted by water supply/sanitation interventions 3,388,683 20,198,440 Costs of diarrheal cases potentially averted by water supply/sanitation interventions 269,669 789,214 Costs of illness (medical costs + lost productivity costs) 8,542,690 53,019,747 Total costs due to inadequate water supply and sanitation 12,201,042 74,007,401 106 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS and spring sources, and shallow tubewells and nologies such as rainwater harvesting and dug wells for groundwater sources. The Melam- fog water harvesting are being promoted. chi inter-river basin transfer is an ambitious, and The Fund Board plans to promote rainwa- expensive, effort by the government to supply ter harvesting in 32 rural communities to drinking water to the Kathmandu Valley. benefit over 19,000 people by 2009. Addi- tionally, NEWAH and the Environment and F.17 Financing options. Several government Public Health Organization (ENPHO) are drinking water supply and sanitation projects also working with local populations in wa- are being subsidized. The Fund Board pro- ter-stressed areas to help in the adoption vides for around 70% of drinking water project and installation of rainwater harvesting costs, while the rest is borne by the beneficiary systems. In regions of dense fog, such as in community in cash and kind. Also, a Sanitation eastern Nepal, feasibility studies and pilot- Revolving Loan Fund has been established in ing of fog water harvesting are also being beneficiary communities, with available grants carried out. In one program, about 900 li- able to support the installation of latrines in ters of fog water are collected every day to 25% of households without sanitary facilities. provide water for the pilgrims visiting the This fund is managed by the community as Pathivara Temple in the Taplejung district a revolving fund that provides loans to the during the summer (NEWAH 2005a). members for latrine construction. Similarly, Ecological sanitation. Ecosan is a dry toilet Nepal Water for Health (NEWAH) programs that conserves water and separates out feces provide varying amounts of subsidies for differ- to be used as organic fertilizer. It is being ent drinking water and sanitation systems, for promoted in Nepal; currently, more than example 80% for gravity flow schemes, 85% for 100 Ecosans have been adopted in the peri- tubewells, and 87% for school latrine projects. urban areas of Kathmandu. YSIS F.18 In addition to subsidies to water supply F.20 Service delivery approaches include: NAL and sanitation projects, innovations in technol- A ogy and service delivery are working in tandem Household water treatment systems. At the AL to find new ways to access water, improve water household level, various water quality im- quality, and dispose of feces. Technology in- provement technologies are being piloted novations include new ways to access source and promoted in Nepal. Water testing kits waters and alternative sanitation options. Ser- are being piloted in several communities vice delivery approaches focus on a range of so that local populations can check their activities, both at the household level (such drinking water quality and then seek pro- NVIRONMENT as for water treatment) and at the community tection measures if necessary. Commer- E level (such as for sanitation), and include pri- cially available chlorine solutions for water Y vate sector initiatives (on the supply side). disinfection, such as Piyush, are becoming popular in Nepal--in 2004/05, around F.19 Technology innovations include: 110,000 units of Piyush were sold. Filtration OUNTR technologies such as biosand filters and C Source water. In areas with increasing and colloidal silver filters are being promoted ­ acute water shortages, innovative tech- to remove pathogens, iron, and turbidity AL EP N APPENDIX F: ENVIRONMENTAL HEALTH INNEPAL 107 from drinking water; while the Kanchan ar- been set; however, without major interven- senic filter is being promoted in the Terai tions and additional resources, reaching these districts and in the Kathmandu Valley. Solar targets will be difficult. There is an important disinfection (SODIS) technology--which need to target communities in the mountains uses the synergetic effects of UV-A solar ra- of the western, mid-western and far-western diation and temperature to destroy patho- regions of the country, where programs to gens in water--has been adopted by over improve water supply and sanitation facilities 20,000 households in Kathmandu. are lacking. To enable the expansion of water Community-level sanitation programs. Com- and sanitation facilities, local bodies, includ- munity-led total sanitation (CLTS)--an ing municipalities, DDCs and VDCs, should be approach based on collective community given more responsibilities relating to scheme action to stop open defecation--is being selection and implementation. promoted in Nepal. So far, about 14 villages in six districts have been declared "open F.22 Furthermore, efforts are needed to bol- defecation free" and another 18 villages ster the role of local NGOs in implementation in 7 districts have adopted this approach and the role of communities in the operation to achieve total sanitation (WaterAid Ne- and maintenance of water supply and sanita- pal 2006). A similar community-level ap- tion schemes to ensure sustainability. In terms proach, school-led total sanitation (SLTS), of approaches, sanitation programs should be which aims at stopping open defecation in integrated into all water supply programs to schools and surrounding settlements, is be- ensure the quality of the water and to reduce ing implemented in at least 50 schools in related health hazards. Programs and service 15 districts. The United Nations Children's delivery approaches at the household and com- Fund (UNICEF) and the Nepal Red Cross munity levels--such as the Sanitation Revolving Society plan to implement SLTS in 800 and Loan Fund, CLTS, SLTS, SaniMart, and Eco- 60 schools respectively within the next three san--need to be appropriately scaled up. Ap- years (WaterAid Nepal 2006). proaches that are demand driven and require Private sector role in sanitation marketing. community participation in the operation, To complement community-level sanita- management, and maintenance of water sup- tion, toilet construction and supply has ply and sanitation schemes need to be applied been encouraged by programs aimed at widely. In terms of financing, the government vitalizing the private sector, especially in ru- does not have a policy to provide subsidies or ral areas, to sell sanitary equipment in local microcredit for toilet construction. Given the markets, thereby reducing transport and lack of sanitation facilities, a national program other costs. The SaniMart project, promot- to promote toilet construction and use needs ed by NEWAH, has helped construct over to be implemented. To capitalize on the health 100 toilets and rehabilitate 75 more in a vil- benefits of improved water supply and sanita- lage of 294 households (NEWAH 2005b). tion measures, it is imperative to simultaneous- ly disseminate hygiene promotion messages, Next Steps including messages on better handwashing F.21 In Nepal, water supply and sanitation practices, on improved water storage measures, policies have been formulated and targets have and on good personal and household hygiene. 108 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Rural Energy and Indoor Air Pollution the Hydropower Development Policy (2001), the Renewable Energy Perspective Plan of F.23 About 2.4 billion people worldwide burn Nepal (2000­2020), the Perspective Energy biomass (wood, crop residues, charcoal, and Plan (1991­2017), the Water Resources Act dung) for cooking and heating. The smoke (1992), and the Electricity Act (1992) are the created from burning these fuels turns the main policy, planning, and legislative docu- kitchens of the world's poorest countries into ments guiding the energy sector in Nepal death traps. Indoor air pollution from the (ADB/ICIMOD 2006). The Tenth Plan (NPC burning of solid fuels kills over 1.6 million 2002) emphasizes rural electrification and people, predominantly women and children, plans to supply energy to an additional 10% of each year. Smoke in the home is one of the the population through the national grid and world's leading child killers, claiming the lives an additional 5% of the population through of nearly 1 million children each year (ITDG alternative sources of energy during the Plan 2004). period. Some of the quantitative targets for the renewable energy sector include 200,000 F.24 Rural energy use. The vast majority of biogas plants in 65 districts, 2,700 solar dry- Nepali households use biomass for cooking, ers/cookers in 20 districts, 100 solar drinking especially firewood and agricultural residues. water and irrigation projects in 15 districts, The share of traditional, commercial, and re- 4,000 improved water mills, and 250,000 im- newable energy was 87.7%, 11.75%, and 0.53% proved cookstoves in rural areas. respectively during FY2004/05. Of the total traditional energy consumption, the share F.27 Exposure to smoke. In Nepal, the use of of fuelwood was 89%, of agricultural residue biomass fuels such as wood, dung, agricultural 4.34%, and of cattle residue 6.57%. waste, and charcoal as cooking and heating fuel YSIS is the principle cause of indoor air pollution, F.25 Energy consumption growth over the especially in the rural areas (ADB/ICIMOD NAL 15 years to 2005 was almost linear, with an 2006). In the higher altitudes, houses have A annual average increase of 2.7% (figure F.2). smaller doors and windows to keep warmth The annual average growth rate of traditional AL in during the winter season, and ventilation energy consumption was 2.2%. The contri- is poor. Combustion is incomplete in the use bution of alternative energy technologies in of mud stoves; this results in high smoke emis- Nepal, including hydropower, has been rising sions and contributes to burns and injuries rapidly in the last decade. However, as it starts due to the stove's poor design. Most kitchens from a small base, alternative energy still only do not have chimneys or hoods for smoke NVIRONMENT contributes about 0.6% of the total current exhaust. Use of low-efficiency cookstoves in E energy demand. Though within total energy poorly ventilated kitchens cause severe indoor Y consumption the share of traditional sources air pollution that contains particulate matters, of energy is gradually decreasing, its utilization carbon monoxide, nitrous oxides, sulfur ox- is still increasing at a steady pace. ides (more with coal), formaldehyde, and poly- OUNTR cyclic organic matter, including carcinogens C F.26 Plans and targets. The renewable energy (WHO 2002). Though indoor particulate mat- ­ component of the Tenth Plan (2002­2007), ter of less than 10 microns in diameter (PM10) AL EP N APPENDIX F: ENVIRONMENTAL HEALTH INNEPAL 109 Figure F.2 Total Energy Consumption and Traditional Sources in Nepal 10000 9000 8000 7000 TOE 6000 5000 1000X 4000 3000 2000 1000 0 1991/92 1992/93 1993/94 1994/95 1995/96 1996/97 1997/98 1998/99 1999/00 2000/01 2001/02 2002/03 2003/04 2004/05 2005/06* FY Total Energy Consumption Traditional Sources * Provisional is considered to be safe at 0.05 milligrams per ide (N2O), where biomass (wood) was used as cubic meter (mg/m3), PM10 concentration is fuel. In the high hills region, Practical Action often found to be as high as 1 to 5 mg/m3 in is carrying out impact monitoring to assess pol- smoky kitchens. lution loads of CO and PM2.5 in 33 households in Rashna district. With the introduction of F.28 Exposure monitoring. Information on hoods, there has been a reported 70% decline indoor air quality through exposure monitor- in pollution levels. This study is now being ex- ing in Nepal is limited. One study, done by the panded to 200 households, with a combination Nepal Health Research Council and others of ventilation and insulation intervention (use (2001), indicated that PM10 concentration in of T82 personal dosimeter).10 Also, another cooking areas in places where biomass (wood) new study is being carried out in Kathmandu is burnt was 8,207 micrograms per cubic meter in collaboration with Kirk Smith.11 (µg/m3); and in places where kerosene and liquefied petroleum gas (LPG) are used as fuel F.29 Health impacts. Acute respiratory infec- concentrations were 3,414 µg/m3 and 1,504 tion, chronic obstructive pulmonary disease µg/m3 respectively. Another study done by (COPD), and tuberculosis are the three most Davidson and others in 18 houses in Nepali vil- lages in 1986 revealed that the total suspended particles (TSP) was 8,800 µg/m3, with 21 parts 10Meeting with Practical Action, November 2006. per million (ppm) of carbon monoxide (CO) 11Anil Raut, Winrock Nepal, personal communica- and 368 parts per billion (ppb) of nitrous ox- tion, November 2006. 