Abstract

The operations policy on Development Policy Lending (DPL), approved by the Board in August 2004, requires that the Bank systematically analyze whether specific country policies supported by an operation are likely to have "significant effects" on the country's environment, forests, and other natural resources. The implicit objective behind this requirement is to ensure that there is adequate capacity in the country to deal with adverse effects on the environment, forests, and other natural resources that the policies could trigger, even at the program design stage. DPL operations are associated with a whole array of policies such as macro policy reforms, fiscal policies, and specific sectoral policies, particularly in key sectors such as agriculture, health and education, energy, etc. In some cases, the operation may deal directly with reforms in certain environmentally sensitive sectors such as energy, transport, water and sanitation, agriculture, and forestry. In these cases, there is an obvious need for careful analysis of environmental, natural resource, and forestry impacts. In other cases, such as public sector reform and governance, there is less potential for likely significant impacts on the natural environment and natural resources. The toolkit is designed to be concise and user-friendly. It consists of three specific modules. The first module identifies relevant transmission channels through which the proposed reform would have a likely effect on the identified environmental, forest, and other natural resource priorities. The second module provides assistance in identifying key environmental issues in the country, regions, or sectors likely to be influenced by the DPL program. The third module presents different tools and methodologies for rapid assessment of the likely significant effects of each reform.