BELARUS Building Blocks for a Sustainable Future A Selected Review of Environment and Natural Resource Management ECSSD June 2002 CONTENTS Page Executive Summary i-xix I. Introduction 1 A. Background and Purpose 1 B. Rationale and Context for the Study 1 C. Value Added of the Report 3 Why these three areas of focus (water, energy, natural resources 3 management)? II. Macroeconomic Trends and Linkages 6 A. Macroeconomic Background 6 Poverty and the Environment 8 B. The Pollution Intensity of Economic Activity 9 C. Genuine Savings 11 D. Allocation of Capital Investment for Environmental Protection 13 E. Environmental Expenditures and Their Financing 14 Expenditures 14 Revenues 15 Pollution Charges 16 Natural Resource Extraction Charges 17 Forestry Charges 18 Environmental Finances in a Broader Context 18 F. Conclusions on Environmental Policy and Macroeconomic 22 Developments III. Environmental Trends in Belarus 23 A. The Country, its Geography and Economy 23 B. Environmental Pollution and Ambient Quality 24 Air and Water Emissions 24 Water Quality 24 Air Quality 27 Radioactivity 30 Solid Waste 30 C. Agriculture, Forestry, Biodiversity and Mineral Resources 31 Agriculture 31 Forestry 33 Biodiversity 35 Mineral Resources 36 IV. The Management of the Environment: Institutional Issues 38 A. Institutional Framework 38 B. Environmental Education and Training 43 C. NGOs in Belarus 43 Public Participation in Environmental Issues 46 D. International Cooperation and Agreements 47 Annex 4-1: Environmental Assessment Procedures in Belarus 50 V. Environmental Aspects of Energy Efficiency in Belarus 61 A. Background and Regional Context 61 B. The Impact of Macroeconomic Developments on Energy-related 63 Emissions Russian Natural Gas Prices 65 C. Energy Saving: Existing Programs and Options for the Future 66 The Energy Conservation Program for the years 1995-2000 66 The Role of State Enterprise Belenergo in Energy Conservation and 70 Environmental Protection The Role of the Ministry of Housing and Communal Services 70 (MHCS) in Energy Savings The District Heat System 71 D. Global Emissions 72 Special Status of Belarus in Relation to UNFCCC 73 E. Conclusions 73 Annex 5-1: Prices for Communal Services (electricity, heat, hot water, 75 sewage, rent, gas) VI. The State of the Water Supply and Sanitation Sector 77 A. Main Issues and Constraints 77 Water Supply and Sanitation Service Coverage 77 Safety and Reliability of Water Supply Services 77 Consumer Coping Strategies and Impacts on the Poor 78 Physical Condition of Water and Wastewater Systems and Technical 80 Efficiency of Operations Sector Organization, Legal Framework and Governance 81 Relationships Financial Situation of the Water and Sanitation Sector 83 B. Strategy for Sector Reform and Strengthening 89 Institutional and Governance Reform 90 Financial Reform 92 Technical Reform 97 Service Reform 100 C. Next Steps to Implement the Sector Reform Process 103 Municipal Water Supply and Wastewater Program for Small and 104 Medium Size Cities Rural Water Supply and Sanitation Program 105 Policy and Human Resource Capacity Program 106 Annex 6-1 : Selected Technical Data on Water and Wastewater Utilities in 108 Secondary Cities and Small Towns Annex 6-2: Selected Financial Data on Water and Wastewater Utilities in 110 Secondary Cities and Small Towns Annex 6-3: Selected Financial Data for the Minsk Water and Wastewater 112 Utility Annex 6-4: Water Quality Indicators 115 VII. Municipal Solid Waste Management in Belarus 117 A. Main Issues 117 B. Characteristics of Municipal Solid Waste 118 Waste Generation Rates 118 Waste Composition 120 Municipal Waste Collection 120 Municipal Waste Disposal 122 C. Financial and Economic State of the MSW Sector 123 D. Organization of Municipal Solid Waste Sector 124 Legal Framework 124 Governance Relationships 125 E. Reform Strategies, Plans and Programs for the Waste Management System 126 Government Priorities and Programs 126 The Bank’s Role 130 F. Conclusions 130 Annex 7-1 Structure of Priority Measures for Implementation if MSW Program in 1999-2000 132 VIII Environmental Impacts of Chernobyl 134 A. Background 134 B. Environmental Effects 136 Natural (Non-agricultural Environment) 137 Agricultural Environment 139 C. Economic Impact 140 D. Agricultural Countermeasures: Producing “Clean” Food 141 E. Monitoring 145 Environmental Monitoring 146 Monitoring Radionuclides in Agricultural and Other Products 147 F. Future Implications and Outlook 149 IX. Natural Resources Management in Belarus 151 A. Background 151 B. Agriculture 151 C. Forestry 153 Other Forest Products 157 Carbon Sequestration 159 D. Biodiversity and Wetlands 159 References 163 ACKNOWLEDGEMENTS This report is the result of a cooperative effort between the Government of Belarus, the World