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PAPER NO. 97 Public Disclosure Authorized ENVIRONMENTAL ECONOMICS SERIES Cost of Environmental Degradation — Public Disclosure Authorized The Case of Lebanon and Tunisia Public Disclosure Authorized Maria Sarraf Bjorn Larsen Marwan Owaygen June 2004 Public Disclosure Authorized THE WORLD BANK ENVIRONMENT DEPARTMENT Cost of Environmental Degradation — The Case of Lebanon and Tunisia Maria Sarraf Bjorn Larsen Marwan Owaygen June 2004 Papers in this series are not formal publications of the World Bank. They are circulated to encourage thought and discussion. The use and citation of this paper should take this into account. The views expressed are those of the authors and should not be attributed to the World Bank. Copies are available from the Environment Department of the World Bank by calling 202-473-3641. The International Bank for Reconstruction and Development/THE WORLD BANK 1818 H Street, N.W. Washington, D.C. 20433, U.S.A. Manufactured in the United States of America First printing June 2004 The authors can be contacted at: Maria Sarraf Bjorn Larsen Marwan Owaygen Environmental Economist Environmental Economist Assistant Professor of Economics World Bank Consultant University of Balamand Washington, DC, United States Reston, VA, United States Lebanon [email protected] [email protected] [email protected] Contents ACKNOWLEDGMENTS vii ACRONYMS ix INTRODUCTORY NOTE xi Case Study: Lebanon — Executive Summary 1 Chapter 1 Introduction 5 Background 5 Cost of Environmental Degradation 5 Rationale and Objectives 6 The Preparation Process 7 Chapter 2 Methodological Framework 9 Definition 9 Methodological Processes 9 Categories of Analysis 10 Consequences of Degradation 10 Monetary Valuation 11 Damage and Remediation Costs 12 Marginal Analysis 12 Chapter 3 Cost Assessment of Environmental Degradation 15 Introduction 15 Total Cost of Degradation 15 Water 16 Air 18 Land and Wildlife 19 Waste 21 Coastal Zones 21 Global Environment 23 Environmental Economics Series iii Cost of Environmental Degradation — The Case of Lebanon and Tunisia Chapter 4 Cost of Remediation 25 Introduction 25 Policy Context 25 Water 25 Air 26 Land and Wildlife 27 Waste 27 Coastal Zones 27 Global Environment 27 Chapter 5 A Comparison between Damage and Remediation Costs and Conclusion 29 Introduction 29 A Comparison by Environmental Category 29 Conclusion 31 APPENDIXES A Pilot Surveys in Lebanon 33 B Damage and Remediation Costs Calculation 41 C Detailed Estimates of Damage Costs 47 NOTES 55 REFERENCES 57 FIGURES 1. Annual cost of environmental degradation by environmental category 16 2. Annual cost of environmental degradation by economic category 16 TABLES 1. Annual cost of environmental degradation, mean estimate, 2000 15 2. Water — Annual damage cost, mean estimate, 2000 17 3. Air — Annual damage cost, mean estimate, 2000 19 4. Land and Wildlife — Annual damage cost, mean estimate, 2000 20 5. Waste — Annual damage cost, mean estimate, 2000 21 6. Coastal zones — Annual damage cost, mean estimate, 2000 23 7. Water — Cost of remediation 26 8. Air — Cost of remediation 26 9. Land and wildlife — Cost of remediation 27 10. Waste — Cost of remediation 27 iv Environment Department Papers Contents LES COÛTS DE LA DÉGRADATION DE L’ENVIRONNEMENT — CAS DU LIBAN ET DE LA TUNISIE 61 ETUDE DE CAS: TUNISIE — RÉSUMÉ 63 Chapitre 1 Introduction 67 Contexte général 67 Contexte politique et institutionnel 67 Objectifs de l’étude 69 Préparation de l’étude 69 Chapitre 2 Cadre méthodologique 71 Introduction 71 Approche méthodologique générale 71 Catégorisation 72 Hypothèses 73 Evaluation Monétaire 74 Coûts des Dommages et de Remplacement 75 Analyse Marginale 75 Chapitre 3 Coûts des dommages 77 Introduction 77 Coûts Totaux de la Dégradation 77 Eau 78 Air 79 Sols et Forets 80 Déchets 81 Littoral 81 Environnement global 82 Chapitre 4 Coûts de remplacement 83 Introduction 83 Contexte Politique 83 Eau 84 Air 84 Sols, forêts et Biodiversité 85 Déchets 85 Littoral 86 Environnement global 86 Environmental Economics Series v Cost of Environmental Degradation — The Case of Lebanon and Tunisia Chapitre 5 Conclusion 87 APPENDICES A Estimations des coûts des dommages et des coûts de remplacement 89 B Estimations détaillées des coûts des dommages 95 NOTES 101 BIBLIOGRAPHIE 103 FIGURES 1. Coûts annuels des dommages par catégorie environnementale 77 2. Coûts annuels des dommages, par catégorie économique 78 TABLEAUX 1. Quelques indicateurs de performance 67 2. Données économiques, 19995 74 3. Coûts annuels des dommages, estimation moyenne, 1999 77 4. Eau : Coûts annuels des dommages, estimation moyenne, 1999 79 5. Air : Coûts annuels des dommages, estimation moyenne, 1999 81 6. Sols et forets : Coûts annuels des dommages, estimation moyenne, 1999 81 