PEI Annual Progress Report 2010 -- Report by United Nations Development Programme

Environment for the MDGs

Belgian Development Cooperation

Danish Ministry of Foreign Affairs (DANIDA)

European Commission

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MINISTERIO DE ASUNTOS EXTERIORES Y DE COOPERACIÓN

Norwegian Ministry of Foreign Affairs

Spanish Ministry of Foreign Affairs and Cooperation

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Swedish International Development Cooperation Agency

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PEI ANNUAL PROGRESS REPORT 2010 Executive Summary

UNDP-UNEP Poverty-Environment Facility P.O. Box 30552 - 00100 Nairobi, Kenya Fax: +254 20 762 4525 E-mail: facility.unpei@unpei.org Website: www.unpei.org

UNDP-UNEP Poverty-Environment Initiative

The Poverty-Environment Initiative (PEI) of the United Nations Development Programme (UNDP) and the United Nations Environment Programme (UNEP) is a global UN effort that supports country-led efforts to mainstream poverty-environment linkages into national development planning. The PEI provides financial and technical assistance to government partners to set up institutional and capacity-strengthening programmes and carry out activities to address the particular poverty-environment context. The PEI is funded by the Governments of Belgium, Denmark, Ireland, Norway, Spain, Sweden, the United Kingdom, the United States, and by the European Commission and with core funding of UNDP and UNEP. First edition. Published 2011. © 2011 UNDP-UNEP Produced by the UNDP-UNEP Poverty-Environment Initiative Directors of Publication: David Smith and George Bouma Writer and Project Coordinator: Victoria E. Luque Panadero Publication Assistance: Mónica López Conlon Editing, design, and layout: Nita Congress Cover photos: PEI Thailand; Sean Sprague, Lineair/Specialist Stock Printed by: UNON Publishing Services Section, Nairobi, ISO 14001:2004-certified. All $ referred to in this publication are US$, unless otherwise specified.

PEI Annual Progress Report 2010 and its Executive Summary are available online at www.unpei.org. This publication may be reproduced in whole or in part and in any form for educational or non-profit purposes without special permission from the copyright holder provided acknowledgement of the source is made. The UNDP-UNEP PovertyEnvironment Facility would appreciate receiving a copy of any publication that uses this publication as a source; send to facility.unpei@unpei.org. No use of this publication may be made for resale or for any other commercial purpose whatsoever without prior permission in writing from UNDP and UNEP. The designation of geographical entities in this report, and the presentation of the material herein, do not imply the expression of any opinion whatsoever on the part of the publisher or the participating organizations concerning the legal status of any country, territory or area, or of its authorities, or concerning the delimitation of its frontiers or boundaries.

UNEP promotes environmentally sound practices globally and in its own activities. This publication is printed on paper from sustainable forests including recycled fibre. The paper is chlorine free, and the inks vegetable-based. Our distribution policy aims to reduce UNEP’s carbon footprint.

Environment for the MDGs

PEI Annual Progress Report 2010 Executive Summary

UNDP-UNEP Poverty-EnvironmentÂ Initiative

n 2010, the United Nations Development Programme–United Nations Environment Programme Poverty-Environment Initiative (UNDP-UNEP PEI) saw the consolidation of its programme in 18 countries spread across Africa, Asia and the Pacific, Europe and the Commonwealth of Independent States, and Latin America and the Caribbean (see map on pages 8 and 9). During 2010, the PEI continued to provide sustained programmatic support to developing countries to strengthen their capacity to respond to concerns of poor and vulnerable groups by integrating critical poverty-environment issues—such as food security or climate vulnerability—into development policy planning and implementation.

support at the country, regional and global levels. The PEI harnesses the respective expertise and comparative advantages of both host agencies, UNDP and UNEP. As we reflect on our experience halfway through the PEI Scale-Up Programme (2008–2012), ample evidence demonstrates that this approach is a generally successful one for poverty-environment mainstreaming at the national—and increasingly, the subnational— level. Our approach has also proved to be a flexible one, selecting, tailoring and combining activities, tactics, methodologies and tools to achieve intended outcomes at different stages in the design or implementation of development planning in the various PEI countries.

As described in this year’s annual report, our country partners have achieved a number of outcomes that contribute to pro-poor economic growth based on sound environmental management. While much work remains, this past year has once again demonstrated the added value of a joint UNDP-UNEP programme delivering

How do we operate? The PEI sets out to help governments change the way they do business. Our work is based on the simple premise that economies depend on environmental natural resources and that poor

The joint UNDP-UNEP PEI in brief The UNDP-UNEP PEI has its origins in a growing appreciation of how increasing investment in environmental sustainability can help achieve poverty reduction and more generally improve livelihoods for the poor. The PEI is a catalytic global UN programme that supports country-led efforts to put in place enabling conditions—policies, instruments, capacities and behaviours—that support the continued integration of pro-poor environmental sustainability issues into national and subnational development planning processes and related implementation plans. We do this by helping key actors understand the linkages between environmental sustainability and poverty reduction, and to then integrate environmental sustainability objectives into national development planning as a priority element of poverty reduction efforts. We work mostly at the central, sector and subnational government levels, as well as with private sector and civil society institutions in developing and emerging countries. Sustained increased investments in pro-poor environmental priorities

••Understanding poverty-

••Long-term support from

••

••Environmentally

environment linkages Building capacity in pro-poor environmental sustainability

governments

sustainable management of natural resources

Integrate environmental sustainability into national development plans

••Improved livelihoods ••Reduced poverty Meet national development goals/Millennium Development Goals

