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Environment Sector Brief

Available in: العربية, Français

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With scarce water and limited arable land the Middle East and North Africa (MENA) region is accustomed to dealing with environmental stress since its early civilizations.  However the environmental challenges in modern times have accelerated, posing risks for the standards of living of future generations and raising the costs of mitigating negative environmental impacts.  Despite significant and steady awareness and improvements over the past decade, the region is threatened by declining per capita water resources, loss of arable land, pollution-related health problems, deteriorating coastal zones and vulnerable marine resources. 

The economic costs of environmental degradation are high.  According to World Bank studies they vary from 2.1 percent of gross domestic product (GDP) in Tunisia, to as high as 7.1 percent of GDP in Iran.  This high cost of environmental degradation spills into public finances, household budgets, the competitiveness of the economy, and inter-generational equity.  At current rates of mining and degradation, many of the existing resources will not be available in the future.

Environmental stresses will increase due to climate change.  MENA is one of the regions most vulnerable to warming, reduced precipitation and rise in sea levels.  Water scarcity (the highest in the world) will increase, climate-sensitive agriculture will be affected, urban coastal areas will become more vulnerable to flooding, and competition for scarcer resources could escalate violence and political turmoil even beyond the region’s boundaries.

Key Issues in the Sector

Water resources will become increasingly scarcer.  Annual renewable water resources per capita are expected to fall from 1997 levels of 1,045 m3/yr to 740 m3/yr by 2015.  Despite growing urban populations, an average of 88 percent of MENA's water resources are allocated to the agriculture sector, with only seven percent going toward domestic consumption.  As urban and industrial consumption increases with standards of living, less water will be available for irrigation.  Water scarcity is aggravated by increased degradation of water quality, which primarily affects the region's poor.

Degradation of arable land continues.  Unsustainable agriculture and pasture practices due to weak property rights coupled with population growth threaten the more marginal lands with lower productivity and desertification. 

Pollution-related health problems, particularly in urban and industrial centers, are another challenge.  The causes include open municipal waste dumps; the use of leaded gasoline in an aging and poorly maintained vehicle fleet; the inefficient use of fossil fuels for power generation; and particulate and sulfur-oxide emissions from industry. Hazardous waste and Persistent Organic Pollutants (POPs), such as those from obsolete pesticides, continue to pose a challenge in the region.

Marine resources, including fisheries, are an important generator of income.  But the fishery is being overexploited by competing fleets in the face of weak enforcement and regulation.  Degradation of critical habitats by pollution and other kinds of stress compound the problems and put in jeopardy the wellbeing of vulnerable coastal communities.

Coastal zones continue to deteriorate.  Concentration of populations along coastal zones from migration and urbanization coupled with unregulated development adds to sources of untreated pollution and damage the scarce natural habitats that remain.

Climate change will compound those effects.  Water run off in MENA is projected to drop by 20% to 30% in most of MENA by 2050.  The Intergovernmental Panel on Climate Change’s (IPCC) Fourth Assessment Report estimates an increase in temperature of up to two degrees in the next 15-20 years and of over four degrees by the end of the century (the increase is higher for faster emission scenarios).

World Bank Recommendations

The World Bank's assistance to improve the environment and reduce the risks of further deterioration emphasizes three complementary lines of action:

  • To raise the awareness of decision-makers and citizens in general about the degree (present and future) and consequences of environmental degradation.  Cost of Environmental Degradation Studies carried out for most countries put a monetary value on the losses incurred by the country that can be compared with measures of economic activity, such as the amount of growth foregone, thus feeding into economic policy strategies and calling for action by agencies other than the one responsible for the environment.  Monitoring and evaluation systems provide information to citizens on the degree of depletion, degradation and contamination, and thus the basis for collective action by citizenry for better environment management.  Raising awareness among all stakeholders about climate change and its likely impacts is of the highest priority.
  • To prevent and mitigate environment degradation through improved regulatory frameworks and enforcement activity.  Enhancing the quality and effectiveness of countries' environmental assessment process helps mitigate the negative impacts of development projects and programs.  Appropriate systems of regulation if coupled with adequate enforcement can create strong negative incentives to arrest environment depletion.  In specific situations community-based systems carry with them self-enforcement incentives from peer monitoring and can be a cost effective approach for environment self-management.
  • To create positive incentives for good environment practices.  There are economic and financial opportunities to be made by good environmental practices.  As the environment increases in scarcity, markets or other institutional arrangements develop that put a value on environmental services and allow these values to be captured.  For example the Clean Development Mechanism (CDM) established under the Kyoto Protocol is financing projects in MENA that reduce greenhouse gas emissions, for example, in the solid waste sector.  More and more “organic” and “green” attributes of tradeable goods help penetrate new markets and increase the value of sales and create backward incentives through the supply chain for producers using environmental resources to do so in a responsible manner.  The Global Environment Facility is available to finance projects that contribute positively to the global commons such as protecting biodiversity or disposing of POPs.  More open markets and openness to direct foreign investment can also be an important conduit for transfer of more environmentally sound technologies.  Helping markets for environmental services mature in MENA or using institutional mechanisms such as GEF to pay for global benefits create incentives for more responsible environmental behavior.