7. Déchets : Coûts annuels des dommages, estimation moyenne, 1999 81 8. Littoral : Coûts annuels des dommages, estimation moyenne, 1999 82 9. Eau : Coûts de remplacement 84 10. Air : Coûts de remplacement 85 11. Sols, forêts et biodiversité : Coûts de remplacement 85 12. Déchets : Coûts de remplacement 85 vi Environment Department Papers Acknowledgments This report was prepared by a team consisting support and constructive feedback. They of Maria Sarraf (Environmental Economist, gratefully acknowledge the financial support World Bank), Bjorn Larsen (Environmental provided by the Swiss Agency for Develop- Economist, Consultant), and Marwan Owaygen ment and Cooperation through a grant to the (Natural Resources Economist, Consultant). It Mediterranean Environmental Technical was prepared in collaboration with the Assistance Program. They would also like to Ministry of Environment in Lebanon and the thank Gonzague Pillet (Consultant, Ecosys) Ministry of Agriculture, Environment and who contributed to an initial draft of the Water Resources in Tunisia. The authors would Tunisia case study and Jim Cantrell who was like to thank Sherif Arif (Regional responsible for printing report. Environmental Advisor, World Bank) for his Environmental Economics Series vii Acronyms English Acronyms CAS Central Administration of Statistics, Lebanon CBS Central Bureau of Statistics, Lebanon DALY Disability Adjusted Life Year DC Damage Cost GDP Gross Domestic Product Koe Kilo of oil equivalent LBP Lebanese Pound LEDO Lebanese Environment and Development Observatory METAP Mediterranean Environmental Technical Assistance Program MoE Ministry of Environment, Lebanon PM10 Particulate Matter ORT Oral rehydration therapy RC Remediation Cost SOER State Of the Environment Report, Lebanon UNDP United Nations Development Program UNICEF United Nations Children’s Fund USAID United States Agency for International Development US$ US dollar WHO World Health Organization WTP Willingness-to-Pay French Acronyms ANER Agence nationale de l’énergie renouvelable ANPE Agence nationale de protection de l’environnement APAL Agence de protection et de l’aménagement du littoral DALY Disability adjusted life years (Année de vie corrigée du facteur invalidité) CDR Coûts de remplacement CDUIR Coûts des dommages et de l’utilisation inefficace des ressources EIE Etude d’impact sur l’environnement FAO Organisation des Nations Unies pour l’Alimentation et l’Agriculture Environmental Economics Series ix Cost of Environmental Degradation — The Case of Lebanon and Tunisia n.d. Non disponible MAERH Ministère de L’Agriculture, de l’Environnement et des Ressources hydrauliques MEAT Ministère de l’environnement et de l’aménagement du territoire METAP Programme d’assistance technique pour l’environnement pour la région méditerranéenne MNA Région Moyen-Orient et Afrique du nord OCDE Organisation de coopération et de développement économique OMS Organisation mondiale de la santé ONAS Office national tunisien de l’assainissement ONTT Office national tunisien du tourisme OTEDD Observatoire tunisien de l’environnement et du développement durable PIB Produit intérieur brut TEP Tonne équivalent pétrole TRO Thérapie de réhydratation oral DT Dinar tunisien $EU Dollars des Etats Unis x Environment Department Papers Introductory Note This report was prepared under the METAP effects of urban air pollution, indoor air program as a first step in a process toward pollution, and inadequate water, sanitation and using environmental damage cost assessments hygiene. The productivity method was applied for priority setting and as an instrument for to agricultural land degradation, but the integrating environmental issues into economic approaches to provide quantitative estimates and social development in the Middle East and varied depending on the specificity of issues North Africa region. Cost of environmental and data availability in each of the countries. A degradation reports were also prepared for combination of methodologies was applied to Algeria, Egypt, Jordan, Morocco and Syria assess costs associated with coastal during the period 2001-2004. Based on the degradation, inadequate waste management, reports, regional training programs were and natural resource degradation (other than conducted in Egypt (December 2002), Lebanon agricultural land). These methodologies (August 2003) and Morocco (January 2004) with included techniques such as contingent participants from the ministries of valuation, hedonic property pricing, the environment, sector ministries, research recreational travel cost method, as well as institutes, and the private sector. economic impacts associated with possible international tourism losses. Cost of avertive The reports commenced with Algeria in 2001 as behavior was also exemplified in