PEI Annual Progress Report 2010: Executive Summary

• 1

The value of joint programming The PEI arguably represents the most comprehensive partnership between UNDP and UNEP, with joint decision-making, joint programming, joint staffing and a unique joint UNDP-UNEP financial management arrangement through pooled funds. Vital to its success in this regard is the PEI’s ability to navigate—or at least adapt to—frequently divergent agency operating systems. Also vital is the commitment of PEI staff and their UNDP-UNEP counterparts and colleagues to joint programming, demonstrated by a flexible, open, team-oriented approach that looks beyond proprietary considerations.

people are disproportionately dependent on these resources. Our approach is to make the case that more environmentally sustainable natural resource management, rather than detracting from the accomplishment of development objectives, actually contributes to the achievement of goals such as poverty reduction and sustained economic growth. Our focus of intervention is therefore on poverty reduction strategies and other planning and budgeting processes. A key aim of the PEI is to demonstrate to governments and donors the value of providing the longer-term support needed for a sustained increase in investments and capacity building in pro-poor sustainability to help achieve development goals. We provide financial and technical assistance to governments to:

• set up analytical, institutional and capacitystrengthening programmes to better integrate pro-poor environmentally sustainable natural resource use into policy and budgets; and

• bring about enduring institutional change by increasing understanding of how environmental sustainability can contribute to the achievement of development goals. Our work is based on a three-component programmatic approach: 1. Finding the entry points and making the economic case, based on country-specific evidence; this sets the stage for mainstreaming

2 • PEI Annual Progress Report 2010: Executive Summary

2. Mainstreaming poverty-environment linkages into policy processes, focusing on integrating poverty-environment linkages into an ongoing policy process, such as a poverty reduction strategy paper (PRSP), subnational development plan or sector strategy 3. Meeting the implementation challenge, to ensure the sustainability of PEI efforts by integrating poverty-environment linkages into budgeting, implementation and monitoring processes The PEI operates at the country, regional and global levels and consists of an “umbrella,” or global programme, as set out in the joint UNDPUNEP programme document results framework (2008–2012). PEI management structure Joint PEI Management Board Donor Steering Group

Poverty-Environment Facility Technical Advisory Group

PEI Africa

PEI AP

PEI ECIS

PEI LAC

Joint government–UN PEI country teams AP = Asia and Pacific; ECIS = Europe and the Commonwealth of Independent States; LAC = Latin America and the Caribbean.

Our chief partners at the country level are policy and budget decision makers—i.e., the ministries of planning, finance, environment and related sectors, such as agriculture, plus the poverty, governance and environment units of the UNDP Country Offices. The PEI also works with other relevant actors at the national and subnational levels, such as leading practitioner and knowledge organizations, civil society organizations and the private sector.

The PEI at a glance

What is our value added? PEI programme growth by region/country 20

Europe & the Commonwealth of Independent States Latin America & the Caribbean

Asia & the Pacific Africa

10 5 0

2007 Mali Mauritania Rwanda Tanzania Uganda

2008 2009 Bhutan Bangladesh Kenya Lao PDR Malawi Mozambique

2010 2011 Botswana Kyrgyzstan Burkina Faso Nepal Tajikistan Thailand Uruguay

Distribution of PEI support by category Preparatory phase 11% Technical support 22% Full programme 67%

Dominican Republic, Guatemala, Timor Leste

Armenia,Burundi, Liberia, Papua New Guinea, the Philippines,Sri Lanka, Viet Nam

Bangladesh, Bhutan, Botswana, Burkina Faso, Kenya, Kyrgyzstan, Lao PDR, Malawi, Mali, Mauritania, Mozambique, Nepal, Rwanda, Tajikistan, Tanzania, Thailand, Uganda, Uruguay

Programmatic implementation status as per PEI scale-up outcome Regional programme

Focus

Timeline

Africa



Asia and the Pacific



Europe and the Commonwealth of Independent States



/

Latin America and the Caribbean



 Implementation fully consistent with intended outcome.  Some outcomes potentially not delivered by December 2012.  Unlikely to fully deliver outcomes by December 2012. For Latin America and the Caribbean, this largely reflects the funding disbursement freeze in effect for the Dominican Republic and Guatemala.

Full integration of the environment into national economic planning processes so as to improve the livelihoods and security of the poor is a longterm change process, usually taking 10–20 years, including for capacity building. The initial indicators of success include ensuring better integration of environmental sustainability into national, sectoral and subnational strategies. Longer-term aims include increasing national budget allocations for pro-poor environmental management and creating the enabling conditions for successful poverty reduction. In supporting this process in selected countries, the PEI is aiming for a broader impact by building up a body of knowledge so that principles and operational practices can be widely applied. PEI country programmes are fully owned by the respective government and are integrated into government processes. Compared with some institutional-strengthening technical assistance programmes, the PEI only operates through existing government processes. The PEI operates by influencing existing policy and decision-making practices, not by establishing new processes in parallel. In many respects, this is both a significant added value and a source of the challenges facing the PEI in achieving its objective. An important value added of the PEI continues to be that it is the only programme offering the level of sustained programmatic engagement on pro-poor environmental sustainability mainstreaming needed to bring about the desired change in developing and emerging countries. This level of engagement is essential, since such impact means changing national priorities in a cross-government and multisector manner—a challenging task, as reflected by the increasing demand for PEI support. Another value added of the PEI is that it demonstrates a practical way to operationalize the concept of sustainable development in a pro-poor manner in developing countries.

PEI Annual Progress Report 2010: Executive Summary

• 3

• The impact on national planning processes (already felt in most of the new scale-up countries) is closely linked to identifying the appropriate entry points and cultivating change agents for sustainable development. These successes have resulted from a combination of timing our work to planning and budgeting processes and identifying PEI “champions” to influence these.