110 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS common diseases associated with indoor air F.32 Economic costs. The use of biomass for pollution in Nepal. These mainly occur due cooking, and poor ventilation, results in acute to prolonged exposure to smoke and dust lower respiratory infection (LRI) in women (ADB/ICIMOD 2006). These diseases account and young children under five. In addition, for almost 6% of all outpatient visits to health prolonged exposure to smoke also results in institutions (Department of Health Services COPD in women. With very few studies on 2006), and a significant percentage of these smoke exposure monitoring in Nepali house- can be correlated to indoor air pollution. holds, data from similar monitoring carried out in developing countries is used to estimate the F.30 Vulnerable groups. Women are primarily proportion of children and women affected by responsible for cooking in Nepali households; indoor air pollution. Every year, indoor air pol- therefore, they and their young children often lution prematurely kills, on average, 5,223 chil- suffer the most from indoor air pollution, which dren in Nepal. In terms of morbidity in young leads to or aggravates respiratory diseases. Acute children (LRI) and the impact on women (LRI respiratory infection continues to be one of the and COPD), a total of 34,670 DALYs are lost to top killers of children under five years of age. indoor air pollution every year. Valuing DALYs This is because they are especially susceptible from both sickness and death from respiratory to an increased exposure to smoke while their infections and COPD as equivalent to GDP per mothers are cooking, which is compounded capita of US$272, this translates into an annual by their poorly developed immunological sys- cost of about US$78.4 million. tems (Raut 2004). Of the total deaths in the 12 months before the 2001 census, pneumonia F.33 The costs of illnesses are based on the and asthma/bronchitis accounted for about information (preliminary estimates from Minis- 4.2% and 6.9% respectively (CBS 2001). COPD try of Health 2006) that 42.9% of children with YSIS is another major risk, especially among women, acute respiratory infection are taken to a health and has been strongly associated with smoke provider and on the assumption that for each NAL exposure from cooking on open biomass stoves case the care-giver loses the equivalent of about A (Winrock International Nepal 2004). one day of work to take care of the child. This AL includes treatment costs as well as lost produc- F.31 In the Nepali context, the incidence of tivity due to care-giving, and amounts to about acute respiratory infection is also affected by US$69 million. The total cost of indoor air pol- the climate, terrain, and living conditions of lution is therefore calculated to be US$147.3 the people in various regions. In the mountains million, which is almost 2.0% of Nepal's GDP and high hill regions, attempts to conserve (table F.5). NVIRONMENT heat in households results in poor ventilation, E and consequently higher incidence of acute F.34 In Nepal, the use of cooking fuels and Y respiratory infection and COPD than in Terai their availability are often determined by cli- households. With a higher dependence on mate and terrain. Therefore, when analyzing biomass for cooking, rural people have higher costs associated with indoor air pollution, it is OUNTR exposure to smoke than their richer counter- useful to consider a disaggregation by spatial C parts living in urban areas where alternative location (urban versus rural) as well as by eco- ­ (cleaner) fuels are available. logical region (mountains, mid-hill regions and AL EP N APPENDIX F: ENVIRONMENTAL HEALTH IN NEPAL 111 Table F.5 Estimated Health Costs Due to Indoor Air Pollution in Nepal Type of cost Estimated cost (US$) Costs of LRI deaths from indoor air pollution (children < 5, women) 58,977,433 Costs of COPD deaths from indoor air pollution (women > 15) 9,980,965 Costs of LRI/COPD cases from indoor air pollution (children < 5, women) 9,443,878 Costs of illness (medical costs + lost productivity costs) 68,947,632 Total costs due to indoor air pollution 147,349,908 Total costs as % of GDP 1.99% Terai) in order to better inform interventions settlements and cook with biomass), the urban aimed at improving energy access and at reduc- health costs are expected to rise. ing indoor air pollution through better stoves and cleaner fuels. Due to the inadequate disag- F.35 Programs and policies. Numerous rural gregated data by ecological region, this analysis energy programs have been launched and of environmental health costs from indoor air are currently ongoing in Nepal; their goal is pollution has only been undertaken for rural to provide the rural areas with a broad range versus urban areas. Given the high percentage of technology options and service delivery of biomass fuel use in rural regions, the associ- approaches. These broadly include rural en- ated economic costs in terms of health impact ergy access programs, programs on improved and productivity loss are several times higher cookstoves and biogas, and renewable energy than similar valuation done for urban areas. In projects. rural Nepal, the total costs of indoor air pol- lution are estimated at nearly US$130 million, Rural Energy Development Program was while that in urban areas of Nepal is estimated started in 1996 as a joint program by the to be US$17.8 million (table F.6). Again, with Government of Nepal, the United Nations growing urbanization in Nepal and increasing Development Programme (UNDP), and the numbers of urban poor (who live in congested World Bank, It complements the rural elec- Table F.6 Estimated Rural and Urban Health Costs Due to Indoor Air Pollution in Nepal Estimated cost (US$) Type of cost Urban Rural Costs from premature mortality due to indoor air pollution 10,471,612 59,056,639 Costs from LRI and COPD morbidity in women and children under five, due to indoor air pollution 1,707,075 7,824,013 Costs of illness (medical costs + lost productivity) 5,671,067 62,507,880 Total costs due to indoor air pollution 17,849,754 129,388,532 112 NEPAL -- COUNTRY ENVIRONMENTAL ANALYSIS trification objective of the Government of from ESAP. It is being implemented in Nepal's Tenth Five-Year Plan by promoting the mid-hill regions of Nepal through lo- micro-hydro schemes and solar, wind energy, cal NGOs and the government. Currently and biogas technologies. In phase I, the Ru- AEPC/ESAP works with more than 10 re- ral Energy Development Program supported gional service centers providing technical 100 VDCs in 15 districts with the installation backstopping and quality monitoring to over of 120 micro-hydro schemes, 1,524 solar 100 local NGOs. The next phase of AEPC/ home systems, 2,953 toilet-attached biogas ESAP, phase II (2007­2011), targets the in- plants, and 7,200 improved cookstoves. The stallation of 500,000 improved cookstoves, of program is currently in phase II. which 400,000 will be in the mid-hill regions Improved Water Mill Support Program was and 100,000 in the high-altitude areas (V. B. implemented by the Alternative Energy Amatya, personal communication, 2006). Promotion Center (AEPC) through the Biogas Support Program is the major pro- Centre for Rural Technology, Nepal, with gram to support the promotion of biogas the support of the Dutch Government. The use in Nepal. Currently in phase IV, the improved water mill is a modified version of program has assisted in the installation of the traditional water mill and can provide a 150,000 biogas plants in 66 districts of Ne- diverse range of services, such as hulling, pal. The success of Nepal's biogas program oil expelling, saw milling, and electricity can be attributed to strict quality control. generation. The program's goal is to install The Biogas Sector Partnership Nepal, a 4,000 improved water mills by 2007. A total nongovernmental organization, is execut- of 937 improved water mills had been in- ing phase IV of the Biogas Support Program stalled by the end of March 2005. with the financial and technical support of Energy Sector Assistance Program (ESAP), the Netherlands Development Organization YSIS a program of Danish International Devel- (SNV). The subsidy component for phase NAL opment Assistance (DANIDA), is a broad IV has been cofunded by KfW, SNV and the A rural energy access project that includes Directorate General for International Co- support to AEPC, support to micro-hydro operation of the Netherlands (DGIS), and AL development, promotion of solar energy AEPC. The Biogas Sector Partnership-Nepal and improved cookstoves, and financial as- has plans to have 200,000 biogas plants in- sistance to renewable energy investments. stalled by 2009 (BSP 2007). ESAP phase I (2000­2006) installed 200,000 improved cookstoves, 2,914 kilowatts of mi- F.36 The micro-hydro, solar photovoltaic (PV), cro-hydro, and 69,524 solar home systems improved cookstove, solar thermal, and biogas NVIRONMENT E (far above the planned targets). Phase II is subsectors have proven technologies that are Y ongoing, with targets set for improved cook- being widely disseminated through promoting stove installations in the mid-hill regions awareness, capacity building, quality assurance, and the Terai, dissemination of household subsidies, and microfinance. To maximize the OUNTR and institutional gasifiers, and stoves for utilization of renewable energy resources and C use in the high hill regions. contribute towards environmental protection Improved Cookstove Program is a national and sustainable rural development, the Govern- -- program executed by AEPC with support ment of Nepal is providing subsidies for renew- AL EP N APPENDIX F: ENVIRONMENTAL HEALTH IN NEPAL 113 able energy technologies (table F.7). This is ex- systems. Private sector companies aggres- pected to improve service delivery and service sively market their products and this, to- delivery efficiency in the use of such technolo- gether with government support, results gies in rural areas, especially among low-income in a strong distribution and retail chain. rural households. This proposed subsidy policy Artisans supplying improved cookstoves to is expected to be revised every two years. individual homes are another successful example of the private sector-led supply F.37 Service delivery models for rural energy system. access. A number of different service delivery Community ownership of micro-hydro and models have been put in place to increase the rural electrification networks. Communi- access to energy through grid-based electrifica- ties are involved in the projects from the tion and also through off-grid-based renewable planning to the management stages. Com- energy technologies. They include: munity involvement not only reduces costs, but also accelerates implementation and is Private sector supply of household