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Introduction

Country: Laos  

 

Description of the Assignment:  

a)  GBF EAS

For Component 1 :

a)    Support the Interntional consultant- Biodiversity Finance Specialist in carrying out a literature review to identify existing biodiversity financing mechanisms.

b)    ​Take lead on liaise with Governmental Actors and Non-Governmental Organisations (NGOs) as well as Community Based Organisations (CBOs) as required, including one-on-one calls and technical support   

c)    Lead a consultation workshop with all partners to finalize the mapping and analysis of existing funding mechanisms.

·         Together with the International consultant- Biodiversity Finance Specialist, develop a report including a database of all existing financing mechanisms If there is available information of the revenue generated from these financing mechanisms, these should be included.

For component 2 :

A. Analysis

This phase aims to draw up an initial inventory of subsidies at the national level.

1. Scoping phase

a)    Assemble a team of experts to carry out the assessments.

·  With coordination of government and consultation with team, create a working group of high-level representatives and experts from key government and private sector counterparts (or build on existing cross-sectoral groups) to oversee and guide the process.

·  Support the International consultant- Biodiversity Finance Specialist define the scope (priority sectors, geographic focus and working definition) of the assessment Analyze evidence of the importance of a sector dependent on or impacting biodiversity to inform the prioritization of sectors for the scope of this assessment.

b)    In collaborative with team and government, develop a stakeholder consultation and engagement plan, including key communication messages adapted to the national context to support this process.

·   Support the International consultant- Biodiversity Finance Specialist carrying out a literature review of all available international best practices on reallocation options for biodiversity-damaging subsidies in the national context (e.g. publications, databases, online articles).

·   Decide on a detailed methodological framework and outline the final report with International consultant- Biodiversity Finance Specialist.

2. Diagnosis phase

·  With International consultant- Biodiversity Finance Specialist Mapping the main subsidies in key sectors

Carry out a rapid mapping of all the country's major subsidies in selected key sectors). Biodiversity-friendly subsidies should be included, as they can drive reallocation efforts or even have their own unintended negative effects on nature. Production and consumption subsidies must be taken into account. Some preliminary information may already exist in BIOFIN's Policy and Institutional Review (PIR) and the Biodiversity Expenditure Review (BER) methodology.

Result: This step results in an initial list of subsidies in the country that could have adverse effects on biodiversity.

a)  Support to review the initial selection of subsidies likely to have a significant impact on biodiversity:

Preparation of an initial inventory of potentially damaging subsidies using the template provided in the BIOFIN 2018 manual, in Appendix 2 above as a guide to describing subsidies. General questions to guide the grant selection and evaluation process can be found in Appendix 1 - Selection questions. For many studies, it may be difficult to accurately determine the impact on nature, as grants are often part of a larger package of measures, or data may be lacking. In such cases, a prediction can be made based on international examples of similar studies.

Outcome: The list from step a is completed with a review of the potential negative impacts on biodiversity for each grant and a decision on whether or not to investigate further.

b)   Coordinate and support the International consultant- Biodiversity Finance Specialist to conduct a more detailed study of these subsidies, covering at least the following points:

Subsidy policies

• Legal and institutional framework
• Objective and results
• Total annual financial cost to the government
• Estimation of the financial impact of these subsidies on different categories of households and producers
• Unintended impacts of subsidies on biodiversity and, if possible, associated economic costs

This can be a desk study, supplemented by expert contributions and spatial analysis. Potential sources include the national statistical institution, government analytical reports, scientific data and findings from academics and NGOs, local newspapers and media. Evidence of the economic value of nature, including cost-benefit analyses and environmental impact studies linked to subsidies, are important sources of information. The international database on environmental economic valuation, such as https://www.esvd.net/ , could also be a source of information.

For the desk review, the analysis can be supported by spatial analysis and/or expert assessment (Delphi method, semi-structured interviews, etc.) to identify the most affected areas and better understand the drivers of the impact on biodiversity. The analysis should mention cases where multiple factors, including a subsidy, may have a negative impact on biodiversity. Studies or technical reports that support these claims are the ideal source of information, but in their absence, anecdotal information from experts may be useful. General accuracy will be sufficient at this stage to support the prioritization process. The guiding questions to be answered for this stage of the research are given in Appendix 1 - Questions for preliminary screening.