• The PEI has established critical links with ministries of finance and planning. Also, in most PEI countries, we have played an important role in strengthening the links between finance and planning ministries on the one hand and environment and—increasingly— sector ministries on the other. Similarly, the PEI has supported other government/development partner initiatives at the country level to strengthen ties with the ministries of finance and planning.

• The PEI has seen a significant mobilization Woman transporting fodder for rabbits, Rwanda (PEI Rwanda).

Highlights of achievements from the PEI scale-up Looking back since we began the PEI scale-up, considerable progress and achievements have been made at the country, regional and global levels. Below, we highlight some of the main achievements made thus far (2008–2010) at these three levels. The table at the end of this executive summary plots significant PEI accomplishments against the indicators established for the programme. Representative and exemplary achievements are briefly presented on pages 6 and 7.

Country level • The contribution of environmental sustainability to development has been systematically integrated into poverty reduction strategies through poverty-environment linkages and indicators and the application of economic tools to improve interministerial information and knowledge sharing.

4 • PEI Annual Progress Report 2010: Executive Summary

of core funds from UNDP Country Offices. Approximately 28 percent of total PEI country programme budgets come from this source, which indicates senior management support—and signals increased success in “mainstreaming” the PEI within UNDP Country Programmes.

• In addition to UNDP Country Office core funds, the PEI has received a steady increase of funding at the country level. In-country bilateral donors and commitments from government counterparts indicate a keen interest in the PEI. This priority accorded to the programme by our partners, particularly those in-country, to implement the PEI is a positive outcome of our work.

• Within UNDP Country Offices, the PEI plays an important role in bringing the poverty, governance and environment practice teams together. The PEI also responds to demands for integrating environmental sustainability into development policy; we are increasingly focusing on poverty aspects, as per the recommendations of the Norway evaluation of the PEI Africa pilot programme.

• Governments and UNDP Country Offices are applying the PEI programmatic approach more broadly. They are also seeking out PEI input on a wide range of sustainable development issues including climate change and, more recently, “green” economy.

• The PEI country programmes are aligned with and, in most cases, integrated into several important UN initiatives. These include UNDP Millennium Development Goals support activities, the integration of economic, scientific and social aspects in UN Development Assistance Frameworks and various UN reform modalities. In this context, UN Resident Coordinator buy-in regarding PEI experience and value added is a major factor in creating an opportunity for country engagement, in line with Delivering as One best practice.

Regional level • Building on the lessons learned and recommendations from previous evaluations, the PEI has streamlined a coherent and adaptive programmatic phased approach to countryled poverty-environment mainstreaming. The PEI approach has proved to be adaptive to the different contexts of the three new regions in which the scale-up has taken place. These regional approaches have in turn allowed the contextual variation of each country to be reflected in regional PEI joint teams providing appropriate policy services to developing countries.

application of economic tools and approaches such as economic valuation studies, public environmental expenditure reviews, green budgeting efforts and environmental fiscal measures undertaken throughout the PEI Africa countries. These measures were recognized as a clear value added of the PEI by governments and donors. Selected regional institutions benefited from this in-depth, cross-regional knowledge sharing.

• Strong regional cooperation exists between UNDP and UNEP, particularly in Asia and the Pacific and Europe and the Commonwealth of Independent States. In the latter region, joint programming has turned into a poverty-environment nexus cross-practice success story in bringing together UNDP poverty and environment specialists at the regional and country levels, demonstrating a high level of ownership towards the PEI.

• Follow-on programme phases have been fully implemented in several countries in the Africa portfolio, and there are new country programmes in full implementation in Asia and the Pacific, Europe and the Commonwealth of Independent States, and Latin America and the Caribbean (see map on pages 8 and 9).

• There is deepening recognition of the PEI as a hub for poverty-environment mainstreaming and related implementation activities. This is demonstrated by increasing requests for support and establishment of country programmes—and by a growing number of governments and UNDP Country Offices applying the PEI model more broadly.

• In this context, the PEI Africa team held an Economic Forum workshop in 2010 that provided government partners with the opportunity to consolidate lessons learned on the

Reforestation in Lao PDR (PEI Lao PDR).

PEI Annual Progress Report 2010: Executive Summary

• 5

Government ownership makes a big difference

compromise the long-term benefits of investing in

Bhutan’s former planning commission, the Gross

In Bhutan, we have seen a gradual shift towards

National Happiness Commission (GNHC), has gotten

poverty-environment–related proposals being

behind a number of “outside-the-box” initiatives

submitted for government and donor financing. For

in advancing the country’s poverty-environment

example, the National Statistical Bureau is currently

mainstreaming agenda, thereby demonstrating

developing a proposal for “green accounting” to

strong government ownership of that agenda and

environmentally friendly road construction.

secure funding through the Danish Ministry of For-

making it a true poverty-environment champion.

eign Affairs (DANIDA). The PEI will ensure synergies

GNHC fostered the establishment of an intera-

country’s public environment expenditure review.

through the findings from our current support to the

gency help desk to assist sectors in mainstreaming environmental sustainability. This is an innovative example of how central planning units can

Economics catalyse action

support improved intersectoral coordination and

In 2010, we supported Malawi’s Ministry of Devel-

combine subnational- and national-level expertise. Through 2010, the PEI provided capacity

opment Planning and Cooperation in conducting an economic analysis of the country’s management

development support, which helped increase the

of its natural resources. Its findings highlighted

engagement of sectors in addressing poverty-

estimates that 1.88 million people would remain in

environment linkages. Sectoral involvement in

poverty over 2005–2015 due to the impact of soil

the development of ongoing projects on the

erosion on agricultural productivity. It also project-

sustainability of farm roads, rural electrification

ed an annual loss of 5.3 percent in gross domestic

and renewable natural resource programmes,

product due to unsustainable resource manage-

and integrating conservation and development

ment. These findings were strategically and broadly

in managing national parks bear witness to such

communicated and have stirred much debate in

positive developments.

