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Improvement of environmental liability regime: introduction of methodology for valuation of environmental damage

Tasks & Activities

Activity 1. Inception activities

During the inception phase the following preparatory activities will be accomplished:

- Formation of the Project team – TORs for major staff and experts will be developed and selection conducted in accordance to REC rules and procedures. In addition leading governmental entities will be requested to provide nominate project contact point for further collaboration and coordination of activities in each of the countries.

- Identification of stakeholders and formation of the project inter-agency National Steering Committee (NSC) – based on consultations at national level the project steering committees will be formulated in each beneficiary country at the beginning stage. It is very important to ensure involvement into the process since the beginning of all related stakeholders. Apart of leading agency, that will be Ministries of Environment in two countries, would be necessary to involve into the process Ministries of Finance, Economy, Justice and Tax authorities.

- Preparation and conduction of the inception workshops – Inception meeting in each country will be organized with participation of selected stakeholders from public sector and Civil Society Organisations from Armenia and Georgia. Goals and objectives of the project will be presented, general approach toward implementation and major outputs will be discussed, recommendation for detailed work plan will be elaborated. Based on result of national workshops, regional meetings will be organize to discuss project approach and methodology, come up with consolidated project work plan, to setup major milestones.

Activity 2. Identification of key sectors of the economy (economic activities) in each country mostly causing damage to the environment (in the result of overexploitation or pollution).

Based on key sectors of economy that cause damage to environment are already indicated in national policies (NEAPs, EPR, Sustainable development strategy, etc.), as well as in the result of discussions to be held in the framework of a workshop organized with the participation of stakeholders, determine the key sectors of the economy in each country that are increasingly vulnerable toward overexploitation of natural resources and damage caused to the environment as a consequence of carrying out economic activities and their further development (expansion).

Activity 3. Support in revision and analysis of the system of economic instrument applied in all two countries of the region

Analysis of the existing system of economic instruments used in the countries will be conducted as well as liability regimes with regard to environmental damage will be reviewed. Institutional analysis will be updated, legislative requirements and existing gaps in the system will be revealed. It is important to consider experience of OECD EAP TF activities in the countries in the area of introduction of economic instruments and environmental liability.

Activity 4. Identification and Assessment of the best available practice in introduction of the system (methodology) of valuation of damage into environment.

The project needs to analyze and categories the different methods for valuing natural resources, mostly used in OECD countries and relevant EECCA countries, that can be used for the application of liability regimes. The advantages and disadvantages of using different methodologies in Caucasus countries should be well documented, recommendations as to the best method or combination of methods to be applied under national liability regimes will be elaborated.

Activity 5. Development of relevant methodology(ies) for monetary assessment of depreciation of natural resources and indicators for calculation of the damage.

A framework approach will be developed for different sectors for identification of methods for monetary assessment of depreciation of natural resources and calculation of the damage caused as a consequence of environmental pollution and exploitation of natural resources. It is important to identify clear links between environmental losses and country’s development trends while evaluating macroeconomic parameters. It is also very important to understand how to define “significant damage” to environment and a level of restoration, therefore criteria to define the scope of damage for the application of liability regime will be elaborated. Relevant recommendations will be developed and submitted to the government for approval.