tech- sustainable because of communities' own- nologies such as biogas and solar home ership of the project. Table F.7 Subsidy Policies to Promote Renewable Energy in Nepal Renewable energy source Summary of subsidy policies (Nepalese rupees; Nrs.) Micro-hydropower Nrs. 8,000 per household for new project up to 5 kW capacity Nrs. 10,000 per household for new project from 5 kW to 500 kW Nrs. 4,000 per household for add-on project, providing electricity to villages Solar energy Solar home system system Subsidy of Nrs. 5,000­7,000 for installing system of 10­18 Watt peak (Wp); and Nrs. 6,000­10,000 for > 18 Wp, depending on remoteness Solar cooker Subsidy is 50% of its market value, but will not exceed Nrs. 4,000 Solar dryer Subsidy to family-sized solar dryer costing up to Nrs. 20,000 is up to 50%; for dryers in rural areas for commercial purpose, subsidy up to 70% Solar water pump Subsidy of solar pumps up to 1,000 Wp capacity will be 75% of its cost Biogas 20 specified districts of Terai = Nrs. 6,000 per plant 40 specified hilly districts with road access = Nrs. 9,000 per plant 15 specified remote districts without road access = Nrs. 12,000 per plant For small users, 4­6 cubic meters capacity plants subsidy of Nrs. 500 per plant Improved Subsidy of Nrs. 9,000 for grinding and Nrs. 18,000 for hulling and grinding in specified districts water mill Additional Nrs. 1,500 for grinding and Nrs. 3,000 for hulling and grinding in all specified remote districts not connected by roads Improved cookstove No subsidy for households mud improved cookstoves in hills and mid-hills 50% subsidy for improved cookstoves in high mountains, but not more than Nrs. 2,500 Wind energy Feasible wind electrification projects based on wind chargers to provide lights in village will be provided subsidy at a rate similar to solar home system based on number of households served by each installation Source: AEPC 2006. 114 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Private company provision of rural elec- population (especially the urban poor) "up the trification services. Private companies are energy ladder" to cleaner fuels (such as LPG) in involved in rural electrification because of peri-urban and urban areas. their commitment to community develop- ment and also as a means of maintaining F.40As the National Improved Cookstove Pro- a good relationship with the local commu- gram (coordinated by AEPC) is scaled up, there nity where their power plants are situated. is a clear need for better coordination between The rural electrification is cross-subsidized the several improved cookstove programs, and either by income from urban consumers or for improved consistency in technology (suited through the sale of electricity to the Nation- to specific ecological regions), design (suited to al Electricity Authority. user needs), costs (financing modalities), train- ing, and quality control. Current improved cook- F.38 Nepal has been successful in reaching stove technologies are best suited for the mid-hill over 10% of the country's population with a regions in Nepal. There is a potential demand range of renewable energy technologies. The for about 2.5 million units, but only about 10% of poor rural population's degree of access to en- the households are using improved cookstoves. ergy services depends on the specific technolo- Current attempts at designing and promoting gies in question. Improved cookstoves are low special metal stoves for cooking and space heat- cost and are available to the poor. Electricity ing in high-altitude areas in Nepal (above 2,000 from micro-hydropower is generally available meters) is likely to expand the market by an ad- to all residents of the community. So that the ditional 500,000 units. Though a government poor can participate in these programs, they policy has given a 50% subsidy on metal stoves, are often allowed to make their contribution programs need to be designed for the effective in labor and in kind rather than in cash. Solar marketing of such stoves in remote areas. Biogas YSIS home systems and biogas are expensive house- technology is also being scaled up in response to hold-level technologies and generally are not this potential demand. Of the projected demand NAL affordable to those below the poverty line. of 1.9 million households, only about 150,000 A households have so far adopted this technology. AL While biogas has been shown to have positive Next Steps impacts on the environment, livelihoods, and F.39 In the coming years, Nepal plans to invest the economy, poor households are often unable significantly in rural energy support with specific to afford these units due to the high up-front efforts to improve the use of renewable energy costs. While subsidies provide some support, technologies. To improve service delivery and more work is required to encourage financing of NVIRONMENT service delivery efficiency in the use of renew- biogas by microcredit institutions that have been E able energy technologies in rural areas, espe- reluctant to invest in biogas as it is considered an Y cially among low-income rural households, the unproductive sector. revised subsidy policy, proposed in 2006, is a step in the right direction. Plans for the coming years F.41 With these expansion plans, there is an OUNTR include (a) a significant scaling up of biogas and urgent need for quality control, proper dissemi- C improved cookstove technologies in rural areas; nation of specific technical standards for biogas ­ and (b) market development to move the Nepali and improved cookstove technologies, and the AL EP N APPENDIX F: ENVIRONMENTAL HEALTH IN NEPAL 115 standardization of new improved cookstove the Kathmandu Valley. The Kathmandu Valley's models. The potential for expanding the scope bowl-shaped topography, which restricts air of the regional renewable energy service centers, movement and traps pollutants, makes it espe- currently in place for biogas technologies, to cially vulnerable to air pollution. This problem provide technical backstopping for all renewable is further compounded by the rapid and hap- energy technologies (improved cookstove, bio- hazard growth leading to dense settlements, the gas, solar, etc.) should also be explored further. mushrooming of polluting industries, a poor This might prove to be an important cost-cutting road network, and a largely unmanaged trans- measure, as well as providing communities with portation system. Various studies and the data options for potential upgrades. In addition to coming from Kathmandu's six monitoring sta- technical support, better information dissemi- tions show that Kathmandu's air pollution, par- nation materials (in local languages) should be ticularly the concentration of particulate matter made available with information on local con- (PM), is already several times higher than na- tacts. User manuals specific to each renewable tional and international standards (figure F.3). energy technology should be distributed widely Similarly, sporadic studies done in other urban for better operation and maintenance. areas of Nepal indicate that air pollution is a problem in other cities, for example Birgunj and Biratnagar. Studies have also indicated that Urban Air Pollution the high pollution level, particularly in the dry season, is having serious adverse impacts on F.42 Air pollution is emerging as a major prob- the health of the citizens and the economy as a lem in Nepal's urban centers, particularly in whole. Figure F.3 Concentration of Particulate Matter 350 300 ) 3 250 200 (micrograms/m 150 10 PM 100 50 0 `02 `03 `03 `03 `03 `04 `04 `04 `04 `05 `05 `05 `05 Nov Feb May Aug Nov Feb May Aug Nov Feb May Aug Nov Month Putali Sadak TU Kirtipur Patan Bhaktapur Thamel National Std. Maysyagaon Source: ENPHO 2007. 116 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS F.43 The main sources of air pollution in F.45 The most significant health impact of urban areas are vehicles, industries, resus- outdoor air pollution has been associated with pended road dust, and burning waste. An air particulate matter and, to a lesser extent, with pollution inventory done in the Kathmandu ground-level ozone. Particles smaller than 10 Valley indicates that the main sources of air microns diameter (PM10), and especially those pollution in the valley are vehicle emissions, smaller than 2.5 microns (PM2.5), penetrate road dust, and emissions from brick kilns. In deep into the human body and cause health im- 2005, vehicle emissions were responsible for pacts such as acute respiratory infection (both 37% of the total PM10, the main source of air upper and lower respiratory tract infections), pollution in the valley. Resuspended dust, chronic obstructive lung disease (especially which is also caused by vehicles, accounted bronchitis), asthma attacks, cardiovascular for 25% of the PM10, and brick kilns were disease, and lung cancer. Certain population responsible for 11% of total PM10 emissions. subgroups, such as the elderly, children, and Himal Cement was the main industry caus- individuals with existing respiratory or cardio- ing air pollution in Kathmandu, but it has vascular diseases, are at increased risk from now been closed. Air pollution from vehicles exposure to particulate matter. is generally due to poor fuel quality, poorly maintained vehicles, inadequate transport- F.46 No long-term epidemiological studies related infrastructure, and lack of proper have been conducted to assess the health im- land use and transport planning. A combina- pacts of Kathmandu's air pollution, but a few tion of all these factors is causing air quality studies have undertaken a one-time medical to deteriorate in Nepal's cities. examination of an exposed population or have used dose-response relationships to indicate that the health impacts of Kathmandu's air Health Impacts YSIS pollution can be quite severe (box F.1). Re- F.44 High levels of exposure to air pollutants cords from major hospitals in the Kathmandu NAL produce symptoms of both upper and lower Valley also indicate that the number of COPD A respiratory tract irritation and can result in se- inpatients in Kathmandu Valley hospitals has AL vere respiratory diseases, such as asthma and increased significantly. chronic bronchitis. Air pollutants may also affect other systems in the body, for example F.47 Increasing air pollution in Nepal's urban the cardiovascular system and the central ner- areas, especially in the Kathmandu Valley, is vous system. In Nepal's urban areas, especially imposing a negative economic impact from in the Kathmandu Valley, outdoor air pollu- premature deaths, illness, medical costs, and NVIRONMENT tion typically consists of a complex mixture lost productivity. Costs of health impacts from E of multiple pollutants including suspended particulate matter have been assessed, and Y particulate matter (dust, fumes, mist, smoke) health conditions such as premature mortal- and gaseous pollutants (sulfur compounds, ity, hospital admissions, restricted activity days, carbon monoxide, nitrogen compounds, and emergency visits have been considered. In OUNTR organic compounds such as hydrocarbons, the absence of proper data on treatment costs, C volatile organic compounds, and polycyclic informed estimates have been provided by ­ aromatic hydrocarbons). medical experts in Kathmandu. AL EP N APPENDIX F: ENVIRONMENTAL HEALTH INNEPAL 117 Box F.1 Studies Estimating Health Impacts of Urban Air Pollution in Nepal In Nepal, information regarding the health impacts of urban air quality is limited. There have been a handful of studies that have monitored the impacts of urban air pollution, mostly around the Kathmandu area, on vulnerable groups such as children and roadside residents. · A 1997 World Bank study estimated 85 cases of excess mortality and 1.5 million respiratory symptom days due to PM10 exposure. · In 1998, leaders conducted a survey among children in