Forests Sourcebook - HCV Resource Network

orientation of the DPL operations can reveal areas of intervention
in these categories that could potentially benefit or
adversely affect forests. For example, 100 percent of a World
Bank DPL operation proposed for Guatemala (in fiscal
2005) is allocated under the Central Government Administration
sector. Thematically, this operation will focus on
macroeconomic management and tax policy and administration—themes
that could impact forest outcomes (see box
6.15 for other relevant themes).
Reviewing the most relevant effects of the reform and
preliminarily assessing the environmental and social
impacts are important to identifying where to focus a more
detailed analysis. It is usually important to identify and consult
key interest groups, public representatives, government
officials, and other stakeholders at this stage. Analytical
tools such as environmental balance sheets, checklists of
possible effects of a particular type of policy, and a qualitative
matrix can be helpful (see annex 6.3A to this note).
The review should produce a conceptual map that the
team can follow during the assessment process. The exercise
can also help distinguish between those effects that are most
likely to occur and those that are severe and irreversible. The
review only produces a strong indication of the eventual
effects of the policy reform, but not evidence regarding the
actual connection. The latter strong indications are important
for informing the policy revision process.
Box 6.15
■
■
■
■
■
■
■
■
■
■
Themes Associated with World Bank
Policy Lending Operations in FY05 and
FY06 Relevant to the Forest Sector
Environmental policies and institutions, regulation
and competition policy, rural policies
and institutions
Macroeconomic management
Environmental policies and institutions
Rural policies and institutions
Tax policy and administration
Poverty strategy, analysis and monitoring,
decentralization
Public expenditure, financial management and
procurement, infrastructure services for private
sector development
Regulation and competition policy
Regulation and competition policy, small and
medium enterprise support, trade facilitation
and market access
Rural services and infrastructure
Source: World Bank 2005.
Selecting the appropriate approach for handling
cross-sectoral impacts. A clear understanding of the
relationship between policy reform and the forest sector is
needed to analyze and develop mechanisms for handling
the cross-sectoral impacts. Numerous analytical tools can
help in this understanding. The appropriate analytical
approach should be tailored to answer the questions as precisely
as possible, show a good cost-benefit ratio, and be
conducted with the available resources and accessible data.
The analysis should be able to provide necessary information
on links between the proposed reform and its impact
on the forest sector. It should also provide options regarding
measures to enhance positive impacts and mitigate negative
ones. The formulation of mechanisms for handling
cross-sectoral impacts should blend quantitative and qualitative
information and bring in the outcomes of consultative
processes.
To assess the key issues, the assessment team will have to
collect relevant data on economic, social, and political conditions,
as well as information about the environment, the
natural resource base, and relevant institutions. This data
will serve in the reevaluation of the outcome of the initial
review. A central challenge will be to accurately understand
and identify the economic, social, political, and environmental
factors because the downstream effects are often indirect.
Approaches such as the CEA or SEAs can be useful for this
purpose (see note 6.4, Assessing Cross-Sectoral Impacts).
The fast-disbursing nature of DPL operations may not
allow for a detailed CEA or SEA analysis in tandem with the
lending cycle. However, to ensure that required due diligence
on determination of “likely significant” effects is carried
out, a number of rapid assessment tools may have to be
used. For example, simple analytical tools (and elasticity
estimates) can be used to assess environmental implications
of raising tariffs in the electricity and water sectors or for
analyzing the impact of relative price changes (often triggered
by trade reforms) in agriculture and the implications
thereof for forest depletion. Similarly, robust action-impact
matrices can be developed to capture economy-environment
linkages (such as fuel-switching implications of
energy price reforms). 4
If a rapid or preliminary assessment indicates that specific
policy reforms supported by DPL operations are going
to adversely impact forests or water resources, follow-up
actions would need to be developed to help the borrower
strengthen its institutional capacity and policy framework
for environmental and natural resource management in
these areas and monitoring of applicable indicators. A CEA
or SEA would then be necessary.
232 CHAPTER 6: MAINSTREAMING FORESTS INTO DEVELOPMENT POLICY AND PLANNING