First Name: Last Name: Title or position: Your E-mail: Name of your organization: Type of Organization Location (City): Location (Country): Have you read the Strategy Concept Note? If yes, in what language?

Kyle Gracey Chair [email protected] SustainUS Non-Government Washington, D.C. U.S.A. Yes No English Arabic Chinese French Portuguese Russian Spanish

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Yes No

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Date (02/09/2010) New York City, NY

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Yes No

1. The World Bank Group is a relatively small source of finance for major economic transformation in developing countries. What should the role of the Bank be in helping developing countries to address the challenges and opportunities they face in achieving environmentally sustainable development?

Its role should be to merge the expertise of its worldwide staff with the needs of local communities and promote solutions that consistently incorporate environmentally and socially sustainable solutions to poverty reduction. The Bank has the expertise to become the leader in environmentally sustainable development projects. Given it's limited ability to drive major economic transformation alone, it can instead set the standard for projects that improve the quality of life for people in target projects by focusing on those solutions which will have the highest quality of environmental protection or restoration while still ensuring gains in poverty reduction and improved quality of life, even if the scope of these projects is not major. The World Bank can make significant improvements in human capital in developing countries by prioritizing small grants/microloans over large, capital-intensive projects like dams and mines with both significant environmental consequences as well as the potential to promote unequal access to gains from the projects or the marginalization of certain communities, especially indigenous. It can help the world's poorest to avoid

repeating a development path similar to industrialized countries that forces them to spend larger sums of money trying to repair environmental damage rather than preventing it from happening in the first place (respecting the use of some level of discounting). It should also value in its project implementation that putting countries on a path of ever increasing total resource consumption can never be environmentally sustainable. The Bank should prioritize projects that improve quality of life rather than simply aggregate quantity of goods or resources consumed, while respecting that for many of the world's poorest the two are often the same. The Bank should focus on providing projects that are locally-driven, provide means for project beneficiaries to sustain the projects themselves through capacity building and training, and that consistently have a high level of full-cost account for social equality impacts and environmental indicators, including the expanded use of non-market valuation techniques like ecosystem services valuation, contingent valuation, and the use of the precautionary principle where potential negative environmental impacts could be severe (on the level of eliminating entire ecosystems, especially those heavily depended on by local populations) but the risks uncertain. The Work Bank is in a unique position to shape worldwide conceptions of 'poverty' and 'need,' with publications like the World Development Report. The World Bank can de-emphasize development indicators that are exclusively based on GDP, GNP, monetary systems, financial transactions, etc., and rather preference development indicators that reflect and legitimize healthy non-monetary economies (agrarian, land-based) and happiness. Finally, if it truly desires to provide the best quality of poverty reduction and development strategies within some of the most complex regions of the world,

the World Bank should understand itself to be international financial institution, not an appendage of any nation's foreign policy. This is a critical point, as the confusion of agendas high a high likelihood of damaging public perception of World Bank projects in client countries. 2. The WBG has worked to become a country/ client driven organization. What should be the balance in the Bank Group’s role between addressing country/clients specific priorities and global public goods agendas?

To begin, it is necessary to clarify what is meant by client or country, since in some cases decisions may be made based on the desires of some group among the client country, but leaving out the needs and desires of others within the community, including especially minority groups or those who otherwise lack the power or financial capital to communicate and act on their views in the society. Fulfilling the desires of political or business elites is not the same as fulfilling the needs of all clients in a country or area. Many environmental problems, climate change foremost among them, are global in scope. These challenges do require coordinated global action. The Bank should deprioritize projects where there is significant negative spillover or reduction of global public goods, especially outside the boundaries of the country or client. As a global bank, the WBG cannot ignore where the impacts of unsustainable practices in one country adversely affect the needs of other nations, especially since those other nations may also be clients, either now, in the past, or in the future. It is likely that severe reduction in public goods will impose additional future costs on the World Bank through economic, social, or political destabilization of client countries. The World Bank should also of course look for and prioritize projects where these conflicts do not exist or are minimal, or where synergies between these objectives exist. At the same time, the Bank's role is not to restore global public goods as a primary objective, though it should be to prevent any

further degradation to them through its projects, and projects that focus on client needs without improving external environmental conditions are highly important.

3. What should the role of the IFC and MIGA be in helping private sector stakeholders to achieve Prioritize funding and supporting private higher levels of performance in pursuing implementors or contractors who can environmental sustainability? exemplify and ideally provide expertise, technology, and capital to expand on the Bank's high level of sustainable practices as outlined in question 1. This would include improving specific environmental performance metrics for any private operators collaborating on a Bank project. The Bank can also provide technical support for private sector stakeholders to improve their sustainable implementation of projects, or provide loans for upgrades to private sector equipment or practices to allow them to improve their sustainable practices. Private sector stakeholders form the core of economic activity in many client countries and their participation and sustainability knowledge is key to the long-term sustainability of projects and country economic development. The Bank should support their development through targeted expertise and capacity building and the careful use of its limited project funds. Project metrics that values and evaluates private sector sustainability improvement as part of project success would help to focus IFC's and MIGA's efforts in ensuring this is accomplished during each project, at least where private stakeholders are engaged.

4. How can the WBG put in place a systematic Implement non-market and other approach to assess environmental sustainability in environmental valuations for all sector sector portfolios? portfolios and projects, making these valuations criteria in part on which project success is judged. Include environmental quality surveying pre- and post-project wherever feasible to judge changes in environmental quality

(keeping in mind changes in external or transportable public goods as well). Postproject surveying and valuation should also be reviewed at defined intervals after project completion to determine just how "sustainable" the project sustainability objectives have been, respecting and incorporating that that exogenous factors may affect the sustainability of a project long after the Bank has completed its work.

5. How should short term and long term trade-offs between development and environmental This question presupposes a definition of sustainability be balanced? development that is extractive, exploitative, and unsustainable in both philosophy and practice. Development itself must become sustainable and regenerative. The cradle-to-cradle philosophy of production significantly reduces the pressure of the imbalance between "development" and "sustainability". The World Bank can make a powerful statement by supporting projects that are underpinned by an understanding of this approach to production. This question also assumes a weak sustainability definition of continued economic growth rather than a strong sustainability definition such as that typified in ecological economics. If policies lead to ever growing levels of total material consumption, they can never be sustainable. While poverty elimination does have environmental implications, encouraging or mandating low-GDP countries to replicate wasteful and fossil fuel-intensive development strategies typified by high-GDP countries is wholly counterproductive. Focusing on strategies that improve welfare while preserving environmental quality must come first. Balance implies that the environmental quality will not continue to degrade over time.

6. Please fill in here any further comments or We strongly encourage the consistent issues (global, regional, country or sector specific) use of environmental and other nonthat you would like to share with us. market valuations (see separate

submission on Environmental Valuation concept paper by Kyle Gracey and Dr. Sabina Shaikh) in assessing project success and sustainability, and a recognition that sustainability requires the use of longer time horizons over which to judge project success, as well as discount rates that are appropriate for environmental goods.

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