Kathmandu based on the secondary data collected from Kanti Children's Hospital. It showed that respiratory infections increased from 10.9% of the total outpatient visits in 1996 to 11.6% of the total outpatient visits in 1998. The other health impacts observed were eye irritation and infection during dry months. · A study by Nepal Environmental and Scientific Services and the Nepal Health Research Council in 2001 found that about nine children under the age of five die prematurely due to PM10 levels in Kathmandu. In 2002, Clean Energy Nepal surveyed schoolchildren around brick kilns and found that the brick kilns had a significant impact on the health of these children. · In 2003, a study by Clean Energy Nepal and ENPHO estimated that a reduction of the PM2.5 level in Kathmandu by half would result in a reduction of mortality by 7% and of hospital admissions by 24%. The study further suggested that a reduction in the annual average of the PM10 level in Kathmandu to 50 µg/m3 would prevent over 2,000 hospital admissions, 40,000 emergency room visits, 135,000 cases of acute bronchitis in children, 4,000 cases of chronic bronchitis, and 500,000 asthma attacks. · A recent study (2006) by the Nepal Health Research Council, using the environmental burden of disease (EBD) approach, estimated that the attributable burden due to PM10 concentration in the Kathmandu Valley against the baseline concentration of 10 µg/m3 is 1,926 cases of premature mortality per year. Source: CEN/ENPHO2003. F.48 Urban air pollution in Nepal is estimated chronic bronchitis and other morbidity ob- to have caused nearly 7,000 premature deaths tained from medical experts in Kathmandu, in 2005, and about 2,106 new cases of chronic and based on average treatment costs at pri- bronchitis. Annual hospitalizations due to ur- vate hospitals (to obtain real costs, as opposed ban air pollution are estimated at 4,764, while to subsidized costs at public hospitals). The emergency room visits are at around 93,400. cost of illness burden related to hospitaliza- Assessing these health impacts conservatively by tion and outpatient visits from exposure to using GDP per capita (US$272), this translates particulate matter is estimated to be about into an annual cost of about US$19 million. US$2 million. Altogether, the total economic costs of urban air pollution in Nepal are es- F.49 In addition, the costs of illness may be timated at about US$21 million, or 0.29% of calculated based on estimates of treatment for Nepal's GDP (table F.8). Table F.8 Estimated Health Costs Due to Urban Air Pollution in Nepal Type of cost Est. cost (US$) Costs of premature mortality from particulate matter (PM2.5) 15,186,923 Costs of morbidity endpointsa from particulate matter (PM10) 3,903,578 Costs of illness (medical costs + lost productivity costs) 2,012,000 Total costs attributed to urban air pollution 21,074,932 Total costs as % of GDP 0.29% a. Includes chronic bronchitis, hospital admissions, emergency room visits, restricted activity days, LRI in children, and respiratory symptoms. 118 NEPAL -- COUNTRY ENVIRONMENTAL ANALYSIS Next Steps the valley's air clearly indicates the need for more action. The Air Quality Management F.50 The Nepal Government has had some Action Plan recently drafted by the Ministry success in initiating programs to address the of Environment, Science, and Technology urban air quality problem in Kathmandu, offers a good starting point from which in- notably the ban on the import of new three- terventions need to be prioritized according wheelers and two-stroke two-wheelers, new to their level of difficulty in implementation tailpipe emission standards and inspections, and expected impacts. Complementing this and the import of unleaded fuel. With the should be a program to increase the institu- support of international agencies and na- tional capacity of the Ministry and other sec- tional NGOs, Kathmandu now has a good tor agencies and local governments involved air quality monitoring system. More recently, in air quality management. Lastly, but impor- with the closure of the Himal Cement factory, tantly, recognizing the potential role of the and the ban on polluting Bull's trench brick public in advocacy, attention should be paid kilns, the air pollution level around Kathman- to improving public awareness on the issues du has begun to stabilize over the last three of air quality and possible interventions to years. However, the rapid growth in traffic address the matter. congestion and very high levels of PM10 in YSIS NAL A AL NVIRONMENT E Y OUNTR C -- AL EP N A P P E N D I X Estimating Environmental G Health Costs G.1 Environmental health issues, such as in- as malaria, and the health impacts from toxics door and urban air pollution and inadequate (increased use of pesticides and insecticides). water and sanitation, are of growing concern in Nepal. The true costs of these environmen- G.3 Methodology and data sources. Using the tal problems need to be assessed to understand methodology outlined in box G.1, the analysis their importance. Studies carried out so far for environmental health costs in Nepal was have been limited in scope or coverage. An as- undertaken for the Country Environmental sessment of health impacts and its valuation can Analysis. For population and health data, key be powerful tools for planning and advocacy. sources have included the Nepal Demographic This study attempts to provide an estimate of and Health Survey (Ministry of Health 2006), the value of these environmental health issues the Nepal Living Standards Survey 2003/04 in Nepal. Results from this study are expected (Central Bureau of Statistics 2004), UNICEF's to help policy makers better integrate environ- report on the State of the World's Children mental health into economic development (UNICEF 2006), and the World Bank's World decision making. Translating health impacts Development Indicators (World Bank 2006d). into economic costs is seen also to be a power- Treatment costs data (costs of health care pro- ful means of raising awareness about environ- vider visits) were estimated by key informants mental health issues and facilitating progress (medical doctors from hospitals in Nepal). toward sustainable development. G.2 This study is limited in its coverage and A. Economic Analysis of Impact of scope, and therefore represents an underesti- Inadequate Water and Sanitation mate of the costs of environmental health risks in Nepal. Early conversations and consulta- G.4 Inadequate access to water and sanitation tions with stakeholders in Nepal revealed that leads to premature deaths and disease, which indoor air pollution, inadequate water sanita- in turn imposes a cost on Nepal's economy. tion, and urban air pollution were seen as the These costs include the expenses incurred to major environmental health risk factors in treat illness from diseases attributed to poor Nepal. It was therefore decided to restrict this water and sanitation. Other costs include lost valuation study to these three factors. Other productivity from when adults fall sick and potential environmental health risk factors stay home from work, or when primary care- may have included vector-borne diseases such givers have to take care of sick children (and 119 120 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Box G.1 Methodology Step 1. Quantification of Health Impacts (a) Determine mortality and morbidity attributable to the environmental risk factors · Identify exposed groups of population · Examples (under 5 yrs, and > 5 yrs) for water supply and sanitation, indoor air pollution; females > 15 yrs (indoor air pollution) · Use dose-response functions where appropriate (such as for urban air pollution; or odds ratios (such as for indoor air pollution) to convert exposures to health impacts · Calculate for multiple health endpoints · Examples for urban air pollution: premature mortality, chronic bronchitis, hospital admissions (b) Convert to disability adjusted life years (DALYs) to provide common measure of disease burden for illnesses, premature mortality · Use DALY methodology from WHO · Disability weights, age weights: use subregional figures as proxy for country · e.g. diarrhea, disability weight = 0.11 · e.g. diarrhea, age weight = 0.31 (< 5 yrs), 1.00 (> 5 yrs) · Discounting at 3% Step 2. Valuation of Health Impacts · For mortality: · DALYs valued at GDP per capita (human capital approach) · For morbidity: · DALYs valued at GDP per capita to account for cost of pain and suffering (human capital approach) · Cost of illness = treatment costs + value of time lost to care-giving and illness potentially lose wages). Only diarrheal disease reduce the cases of diarrhea by 18.3%. This YSIS was included in these cost calculations, which then translates into 2,174 deaths in children therefore represent an underestimate of the under five years from unclean water and poor NAL total costs attributed to inadequate water and sanitation. At 34 DALYs per under-five child A sanitation in Nepal. death, diarrheal deaths in this age group in AL Nepal represents a total annual loss of about 73,364 DALYs. Part I: Quantification of Health Impacts G.5Mortality (children under five years). The G.6 Morbidity (children under five years). under-five mortality rate was 65 per 1,000 live About 12% of Nepali children under the age births (Ministry of Health 2006, preliminary of five had diarrhea in the preceding 10 days. NVIRONMENT report), and diarrhea is estimated to be re- With a population of children under five years E sponsible for about 22% of under-five deaths. of age of 4.15 million (World Bank 2006d), the Y This implies that more than 11,800 children estimated number of cases of diarrheal disease under five die annually from diarrheal dis- among children is about 13 million cases per ease. According to Hutton and Haller (2004), year. Key parameters and assumptions: OUNTR providing access to water and sanitation to C the entire population in the WHO subregion Average duration of diarrheal disease of ­ of SEAR-D (which includes Nepal) would four days; AL EP N APPENDIX G: ESTIMATING ENVIRONMENTAL HEALTH COSTS 121 Severity weight of 0.11 (Murray and Lopez both mortality and morbidity associated with 1996);12 diarrheal diseases was approximately 77,417. Average age weight of 0.31 (WHO). Using the Human Capital Approach (HCA), the total annual cost of lost DALYs from diar- From these calculations, the number of rheal diseases due to inadequate water and DALYs lost from morbidity in children under sanitation ranges from a low of US$79 million the age of five years is estimated at 879 DALYs to a high of US$101 million (equivalent to an per year. average of US$89 million, which is 1.2% of Nepal's GDP). G.7 Morbidity (population above five years). As in many developing countries, most of the G.9 Valuing the costs of illness. Children with information on diarrheal incidence in Nepal mild and moderate cases of diarrhea are usually comes from household surveys, usually the treated at home with oral rehydration solutions Demographic and Health Survey, which mea- or other forms of oral rehydration therapy, such sures this indicator only for children under five as weak tea, or home brews. In Nepal, about years of age (as they are the most severely im- 29.3% (Ministry of Health 2006) of diarrhea pacted). Therefore, this study uses results from cases are treated at home using oral rehydration studies conducted in Colombia, Vietnam, and therapy (estimated oral rehydration solution the provinces of Qena and Damietta in Egypt, costs = US$1.7 per case). With nearly 700,000 where the average prevalence ratio is 5. There- cases of mild and moderate diarrhea treated fore, for Nepal about 2.4% of the population at home, the total medical costs are estimated over the age of five (12% divided by 5) is esti- at US$1.8 million per year. Children with severe mated to have diarrheal diseases over a 10-day cases of diarrhea are often taken to a primary period. With a population over five years of age health clinic for treatment; in Nepal this consti- of about 23 million, the estimated number of tutes about 26.9% of diarrhea cases (Ministry of cases of diarrheal disease is about 14.4 million Health 2006). At a cost of US$49 (Nrs. 3,500) per year. Key parameters and assumptions: per case of severe diarrhea in children, this translates into US$31 million per year. Average duration of diarrhea of four days; Severity weight of 0.11 (Murray and Lopez G.10 In terms of lost wages due to care-giving, 1996); for each case of severe diarrhea, it is assumed Age weight of 1.0 (WHO). that one day equivalent (assumed US$1.2, weighted average of rural and urban house- From these calculations, the number of hold wages) is taken by a care-giver to look DALYs lost from morbidity among the popula- after a child. tion over five years of age is estimated at 3,174 DALYs per year. G.11 Also for Nepalis above five years of age, the number of diarrheal cases taken to health Part II: Valuation of Health Impacts 12The severity weight of 0.11 was assumed given a G.8 Valuing DALYs lost. From part I of this scale of 0 (being in perfect health) to 1 (represent- analysis, the total number of DALYs lost from ing death). 