the media. More importantly, the report and related

Bhutan’s Five-Year Plan for 2008–2013 integrated environmental sustainability as a cross-cutting issue. Consequently, all sectors, agencies and districts are mandated to mainstream environmental sustainability issues into all their policies, plans, programmes and projects. The PEI helped GNHC raise funds for Phase II of the Rural Support Programme in Bhutan, as a spin-off of our support to the assessment of the programme’s first phase in 2008/09. As a result, GNHC has secured $545,000 from the secretariat for interventions

PEI activities have been influential in the government’s increasing the priority attached to pro-poor environmental sustainability in its PRSP and sector plans. We anticipate that this achievement—along with other PEI outputs, such as the integration of subchapters on climate change, the environment and natural resources and social development as new priority areas in Malawi’s Growth and Development Strategy—will contribute to a longer-term commitment in pro-poor environmental sustainability in Malawi, with a likely impact on budget allocations.

currently under way in eight villages. Also in 2010, various sectors in Bhutan agreed to put forward strong justifications through case studies to generate additional resources from the government; this

Better results come from reaching across sectors

was based on findings from PEI-supported studies

In Mauritania, we identified two potential entry

that had shown that current saving practices will

points for the PEI: the country’s formulation of its

6 • PEI Annual Progress Report 2010: Executive Summary

latest PRSP (for 2011–2015) and the Environment

As a result of PEI Thailand’s proactive engagement,

Sector Working Group. The latter brought together

the government has taken actions to improve col-

the Ministries of Agriculture, Mines, Economy, Fish-

laboration between the national and subnational

eries, Water, Environment, Education and Health,

levels—specifically, between the Ministries of

as well as civil society and the private sector. It was

Interior and Natural Resources and Environment,

established by the Ministry of Economy in order to

the National Economic and Social Development

assist in PRSP formulation with a specific focus on

Board, and the Office of Public Sector Development

environmental sustainability. Strong leadership by

Commission and subnational counterparts and

the working group chair—and PEI champion—the

stakeholders.

director of the Ministry of Economy, proved helpful in prioritizing poverty-environment actions. Consequently, poverty-environment linkages were successfully mainstreamed as a cross-cutting sector and into the economic growth and good governance pillars of the new PRSP. The working group also formulated a strategy for the future development of the environmental sector. And, as a result of a PEI-supported gap analysis assessment, the Government of Mauritania revised its environmental framework law to now incorporate poverty-environment linkages.

Open dialogue and sharing of knowledge make things happen Since the beginning of our preparatory work in Uruguay in 2009, the PEI has contributed to the improved understanding among government counterparts of the contribution of environmental sustainability to economic development and wellbeing. This is reflected, for example, in the collaboration among government partners in designing and implementing “making the case” activities, with technical staff and high-level decision makers

Strong collaborations and coordination improve understanding The Millennium Ecosystem Assessment FollowUp, a subglobal integrated ecosystem assessment supported by the PEI in three pilot provinces—Nan, Khon Kaen and Samut Songkram—has proved to be an effective mechanism for improving general understanding in Thailand on the linkages between ecosystem services and human well-being. Moreover, the effort has improved longer-term collaboration through coordination mechanisms between central government, subnational authorities and non-state actors. Core working teams have been established; these include the Mae Klong Civil

engaging in a sustained exchange on povertyenvironment issues, each participant bringing his or her own training and sectoral priorities to the table. This improved understanding among decision makers, together with timely provision of capacity building support among key planning and budgeting actors, has directly translated into increased government allocations to the PEI thematic areas of work. Specifically, the Ministry of Social Development— our main implementing partner—has increased the budgetary allocation for PEI sectors (poverty, environment and waste management) sixfold. The budget has been increased from $350,000 for 2010 to $2.15 million for 2014.

Society Network, Hak Muang Nan Network and

The leadership of true PEI champions—such as the

Nam Phong Network and academic institutions

national director for social policy in the Ministry

as an innovative measure to sustain collaboration.

of Social Development and lead personnel in the

More systematic involvement with the Samut Song-

Budget and Planning Agency and the Ministry

kram Chamber of Commerce was also achieved in

of Environment—has been a vital factor in this

2010.

achievement.

PEI Annual Progress Report 2010: Executive Summary

• 7

The PEI around the globe: country programmes and their focus  Fully fledged PEI programme  Technical assistance  Preparatory phase  Government/UNDP country office request for support in general mainstreaming and regional lesson learning and referrals

Dominican Republic Increase resilience of poor households to climate-induced shocks

Mauritania

Colombia

Mainstreaming as a sectoral and crosscutting issue; ; continued successful joint MDG-F programming joint MDG-F programming

Guatemala Increase food security in the Dry Corridor

Uruguay Waste management related to health and income generation

Mali Leading the PRSP “greening” process

Liberia

Uganda Subnational povertyenvironment mainstreaming

Mainstream environmental sustainability in PRSP implementation and monitoring

Burkina Faso Integrating povertyenvironment linkages in country economic growth investment plan

Rwanda Operationalize PRSP in key sectors and mobilize sustainability investments

Burundi

Botswana

Mozambique

Malawi

Use PEI programmatic approach for UNDP project on poverty-environment mainstreaming

Poverty-environment mainstreaming to help in planning for sustainable economic diversification

Improved sectoral integration of environmental sustainability through enhanced planning activities

Cross-government coordination: climate, natural resources and the environment

Kosovo

Tajikistan

Nepal

Pro-poor development planning and budgeting at national and subnational levels

Promotion of natural resource management in decentralized planning

Bhutan

Kyrgyzstan Sustainable pasture management for poverty reduction

Armenia Mainstreaming povertyenvironment linkages in revision of national development plan

