Introduction to SEA and Systems Analysis (2) – Focus: Environment & Economics

1. Introduction to SEA and Systems Analysis (2) – Focus: Environment & Economics Anders Ekbom Environmental Economics Unit Dept of Economics University of Gothenburg anders.ekbom@economics.gu.se

2. The Economic System The State/ municipalities Labour, taxes Credit, taxes Taxes, goods, servi- ces Credit, Investm., services Subsidies, investments employment Savings Households/ individuals Banks Loans, capital Savings, goods Subsidies, Investments, services Employment, goods, ser- vices Loans, capital Labour Companies

3. The Economic System The Ecological System The State/ municipalities Labour, taxes Credit, taxes Taxes Credit, Investm. Subsidies, investments employment Savings Banks Households/ individuals Loans, capital Savings Subsidies, investments Employment Loans, capital Labour Pollution, depletion Natural resources, Ecosystem services Companies

4. 4 markets in the Economic System: • The Labour market • The Financial market • The Goods market • The Services market

5. 1970:“Most natural resources will be finished with 15-30 years” Are they? Why not?

6. Economics • All markets interact => increasing inter-dependence! • Increasing integration across scales (geographically, vertically) • Economics: explains how markets function/are connected (micro-, sector-, macro-level (systems-) analyses eg CGE)

7. Economic analysis Production functions: GDP = f(K,L,H,I; X) Consumption functions: C = f(K,L,H,I; X) K=physical capital, L=labour, H=Human capital, I=institutions, X=other factors (innovation, technology etc.) Prices: Supply, Demand analysis

8. Environmental Economics acknow-ledges links with Environment:GDP=f(K,L,H,I,E; X)C=f(K,L,H,I,E; X)State of Environment:E=f(GDP,C; soil, water, climate, geology etc;X)Prices: affect E;are affected by E

9. When the Economic System and the Ecological systems meet – some links & examples

10. Deforestation

11. Irrigation in Aral Sea

12. Aral Sea

13. Fossil water

14. Water hyacinth, L. Victoria

15. Desertification,Land degradation

16. Eutrophication: Nitrogen

17. Over-fishing • 25% of commercial fisheries over-exploited Declining catches since the late 1980s

18. Fisheries collapse in Canada

19. CO2-emissions by country groups

20. CO2-emissionsper person

21. SEA

22. SEA • What is SEA? - Objectives - Principles • Strategic actions? tiering • Different kinds (models) of SEA • Why SEA? Advantages, disadvantages?

23. What is SEA? • ”SEA is a systematic process for evaluating the env consequences of porposed policy, plan or program initiatives in order to ensure they are fully included and appropriately addressed at the earliest appropriate stage of decisionmaking on par w. economic and social considerations” (Sadler and Verheem, 1996)

24. SEA objectives, principles • Improve strategic action • Promote stakeholder participation • Focus on key env/sustainability constraints • Identify the best option • Minimize neg. (env) impacts, optimize positive impacts, compensate losses • Ensure PPP do not exceed limits (carrying capacity, irreversible effects etc.)

25. Strategic actions, tiering • Strategic actions: - mega-projects - programs (sector) - plans (spatial) - policies (sector, national, legislation) • Tiering, across: • geographic scales • Strategic actions:

26. Advantages of SEA • Begins earlier • Deals with impacts that are difficult to considerat the project level • Promotes a better coordination of alternatives • Informs decisionmakersabout env impacts of the proposed strategic actions • Facilitates public participationin decision-making

27. Disadvantages with SEA • Takes time and $ • Still a relatively new process • Baselines may not be available • Needs to cope w. a huge range of decision-making situations (appropriate?) • Only one part of decision-making …

28. Steps in SEA:The Rational ”Linear” Model Stylized linear SEA process: Screening Scoping Identification Prediction Evaluation of Impacts Mitigation Monitoring.