122 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS care clinics for treatment is estimated to be half million (table G.2). However, even though that of children under five--i.e. about 13.5%. urban coverage figures are much better, the Again using costs per treatment estimated by intra-urban inequalities are often masked in doctors in Kathmandu, total treatment costs of the averages--slum dwellers and the urban nearly US$20 million per year were estimated. poor are often far worse off in terms of access In addition, due to diarrheal episodes, Nepali to environmental services than higher-income adults (above five years) lose US$12 million urban dwellers. per year in lost wages. Altogether the total economic costs due to inadequate water and sanitation are estimated at about US$89 million B. Economic Analysis of Impact of (ranging from US$78.5 to US$100.6 million), Indoor Air Pollution or 1.21% (ranging from 1.06% to 1.36%) of Nepal's GDP (table G.1). G.13 The use of biomass for cooking, and poor ventilation, result in acute lower respiratory G.12 Since access to water and sanitation var- infection (LRI) in women and young children ies considerably between rural and urban areas under five. In addition, prolonged exposure to in Nepal, these costs have been disaggregated smoke also results in chronic obstructive pul- spatially as well. In rural areas, the total costs monary disease (COPD) in women. With very from inadequate access to water and sanita- few studies on smoke exposure monitoring in tion are estimated to be about US$74 million. Nepali households, data from similar monitor- In urban areas, with far better access to water, ing carried out in developing countries is used sanitation, and sewage disposal facilities, eco- to estimate the proportion of children and nomic costs are estimated to be about US$12.2 women affected by indoor air pollution. YSIS NAL Table G.1 Health Costs Due to Inadequate Water and Sanitation in Nepal A Item Base case Lower bounda Upper bounda AL % cases of death and illness avoidable with improved water supply and sanitation 18.3% 16.5% 20.1% Diarrhea deaths in children from lack of water supply and sanitation 2,174 1,956 2,391 Total mortality (DALYs) 73,364 66,028 80,701 Diarrheal illness in children < 5 from lack of water supply and sanitation (days) 9,510,877 8,559,790 10,461,965 Diarrheal illness in adults from lack of water supply and sanitation (days) 10,530,310 9,477,279 11,583,341 NVIRONMENT Total morbidity (DALYs) 4,053 3,647 4,458 E Total DALYs 77,417 69,675 85,159 Y Value of a DALY: GDP per capita (US$) for Nepal 272 245 300 Valuation of DALYs (US$) 21,087,877 17,081,181 25,516,332 Cost of illness (US$) 68,276,642 61,455,160 75,111,862 OUNTR C Total costs due to inadequate water supply and sanitation (US$) 89,364,520 78,536,341 100,628,194 ­ a. Lower bound estimate assumes cases of illness and death avoidable with improved water supply and sanitation are 16.5%; value of a DALY is US$245. Upper bound estimate assumes cases of illness and death avoidable with improved water supply and sanitation are 20.1%; value of a DALY is US$300. AL EP N APPENDIX G: ESTIMATING ENVIRONMENTAL HEALTH COSTS 123 Table G.2 Estimated Rural and Urban Costs Due to Inadequate Water and Sanitation Estimated costs (US$) Item Urban Rural Costs of diarrheal deaths potentially averted by water supply and sanitation interventions 3,388,683 20,198,440 Costs of diarrheal cases potentially averted by water supply and sanitation interventions 269,669 789,214 Costs of illness (medical costs + lost productivity costs) 8,542,690 53,019,747 Total costs due to inadequate water supply and sanitation 12,201,042 74,007,401 Part I: Quantification of Health Impacts figure means that the probability of getting an acute respiratory illness when using biomass G.14 Estimating exposed population. In Ne- fuels is an estimated 2.3 times higher than if pal, 84.8% of the population uses firewood not using biomass fuels. and straw for cooking (Central Bureau of Sta- tistics 2004). Estimates for SEAR-D exposure G.17 Mortality and morbidity from respiratory rates to indoor smoke (Smith, Mehta, and infections. To approximate mortality data for Maeusezahl-Feuz 2004) have been used to esti- the Nepalese population, baseline data on mate that exposed population share in Nepal acute respiratory infection and COPD deaths from fuel use is 83.5% (sensitivity range from available for the WHO SEAR-D subregion have 56.6% to 85.0%). been used. Every year, some 11,000 children under the age of five die due to LRI in Nepal. G.15 Estimating attributable ratios. Annual Among female adults, it is estimated that near- new cases of acute respiratory infection and ly 6,000 die due to LRI or COPD. For baseline COPD morbidity and mortality (Di) from fuel- data on morbidity, the Nepalese population at wood smoke was estimated from the following risk is multiplied by the incidence rate of the equation: illness considered. Two weeks' incidence of Di = PAR *DiB, acute respiratory infection in children is 8% (Ministry of Health 2006). The incidence of where DiB is baseline cases of illness or mor- acute respiratory infection for the female pop- tality, i is estimated using cause-specific death ulation over 15 is estimated to be 0.6%. The rates for SEAR-D region, and PAR is given by: incidence of COPD in the female population over 15 is taken from Shibuya, Mathers, and PAR = PP*(OR-1)/(PP*(OR-1)+1), Lopez 2001. where PP is the % of population exposed to G.18 Multiplying the baseline data for mortal- fuelwood smoke, and OR is the odds ratio. ity and morbidity from respiratory infections by the attributable ratios provides estimates for G.16 In the absence of Nepal-specific odds ra- deaths and illness from indoor air pollution in tios, this analysis using the figure of 2.3 from Nepal. This analysis shows that every year, in- Smith, Mehta, and Maeusezahl-Feuz 2004. This door air pollution prematurely kills an average 124 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS 5,223 children in Nepal. In terms of morbidity, well as lost productivity due to care-giving--at- there are 4.1 million cases of LRI estimated tributed to indoor air pollution is estimated at in young children and 0.6 million in women. about US$69 million. Furthermore, an additional 44,000 cases of COPD are found in women in Nepal. Convert- G.21 The total impacts from indoor air pollu- ing these deaths and illnesses to DALYs reveals tion are the sum of health costs from excess a total of 287,827 DALYs are lost due to indoor mortality and morbidity, and the costs of ill- air pollution every year. ness. Estimated total damage costs from indoor air pollution range from US$110.4 million to US$182.3 million per year (equivalent to an av- Part II: Valuation of Health Impacts erage US$147.3 million, which is almost 2.0% G.19 Valuing DALYs from both sickness and of Nepal's GDP) (table G.3). death from respiratory infections and COPD as equivalent to GDP per capita of US$272 (us- G.22 In Nepal, when analyzing costs associ- ing the human capital approach), this trans- ated with indoor air pollution, it is useful to lates into an annual cost of about US$78.4 consider a disaggregation by spatial location million. (urban versus rural) as well as by ecological re- gion (mountains, mid-hill regions, and Terai). G.20 Costs of illnesses are based on the infor- Due to the inadequate disaggregated data by mation (preliminary estimates from Ministry of ecological region, this analysis of environmen- Health 2006) that 42.9% of children with acute tal health costs from indoor air pollution has respiratory infection are taken to a health pro- only been undertaken in rural versus urban vider and on the assumption that for each case areas. Given the high percentage of biomass the care-giver loses the equivalent of about one fuel use in rural regions, the associated eco- YSIS day of work to take care of the child. This time nomic costs in terms of health impact and is valued using the average rural household productivity loss is several times higher than NAL wage income (estimated at US$1.5 per day). similar valuation done for urban areas. In rural A The total cost of illness--treatment costs as Nepal, the total costs of indoor air pollution AL Table G.3 Mortality and Morbidity Due to Indoor Air Pollution Indoor air pollution DALYs Value (US$) Value as % of GDP Mortality due to LRI in children under five 176,277 48,016,629 0.65% NVIRONMENT Morbidity due to LRI in children under five 6,910 1,882,238 0.03% E Mortality due to LRI in women 40,239 10,960,804 0.15% Y Morbidity due to LRI in women 4,140 1,127,709 0.02% Mortality due to COPD in women 36,642 9,980,965 0.14% Morbidity due to COPD in women 23,620 6,433,932 0.09% OUNTR C Costs of illness (medical costs + lost productivity costs) 68,947,632 ­ Total costs due to indoor air pollution 147,349,908 1.99% AL EP N APPENDIX G: ESTIMATING ENVIRONMENTAL HEALTH COSTS 125 are estimated at nearly US$130 million, while Thamel, Bhaktapur, Kirtipur, and Matsyagaon. that in urban areas of Nepal is estimated to Because monitoring information was available be US$17.8 million (table G.4). With growing for only a few cities in Nepal, PM10 levels based urbanization in Nepal and increasing urban on average projections for all urban areas of poor (who live in congested settlements and Nepal (estimated by the Development Eco- cook with biomass), the urban health costs are nomics Research Group at the World Bank) expected to rise. were used.13 Most recent estimates for annual average PM10 emissions in urban Nepal are 114 µg/m3. Fine particulate matter (PM2.5) is esti- C. Economic Analysis of Impact of mated to be 64% of PM10 levels (CEN/ENPHO Urban Air Pollution 2003). G.23 Increasing air pollution in Nepal's urban G.25 Determining exposed populations. For areas, especially in the Kathmandu Valley, is this part of the methodology, the study assumes imposing a negative economic impact from that 80% of Nepal's urban population is ex- premature deaths, illness, medical costs, and posed to air pollution. Some health outcomes lost productivity. Costs of health impacts from primarily affect only certain segments of the particulate matter have been assessed, and population, such as restricted activity days for health conditions such as premature mortal- adults, and LRI in children and women. For ity, hospital admissions, restricted activity days, Nepal as a whole, population data were avail- and emergency visits have been considered. In able by various age groups. the absence of proper data on treatment costs, informed estimates