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Expenditures, investment and financing for sustainable development in Trinidad and Tobago

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Expenditures, investment and financing for sustainable development in Trinidad and Tobago

Autor institucional: NU. CEPAL-PNUD-NU. CEPAL. División de Desarrollo Sostenible y Asentamientos Humanos Physical Description: 49 páginas. Editorial: ECLAC Date: November 2002 ECLAC symbol: LC/L.1795-P ISBN: 9211213711


Main Statistical Points GEF funding has proceeded in recent years primarily via the World Bank, UNDP and UNEP. It has provided approximately US$5m in funding for projects totaling approximately US$18m in value (therefore over 70% locally cofinanced).   Total public expenditure (capital and recurrent) on environmental projects (as identified herein) has ranged between 0.15% to 0.21% of GDP over the period or approximately between US$2 to US$3 per capital. o The capital (development) portion of this environmental expenditure has been increasing sharply over the decade, ranging from approximately 4% to 47% over the last seven years of the decade. The major portion of this increase is attributable to the increasing EMA financial capabilities. The Ministry of Environment, which was formed in 1999, has no actual budgetary allocation. It provides policy direction to the Environmental Management Authority (EMA) and an administrative function for the Green Fund. The financial capability of the Environmental Management Authority (EMA) (including government budgetary allocations as well as other loan and grant funds) has more than doubled over the last half of the decade relative to government's total (capital and recurrent) budget, reaching 0.12% of this figure. The EMa's financial capability has also quadrupled relative to GDP over the same period reaching approximately 0.04% of GDP. The EMA was formed in 1995 to undertake all environmental management and monitoring functions nationally. Private sector environmental expenditure is primarily in the petrochemical companies and via the environmental NGo's. o Environmental data from these sources is not easily obtained. 2. Operations The Green Fund was introduced in September 2000 as a means of raising money for undertaking various environmental projects. It is raised by a tax of 0.05% on the gross revenue of all companies operating in Trinidad and Tobago. Information available to the Consultants indicate that, up to the present, the fund has raised under TT$50 million. No indication is immediately available of the potential value of the fund but the Consultant's estimates are that the Fund could raise between TT$150 million -TT$250 million annually. Information on the Fund is sketchy- the following being the only information known at present: No present mechanism for disbursement of the funds. The funds are to be disbursed and managed by a Board of Directors, which has not been set up as yet. They will take policy guidance from the MOE. The funds are administered by the Ministry of the Environment from a special fund set aside by the Ministry of Finance. No project priorities have been identified by the MOE for the disbursement of the funds. The Fund is primarily designed to support NGO environmental operations. The intention of the Green Fund is to allow the Government to remove itself from implementation of environmental projects -deferring to NGo's and helping by providing finance-. The Environmental Management Authority (EMA) is a statutory body established by the government of Trinidad & Tobago to address the country's environmental problems. The EMA was established in June 1995 under the Environmental Management Act, No. 3 of 1995. Under the Environmental Management Act, the EMA is mandated to: Write and enforce laws and regulations for environmental management. Educate the public about the nation's environmental issues through awareness programmes. Issue Certificates of Environmental Clearance to new development projects that may impact the environment; in some cases an Environmental Impact Assessment (EIA) may be a requirement to the developer. Co-ordinate environmental functions performed by organizations and persons in Trinidad and Tobago. Provide for the designation and protection of environmentally sensitive areas and species. Develop and establish environmental standards and criteria. Ensure the effective enforcement of environmental laws, for example, through the use of fines.   3. Main Conclusions While many environmental initiatives may be being undertaken within both the Public and Private sector in Trinidad and Tobago, there is at present very little necessity for accounting of these initiatives. These generally become aggregated with other operational areas and lose their particular environmental" identity. It is, therefore, very difficult for organizations to identify their "environmental" expenditures. The continuous growth in scope and capability of the EMA may cause a more dedicated approach to maintain specific "environment" accounts as organizations -both Public and Private- may be subject to environmental monitoring activities from the EMA. By these organizations maintaining specific accounts on expenditures on environmental activities, they may be more able to cope with this new regulatory mechanism. The Governmental accounting system does not allow for desegregation of the Audited Accounts. It is likely that this will not change. It is expected that based on the points above, better environmental accounting will become more standardized within the organizations and this data will be better sourced at the individual organisation level rather than at the level of the Ministry of Finance's audited statements. The major drawbacks of this are that there will be no standardization in reporting, no central repository of information and th monetary information will be unaudited, and therefore, not official government accounts. Institutional strengthening activities may need to be implemented within both Public and Private sector organizations to provide for environmental accounting capabilities. This is especially so in light of the EMa's expected active role in monitoring environmental compliance. Rules for administration of and access to the Green Fund need to be quickly developed and enacted. Implementation of the Green Fund will require institutional strengthening within NGo's to allow them to have the technical capability to write proper project documents. The roles to be maintained by the various players in the environmental financing and project development structure are evolving in the right direction and should be maintained, as follows: a. Ministry of Environment should remain in policy formulation and facilitation -not getting directly involved but providing guidance and maintenance and distribution of the Green- Fund. The Ministry should have oversight in strategic planning, looking at wider issues and be ultimately accountable to the Ministry of Finance b. EMA remain as the managing (policing, enforcement of the EM Act) arm of the Ministry of Environment. c. State organizations and Private companies maintain their environmental operations -with an obvious need for expansion thereof due to the enforcement threat of the EMA-. d. NGo's remain as the facilitating agencies to actually do the work on environmental conservation/preservation -active in the field or in doing research and other studies-. 4. Summary Tables The following are based on the information available and represented within this report. Table A PUBLIC ENVIRONMENTAL EXPENDITURE (CAPITAL + RECURRENT) AS PERCENTAGE OF THE GROSS DOMESTIC PRODUCT Year 1993 1994 1995 1996 1997 1998 1999 % of GDP 0.16 0.15 0.15 0.21 0.21 0.17 0.20 Source: Author's calculations   Table B PUBLIC ENVIRONMENTAL EXPENDITURE (CAPITAL + RECURRENT) AS PERCENTAGE OF THE TOTAL GOVERNMENT BUDGET Year 1993 1994 1995 1996 1997 1998 1999 % of Budget 0.48 0.44 0.46 0.65 0.59 0.75 0.67 Source: Author's calculations   Table C CAPITAL PORTION OF PUBLIC ENVIRONMENTAL EXPENDITURE AS PERCENTAGE OF THE TOTAL PUBLIC ENVIRONMENTAL EXPENDITURE Year 1994 1995 1996 1997 1998 1999 2000 % of Total Public Environmental Expenditure 3.62 6.32 8.70 13.72 36.24 41.93 47.68 Source: Author's calculations   Table D EMA FINANCING AS PERCENTAGE OF THE TOTAL GOVERNMENT BUDGET Year 1995 1996 1997 1998 1999 % of Budget 0.05 0.09 0.08 0.10 0.12 Source: Author's calculations   Table E EMA FINANCING AS PERCENTAGE OF THE GROSS DOMESTIC PRODUCT Year 1995 1996 1997 1998 1999 % of GDP 0.01 0.03 0.03 0.02 0.04 Source: Author's calculations"