Lao PDR Pollution and Waste Management Project

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The Lao People’s Democratic Republic achieved rapid growth and significant poverty reduction between 2005 and 2015, though inequality widened. Gross domestic product (GDP) has averaged around 8 percent growth per year since 2000. The poverty rate declined from 34 percent in 2003 to 23 percent in 2013, reaching 18 percent in 2019. Yet the Gini coefficient increased from 32.5 to 38.8 during the same period, reflecting lower gains for the bottom 40 percent. COVID-19 is placing an added economic burden on the country. Economic growth declined to 0.4 percent in 2020, the lowest level in three decades.Lao PDR has been shifting its development trajectory to a green growth path that is more resilient and sustainable. Key policies have been put in place that aim to reduce pollution and the high cost it places on human health and economic growth. The National Green Growth Strategy 2030 prioritizes policy and investment action on renewable natural resources; pollution and waste management; environmental fiscal instruments; and others that can drive the circular economy. The proposed project would build upon these achievements and support the GoL by increasing its implementation capacity to address a range of environmental issues, including pollution and waste management.Pollution levels in Lao PDR have severe public health and economic impacts and need improved monitoring and regulatory oversight. Recent WB assessments attribute some 10,000 deaths annually (21% of all deaths) to environmental health risk factors, and health impacts from pollution are equivalent to 15 percent of GDP. Improved monitoring and regulation of key pollution sources such as household and ambient air pollution, lead exposure, drinking water including biological and arsenic contamination are needed to reduce the severe health and economic impacts on the country. Climate change hazards are expected to exacerbate current human health issues and degradation of natural resources and should be addressed alongside such measures.Solid waste generation has increased substantially over the years. Sound waste data is missing in the country and is often inconsistent and unverifiable. Waste generation is rapidly increasing in cities and towns due to urbanization, economic growth and changing lifestyles, as well as in tourism hotspots which have seen rapidly increasing numbers over the last decade. Nevertheless, waste collection is largely limited to the urban centers but remains at low levels. While no accurate figures exist, it is estimated that in Vientiane city only around 30-50% of the waste generated, and only about 25% of household waste, is collected and transported to the landfill sites. Due to the lack of appropriate collection systems, open burning, household burying, littering along roadsides and rivers, and dumping in vacant lands are widely spread practices in both urban and rural areas. Plastics pollution is an increasing concern in the country. The amount of plastic waste is continuously increasing particularly in urban areas and often remains uncollected. In Vientiane, plastics constitute around 12 percent of the total waste stream. In major cities such as Vientiane, Savannakhet, and Pakse, plastic waste is a key factor in blockage of drainage systems causing sudden flooding during rains. In key tourism hotspots such as Luang Prabang or Vang Vieng, widespread plastics littering poses a substantial threat to the touristic value. Lao PDR has seen an almost 10-fold increase in plastic waste imports from 2018 to 2019 due to the recent import regulations by neighboring countries. The quality and recyclability of the waste imports are unknown, and the capacity to cope with the large amounts of plastic waste in Lao PDR is not present.The priority challenges within the solid waste sector can be summarized as follows. (a) lack of a clear legal framework for solid waste and pollution management and policies and regulations on pollution and solid waste management; (b) lack of capacities at national level to provide regulatory oversight; (c) lack of monitoring and enforcement capacities for environmental pollution (d) local governments are in charge of solid waste management but lack of capacities for operations, monitoring and regulations; (e) lack of financial sustainability due to limited fee collection leading to partial services; (f) lack of proper treatment, recycling and disposal infrastructure causing environmental pollution an d severe health and economic impacts; (g) strong increase of single-use plastic items and widespread plastics pollution. The project will be designed to address these key challenges and priorities at both national and local levels.The project aims to strengthen Laos’ monitoring and enforcement of pollution control, improve municipal solid waste management in targeted areas in Laos, and provide immediate and effective response in case of an Eligible Crisis or Emergency. The project will seek to comprehensively support stakeholder collaboration across all aspects of the sector, most notably the Ministry of Natural Resources and Environment, Ministry of Public Works and Transport, and Environment Protection Fund, as well as local governments responsible for solid waste management. Component 1. Advancing Systems for Waste and Pollution Management. The objective of this component is to strengthen the national government’s capacity for waste and pollution management. Subcomponent 1.1 will focus on pollution management by financing the development of an effective and operational compliance monitoring system for air and water pollution control enforcement in the five key sectors of energy, mining, infrastructure, agriculture, and industry and upgrading air and water quality monitoring systems. Subcomponent 1.2 will focus on waste management by financing the development and early-implementation of the waste management legal framework, establishment of an inter-ministerial waste management committee (WMC), and improving waste data collection and management. Component 2: Improving Municipal Solid Waste Services in Vientiane Capital. The objective of this component is to improve MSW services in VC by financing activities that enhance the institutional, operational, financial, and technical capacity of MPWT and VCOMS. Subcomponent 2.1 will finance capacity enhancement activities of VC’s solid waste services using an Integrated Solid Waste Management (ISWM) approach, while Subcomponent 2.2 will finance MSW service infrastructure investments. The regional benefits of this component are reduced plastics pollution emerging from VC due to improved collection, recovery, and disposal of MSW. Investments in integrated waste management facilities and landfill rehabilitation will further reduce plastics pollution as well as GHG emissions by ensuring safe disposal without burning of plastics and leakage into the environment and waterways.Component 3. Contingent Emergency Response Component (CERC). This component is designed to provide swift response in the event of an eligible crisis or emergency that could arise during implementation. Crises may include extreme flooding and zoonotic disease outbreaks. The activation process and implementing arrangements for the component, list of activities that may be financed, and other required aspects will be further assessed during project preparation.The project will facilitate the creation of models for solid waste management in Vientiane Capital that can demonstrate improved and cost-effective performance and serve as inspirations for other cities. The project is closely aligned with the World Bank Group Country Partnership Framework (CPF) the upcoming CPF for FY2022-2026 under preparation, the Global Crisis Response Framework (GCRF), and directly supports the Bank’s goals on poverty reduction, shared prosperity, sustainability, and commitments on climate co-benefits. It also supports the GoL with regional and international commitments such