have been provided by G.26 Using established dose-response coef- medical experts in Kathmandu. ficients. The best available research evidence on the mortality effects of ambient particulate pollution (PM2.5) on a population are the dose- Part I: Quantification of Health Impacts response coefficients of Pope et al. (2002). For G.24 Monitoring air pollutants. The air quality monitoring system in the Kathmandu Valley is still relatively recent, and consists of six moni- 13 http://www.worldbank.org/nipr/Atrium/map- toring stations in Putali Sadak, Patan Hospital, ping.html. Table G.4 Estimated Rural and Urban Health Costs Due to Indoor Air Pollution in Nepal Estimated cost (US$) Type of cost Urban Rural Costs from premature mortality due to indoor air pollution 10,471,612 59,056,639 Costs from LRI and COPD morbidity in women and children under five, due to indoor air pollution 1,707,075 7,824,013 Costs of illness (medical costs + lost productivity) 5,671,067 62,507,880 Total costs due to indoor air pollution 17,849,754 129,388,532 126 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS Table G.5 Urban Air Pollution Dose-Response Coefficients Per 1 µg/m3 annual average Annual health effect Dose-response coefficients ambient concentration of: Mortality (% change in cardiopulmonary and lung cancer mortality) 0.8% PM2.5 Chronic bronchitis (% annual incidence) 0.9% PM10 Respiratory hospital admissions (per 100,000 population) 1.2 PM10 Emergency room visits (per 100,000 population) 23.5 PM10 Restricted activity days (per 100,000 adults) 5,750 PM10 Lower respiratory illness in children (per 100,000 children) 169 PM10 Respiratory symptoms (per 100,000 adults) 18,300 PM10 Sources: Mortality dose-response coefficient (PM2.5) from Pope et al. 2002; morbidity dose-response coefficients from Ostro 1994 and Abbey et al. 1995 (PM10). morbidity effects, dose-response coefficients outpatient visits from exposure to particulate from the Ostro (1994) global review of health im- matter is estimated to be about US$2 million. pact studies (PM10) and the Abbey et al. (1995) Combining these treatment and lost produc- estimates of chronic bronchitis associated with tivity costs along with costs of mortality and particulates (PM10) are used (table G.5). morbidity, the total economic costs of urban air pollution in Nepal are estimated at about G.27 Calculating health impacts. Using the US$21 million, or 0.29% of Nepal's GDP WHO Global Burden of Disease methodol- (table G.6). ogy, the health effects of urban air pollution YSIS are converted to DALYs. In 2005, an annual G.29 Nepal's economic costs associated with average concentration of 10 µg/m3 was cho- lack of water and sanitation and indoor and ur- NAL sen by the World Health Organization as the ban air pollution amounts to US$258 million, A long-term guideline value for PM2.5. This fig- or 3.5% of the country's GDP (table G.7). This ure is used in the Nepal analysis along with is comparable in range to other such valuation AL the appropriate dose-response coefficients to studies on environmental health carried out in calculate the health impacts. the South Asia region. G.30 This analysis of economic costs of envi- Part II: Valuation of Health Impacts ronmental risk factors in Nepal is an under- NVIRONMENT G.28 In Nepal, the total number of mortal- estimate of the true economic costs. Due to E ity and morbidity DALYs attributed to urban the lack of availability of country-specific data Y air pollution was found to be approximately on other disease outcomes, this analysis was 70,000 in 2005. Using the human capital ap- restricted to fewer health endpoints. Addi- proach, this translates into an annual cost tionally, international and subregion (SEAR- OUNTR of US$16 million, ranging from US$13.4 D) estimates were sometimes used as proxy C million to US$19.3 million. The cost of ill- for Nepal, in the absence of related country ­ ness burden related to hospitalization and data. For example, in indoor air pollution, the AL EP N APPENDIX G: ESTIMATING ENVIRONMENTAL HEALTH COSTS 127 Table G.6 Estimated Health Costs Due to Urban Air Pollution in Nepal Effects/costs Cases DALYs Valuation (US$) Premature mortality from particulate matter (PM2.5) 6,969 55,754 15,164,991 Morbidity endpoints from particulate matter (PM10) Chronic bronchitis (PM10) 2,106 4,633 1,260,275 Hospital admissions (PM10) 4,764 76 20,734 Emergency room visits (PM10) 93,461 421 114,396 Restricted activity days (PM10) 13,919,461 4,176 1,135,828 Lower respiratory illness in children (PM10) 261,868 1,702 462,983 Respiratory symptoms (PM10) 44,300,197 3,323 903,724 Costs of illness (medical costs + lost productivity costs) 2,012,000 Total costs attributed to urban air pollution (US$) 21,074,932 Total costs as % of GDP 0.29% lack of exposure monitoring data for Nepal Nepal. Subsequent economic analyses, such meant that the analysis used odds ratios from as cost-benefit analyses, would serve as impor- international studies. Furthermore, this analy- tant guidance to help the Nepal Government sis represents a first step in highlighting the choose appropriate environmental health in- importance of environmental health issues in terventions. Table G.7 Aggregate Environmental Health Costs for Nepal US$ (millions) % of GDP Indoor air pollution $147.3 ($110.4­$182.3) 2.0% (1.49­2.47%) Lack of water and sanitation $89.2 ($78.4­$100.4) 1.21% (1.06­1.36%) Urban air pollution $21.1 ($17.7­$24.6) 0.29% (0.24­0.33%) Total $258 ($206.6­$307.3) 3.49% (2.79­4.16%) A P P E N D I X List of Environment-Related Laws H and Other Measures of Nepal Measure Date Purpose 1 Private Forest Nationalization Act 1957 Nationalizes all the natural forests in the country 2 Aquatic Life Conservation Act 1961 Forbids the introduction of poisonous, noxious, or explosive materials into a water source or the destruction of any dam, bridge, or water system with the intent to catch or kill aquatic life 3 Land Act 1965 Provides for land consolidation and development along with control of land degradation 4 Forest Protection (Special Arrangement) Act 1967 Conserves and manages forest and biodiversity 5 Forest Areas Land Act 1971 Land ownership and usage of forests 6 Plant Protection Act 1972 Monitors the selling, import and export, and transplantation of various kinds of plants and their products from one district to another; regulates the use of pesticides; establishes plant quarantine station; deals with the prevention and treatment of plant disease 7 National Parks and Wildlife Conservation Act 1973 Protects wildlife and wetlands; defines wildlife as any wild animal, including mammals, birds, fish, and reptiles 8 Pasture Lands Nationalization Act 1974 Guidelines for management of pasture lands 9 Tourism Act 1975 Makes it mandatory for mountaineers to keep the environment clean and abide by the specified conditions 10 Soil and Watershed Conservation Act 1982 Preserves the comfort and financial interest of the public by controlling natural disasters such as flooding and landslides 11 King Mahendra Trust for Nature 1982 Formulates rules for conservation, maintenance, and management of wildlife and Conservation Act other natural resources 12 Solid Waste Management and Resource 1986 Ensures solid waste management through the collection, transportation, recycling, disposal, Mobilization Act and classification of hazardous waste 13 Town Development Act 1987 Conserves wildlife and vegetation, including natural environment within the reserved areas 14 Management and Resource Mobilization Act 1987 Manages solid waste and controls air, water, and soil pollution from solid waste 15 Nepal Water Supply Corporation Act 1989 Takes necessary steps to control water pollution and provides legal provision to penalize those who are found contaminating drinking water 16 Seed Act 1989 Deals with registration, certification, ownership, and release of seeds 17 Pesticide Act 1991 Calls for the registration of pesticides before they can be imported, exported, and produced. Requires container and label specification and licensing for any person, institution or agency selling, formulating, or professionally spraying pesticides 18 Vehicle and Transport Management Act 1992 Defines and prescribes necessary standards for vehicles 19 Electricity Act 1992 Makes provision for licensing to carry out electricity generation with no substantial adverse effects on environment (continue on next page...) 129 130 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS (...continued) Measure Date Purpose 20 Industrial Enterprises Act 1992 Regulates industries by only providing permits to those industries that will not have significantly adverse effect on the environment 21 Water Resources Act 1992 Minimizes environmental damage to wetlands, especially to lakes and rivers, through the requirement of (a) environmental impact assessment; (b) detailed economic, technical, and environmental report prior to the survey or use of water resources; and (c) environment study and subsequent report before a license is granted 22 Forest Act 1993 Ensures the development, conservation, and proper utilization of forests and forest products 23 Pesticides Regulation Act 1993 Regulates pesticide entry into the country by permitting the import of only registered chemicals 24 Buffer Zone Management Rules 1996 Conserves buffer zone around forest, wildlife, natural environments and natural resources, and biodiversity; provides for development work in this area 25 Environment Protection Act 1997 Makes necessary arrangements to open the EIA report to the general public so they may render opinions and suggestions 26 Environment Protection Rules 1997 Provides for the institutionalization of the EIA system, pollution control, management of environmental conservation areas, and management of environment fund 27 Kathmandu Valley Development Authority Act 1998 Provides guidelines for the Kathmandu Valley environment 28 Animal Health and Livestock Services Act 1998 Provides for import regulation through quarantine check-posts and standard formulation for biochemicals 29 Buffer Zone Management Guidelines 1999 Provides for sustainable utilization and conservation of natural resources in the buffer zones and sustainable protection of national parks and reserves YSIS NAL A AL NVIRONMENT E Y OUNTR C ­ AL EP N A P P E N D I X Key Environmental I Institutions in Nepal Council of Parliament Ministers Supreme Court Civil Society Press Parliamentary Committee on National Development Natural Resources and Council Environmental Protection NGOs, National Planning INGOs Commission Media Environment Protection Council National Commission on Academic Sustainable Development Institutions National Biodiversity Coordination Key Water and Energy Committee Ministries Commission Local Bodies Donors Environment, Forest Industry, Agriculture Local Water Science and and Soil Commerce and Development Resources Technology Conservation and Supplies Cooperation INGO = international nongovernment organization, NGO = nongovernment organization Source: Compiled from various sources by ADB/ICIMOD 2006. 131 A P P E N D I X Environment-Related Court J Cases in Nepal Filing Verdict No. Name date date Petitioner Respondent Major issues Results/achievement 1 Drinking water July 1999 June 2001 Pro Public Nepal Water Supply Fresh and pure drinking water to The duty of the Nepal Water Supply case (2058-3-26) Corporation et al. be provided by the government. Corporation must be maintained, as It was reported that the people stipulated by the law, to provide clean had to consume contaminated and fresh water. Nepal Water Supply water instead of pure drinking Corporation has yet to provide safe water water supplied by the govern- to all its clients. ment-owned corporation. 