Gross National Happiness Commission’s integration of climate and environment in sectoral/ local plans and budgets

Mongolia

Bangladesh Planning Commission’s integration of climate in planning and budgeting

Viet Nam Use PEI programmatic approach for UNDP project on povertyenvironment mainstreaming

Nigeria

Ethiopia

Zambia

Afghanistan

Philippines Use PEI programmatic approach for UNDP project on povertyenvironment mainstreaming

Sri Lanka Support design and implementation of UN Development Account project on mainstreaming environmental sustainability

Namibia Lesotho

Papua New Guinea Promote environmentally sustainable economic growth

Timor Leste Build advocacy for and capacity in natural resource management to reduce poverty

Thailand Ministry of Interior’s inclusion of natural resource management in provincial planning

Tanzania Accelerate implementation of national povertyenvironment objectives in key sectors

Kenya Sector operationalization of poverty-environment objectives

Lao PDR Ministry of Planning and Investment’s attraction and management of quality investments

A paper company in Khon Kaen Province uses water from the Nam Pong River (PEI Thailand).

• There has been a continuous increase in gov-

has facilitated the achievements outlined above and is an innovative precedent entailing fully pooled funding and joint programming arrangements. A number of member states of UNDP’s Executive Board and UNEP’s Governing Council have publicly expressed their support for these joint management arrangements targeted at integrated poverty and environment development policy responses.

ernment and UNDP Country Office requests for support, providing strong evidence of progress in the poverty-environment mainstreaming agenda. Overall, 37 requests for support have been received so far. Taking into consideration the PEI’s current financial situation, the PEI has responded by:

–– establishing or continuing 18 fully fledged country programmes,

• The PEI has sustained increased expenditures since the beginning of the scale-up. Total expenditures are estimated at $10.1 million for 2010, bringing total PEI expenditures for the 2002–2010 period (including the PEI Africa pilot phase) to over $38 million.

–– undertaking preparatory phases in 3 countries (this effort is currently on hold because of funding issues),

–– providing technical assistance to 7 countries, and

–– placing a further 8 countries in the pipe-

• The PEI is a priority for the two host organi-

line for support subject to mobilizing resources.

Global level • An agreement was implemented between UNDP and UNEP on joint programme management. The PEI’s joint programming model

10 • PEI Annual Progress Report 2010: Executive Summary

zations and is increasingly being integrated into their mainstreaming work. In 2010 the UNDP Poverty Group (Bureau for Development Policy) formally became part of the Joint Management Board to strengthen the poverty alleviation work of the PEI, and UNEP changed the management arrangements. It now engages two of its divisions, Environmental Policy

Key challenges arising in 2010

Implementation (lead) and Regional Cooperation, in support of the PEI.

• The PEI contributes to the wider UNEP mainstreaming agenda by providing information about its experience so other elements of UNEP can better include PEI mainstreaming lessons in their work. For example, the PEI is engaged with such UNEP subprogrammes as the Green Economy Initiative as well as those involved with ecosystem management and climate change adaptation.

• In 2010, the PEI interacted and collaborated with numerous peer and expert practitioners and entities on a variety of initiatives. For example, we reconvened the Technical Advisory Group, which includes key stakeholders. We also worked closely with the UK Department for International Development (DFID), the Organisation for Economic Co-operation and Development’s Development Assistance Committee (OECD DAC), the Government of Malawi and UNDP Malawi to organize and host the Poverty and Environment Partnership’s 15th meeting in Malawi. Presentation of case studies and experiences by new PEI Africa countries led to deeper cooperation with OECD DAC on environmental mainstreaming in the context of aid effectiveness reform.

While the design of the scale-up phase has demonstrated a variety of programming strengths at the global, regional and country levels, several challenges have also emerged. These include the suspension of disbursements against signed donor commitments as a consequence of the international financial crisis, and vacancies in the Poverty-Environment Facility’s top two senior management positions since April and May 2010, respectively. These circumstances are increasingly affecting the PEI’s ability to deliver in accordance with the PEI scale-up programme document.

• The PEI made enhancements to our monitoring and evaluation system to better reflect reporting from the country level against PEI scale-up global outcomes.

• Knowledge management support to regional and country PEI teams was firmly established, resulting in:

–– an improved website and communication networks;

–– development and dissemination of guidance materials such as primers—themselves based on the collection of good practices and new lessons—for managing private investments, managing adaptation to climate change and enabling local success, among others; and

–– cross- and interregional experience sharing.

Manual water pump being used in Malawi (PEI Malawi).

PEI Annual Progress Report 2010: Executive Summary

• 11

PEI workshop in Oudomxay, Lao PDR (PEI Lao PDR).

Accordingly, our targets and budget for 2011 have been down-scaled to ensure delivery on our commitments to the 18 fully fledged country programmes. Nonetheless, these two factors are having serious consequences during the remaining period of implementation for the scale-up in terms of funding planned programmes, which have instead remained in the preparatory phase in 2010, or of funding subsequent phases of country programmes despite the good progress they have made. An additional challenge is that in some countries it has taken longer than planned to get country programmes developed and approved. On the one hand, taking time is essential to ensuring the necessary level of country ownership so that country partners can energetically focus on implementation. However, development and approval of PEI country programmes has been delayed at times due to complex in-country government decision-making processes or to UNDP Country Office administrative delays. Other hold-ups are attributable to factors beyond the PEI’s control, such as the political turmoil in Kyrgyzstan.

During the scale-up, certain programmatic issues have arisen. By considering and addressing these thoughtfully and thoroughly, the PEI’s future effectiveness can be improved.

