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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 BANK1818 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 EconomicsWorld BankConsultantUniversity of Balamand
Washington, DC, United States Reston, VA, United StatesLebanon Msarraf@worldbank.orgBj_La@hotmail.com Marwan.owaygen@balamand.edu.lb iiiEnvironmental Economics SeriesContents
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 15Introduction 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 TunisiaChapter 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 29Introduction 29
A Comparison by Environmental Category 29
Conclusion 31
APPENDIXES
A Pilot Surveys in Lebanon 33
B Damage and Remediation Costs Calculation 41C 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
vEnvironmental Economics SeriesContents
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 71Catégorisation 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 TunisiaChapitre 5
Conclusion 87
APPENDICES
A Estimations des coûts des dommages et des coûts de remplacement 89 B Estimations détaillées des coûts des dommages 95NOTES 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
viiEnvironmental Economics SeriesAcknowledgments
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 theMinistry 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 theMediterranean Environmental Technical
Assistance Program. They would also like to
thank Gonzague Pillet (Consultant, Ecosys) who contributed to an initial draft of theTunisia case study and Jim Cantrell who was
responsible for printing report. ixEnvironmental Economics SeriesAcronyms
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 ProgramMoE 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 DevelopmentUS$ 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 ressourcesEIE 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 méditerranéenneMNA Région Moyen-Orient et Afrique du nord
OCDE Organisation de coopération et de développement économiqueOMS 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 durablePIB Produit intérieur brut
TEP Tonne équivalent pétrole
TRO Thérapie de réhydratation oral
DT Dinar tunisien
$EU Dollars des Etats Unis xiEnvironmental Economics SeriesIntroductory 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 andNorth Africa region. Cost of environmental
degradation reports were also prepared forAlgeria, 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 and2002. 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. In2002, however, Pope et al published a new
study of long-term mortality effects of fine particulates that confirmed the findings ofPope et al (1995) of much larger mortality
effects than the findings from acute mortality studies. The long term coefficients from the2002 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 andTunisia 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 toUS$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 SeriesIntroductory 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 toUS$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[PDF] air force form 910 pdf
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