2 Balkhu open July 1997 Jan. 2002 Pro Public Council of Ministry The government decided to pro- The Court quashed the government space case (054-4-20) (2058-9-17) et al. vide ownership of the open space decision to grant ownership to the govern- to the state-run media Gorkhapa- ment-owned Gorkhapatra Corporation and tra Corporation to construct its directed the government to use that land building. The case was filed for only for common public purposes. The the protection of the open space public land was thus protected. at Balkhu, Kathmandu. 3 Forest Sept. 1998 (2059-2-13) Pro Public Council of Ministry. The government decision to give The Court quashed the petition by protection case (2055-5- et al a monopoly of cutting and selling reasoning that the decision of the (TCN) 25) timbers to the government-owned government is of an administrative and Nepal Timber Corporation was policy nature, which is in line with legal challenged. provisions. 4 Pollution July 1999 Nov. 2001 Pro Public Ministry of Asked for introduction of water, The Court ordered the respondent to standard case (056-3-17) (058-10-26) Population and air, and noise pollution standards set standards for water, air, and noise Environment under Environment Protection Act pollution. The government has since as it is a statutory duty of the issued standards for ambient air quality Ministry. and drinking water quality. 5 Water pollution Sept. 1999 Aug. 2001 Pro Public Ministry of Water Setting standards of water pollu- The Court issued a mandamus to the standard case (056-6-13) (058-4-12) Resources et al. tion for different purposes. Ministry of Population and Environment and the Ministry of Water Resources to set a tolerance limit on the pollution of water resources and a standard of water resources to be used for different purposes. This has not yet been done. (continue on next page...) 133 (...continued) Filing Verdict No. Name date date Petitioner Respondent Major issues Results/achievement 6 Import of Sept. 2000 Sept. 2001 Pro Public, The decision of government The Court upheld the decision of the substandard (057-6-5) (2058-6-11) Leaders to import Indian vehicles by government. However, it ruled that as Indian vehicle Nepal & self-certification of manufacturers per the Nepal Vehicle Emission Standard case Martin is contrary to the Nepal Vehicle 2000, it was not appropriate to rely on Chautari Emission Standard 2000. On the certificate issued by the manufac- the basis of the Prime Minister's turer company of a foreign country. The agreement with India to allow Court directed the government to set up import of Indian vehicles into an in-house certification mechanism with Nepal and on the basis of self-cer- testing facility for type approval and tification by the manufacturers, conformity of production. This certifica- the Ministry of Population and tion mechanism is not yet in place. Environment directed accordingly, to import Indian vehicles without conformity of production. 7 Bagmati River Jan. 2001 Dec 2001 Pro Public HMG Council of To maintain the ecology of the The Court issued a mandamus to the dumping case (057-10-10)(2058-9-20) et al. Ministers et al. Bagmati River, the demand was cabinet, Ministry of Local Development, (Balkhu-Chovar) to stop dumping of municipal Ministry of Population and Environment, waste on its banks. Kathmandu Metropolitan City, and Lalit- pur Sub-Metropolitan City to manage municipal waste with full compliance with scientific measures under existing environmental laws, including EIA. The municipalities, however, still dump waste on the banks of the Bagmati. 8 Rani Pokhari (052) 9 June Pro Public HMG Council of To protect the Rani Pokhari area, The Court did not order the demolition case (1) 1997 et al. Ministers et al. a historical cultural heritage of the police building but made a direc- (20054-2- site situated in the heart of tive order in the name of the Council 27) Kathmandu City and built by of Ministers for the formulation of a King Pratap Mall 300 years ago, uniform national policy in religiously, from encroachment, the petition culturally and historically important demands the maintenance of the areas. pond by demolishing the building built by Nepali Police, and its renovation as a good public park and open space. 9 Waste dump in 20 Nov. 2 June 02 Pro Public Pokhara The petition called for a halt to The Court issued a mandamus to the Set River case 2001 (0059-2-19) et al. Sub-Metropolitan the dumping of untreated munici- respondents not to discharge the wastes (058-8-5) City pal waste into the Seti River by and effluents without treatment. Pokhara Sub-Metropolitan City. 10 Pew Lake 27 Nov. 7 April 2002 Pro Public Pokhara Sub-Metropolitan City The Court issued a mandamus to the protection case 2001 (058-12-25) et al. Pokhara's Phewa Lake is famous Pokhara Sub-Metropolitan City to keep (058-8-11) for its beauty. The lake was being the lake clean and free from pollution polluted by Pokhara Sub-Metro- and wastes. politan City and nearby hotels and restaurants. The demand was to protect Phewa Lake from pollution. A P P E N D I X Summary of Proposed K Action Plan Recommendations Key issues Actions Responsible institutions Timeline Strengthen EIA/IEE system Clarify policy gaps in Environment Protection Act and Ministry of Environment, Science, and Short term Rules implementation, including: Technology; sector agencies Strengthen screening criteria Clarify project scoping Strengthen site-specific analysis Improve public participation process Simplify clearance process Develop sector-specific guidelines and manuals for Ministry of Environment, Science, and Short to medium term EIAs and IEEs Technology; sector agencies Require comprehensive training on EIA policies Sector agencies; private sector; civil society Short to medium term and process Establish environmental information clearinghouse Ministry of Environment, Science, and Medium to long term for EIA and other issues Technology; sector agencies Clarify national roles and Consider establishment of independent National Planning Commission; Ministry of Medium to long term responsibilities environmental enforcement agency Environment, Science, and Technology Clarify agency roles in monitoring and enforcement Ministry of Environment, Science, and Short to medium term Technology; sector agencies Dedicate resources for monitoring and enforcement Ministry of Environment, Science, and Short to medium term Technology; sector agencies Establish mechanisms for reporting and Ministry of Environment, Science, and Medium to long term documenting enforcement Technology: sector agencies Enhance urban service Explore alternatives to current solid waste Kathmandu Metropolitan City; DDCs; VDCs Short to long term delivery management system Endorse and implement proposed Air Quality Ministry of Environment, Science, and Short to long term Management Action Plan Technology; sector agencies; Kathmandu Metropolitan City Introduce regulatory and financing incentives to Ministry of Environment, Science, and Medium to long term promote industry compliance Technology; Ministry of Industry, Commerce, and Supplies; industry associations (continue on next page...) 135 136 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS (...continued) Key issues Actions Responsible institutions Timeline Empower local Explore funding sources to provide for urban Ministry of Local Development; Kathmandu Short to long term governments environmental services Metropolitan City; DDCs; VDCs Provide greater flexibility in hiring of local Ministry of Local Development; Kathmandu Short to medium term administrative staff Metropolitan City; DDCs; VDCs Implement pilot programs for local environmental Ministry of Local Development; Kathmandu Medium to long term governance Metropolitan City; DDCs; VDCs Provide specialized training in urban environmental Ministry of Local Development; Ministry Short to medium term management issues of Environment, Science, and Technology; Kathmandu Metropolitan City; DDCs; VDCs Enhance role of stakeholders Involve civil society organizations in monitoring Ministry of Environment, Science, and Short to medium term environmental compliance Technology; sector agencies; civil society organizations Promote utilization of private sector in delivering Kathmandu Metropolitan City; DDCs; industry Short to medium term environmental services associations Support oversight role of judiciary and Parliament Judiciary and Parliament Medium to long term Key to timeline: Short term: 1 year Medium term: 2­3 years Long term: 3­5 years YSIS NAL A AL NVIRONMENT E Y OUNTR C ­ AL EP N Bibliography Abbey, D. E., M. D. Lebowitz, P. K. Mills, F. F. mandu, Nepal. Available at http://www. Petersen, W. Lawrence Beeson, and R. unep.org/bpsp/EIA/Case%20Studies/ J. Burchette. 1995. "Long-Term Ambient NEPAL%20(EIA).pdf. Concentrations of Particulates and Oxi- Baidya, Saraju. 2007. DHM activities related to dants and Development of Chronic Disease climate variability and climate change in Ne- in a Cohort of Nonsmoking California pal. Presentation delivered in Workshop Residents." Inhalation Toxicology 7: 19­34. on Climate Change and Adaptation in ADB/ICIMOD (Asian Development Bank/Inter- Nepal, January 17, 2007. Kathmandu. national Centre for Integrated Mountain In Workshop Proceedings "Identifying Development). 2006. Environment Assess- Priorities and Opportunities for Actions ment of Nepal: Emerging Issues and Challenges. on Climate Change Adaptation in Nepal," Kathmandu: ADB/ICIMOD. Winrock International Nepal. Available at AEPC (Alternative Energy Promotion Center). http://www.winrock.org.np/pdf/Work- 2006. Subsidy for Renewable (Rural) Energy, shopProceedings.pdf 2006. Kathmandu: AEPC, Ministry of Bhandari, B., ed. 1998. An Inventory of Nepal's Terai Environment, Science, and Technology, Wetlands. Kathmandu: World Conservation Government of Nepal. Union (IUCN). Alam, Mozaharul and B.R.Regmi. 2004. Adverse Bhattarai, R. C. 2003. Economics of Solid Waste Impact of Climate Change on Development of Management: A Case Study of Kathmandu Nepal: Integrating Adaptation into Policies and Metropolis. Ph.D. dissertation submitted to activities. Working Paper No. 3. Bangladesh Faculty of Humanities and Social Sciences. Centre for Advanced Studies (BCAS). Kathmandu: Tribhuwan University. Dhaka: BCAS. Available at: http://www. BSP (Biogas Sector Partnership-Nepal). 2007. An- clacc.net/Documents/asia/CLACCRep- nual Progress Report 2006 of Biogas Support ort-%20Nepal.pdf Programme--Phase IV. Lalitpur, Nepal. Anneveldt, E., and M. Pasman. 2001. Country Status Bojö, J., K. Green, S. Kishore, S. Pilapitiya, and R. C. Report Nepal: A National Case Study on the Reddy. 2004. Environment in Poverty Reduction Integration of Biodiversity into EIA. Report Strategies and Poverty Reduction Support Credits. for the IAIA-backed Action Programme on Paper No. 102. Washington, DC: Environ- Biological Diversity and Impact Assessment ment Department, World Bank. Available under the UNEP/UNDP/GEF Biodiversity at http://www-wds.worldbank.org/exter- Planning Support Programme. Kath- nal/default/WDSContentServer/WDSP/ 137 138 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS IB/2004/12/16/000090341_20041216111209/ Department of Forest. 2005. Records of the Depart- Rendered/PDF/308900PAPER0EDP0102. ment of Forest. Kathmandu: Department of pdf. Forest, Government of Nepal. CEN/ENPHO (Clean Energy Nepal/Environment Department of Health Services. 2006. Annual Report and Public Health Organization). 2003. 2004/05. Kathmandu: Ministry of Health Health Impacts of Kathmandu's Air Pollution. and Population, Government of Nepal. Kathmandu: CEN/ENPHO. Available at http://www.moh.gov.np. Central Bureau of Statistics. 1997. Urban Population Department of Industries. 2005. Procedural Manual Survey 1996. Kathmandu: Government of for Foreign Investment in Nepal. Draft Report Nepal. submitted to the World Bank. Kathmandu: Central Bureau of Statistics. 2001. Population Ministry of Industry, Commerce, and Sup- Census, 2001: National Report. Kathmandu: plies, Government of Nepal. Available at Government of Nepal. http://www.doind.gov.np/pdf/pmanual. Central Bureau of Statistics. 