29. Policy making as a Linear, Logical, and Rational Process

30. Policy making is dynamic, complex Intl NGOs Media Legislature Bureaucracy Business sector Political parties Military Vested interests Judiciary Foreign donors Old elites Civil society Ministries Universities, Research institutes

31. SEA & different types of planning Planning SEA • Features: • Parallel • Separate • Linear • ”Down- • stream”

32. SEA & different types of planning (2) • Features: • Feeding prel. results • No feedback Planning SEA

33. SEA & different types of planning (3) Planning SEA • Features: • Interactive • Feedback

34. SEA & different types of planning (4) Planning • Features: • Integrated • ”Upstream” • Focus on • institutions • outcomes

35. SEA – Different Approaches • “Linear” (impact-centered) SEA • “Non-linear” (institutions-centered) SEA • SEA at the Policy level (concepts and some examples) • Understand ”Institutions” (vs organisations) • Discuss Adaptive and Inclusive SEA Approaches

36. 2. Decision-making - the Rational Model (-the linear approach, 5 steps): • Determine the problem • Establish preferences • List all options or alternatives • Gather all relevant information • Make a choice that max./optimizes the likelihood of achieving goals.

37. Mini discussion • Think of a Policy process or strategic • planning in your country (2 min.) • Discuss with neighbour (5 min.): • What were the features of the process? • How & to what extent were environm. • issues addressed in the policy • How did people participate?

38. Policy reforms and potential environment linkages

39. Policy reforms and potential environment linkages (c’ed)

40. Experiences from Env. Integration 1. Planning at strategic levels is not linear! It’s a complex process, influenced by interest groups with conflicting interests and different agendas => look for ‘windows of opportunity’ to initiate SEA during cycles of the decision-making process. 2. Relationships between alternative options and environmental effects are often indirect => Emphasize relevance vis-à-vis stakeholders (e.g. politicians, gov. agencies, civil society etc.). 3. Strategic issues cannot be tackled by a one-off analysis; => Adjust SEA approach as the Policy takes shape and is implemented.

41. Experiences from Env. Integration Difficult to achieve rational, linear environmental assessment in reality since: people are limited information processors; policy-makers are not unitary/homogenous actors with clear and stable preferences (multiple actors w. multiple & conflicting goals); it is difficult or impossible to define a problem clearly at the policy level (many different views, uncertainty on env impacts!).

42. Envl. Issues Pollution Env.-rel. disease NR depletion Extinction Habitat Loss Distorted eco- system functions Social & econ. Issues Poor public health Involuntary Resettlement Deprivation of Rights Gender inequality Vulnerability, conflict Loss of Social capital, economic values Env., econ & social issues linked – Integration necessary at the policy level

43. Globalization/regionalization Requires new solutions, increased scope (EU, MEA, WTO) Need to move env. assessment upstream in decision process (local national, global) Powerful policy tools beyond project level (e.g. Env Fiscal Reform)

44. Shift in Focus of Env. Assessment • Impact assessment • Focus on technical solutions • Stakeholder consultn • Attention to projects • Upstream analysis • Focus on policies and institutions • Stakeholder particip. • Attention to country capacity

45. Inst.-centered SEA - more perspectives Policy formulation & implementation are not separate processes. The policy formulation process never ends; the way it unfolds depends on the stakeholders participating in the processes (policy design, adoption, implementation) & the actions they take.

46. Inst.-centered SEA – more perspectives (2) Focus of I-SEA is to integrate environmental considerations in policy formation Policy Formation Learning (feedback) Learning (feedback) Discrete Policy Intervention Focus of SEA is to integrate environmental considerations in discrete policy interventions

47. Inst.-centered SEA – more perspectives (3) Planning and decision-making at policy level often characterized by ambiguity and uncertainty Ambiguity – “many ways of thinking about the same circumstances or phenomena”

48. 5. Adaptive & Inclusive SEA Approaches

49. Adaptive Management (1) • No formula, key elements: • Multiple decision points (timing!) • Management objectives regularly revisited & revised (adjust!) • • A range of management choices (prioritize!)

50. Adaptive Management (2) • Monitor & evaluate outcomes (not activities!) • Institutionalize mechanisms for learning (social, technical, organizational) • Create structure for broad & collaborative stakeholder participation (not one-off consultation!)