Pollution Solutions for Lao PDR's Green Growth Policy and Investment Agenda

Project Summary:

The objective of this grant is to generate and disseminate knowledge that informs the development and implementation of green growth transition policies, and to help with building natural and human capital resulting from better management of pollution. The annual cost of certain types of pollution in Lao PDR was estimated by the World Bank at 14.6% of GDP in 2017, up from 12.8% in 2015.  Environmental health risk factors resulted in approximately 11,000 deaths in Lao PDR in 2017, which is equivalent to 22.7% of all deaths.  Facing those problems, Lao PDR has been shifting its development trajectory to a green growth path. In February 2019 the Government of Lao (GOL) undertook consecutive, relevant efforts and approved a National Green Growth Strategy 2030 that prioritizes policy and investment action on renewable natural resources, pollution and waste management, environmental fiscal instruments, and nature-based tourism that can drive the circular economy.  However, gaps remain in the analytical underpinnings and advisory services provided to the GOL to implement this ambitious reform agenda. This KGGTF funded activity will support the World Bank’s continuing efforts on policy dialog and technical support to help Lao PDR sustain the good reform momentum. Priority areas are centered on supporting Lao PDR to operationalize its stated green growth policy and investment priorities to drive the circular economy.  Examples include technologies, tools, practices, policies, and assessments related to air, water and chemical pollution, environmental fiscal instruments, solid waste and recycling technologies and policies, as well as resilient infrastructure technologies.  

List of Activities:

1. Assessment of waste management priorities and investment opportunities and requirements
2. Support development of GOL’s National Air Quality Management Roadmap
3. Policy development support: environmental fiscal instruments
4. Assessment of innovative information and communication (ICT) and other technologies for air, water and chemical pollution monitoring and policy enforcement
5. Microeconomic assessment to change waste and land burning behavior
6. Green tourism development for the circular economy
7. Strategic communication and dissemination
8. Support to the National Green Growth (GG) Policy Platform
9. Client training and capacity development

Outcomes:

Output 1:

• Pre-feasibility study of KM32 landfill in Vientiane, Vang Vieng and Luang Prabang (KEITI implements and co-financing)
• Pre-feasibility study of additional sites (as funding allows)
• National diagnostic to prioritize investment and policy interventions

Output 2:

• Action Plan including costed actions, supported by relevant analytics and advisory services.

(Note: parallel LENS2 IPF resources at MONRE can be used by client to purchase some equipment)

Output 3:

• Regulatory procedures for operationalizing (i) wastewater discharge fees, fines and service charges, (ii) environmental tax, and (iii) other fiscal instruments requested by the GoL (i.e., incentive for vehicle/motor fleet replacement with electrics).
• Assessment of distributional effects of environmental fiscal instruments and mitigation strategies.

Output 4:

• Assessment of locally relevant ICT options and other potential technology solutions (i.e. permeable roads made from recycled plastic waste -- one new example of a Korean technology that may find interest in Lao PDR) that can enhance institutional capacity to regulate pollution and build resilience.
• Assessment of other technology options relevant for the objectives of the National GG Strategy of Lao PDR
• Explore opportunities for private sector participation to provide technology innovations 
• This work will leverage green growth experience residing in the Republic of Korea, with whom a partnership with the Bank has been established, and more recently a specific MOU between the ENR GP and the Korea Institute for Environmental Industry and Technology Institute (KEITI).

Output 5:

• Microeconomic analysis to identify options to change damaging behavior that has contributed to massive air pollution problems nationwide
• Recommended actions identified to support behavior change 
• Development of a dedicated activity on communication, outreach, and behavior change for insertion into investment operations and policy development

Output 6:

• Assessment of options for concession management reform in Lao’s new national parks, national protected areas, and landscapes to drive investment, job creation and economic multiplier effects.
• Nature-based tourism is a high priority in the new Lao National GG Strategy
• Assessment of priority pollution watch sites (PPWS) overlaid against priority tourism sites, to reduce the negative impact of tourism (such as the Song River / Vang Vieng), and to maintain attractions and assets for tourism and local use.

Output 7:

• Communication products and outreach to apply the knowledge generated from this KGGTF support, prior KGGTF support, and related partner and WB project support to achieve the objectives of the country’s National GG Strategy and WB investment operations.
• Diverse products developed for diverse audiences in diverse languages: short films, brochures, radio programs, social media campaigns, etc.

Output 8:

• TA for policy development and/or implementation under GGDPO series: pesticides, lead; Environmental and Social Impact Assessment; Strategic Environmental Assessment; protected areas and nature tourism, timber legality and certification; water resources regulations; climate resilient infrastructure, and natural solutions to climate risks such as flooding.
• National GG Strategy implementation support: monitoring, evaluations, financing, green budget tagging 
• Advisory services to Lao PDR’s the National GG Promotion Center

Output 9:

• Trainings and exposure visits for the client on the topics above in this proposal that are part of the National GG Strategy and policy program. Specific topics would include among others: integrated landscape management, Environmental and Social Impact Assessment, Strategic Environmental Assessment, environmental fiscal instruments, innovative environmental technologies, restoration experience, etc. 

Outcomes:

1. Improved efficiency:   

• A combination of policies, technologies and investments are needed to reduce pollution, GHG emissions, and waste  
• Recycling technologies, investments, and enabling policies can boost efficiency and human health while generating jobs and economic growth from private sector participation 
• Environmental fiscal instruments can generate needed government revenue while incentivizing environmental policy compliance (example: wastewater discharge fees, environmental tax) 
• Micro-economic analysis to change waste and land burning behavior  

2. Greater resilience:   

• A focus is on developing GGDPO3 and support for the country’s green growth policy platform. This includes supporting implementation of Strategic Environmental Assessment on key themes and sectors. One is the National GG Strategy, and doing so will help balance competing objectives regarding the (i) use of water resources for power, tourism, and irrigation, and (ii) the use of forests for timber, biodiversity conservation, tourism, infrastructure protection, and flood risk reduction. 
• Support implementation of new policies and standards on water and air pollution and resilient roads 

3. Increased competitiveness:  

• Lao PDR’s National GG Strategy shares the Korean vision of GG. 
• Job creation and economic growth through nature-based and clean tourism activities, and waste management  
• Build human capital by reducing pollution, which is critical for the long-term prospects of Lao PDR’s economy 
• Green lifestyle and consumption increasingly gain public interest and help drive the circular economy

Collaboration with K-Partners and Others:

• Korea Environmental Industry and technology Institute (KEITI)
• European Commission, European Union