• Emphasize poverty reduction. The focus on the poverty side of poverty-environment mainstreaming has not always been as explicit as it should be. Therefore, the PEI is working to ensure a stronger emphasis on poverty reduction. The expansion of the PEI Joint Management Board to include a representative of the UNDP Poverty Group is an important step towards this at the global and regional levels. The PEI is already seeing increased involvement of the UNDP poverty practice at the country level, particularly as we begin work in new countries.

• Focus on increasing funding for pro-poor

12 • PEI Annual Progress Report 2010: Executive Summary

environmental sustainability. The PEI outcomes refer to increasing investment targets and improving financing strategies for poverty-environment considerations. However, we acknowledge that a more explicit focus on increasing budget allocations would be

Thoughts for the future

preferable. In any new phase of the PEI, this objective should be reflected.

• Sustain poverty-environment mainstreaming capacity at the country level. Capacity building is a long-term process, requiring substantial resources over a 10- to 20-plus-year time-frame. To be taken into account alongside this fact is the reality that, in many developing countries, staff turnover and vacancy rates are very high. The PEI needs to improve its engagement and coordination with in-country donors to mobilize sufficient resources and strongly focus on poverty-environment mainstreaming capacity development.

• Ensure full consistency between intended outcomes as envisioned at the PEI programme level and as implemented at the country level. Outcomes and outputs at the country, regional and global levels as stated In the joint PEI scale-up programme document do not always match the actuality experienced by the PEI country programmes. On occasion, trade-offs have to be made in the interests of ensuring appropriate Integration with existing country processes, priorities and timetables. This is one reason why the PEI monitoring and evaluation framework is being revised— to provide clearer guidance for PEI country design so that trade-offs will not significantly reduce achievement of the intended PEI outcome.

• Use country conditions and partnerships to mainstream the PEI. Engagement levels shift as the work of the PEI becomes more fully integrated into country processes over time. For example, circumstances in certain regions and countries have created opportunities for less or more narrowly focused support to achieve a potentially higher value for the money expended. Such is the case in Nepal, where the PEI is coordinated with the Asian Development Bank, DFID, and the UNDP Country Programme, demonstrating why only limited funds are required to catalyse major policy change.

The PEI scale-up is scheduled to end in 2012. But substantial and varied evidence suggests that there is a need for the PEI to continue to catalyse action and inspire practitioners and policy makers. There is much interest, for example, in the PEI approach as a model to be promoted in the Rio+20 context to operationalize the concept of sustainable development at the country level. In this regard, the UNDP Poverty and Environment Nexus 2010 evaluation endorsed the PEI approach and recommended it as a best practice, noting that its wider applicability within UNDP would improve delivery on poverty-environment issues. And the UNEP Governing Council in early 2011 urged UNEP to use the PEI as a model for future collaboration with UNDP and other UN agencies where relevant; this assessment was echoed in the 2011 DFID Multilateral Aid Review.

“The joint UNDP-UNEP Poverty-Environment Initiative is one of the best used examples of how UN agencies can work positively in partnership.” —DFID Multilateral Aid Review 2011 We continue to receive an increasing number of requests for technical assistance and/or the establishment or continuation of PEI country programmes. Another welcome development has been the deepening of our working relationship with several donors on specific initiatives of common interest. For example, Sweden (through the Swedish International Biodiversity Programme and the Swedish International Development Cooperation Agency—SwedBio/Sida) and the UNEP Division of Environmental Policy Implementation’s Millennium Assessment Follow-Up programme cooperated in applying the Millennium Ecosystem Assessment methodology at the subglobal level in Guatemala, Thailand and Uganda. This effort gives us all an opportunity to

PEI Annual Progress Report 2010: Executive Summary

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enhance the method’s utility in poverty-environment mainstreaming at the country level. Looking ahead, we expect to carry out more work with the European Commission on environmental fiscal reform. Also, the Government of Ireland has shown a strong interest in the PEI’s economics work on the costs and benefits of unsustainable and sustainable natural resource use. Within our host institutions, the evolution of the UNDP-UNEP Memorandum of Understanding reflects an emphasis on synergy, recognizing the respective capacities of both UNDP and UNEP with respect to pro-poor environmental sustainability mainstreaming, creating a role for the PEI as a source of knowledge, experience and lessons. The PEI can continue to dialogue with donors about how it can assist the development community in supporting the pro-poor environmental

sustainability mainstreaming agenda. Part of this dialogue should be focused on what aspects of the current PEI programme should continue past 2012, including its role within the host institutions. The findings and recommendations of the mid-term review, to be finalized and presented to PEI stakeholders in 2011, will play a role in this discussion. In numerous forums, our partners have observed that the lead-up to Rio+20 should benefit from the PEI experience. The PEI’s work in strengthening environmental governance through the integration of environmental sustainability into development policy and planning for the benefit of the poor—as well as our use of economic assessment and valuation tools as green economy building blocks—can help broaden and deepen the perspective of the environment community.

Steering Committee meeting in Mali (PEI Mali).

14 • PEI Annual Progress Report 2010: Executive Summary

Table: Highlights of PEI country-level achievements in 2010 The table presents sample accomplishments towards the nine country-level indicators on the results framework in the joint scale-up programme document. For a more comprehensive listing, see section 2 of the full PEI Annual Progress Report 2010 (www.unpei.org/PDF/PEI-annualprogress-report2010.pdf ).

Indicator/overview 1.1 Improved collaboration between environmental agencies, planning/ finance agencies and key donors on identifying entry points and key actions for mainstreaming. Almost all country programmes have, with PEI support, made substantive progress with this indicator; improved collaboration has, in turn, triggered progress and results across the other PEI output indicators.