Bank and the International Atomic Energy Authority (IAEA). A Mission to Belarus was undertaken in February 2001, following which extensive data were collected and analyzed. The mission was led by Karin Shepardson and included Anil Markandya, Ede Jorge Ijjasz-Vasquez, Victor Loksha, Elena Klochan and Alexander Chirkov from the World Bank; and Lucille Langlois and Kerry Burns from the IAEA. The final document has been prepared under the direction of Anil Markandya, with inputs from all the above mission members. An internal review of the document received many helpful comments from Benoit Bosquet, Luca Barbone, Marjory-Anne Bromhead, Phillip Brylski, Arcadie Capcelea, Jane Holt, Inesis Kiskis, Kimberly Heuckroth, William McGrath and Anke Meyer and these are gratefully acknowledged. An earlier draft was discussed at two workshops in Belarus, at which many comments were received from government officials as well as members of civil society. The present version has benefited greatly from these and thanks are due to the many government officials and other individuals who painstakingly went through the report and provided written and oral inputs. The Report draws on many documents but has particularly benefited from the earlier Bank Environmental Strategy prepared in 1993, and the OECD Environmental Performance Review published in 1997. LIST OF ABBREVIATIONS AAS atomic absorption spectrometry BLS building-level substations BOD Biochemical Oxygen Demand CAS Country Assistance Strategy CDM Clean Development Mechanism CEC City Executive Committee CEE Central and Eastern Europe CHP Combined Heat and Power CIS Commonwealth of Independent States CO2 carbon dioxide EA Environmental Assessment EAP environmental action plan EBRD European Bank for Reconstruction and Development EIA Environmental Impact Assessment EMAS Eco-Management and Audit Scheme EMP Environmental Management Plan EPA Environmental Protection Agency FSU Former Soviet Union GDP Gross Domestic Product GNP Gross National Product GEF Global Environment Facility GHG Greenhouse gas Hyrdromet State Committee for Hydrometeorology IAEA International Atomic Energy Authority IBRD International Bank for Reconstruction and Development IDA International Development Association IFI International Financial Institution IPP Independent Power Producers IUCN International Union for the Conservation of Nature ISO International Organization for Standardization JI Joint Implementation kWh kilowatt hours MHCS Ministry of Housing and Communal Services MHME Ministry of Housing and Municipal Economy MEPNR Ministry of Environmental Protection and Natural Resources MNREP Ministry of Natural Resources and Environmental Protection MOE Ministry of the Economy NIS Newly Independent States NGO Non-governmental organization NOx Nitrogen oxide OECD Organization for Economic Cooperation and Development PAC Pollution Abatement Control PREM Poverty Reduction and Economic Management PUD Public Utility Department RIR Research Institute of Radiology SEA Strategic Environmental Assessment SO2 Sulfur dioxide TA Technical assistance TOR Terms of reference TSP Total suspended particulates UNESCO United Nations Educational, Scientific and Cultural Organization UNFCCC United Nations Framework Convention on Climate Change URF Unit Risk Factor VOC Volatile organic compound WB World Bank WHO World Health Organization WPI water pollution index WTO World Trade Organization WWF World Wildlife Fund i Executive Summary 1. This report, “Building Blocks for a Sustainable Future: A Selected Review of Environment and Natural Resource Management in Belarus”, was prepared following a request from the Republic of Belarus for World Bank assistance in updating the Belarus Environment Strategy Study carried out jointly with the Bank in the early 1990s and published in 1993. 2. The purpose of this review of environmental and natural resource management in Belarus is to highlight how environmental management can contribute to a sustainable future for the country. The report summarizes major macroeconomic trends and associated environmental linkages, environmental trends, and institutional issues facing Belarus in its management of the environment. An extensive analysis of environmental aspects of energy efficiency in Belarus and the state of the water supply and sanitation sector is undertaken. Special attention is given to exploring the environmental impact of the Chernobyl accident and to suggesting additional ways to mitigate lasting radioactive contamination. Natural resource management issues, particularly relating to agriculture, forestry and biodiversity, are also examined. 3. The Bank hopes that this report will be useful in establishing a dialogue with the government and segments of civil society to prioritize environmental