2002. 2001 Popula- pdf. tion Census. Kathmandu: Government of Devkota, S. R. 1997. Industrial Wastes Survey in Nepal. Nepal. Industrial Pollution Control Management Central Bureau of Statistics. 2003. Population Census Project HMG/UNDP/UNIDO/NEP/91­ 2001, Selected Tables. Kathmandu: National 029. Kathmandu: Ministry of Industry, Planning Commission Secretariat, Govern- Government of Nepal. ment of Nepal. ENPHO (Environment and Public Health Organi- Central Bureau of Statistics. 2004. Nepal Living zation). 2007. Nepal Country Environmental Standards Survey 2003/04. Volumes I and II. Analysis: Analysis of Urban Environmental Kathmandu: National Planning Commis- Issues. Kathmandu: ENPHO. sion Secretariat, Government of Nepal. FCM/MuAN (Federation of Canadian Municipali- YSIS Central Bureau of Statistics. 2005. Environmental ties and Municipal Association of Nepal). Statistics of Nepal 2005. Kathmandu: Na- 2002. Country Profile: Nepal Urban Sector and NAL tional Planning Commission Secretariat, Municipal Governance. Kathmandu: FCM/ A Government of Nepal. MuAN. Available at http://www.muan- AL Chaulagain, N. P. 2006. Impacts of Climate Change nepal.org/resource-center/FCM_Coun- on Water Resources of Nepal: The Physical and try_profile.php. Socioeconomic Dimensions. Ph.D. disserta- Government of Nepal. 1997. Environment Protec- tion submitted to University of Flensburg, tion Act 2053. Kathmandu: Government Germany. of Nepal. Chhetri, R. B., H. Sigdel, and Y. B. Malla. 2001. The Hutton, Guy, and Laurence Haller. 2004. Evalu- NVIRONMENT Role of Forestry in Poverty Alleviation, Nepal. ation of the Costs and Benefits of Water and E Report for Food and Agriculture Organiza- Sanitation Improvements at the Global Level. Y tion of the United Nations, Rome. Geneva: World Health Organization. Cooke, P. 1998. "The Effects of Environmental IDA (International Development Association). Good Scarcity on Own-Farm Labor Alloca- 2007. Nepal: Interim Strategy Note. World OUNTR tion: The Case of Agricultural Households Bank Report 38119. Washington, DC: IDA, C in Rural Nepal." Environment and Develop- World Bank. ­ ment Economics 3: 443­69. AL EP N BIBLIOGRAPHY 139 ITDG (Intermediate Technology Development Health Division, Ministry of Health, Gov- Group). 2004. Smoke--The Killer in the ernment of Nepal. Kitchen: Indoor Air Pollution in Developing Ministry of Health. 2006. Nepal Demographic and Countries. United Kingdom: ITDG. Health Survey 2006. Kathmandu: Family Itkonen, J., and P. Rantanen. 2002. Strengthening Health Division, Ministry of Health, Gov- of the Environmental Administration Manage- ernment of Nepal. ment at the Local Level, Nepal: Strengthen- MoPE (Ministry of Population and Environment). ing/Establishment of a Water Laboratory with 2004. Initial National Communication to the Support of SEAM-N Project. Available at the Conference of the Parties of the United http://www.seam-n.com/ps.pdf. Nations Framework Convention on Climate IUCN (World Conservation Union). 2004. A Review Change. Kathmandu: MoPE, Government of the Status and Threats to Wetlands in Nepal. of Nepal. Kathmandu: IUCN Nepal. MSG Environmental Services. 2002. Report on Kanel, K. R. 1999. Analysis of Policy and Regulatory Institutional Review Environment Sector Constraints in the Development of Non Timber Programme Support, Nepal. Component 4. Forest Products in Nepal. Consultancy Report. Unpublished Report. Kathmandu: WWFUS. Murray, C. J. L., and A. D. Lopez. 1996. The Global Karna, S. K. 2002. Environmental Administration Burden of Disease. Geneva: World Health and Management of VDCs and Municipalities Organization. Biratnagar-Dharan Corridor, Nepal. Submit- Nepali, S., P. P. Gopal, G. P. Upadhyay, and S. S. ted to SEAM-N Project, Nepal-Finland Thagunna. 2006. Nepal Management Effec- Cooperation, Dharan, Nepal. http://www. tiveness Assessment of Protected Areas Using seam-n.com/eam.pdf. WWF's RAPPAM Methodology. Kathmandu: Martens W. J. M., L. W. Niessen, J. Rotman, T. H. World Wide Fund for Nature (WWF) Jetten, and A. J. McMichael. 1995. "Po- Nepal. tential Impact of Global Climate Change NEWAH (Nepal Water for Health). 2005a. Fog on Malaria Risk." Environ. Health Perspect. Water Harvesting in Nepal. Kathmandu: 103 (5): 458­64. NEWAH. Mills, A. 1994. "The Economic Consequences of NEWAH (Nepal Water for Health). 2005b. Annual Malaria for Households: A Case Study in Report 2004/5. Kathmandu: NEWAH. Nepal." Health Policy 29: 209­27. NPC (National Planning Commission). 2002. Tenth Ministry of Finance. 2006. Economic Survey. Kath- Five-Year Plan. Kathmandu: NPC, Govern- mandu: Government of Nepal. ment of Nepal. Ministry of Forests and Soil Conservation. 2002. NPC/MoPE (National Planning Commission/ Nepal Biodiversity Strategy. Kathmandu: Ministry of Population and Environment). Ministry of Forests and Soil Conservation, 2003. Sustainable Development Agenda for Ne- Government of Nepal. pal. Kathmandu: Government of Nepal. Ministry of Health. 1996. Nepal Family Health Survey NPC/UN (National Planning Commission/United 1996. Kathmandu: Ministry of Health and Nations). 2005. Nepal Millennium Develop- New Era. ment Goals Progress Report 2005. Kathmandu: Ministry of Health. 2001. Nepal Demographic and NPC, Government of Nepal, and United Health Survey 2001. Kathmandu: Family Nations Country Team of Nepal. 140 NEPAL ­ COUNTRY ENVIRONMENTAL ANALYSIS NPC/UNICEF (National Planning Commission/ cleanairnet.org/caiasia/1412/article- United Nations Children's Fund). 2006. 58929.html. An Analytical Study of Basic Social Services in Raut, Anil. 2006. "Climate Vulnerability and Ad- Nepal. Kathmandu: NPC/UNICEF. aptation in Nepal." Tiempo 59. OECD/USAID (Organisation for Economic Co- Rayamajhi, S., D. Messerschmidt, and B. Jackson. operation and Development/United States 2000. "Indigenous Livestock Management Agency for International Development). on the Upper Slopes of Central Nepal." 2006. Rapid Assessment of Environmental Com- In Grassland Ecology and Management in pliance and Enforcement Systems in India. Protected Areas of Nepal, Volume 3: Technical Ostro, Bart. 1994. Estimating the Health Effects of Air and Status Papers on Grasslands of Mountain Pollution: A Methodology with an Application Protected Areas, ed. Camille Richard, Khadga to Jakarta. Policy Research Working Paper Basnet, Jay Prakash Sah, and Yogendra 1301. Washington, DC: Policy Research Raut. Kathmandu: International Centre for Department, World Bank. Integrated Mountain Development. Ostrom, E. 1998. "The Institutional Analysis and Sah, R. C. 2006. Legal Analysis and Recommendations. Development Approach." In Designing Unpublished Report. Kathmandu Par- Institutions for Environmental and Resource ticipatory River Monitoring (KAPRIMO), Management, ed. Edna Tusak Loehman ECCA, Nepal. and D. Marc Kilgour. Cheltenham, United Shibuya, Mathers, and Lopez. 2001. Draft report. Kingdom: Edward Elgar Publishing. Chronic Obstructive Pulmonary Disease Pandit, Bishnu Hari, and Gopal B. Thapa. 2004. (COPD): Consistent Estimates of Incidence, "Poverty and Resource Degradation un- Prevalence, and Mortality by WHO Region. der Different Common Forest Resource Global Programme for Evidence on Health Management Systems in the Mountains Policy. World Health Organization. Avail- YSIS of Nepal." Society and Natural Resources 17 able at https://www.who.int/healthinfo/ (1): 1­16. statistics/bod_copd.pdf NAL Peet, N. B., A. R. Watkinson, D. J. Bell, and U. R. Smith, K. R., S. Mehta, and M. Maeusezahl-Feuz. A Sharma. 1999. "The Conservation Manage- 2004. "Indoor Air Pollution from House- AL ment of Imperata cylindrica Grassland in Ne- hold Use of Solid Fuels." In Comparative pal with Fire and Cutting: An Experimental Quantification of Health Risks: Global and Approach." J. Appl. Ecol. 36: 373­87. Regional Burden of Disease Attributable to Picard, J., and Mills, A. 1992. "The Effects of Ma- Selected Major Risk Factors, ed. M. Ezzati, A. laria on Work Time: Analysis of Data from D. Lopez, A. Rodgers, and C. J. L. Murray, Two Nepali Districts." Journal of Tropical 1435­93. Geneva: World Health Organiza- NVIRONMENT Medicine and Hygiene 95: 382­9. tion. E Pope, C. A., R. T. Burnett, et al. 2002. "Lung UNEP (United Nations Environment Programme). Y Cancer, Cardiopulmonary Mortality, and 2001. Nepal: State of the Environment Report. Long-Term Exposure to Fine Particulate UNEP in partnership with Nepal Ministry Air Pollution." Journal of the American Medi- of Population and Environment, Interna- OUNTR cal Association 287 (9): 1132­41. tional Centre for Integrated Mountain C Raut, Anil. 2004. Crisis Brewing in Nepal's Smoke- Development, and South Asia Cooperative ­ filled Kitchens. Available at http://www. Environment Programme. AL EP N BIBLIOGRAPHY 141 UNICEF (United Nations Children's Fund). 2006. Analysis. Final Report submitted to World The State of the World's Children 2007. New Bank. York: UNICEF. World Bank. 2003. Country Assistance Strategy for Upadhyaya, Shyam K. 2002. Hydropower Development Nepal 2004­2007. Washington, DC: World in Nepal: Issues of Equity and Environmental Bank. Justice. Equitable Hydro Working Paper World Bank. 2004. Urbanization and Service Delivery 1. Kathmandu: Winrock International in the Context of Decentralization: A Review of Nepal. the Issues for the Kathmandu Valley. Washing- Uprety, B. K. 2003. Environmental Impact Assessment: ton, DC: World Bank. Process and Practice. Kathmandu: Uttara World Bank. 2006a. India--Strengthening Institutions Uprety. for Sustainable Growth: Country Environment USAID (United States Agency for International Analysis. Washington, DC: South Asia En- Development). 2004. Environmental Com- vironment and Social Development Unit, pliance and Enforcement in Thailand: Rapid World Bank. Assessment. Draft Report. US-Asia Environ- World Bank. 2006b. Pakistan Strategic Environmental mental Partnership. Assessment. Report No. 36946-PK. Wash- WaterAid Nepal. 2006. Community-Led Total ington, DC: South Asia Environment and Sanitation in Nepal. Kathmandu: WaterAid Social Development Unit, World Bank. Nepal. World Bank. 2006c. Resilience amidst Conflict: An WHO (World Health Organization). 2002. The Assessment of Poverty in Nepal, 1995/96 and Health Effects of Indoor Air Pollution Exposure 2003/04. Washington, DC: World Bank. in Developing Countries. Geneva: WHO. World Bank. 2006d. World Development Indicators Winrock International Nepal. 2004. Household 2006. Washington, DC: World Bank. Energy, Indoor Air Pollution and Health Im- World Bank. 2007a. Nepal and Its Relations with the pacts: Status Report for Nepal. Kathmandu: World Bank. Briefing Note. Washington, Winrock International Nepal. DC, and Kathmandu: World Bank. Winrock International. 2005. Poverty and Forestry: World Bank. 2007b. Urbanization and Service Delivery A Case Study. Report submitted to World in the Context of Decentralization: A Review of Bank. Program on Forests (PROFOR) Issues for the Kathmandu Valley. Draft Report. Nepal. Washington, DC: World Bank. Winrock International Nepal. 2007a. Nepal Country WRI (World Resources Institute) 2005. The Wealth Environmental Analysis: Policy and Institu- of the Poor: Managing Ecosystems to Fight tional Analysis. Final Report submitted to Poverty. Washington, DC: United Nations World Bank. Development Programme, United Nations Winrock International Nepal. 2007b. Nepal Coun- Environment Programme, World Bank, try Environmental Analysis: Sector Review World Resources Institute. The WOrld BanK 1818 H Street, NW Washington, DC 20433 USA Telephone: 202-473-1000 Facsimile: 202-477-6391 Internet: www.worldbank.org E-mail: feedback@worldbank.org World Bank Office, Kathmandu Hotel Yak & Yeti Complex Durbar Marg Post Box No.: 798 Kathmandu, Nepal Telephone: 4-226792 & 4-439571 Facsimile: 4-225112 Internet: www.worldbank.org/nepal