Download The FEASIBLE Model, Version 2

13
The FEASIBLE Model, Version 2
User Manual and Documentation
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Co-ordinate different donor and IFI programmes;
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Identify country pipelines of supported investment projects; and
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Provide a broader perspective for the appraisal of financial viability of individual investment projects.
2.3
Intense dialogue is
needed
The Process of Preparing an Environmental Financing
Strategy
An intense process of analysis, consensus seeking and communication across
various groups of stakeholders in environmental protection must take place in
order to prepare an environment sector financing strategy which is relevant in
the local economic, social and political context.
Furthermore, local ownership of the process and the results is paramount to facilitate the practical use of an environmental financing strategy as key issues
addressed will, by nature, be politically sensitive, for instance, the adequacy of
present user charges and the realism of stated service level targets,.
The suggested structure of this dialogue is outlined in the following subsections.
2.3.1
Analysis of the “No-Change-in-Policy” Alternative2
The establishment of a sound baseline or “no-change-in-policy” alternative is
crucial to any medium- or long-term analysis of sector policies and programmes. This alternative describes the future as it is likely to look if there is
no change in policies and their implementation and enforcement in practice.
This is not a trivial exercise, since expected changes external to the sector, such
as changes in technology, macro-economic conditions, international trade etc.
need to be taken into account in the definition of the baseline. However, a good
“no-change-in-policy” alternative is essential to understand the need, if any, for
enhanced policies.
In terms of the environment sector financing strategy, the “no-change-inpolicy” alternative includes a projection of the future demand for environmental
expenditure that will result from no changes in the present policies in relation to
service levels, pollution control, emission standards etc. as well as a projection
of the supply of finance that will result from no changes in present policies on
user charges, public budget allocations, private sector finance for the environment sector etc.
2
Note that "policy" is defined broadly to encompass the entire spectrum of policy pronouncement, enactment of laws and regulations, enforcement hereof and all practices and
habits that can be said to be policy related. In some countries, enhanced enforcement of
policy may constitute a significant "change in policy".
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