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ENVIRONMENTAL ECONOMICS SERIES

Cost of Environmental

Degradation -

The Case of Lebanon and Tunisia

Maria Sarraf

Bjorn Larsen

Marwan Owaygen

PAPER NO. 97

June 2004Public Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure AuthorizedPublic Disclosure Authorized

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.

Cost of Environmental

Degradation -

The Case of Lebanon and Tunisia

Maria Sarraf

Bjorn Larsen

Marwan Owaygen

THE WORLD BANK ENVIRONMENT DEPARTMENT

June 2004

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 BankConsultantUniversity of Balamand

Washington, DC, United States Reston, VA, United StatesLebanon Msarraf@worldbank.orgBj_La@hotmail.com Marwan.owaygen@balamand.edu.lb iiiEnvironmental Economics Series

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

ivEnvironment Department Papers 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

R

EFERENCES 57

F

IGURES

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

vEnvironmental Economics Series

Contents

LES COÛTS DE LA DÉGRADATION DE L'ENVIRONNEMENT - CAS DU LIBAN ET DE LA TUNISIE 61 E

TUDE 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

viEnvironment Department Papers 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

B

IBLIOGRAPHIE 103

F

IGURES

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

viiEnvironmental Economics Series

Acknowledgments

This report was prepared by a team consisting

of Maria Sarraf (Environmental Economist,

World Bank), Bjorn Larsen (Environmental

Economist, Consultant), and Marwan Owaygen

(Natural Resources Economist, Consultant). It was prepared in collaboration with the

Ministry of Environment in Lebanon and the

Ministry of Agriculture, Environment and

Water Resources in Tunisia. The authors would

like to thank Sherif Arif (Regional Environmental Advisor, World Bank) for hissupport and constructive feedback. They gratefully acknowledge the financial support provided by the Swiss Agency for Develop- ment and Cooperation through a grant to the

Mediterranean Environmental Technical

Assistance Program. They would also like to

thank Gonzague Pillet (Consultant, Ecosys) who contributed to an initial draft of the

Tunisia case study and Jim Cantrell who was

responsible for printing report. ixEnvironmental Economics Series

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

LEDOLebanese Environment and Development Observatory METAP Mediterranean Environmental Technical Assistance Program

MoE Ministry of Environment, Lebanon

PM10Particulate Matter

ORT Oral rehydration therapy

RC Remediation Cost

SOER State Of the Environment Report, Lebanon

UNDP United Nations Development Program

UNICEFUnited 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

CDUIRCoûts 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 xEnvironment Department Papers 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

OTEDDObservatoire 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 xiEnvironmental Economics Series

Introductory Note

This report was prepared under the METAP

program as a first step in a process toward using environmental damage cost assessments for priority setting and as an instrument for integrating environmental issues into economic and social development in the Middle East and

North Africa region. Cost of environmental

degradation reports were also prepared for

Algeria, Egypt, Jordan, Morocco and Syria

during the period 2001-2004. Based on the reports, regional training programs were conducted in Egypt (December 2002), Lebanon (August 2003) and Morocco (January 2004) with participants from the ministries of environment, sector ministries, research institutes, and the private sector.

The reports commenced with Algeria in 2001 as

an input to the NEAP. This was followed by reports for Tunisia and Egypt during 2001 and

2002. Preparation work was then initiated for

Lebanon and Jordan in the spring of 2002,

followed by Syria and Morocco later in 2002.

As the reports were part of a regional program,

it was decided to harmonize the methodological approaches as much as possible in order to facilitate comparison of similarities and differences across countries. Such a harmonization also provided opportunities to better understand differences in relative rankings of environmental issues in terms of their overall socio-economic cost. To a large extent methodological harmonization was done for estimating and valuing the healtheffects of urban air pollution, indoor air pollution, and inadequate water, sanitation and hygiene. The productivity method was applied to agricultural land degradation, but the approaches to provide quantitative estimates varied depending on the specificity of issues and data availability in each of the countries. A combination of methodologies was applied to assess costs associated with coastal degradation, inadequate waste management, and natural resource degradation (other than agricultural land). These methodologies included techniques such as contingent valuation, hedonic property pricing, the recreational travel cost method, as well as economic impacts associated with possible international tourism losses. Cost of avertive behavior was also exemplified in the case of drinking water quality concerns in two of the countries.