Result: Detailed profile studies are carried out for a number of grants selected from the list in step B. These are used for the validation process in step D. These are used for the validation process in step D.

d)  Validation

Validate results with key stakeholders, including representatives from universities, civil society groups, business associations, local communities and local governments. Stakeholder involvement from the earliest stages of the process is important not only to obtain all relevant information but also to understand and assess all the intended and unintended effects of grants on different types of stakeholders.

Result: Detailed grant profiles are understood by a wider range of stakeholders, providing a better basis of support for follow-up actions.

e) With Interntional consultant- Biodiversity Finance Specialist, prioritize 1-3 grants for in-depth evaluation

Prioritize grants for in-depth evaluation, taking into account biodiversity impacts and financial/economic impacts following desk review and consultative validation processes.

3. Validate the national report on subsidies with adverse effects on nature

a)  Documentation of main results and validation :

Support on producing an interim report containing the final national inventory of subsidies in key sectors likely to harm biodiversity, and prioritize at least three subsidies for redefinition. Validate these findings with key stakeholders, including representatives of relevant civil society groups, business associations, local communities, local governments, etc.

b)  Optional additional section on systemic gaps. The report can include an additional section presenting the main gaps identified in the national subsidy design system and their potential impact on nature, as well as proposed institutional improvements, for example strengthening the Strategic Environmental Assessment (SEA) system with a clear focus on biodiversity, or an improved monitoring and evaluation system for subsidies.

c)   A final report containing validated suggestions for priority grants with high redesign potential (at least three major grants).

B. IDENTIFICATION AND ASSESSMENT OF REDESIGN OPTIONS

Support the Interntional consultant- Biodiversity Finance Specialist to develop grant redesign options for priority grants by following these steps:

·         Examine redesign options

a.    Develop criteria and indicators for a multi-criteria assessment of the potential of identified redesign options, including financial/economic and biodiversity impacts, as well as expected political, economic and social consequences. These criteria and indicators could form the basis of a monitoring and evaluation system for the proposed redesign options.

b.    In-depth examination :

In-depth examination of initially prioritized harmful subsidies, with detailed information on the objectives, size, nature and impact of the subsidies. Case studies and/or field observations could provide better data, particularly where there is little hard evidence on the ground. Consideration should also be given to whether there are other policy measures (including taxes) that counteract the purpose of the subsidy. The guiding questions to be answered are listed in Appendix 2.

c.     Define the final/priority list of grants to be reviewed (at least two or three major grants) and present a strong case for change.

d.    Validation meetings with the working group, which includes representatives of civil society groups, business associations, local communities, local governments, etc.

 

·         Redesign of scenarios and action plan

a.    Development of redesign options aligned with national sector priorities, with two or three scenarios that can be compared with the business-as-usual scenario for selected subsidies, including avoided cost potential, perceived effectiveness, and other climate and environmental impacts. A cost-benefit analysis could be a useful tool for comparing the various options and scenarios proposed.  Redesign options may involve eliminating, reducing or greening the selected subsidy (e.g. by introducing biodiversity protection measures), or redirecting savings to support positive biodiversity outcomes. Also, consider how the scenarios can be implemented (operational design) and how the effects of these new scenarios can be monitored and evaluated (it is essential to establish baseline reference points to enable before/after analysis).

b.    An initial impact analysis that identifies which part of the economy and society will be directly and indirectly affected by the different redesign options over time.

c.     Validation meetings with the working group, which includes key stakeholders including representatives of civil society groups, business associations, local communities, local governments, etc. Explore partnership and support opportunities to give political impetus to the redesign of the subsidy.

d.    Detailed socio-economic analysis including gender dimensions and paying particular attention to vulnerable groups and impacts on poverty and health.

e.    Design support programs that facilitate business or consumer adaptation or ease the transition away from harmful practices, as well as possible compensation or targeted exemptions for low-income groups, certain groups of workers and other households affected by the proposed change. A robust monitoring and evaluation system can ensure that, during implementation, target groups and impacts are achieved (monitoring) and that, through regular assessment, adjustments can be made (evaluation).

f.     Evaluate opportunities for policy action, including options for reallocating the savings generated to build resilience and reduce future risks.

g.    Identify potential supporters, such as parliaments, members of government, sector associations, NGOs, etc., to form a broad coalition. Individual meetings create a shared vision of the subsidy redesign process.

h.    Develop a feasible action plan for the redesign, including the objective, indicators, expected effects, unavoidable effects and strategies to avoid possible negative consequences. Set up a monitoring and evaluation system to enhance transparency and ensure that objectives are met and that actions are efficient and cost-effective.

i.      Develop a communications and advocacy budget and strategy.