Achievements

•• Bangladesh: An interministerial steering committee, with support

from interdepartmental technical teams, formulated key strategies for mainstreaming poverty-environment-climate issues, with a focus on socio-economic issues and civil society participation.

•• Bhutan: An interagency help desk, comprised of members of local

government and the Ministry of Agriculture and Forests, provided an innovative example of how central planning units could support intersectoral coordination.

•• Lao PDR and Nepal: Improved coordination among key government

agencies and with donor projects at the national and subnational levels centred on strengthening agricultural investments, multidonor joint financing mechanisms and local government capacity building for rural development.

•• Malawi: A cross-sectoral Working Group on Environment and Climate

Change, chaired by the Ministry of Planning and supported by the Ministry of Environment and Natural Resources, was created.

•• Mauritania: The Ministry of Economy established an Environment Sector Working Group to help integrate poverty-environment issues in the newest PRSP, particularly in the growth/poverty reduction and capacity development/good governance pillars.

1.2 Improved understanding of governance and capacity issues affecting potential for sustained, country-led poverty-environment mainstreaming

•• Bhutan: Sector reviews of the 10th Five-Year Plan resulted in the devel-

In numerous countries, the PEI supported studies— whether situation analysis, gap analysis, capacity needs assessment or capacity reviews of sectors, plans or processes including strategic environmental assessments—to make progress regarding this indicator.

were endorsed, as well as planned strategic environmental assessment studies of key sectors.

opment of poverty-environment mainstreaming capacity development plans.

•• Lao PDR: The government established new coordination working

teams to support provincial-level strategic planning prioritizing investment decisions based on addressing cross-cutting poverty-environment issues.

•• Mali: Objectives and methodologies for the PRSP “greening” process •• Mauritania: Based on a gap analysis assessment, the country’s environmental framework law was revised and poverty-environment indicators developed.

•• Tajikistan: The Ministry of Economic Development and Trade piloted

new approaches to participatory and integrated local planning in 14 districts when a situation analysis highlighted uncoordinated planning and budgeting processes.

•• Thailand: Findings from a situation analysis led the government to

establish core interagency working teams in each PEI pilot province to strengthen coordination with the aim of institutionalizing povertyenvironment mainstreaming within existing integrated provincial committees.

•• Uruguay: A capacity-strengthening programme for integrating

poverty-environment issues in plans and budgets was put in place as a result of a capacity needs assessment.

PEI Annual Progress Report 2010: Executive Summary

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Indicator/overview

Achievements

1.3 Improved understanding of contribution of environment to poverty reduction and growth within planning/ finance, environment and sector ministries

•• Bhutan: Improved understanding of the economic contribution of the

Through stakeholder workshops, case studies, assessments and policy briefs, the PEI helped increase awareness of propoor environmental sustainability and the recognition of its importance as reflected in development plans and strategies. Studies detailing the economic value of environmentally sustainable natural resource management to the achievement of national economic development goals have had a significant impact. 1.4 Improved representation of environmental actors in key planning processes Successes ranged from launching new environmental units in key planning authorities to integrating environmental authorities into committees, working groups or processes previously closed to environmental actors.

environment was reflected in various sectors’ engagement in addressing poverty-environment issues—including in the implementation of projects looking at farm road sustainability, renewable natural resource programmes and the integration of conservation and development in the management of national parks.

•• Malawi: Findings from an economic analysis released by the Ministry

of Development Planning and Cooperation that estimated an annual 5.3 percent loss in gross domestic product due to unsustainable resource management generated considerable debate in the national media and was influential in the government’s increasing the priority attached to environmental sustainability.

•• Mali: The government’s commitment to greening Mali’s PRSP reflects a strong understanding and recognition of poverty-environment issues as they relate to sustainable development.

•• Mauritania: The cumulative production of 19 strategic studies and

policy notes contributed to the Ministry of Environment’s ability to successfully advocate for the integration of environmental sustainability as a cross-cutting sector in the country’s newest PRSP.

•• Nepal: A national stakeholder workshop submitted policy recommendations on poverty-environment mainstreaming to the National Planning Commission for inclusion in the next periodic plan.

•• Thailand: Ecosystem and human well-being assessments in three pilot provinces have strengthened collaboration among various provinciallevel stakeholders and enhanced their understanding of the importance of ecosystem services in sustaining local livelihoods and economic development.

•• Uganda: Radio and TV programmes have raised national awareness of

the lessons learned and experiences gained by community organizations in demonstrating poverty-environment linkages in microdevelopment projects in five districts.

•• Bhutan: Environmental actors have an expanded advisory role with

regard to natural resource management in key development planning led by the Gross National Happiness Commission, Bhutan’s planning agency.

•• Burkina Faso: An Environment Unit was created within the Ministry of

Finance’s Division for Economic Planning. A PEI steering committee is part of the governmental steering committee for land degradation, and environmental sustainability has been integrated into the criteria for project approval.

•• Rwanda: Environmental actors have become an integral part of development planning processes at the national and sectoral levels.

•• Tajikistan: The main environmental authority was included on steering committees for national and subnational economic development programmes.

•• Uruguay: The director for environment advised public investment processes through the integration of environmental sustainability in social policies emanating from the Ministry for Social Development.

16 • PEI Annual Progress Report 2010: Executive Summary

Indicator/overview 1.5 Increased integration of povertyenvironment issues in key planning frameworks for poverty reduction, growth and national MDG targets Most countries integrated sustainability, poverty-environment and climate change issues into various national planning instruments.

Achievements

•• Bhutan, Burkina Faso, Lao PDR, Mozambique, Nepal, Thailand:

Environmental sustainability has been integrated as a cross-cutting issue into PRSPs and other key planning documents; this was a major achievement of the PEI in 2010.