The reports represent one of the first attempts

in the region to quantify and monetize the cost of degradation across a wide range of environmental issues. The assessments therefore had in some cases to rely on health impact studies from other countries, and in other cases were not able to provide quantitative estimates of health effects. In this context, it should be said that several important developments have taken place since the preparation of these reports started in 2001.

First, urban air pollution dose response

coefficients from international studies xiiEnvironment Department Papers Cost of Environmental Degradation - The Case of Lebanon and Tunisia reflecting acute mortality of particulates (PM) have been applied in all the seven country reports, including Lebanon and Tunisia. In

2002, however, Pope et al published a new

study of long-term mortality effects of fine particulates that confirmed the findings of

Pope et al (1995) of much larger mortality

effects than the findings from acute mortality studies. The long term coefficients from the

2002 study is now increasingly becoming the

convention for estimating the mortality effects of particulate pollution in developing countries that lack such studies, and was for instance applied in the World Health Report 2002. It is therefore very possible that the mortality estimates presented in this report on Lebanon and Tunisia represent underestimates.

However, the number of life years lost per

premature death from particulate pollution presented in this report is consistent with years lost on average to cardiopulmonary mortality, which Pope et al finds to be the most significant mortality impact of fine particulates.

Second, the estimated health effects of indoor

air pollution from biomass fuel presented in this report include increased adult female heart disease mortality in addition to increased respiratory mortality in children and adult female chronic obstructive pulmonary disease mortality. Other studies do not consider there is enough evidence regarding indoor air pollution and heart disease. The estimates presented in this report for Lebanon and

Tunisia may therefore represent an

overestimate of mortality effects. On the other hand, increased respiratory morbidity from indoor biomass smoke has not been estimated in this report due to insufficient baseline data.

Third, estimates in this report of diarrheal

illness associated with inadequate water, sanitation and hygiene are limited to children. Sufficient data are not available for the twocountries to provide a reasonably precise estimate of adult diarrheal illness. It should be noted, however, that recent evidence from a household survey in a governorate (province) in Egypt in 2003 indicates that total annual cases of diarrheal illness in the population above five years of age tend to be as many as among children under five years (although incidence is higher in the latter group).

The Lebanon and Tunisia reports have been

combined in this report to provide some perspectives of similarities and differences of the magnitudes of environmental degradation found in the region, and the type of methodologies applied in the country reports.

Lebanon, at twice the income level of Tunisia,

has suffered severe coastal and natural resource degradation in the past three decades, associated in particular with uncontrolled construction. There is for instance now very limited potential for international beach tourism due to this degradation in Lebanon, in contrast to Tunisia with millions of beach tourists along relatively well preserved coastal areas. Tunisia, viewed as the country in the region with highest environmental quality and management, is however not free from problems. Water and land issues are significant, and vehicle dieselization has for instance contributed to deteriorated air quality in Tunis.

As to the specifics of the estimates presented in

this report, the annual damage cost of environmental degradation in 2000 in Lebanon was estimated at 2.8 - 4.0 percent of GDP with a mean estimate of 3.4 percent of GDP, or close to

US$565 million per year. The estimates should

be considered orders of magnitude and a range is provided to indicate the level of uncertainty.

The cost of inadequate potable water,

sanitation and hygiene is assessed at 1.0-1.2 percent of GDP, followed by air pollution xiiiEnvironmental Economics Series

Introductory Note

(urban outdoor and rural indoor) at 0.7-1.3 percent. The cost of coastal zone degradation is estimated at close to 0.6-0.75 percent of GDP and degradation of land resources and wildlife at 0.5-0.7 percent of GDP. Damage costs associated with solid waste management is assessed at 0.05 percent of GDP. Of total damage costs about 62 percent is from damage to health and quality of life, and 38 percent from natural resource degradation.

In Tunisia, the annual damage cost of

environmental degradation in 1999 was estimated at 1.5 -2.7 percent of GDP with a mean estimate of 2.1 percent of GDP, or close to

US$440 million per year. The cost of inadequate

potable water, sanitation and hygiene is assessed at 0.5-0.7 percent of GDP, followed by air pollution at 0.4-0.8 percent of GDP, and by land degradation at 0.4-0.7 percent of GDP. The cost of coastal zone degradation is estimated at around 0.25 percent of GDP. Damage costsquotesdbs_dbs48.pdfusesText_48
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