UNDP-UNEP Poverty-Environment Initiative

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Basic facts of the PEI in Nepal

• PEI Nepal is a joint programme of the Government of Nepal, the UNDP-UNEP Poverty-Environment Initiative and UNDP Nepal. The programme was launched in 2010 and will run to 2012.
• The main objective of the PEI in Nepal is to support poverty reduction and inclusive development by integrating climate and environmental concerns and opportunities for the poor into development planning and economic decision‐making. The programm's focus is on land based income generation opportunities, renewable energy support policy, benefit sharing in the natural resource sector, and urban environmental policies.
• The National Planning Commission and the Ministry of Local Development are the key lead agencies of the PEI programme.
• The PEI Nepal is closely cooperating with a number of government programmes, including the 'Institutional Strengthening Support to National Planning Commission Project' implemented by the National Planning Commission and the 'Local Government Community Development Programme', implemented by the Ministry of Local Development.
• The programme is coordinated closely with the Asian Development Bank and DFID's support to Nepal on climate mainstreaming and existing projects of UNDP's poverty and governance teams.
• The total budget of PEI Nepal is USD 300,000 (PEI contributes USD 200,000 and UNDP USD 100,000).

The context of poverty-environment mainstreaming in Nepal

• While Nepal is endowed with rich biodiversity resources, it experiences chronic poverty which is more severe in rural than urban areas. Livelihoods of over 80% the Nepal's population depend on natural resources. Rural poor, landless, indigenous people and women rely heavily on forests and land resources for survival. Around 86% of total energy for cooking and 40 % of fodder comes from forests.
• Agriculture, forestry and fisheries, together accounts for more than 38% of the country's GDP. Significant portions of the power, water, manufacturing, trade, and tourism sectors are dependent on the environment. Eco-tourism is one of the major income earners accounting for more than 3.5% of the total GDP and about 25% of the total foreign exchange earnings.
• Nepal is extremely vulnerable to climate variability and extreme weather. The risks emanate from glacial floods and other extreme weather and impacts on livelihoods, hydropower, agriculture, and economy; with longer-term consequences on health due to increased food insecurity, water shortages and vector-borne diseases.
• In 2008, following a decade long conflict, the Constitutional Assembly initiated a political transformation to a federal system with a commitment to strengthening decentralized governance and more inclusive growth in line with the Local Self Governance Act of 1999 and the Interim Constitution of 2007. So far, the new Federal Constitution has been delayed due to political differences and various changes in the high level government appointees.

Main activities

• Strengthening the capacity of the National Planning Commission to integrate pro-poor environmental and climate measures into national planning, budgeting and monitoring processes.
• Incorporating poverty-environment indicators in the national Poverty Monitoring System.
• Reviewing national development budgetary processes and financing mechanisms to address pro-poor natural resource management priorities and climate change concerns.
• Improving selected infrastructure and planning guidelines and directives for local bodies to enhance pro-poor and pro-environmental impacts at local level.
• Building the capacity of local bodies to incorporate pro-poor environmental measures in planning and budgeting processes.
• Strengthening communities and community organization's capacity to "demand" integration of pro-poor environmental concerns in local planning and budgeting processes.
• Developing incentives and measures to improve access to fiscal resources for investing in sustainable natural resource management and climate resilience.

Main achievements

• Increased awareness among key national and local decision-makers on mainstreaming poverty and environment concerns into national planning and budgeting processes achieved through poverty-environment specific economic evidence in form of various technical studies and technical support (e.g. Environments of the Poor report).
• Poverty and environment concerns are integrated into Nepal's key national planning instrument, the Three-Year-Plan (2011-2013), across relevant sector plans and programmes (including infrastructure, agriculture and food security, local development, and environment).
• The National Planning Commission has updated its monitoring indicators to incorporate poverty-environment components.
• A Public environment and climate expenditure review was conducted to track and increase government expenditure on environment and climate issues. As follow-up, a Climate Financing Working Group has been formed to further refine and develop climate budget codes to track public climate expenses more easily.
• The project prioritization criteria of the National Planning Commission were reviewed and pro‐poor environment and climate change priorities integrated.
• The 'Planning and Decision-Making Guidelines' of local bodies were revised to incorporate environment, climate change and poverty perspectives. The guidelines have been approved by the government and are under implementation across the country.
• The Minimum Condition and Performance Measures Guidelines serve as effective tool to evaluate the performance and eligibility of District Development Committees, Village Development Committees and Municipalities for government grants. The guidelines were revised and include for the first time environment and climate change criteria.
• In 2011, two economic valuation studies on 'Current Practice of Revenue Generation from Natural Resources for the Local Bodies' and 'Economic Analysis of Local Government Investment in Rural Roads' were completed and results widely advocated. The recommendations have already guided the Ministry of Local Development's fourteen point directives for all districts to mainstream environmental concerns into planning and implementing infrastructure development activities. Furthermore, the Ministry of Environment is working on including those policy recommendations into the revised Environment Protection Regulations.
• A 'Community of Practice' on poverty- environment-climate mainstreaming, environment learning and leadership group was established in consortium with the International Institute for Environment and Development, Pokhara University, the National Planning Commission and Ministry of Local Development to institutionalize environmental leadership and support.
• Advocacy on poverty-environment linkages is supported through a broad range of information education and communication materials on poverty, environment and climate change, and widely distributed to local governments and stakeholders.
• PEI has successfully engaged and developed synergies with Nepal's key development partners.

Lessons Learned

• Poverty-environment mainstreaming into national and local development planning processes (especially into implementation at local level) is a long term process and hence showcasing tangible impact within two years of programme duration is challenging, in particular in countries with a changing and volatile political context.
• A participatory approach in mainstreaming poverty-environment linkages into planning process helps to formulate pro-poor and environmentally sound activities at local level.
• Capacity building remains to be one of the main priorities to increase knowledge and understanding of local bodies to ensure effective and efficient implementation of the poverty-environment nexus into local development planning and budgeting processes.
• Building monitoring capacity is a slow process requiring involvement of multiple sectors e.g. environment, agriculture, forestry etc. to validate the criteria used for indicators.
• A doable methodology to track both climate and environment expenditures at a low cost within the government system would be very beneficial.
• The PEI process helped to reveal the interconnectedness of environmental issues with sector plans and emerging concepts such as the strategic environmental assessments. However, providing one-time inputs is not effective in the long run, but needs to be more widely institutionalized into the government systems for continuity. Strengthening think-tanks helps providing the required impetus to further the process.
• Mainstreaming poverty-environment activities within other ongoing UNDP is a cost and time effective way in achieving policy impacts.

Way forward

• Formulating poverty-environment mainstreaming guidelines for national and sectoral level planning officials.
• Up-scaling poverty-environment mainstreaming/interventions at the national level and fostering inter-ministerial engagement by incorporating poverty-environment issues into an institutionalized training programme for different levels of authorities.
• Support the application of poverty-environment indicators for monitoring at different levels.
• Support creating an enabling environment for implementing the economic study policy recommendations of 'Current practices for generating revenues and benefit sharing from natural resources'.
• Support preparing a model IEE reporting framework and environmental checklists focusing on sand, gravel and stone extraction.
• Formulate a 'Training of Trainers Manual' and provide strategic support for 'Social Mobilizers' on mainstreaming poverty-environment into local development planning and implementation processes.
• Design and organize District Development Committee officials on applying the revised Minimum Condition and Performance Measures Guidelines.
• Improve advocacy targeted at policy and decision makers at all levels through policy briefs and study briefings.