•• Bangladesh, Botswana, Kenya, Mauritania, Mozambique, Ne-

pal, Tanzania: Poverty-environment issues were integrated into the development and implementation of United Nations Development Assistance Frameworks and related plans.

•• Bangladesh, Malawi, Mauritania, Tanzania: The PEI successfully

contributed to the integration of climate change adaptation issues linked to poverty and environmental management. Adaptation to climate change is an increasingly important area of demand for the PEI, one that attracts growing attention from national counterparts as well as donors.

1.6 Improved institutional capacity for poverty-environment mainstreaming among planning/finance, environment and key sectoral agencies

•• Bhutan: Institutional capacity was strengthened through long-term

In 2010, the PEI provided over 40 capacity-building activities as part of our support package to 18 countries; these were focused largely at the subnational level and on fiscal reform as country programmes take on the implementation challenge. Activities were prioritized with government counterparts in association with relevant subnational/ regional and academic partners.

•• Mali: Complementary initiatives in institutional strengthening on the

support for the integration of financing tools for sectors and at the subnational level on pro-poor environmental sustainability.

•• Malawi: PEI capacity-strengthening programmes targeting budget

submissions and the development of cross-government guidelines led to the engagement of key government officials in the mainstreaming of poverty-environment issues. application of strategic environmental assessments in relevant sectors and environmental fiscal reform were undertaken to prepare for PRSP greening.

•• Nepal: The Administrative Staff College, working with the National

Planning Commission, the Ministry of Environment and in-country donors, developed a comprehensive long-term package on institutional capacity for effective pro-poor environmental planning and budgeting processes at the national and subnational levels.

•• Rwanda: PEI efforts ensured sustained capacity in moving towards

financing tools such as environmental fiscal reform measures, public environmental expenditures and budgeting guidelines.

•• Thailand: Key government officials were trained in integrated eco-

system assessment and use and the application of economic, social and environmental indicators for field monitoring of investments; this enabled informed decision-making on pro-poor private investments in natural resources and strategic actions.

•• Uruguay: PEI capacity-building support to the country’s Office for

Budget and Planning resulted in the integration of poverty-environment linkages in national development programmes such as the public investment system and the national housing plan.

PEI Annual Progress Report 2010: Executive Summary

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Indicator/overview 1.7 Environmental sustainability mainstreamed into relevant sectoral policies, plans and implementation processes Particularly noteworthy have been achievements related to agriculture and water resource management—two sectors with very strong linkages to sustainable human development that have received considerable support from the PEI.

1.8 Increased macro and sectoral investment targets for longer-term investments to address priority povertyenvironment concerns and 1.9 Improved financing strategy to meet investment targets through domestic resource mobilization and harmonized donor support PEI support aimed at improving capacity for increased domestic resource mobilization, national budget allocations and public expenditure for propoor growth achieved good results in 2010.

Achievements

•• Malawi: In collaboration with the World Bank, poverty-environment

indicators were integrated into the Agriculture Sector-Wide Approach Monitoring and Evaluation Framework, and training was conducted in developing adequate baselines and targets.

•• Rwanda: A key agricultural sustainability objective was included in

the PRSP, leading to a major soil erosion control programme; sector indicators were developed and linked to PRSP economic development objectives.

•• Tajikistan: In collaboration with the UK Department for International

Development and the German International Development Cooperation (GIZ), poverty-environment issues were integrated into the Rural Economic Development Programme and 14 District Development Programmes, District Trust Funds and microfinance services were consecutively developed.

•• Uganda: Sustainable natural resource management and poverty-

environment issues were successfully integrated into two village land use plans.

•• Uruguay: The Ministry of Social Development redefined the objectives, criteria and scope of its sectoral programme on urban poverty and waste management. Poverty-environment issues have been integrated in the programme.

•• Bhutan: The Gross National Happiness Commission, Bhutan’s planning agency, secured $545,000 from the Secretariat of Rural Support Programme for a second phase of its successful PEI programme.

•• Lao PDR: The country’s national investment strategy includes actions to achieve its sustainability goals framework, prioritizing key sustainable investments for pilot provinces.

•• Malawi: The Ministry of Finance developed guidelines for applying the integration of environmental and natural resource management into national budgeting processes so as to achieve increased macrolevel and sectoral investment targets.

•• Rwanda: Improved conditions for internal resource allocation and

donor support are expected as the government steps up its efforts to reorganize internal resource allocation and the mobilization of donor support for environmental sustainability through the National Fund for Environment and new budgetary guidelines.

•• Tanzania: The prime minister issued a directive that local government

authorities systematically allocate budgets for local public environmental expenditure reviews.

•• Uruguay: The Ministry of Social Development increased the budgetary allocation for PEI sectors (poverty, environment and waste management) sixfold—from $350,000 in 2010 to $2.15 million in 2014.

18 • PEI Annual Progress Report 2010: Executive Summary

Environment for the MDGs

Belgian Development Cooperation

Danish Ministry of Foreign Affairs (DANIDA)

European Commission

Irish Aid GOBIERNO DE ESPAÑA

MINISTERIO DE ASUNTOS EXTERIORES Y DE COOPERACIÓN

Norwegian Ministry of Foreign Affairs

Spanish Ministry of Foreign Affairs and Cooperation

Swedish Environmental Protection Agency

Swedish International Development Cooperation Agency

UK Aid

US Department of State

PEI ANNUAL PROGRESS REPORT 2010 Executive Summary

UNDP-UNEP Poverty-Environment Facility P.O. Box 30552 - 00100 Nairobi, Kenya Fax: +254 20 762 4525 E-mail: facility.unpei@unpei.org Website: www.unpei.org

UNDP-UNEP Poverty-Environment Initiative