World Bank Lending/AAA Activities

MENA’s environmental lending portfolio consists of:

  • Operations in which environment is mainstreamed in other sectors. Examples are (i) the water sector through integrated water and environmental management programs at a water basin level; (ii) in the urban development sector by addressing the entire chain of solid-waste management; and (iii) inclusion of soil conservation and combating land degradation in rural development projects. 
  • Stand-alone environmental Bank operations addressing critical issues in specific sectors of both “green” and “brown” agendas.  These include projects for protected areas, fisheries and industrial pollution, such as Egypt’s Pollution Abatement Project. 

Some projects use innovative financial instruments blending World Bank loans (through the International Bank for Reconstruction and Development - (IBRD) or the International Development Association (IDA) with Global Environment Facility (GEF) grants, complemented with carbon emission revenues provided by the Bank.  Examples of such projects include the Egypt West Delta Irrigation Project and the Industrial Pollution Abatement Project; Tunisia’s Natural Resource Management Project and the Water Sector Investment Project; and the Solid Waste Management Project in Tunisia.

The Bank also carries out studies on specific environment issues and provides technical assistance on environment management.  The most important examples are:

  • Studies on the Cost of Environmental Degradation at the macro level and at the sector level with special emphasis on water quality and costal zone management (Tunisia, Lebanon, others);
  • Country Environmental Analyses for Tunisia, Egypt and Jordan reviewing the institutional framework for environment management;
  • Piloting the Use of Country Systems for Environmental Assessment in Egypt and Tunisia;
  • Assessment of Poverty, Environment and Health Linkages in Egypt, Yemen and Djibouti;
  • Energy-Environment Reviews in Egypt;
  • Support to Catalytic Role of Rural Women of Egypt in water quality monitoring;
  • Support to MENA countries for obtaining access to the carbon-trade market of the Kyoto Protocol in Tunisia, Egypt, Syria and Yemen;
  • Climate-change adaptation for water resources in Morocco, Yemen, Tunisia and Egypt.

The Region has also adopted a regional approach to effectively manage environmental resources and to develop a common set of principles and a framework for cooperation for trans-boundary dialogue and action. It has in that respect successfully implemented a number of projects such as the Red Sea Strategic Action Program, the Mediterranean Technical Assistance Program and the most recent Mediterranean Large Marine Ecosystem Strategic Partnership. It has also collaborated with the Africa Region for the implementation of the Nile Basin Initiative and the Africa Stockpile Project.

Collaboration within the Mediterranean basin will be further enhanced after the launch of the new initiative “Union pour la Mediterrannée” in July 2008, with special emphasis on the de-pollution of the Mediterranean in the context of the “Horizon 2020” program. The Region is a key partner with other regional and bilateral financial institutions in the development of this program.

Another new proposed initiative is the Gulf Environmental Partnership and Action Program (GEPAP), the objective of which being to preserve, protect and promote long-term sustainable development for the Gulf waterway. GEPAP would enhance cooperation among governments, the private sector, and civil society on environment through knowledge development and investments promotion.  The proposed GEPAP will complement and cooperate with existing regional initiatives and activities. 

The region is also engaged with a number of countries for the development of new collaborative programs under the Reimbursable Technical Assistance (RTA) scheme, with the primary intent of enabling the client to implement reforms or strengthen institutions in the environment sector. Progress has been made with Algeria, and two contracts on solid waste management and Clean Development Mechanism have been signed in October 2007.

With the rising urgency of climate change the Bank has recently deployed a series of studies investigating the potential impacts of climate change in the MENA countries.  Some of these studies focus on specific sectors, such as Agriculture and Cities in Morocco, Coastal Zones and Management of Lake Nasser in Egypt, and Water in Yemen.  Other studies investigate the social implications of climate change for selected countries.    In an effort to increase its readiness to assist clients on issues of adaptation and mitigation to climate change the Bank has prepared a “Regional Business Strategy to Address Climate Change”, which proposes to put climate change at the center of the dialogue that the World Bank holds on the overall development agenda with its partners in the region.  The Region has organized in that context consultations in a select number of countries of the region (including Tunisia, Egypt and Saudi Arabia) on the MNA Regional Strategy and the overall Strategic Framework on Climate Change and Development.

Upon approval of the Board of the Climate Investment Funds on July 1, 2008, the Region has focused on raising the awareness of the countries about this newly established mechanism, and on demonstrating how the Multilateral Development Banks can work with countries to scale up support for adaptation and mitigation efforts in the context of national development strategies. Opportunities for investment programs to be developed on a country-specific basis to achieve nationally defined objectives are being explored. High potentials exist under the Clean Technology Fund, mainly in the Energy and Transport sectors, and specific proposals are currently being developed for Egypt.

All dollar figures are in US dollar equivalents. September 2008

For more information, please contact:
In Washington: Najat Yamouri; Email: 

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