1. 8 TH -11 TH NOVEMBER, 2010 UN Complex, Nairobi, Kenya MEETING OUTCOMES David Smith, Manager PEI Africa

2. MEETING OBJECTIVES The meeting, attended by 70 representatives from Botswana, Burkina Faso, Liberia, Malawi, Mali, Mauritania, Mozambique, Kenya, Rwanda, Tanzania, Uganda with participation from UNEP and UNDP regional offices from Asia, Eastern Europe & Africa had the following objectives: 1. To review PEI country experience & lessons learned in relation to: Economic assessments/valuation of environment & natural resource; Budget guidelines & public expenditure reviews on environment expenditures; and Environmental fiscal reform (promoting the use of economic instruments for sustainable utilization of environment & natural resources) 2. To determine harmonized approaches & methodologies based on best practice 3. To explore partnership opportunities with national, regional & global institutions 2

3. MEETING STRUCTURE The four days deliberations were structured around country, institutional & UN presentations plus group work on: Day 1: Overview of experience and best practices in the application of economic tools for poverty and environment mainstreaming; Day 2: Economic assessments/valuation of environment & natural resource; Day 3: Budget guidelines & public expenditure reviews on environment expenditures; & Day 4: Economic Instruments and Environmental fiscal reform Presentations were focused on PEI countries in Africa & comparative experiences from African research institutions, Universities, the Asia region & other UNDP & UNEP programmes. 3

4. OVERALL CONCLUSIONS 1. Overall Importance of Economic Tools & Approaches: Economic tools & approaches are an important instrument for integrating poverty & environment linkages into national & sub-national development planning & implementing processes, including budgets. 2. Economic Analysis has generated solid evidence of links between Environmental Sustainability & Poverty Reduction: Country examples demonstrated how economic analyses have provided substantive evidence of how environmentally sustainable natural resource management is important for achieving sustainable economic growth, poverty reduction & generally improving livelihoods. 3. Economic evidence convinces development decision-makers: Economic evidence is key to convincing key decision-makers that environmental sustainability should be a higher development priority. Policy makers are increasingly using the results from PEI economic assessments to justify mainstreaming poverty & environment linkages into development planning processes & budgets. 4

5. OVERALL CONCLUSIONS (2) 4.Investment in environmental sustainability is low: As demonstrated from Public Environment Expenditure Reviews (PEER), and reviews of Economic Instruments for sustainable environment use and poverty reduction. But there is increasing appreciation of the importance of investment in environmental sustainability for the achievement of key development objectives, including food security & poverty reduction More support needs to be provided to strengthening the integration of environmental sustainability into national budget processes. 5. Public environment expenditure reviews promote investment: PEERs have enabled countries to promote political momentum for internal & external resource mobilization for investing in environmentally sustainable natural resource use & enhanced advocacy for sustainable financing. 5

6. OVERALL CONCLUSIONS (3) 6. Environmental Fiscal Reform Studies including reviews of economic instruments highlight sustainable financing options: Studies have demonstrated diversified options for sustainable financing for environmentally sustainable natural resource management & poverty reduction. 7. Challenges in the application of economic tools remain: Lack of guidance on the application of standardized methodologies across PEI countries, Non-availability of reliable data, Lack of adequate local expertise to apply the economic tools, Ensuring adequate involvement of stakeholders, Limited funding, especially local funding for economic analysis, & Mixed levels of political support for economic instruments. 6

7. RECOMMENDATIONS A. Improve guidance on use of economic assessments, tools and methodologies for PEI mainstreaming : 1.Be clear on terminology & provide capacity development support on standard methodologies: Ensure understanding that PEI focuses on how environmentally sustainable natural resource use can help achieve development objectives, including poverty reduction. Focus is NOT on promoting environmental protection. PEI should borrow from best practices & develop guidance tools on standardized methodologies, tools & approaches for undertaking the economic assessments & valuation, PEER and EFR to ensure comparability & enhance reliability, accuracy & utility of findings. 2. Economic Valuation Studies should be more comprehensive PEI should move from localized case studies to more comprehensive/national level economic assessment/valuation studies Design the studies to capture not just macro-level assessment & results but also meso & micro-levels and use both quantitative & qualitative approaches. 7

8. RECOMMENDATIONS (2) 3. The Public Environment Expenditure Review Process (PEER) should be institutionalized with clear definition of Environmental Expenditures by various sectors: PEER should be institutionalized as part of existing national Public Expenditure Reviews ; Promote the use of a specific environmental sustainability code to enable tracking of fund allocation & expenditure for environment at sector and local levels; Develop, in a participatory manner, a clear definition of environmental expenditure so that the tracking & reviews are based on agreed definition by all stakeholders. 4. Expenditure reviews should promote increased funding for environmental sustainability across sectors: It is vital that different sectors (e.g. agriculture, water, health, education) increase budgetary allocations and invest in environmental sustainability to meet sector objectives e.g. agricultural sector investing in soil erosion control programs to increase agricultural productivity. 8

9. RECOMMENDATIONS (3) 5. Promote environmental fiscal reform to benefit the poor and for sustainable environment management: Advocate for continuous monitoring of the extent to which the economic instruments deliver on their intended goals which should be environmental management for poverty reduction. Promote environmental fiscal reform to ensure the economic instruments benefit vulnerable communities who depend on environment and natural resources i.e. not focus only on generation of revenue and environmental protection. 6. Support effective downstream poverty and environment examples: Support should be given to practical downstream examples through innovative funding to demonstrate effective application & implementation of economic instruments 9

10. RECOMMENDATIONS (4) B. Develop national capacity to apply economic tools and use evidence in national decision making: 7. Training & Capacity Building: PEI & participating countries should partner with Universities & local & international research organizations to train & build capacity of experts & decision makers to be able to undertake high quality research & apply the same for sustainable policy impact 8. Increased technical support by PEI: Well coordinated and continuous technical support to established national institutions will result in sustainable implementation & monitoring 9. Diversify & increase funding for long term capacity building: Funding by government of assessments & valuations is recommended for long term sustainability to be complemented by funding for assessments and capacity development from private sector and development partners. 10

11. RECOMMENDATIONS (5) B. Develop national capacity to apply economic tools and use evidence in national decision making (continued): 10.Ensure multi-stakeholder involvement: Promote multi-stakeholder involvement (different government departments, civil society, private sector, & citizen groups) in the research & assessment process To improve accuracy, ownership & reducing the gaps between research findings & policy implementation & impacts 11.Identification of Champions: Increased advocacy efforts are necessary to ensure success of mainstreaming efforts. Champions should be identified within various institutions (including other ministries, parliament, civil society, government, regional & international bodies) to increase the effectiveness of advocacy efforts. 11

12. RECOMMENDATIONS (6) C. Improve knowledge management and dissemination of lessons learned at national, regional and global levels 12. Develop & implement clear communication strategies: To enhance incorporation of PEI findings into policy, country programs should develop & implement clear communication strategies. This should include engagement with stakeholders throughout the process, peer review of findings & development of policy briefs of the study findings for easy consumption by policy makers. 13. Share Best Practices: PEI experience with the application & impact of use of economic tools has revealed several best practices that should be documented & shared widely for replication. 12