The Institute for Development Policy (INDEP) has reviewed World Bank’s (WB) Draft Environmental Analysis for Kosovo and has identified significant errors in accounting for all environmental pollution-related costs.
The main issues in the report have to deal with the following fields: lack of a comparison basis for all environmental pollution sources, underestimation of air pollution health costs, underestimation of environmental pollution, underestimation of water supply costs, underestimation of agricultural costs, underestimation of the mercury impact costs, and lack of any calculation of climate change costs.
As a result of the above-mentioned errors, the World Bank’s report fails to account for significant costs that are directly related to environmental pollution. Accordingly, the Institute for Development Policy (INDEP)has issued a set of recommendations for the World Bank to include in its study. These recommendations are:
Compare Abatement Options – Energy Alternatives: Given the extremely high social and environmental costs associated with lignite coal development, it is essential to thoroughly investigate energy alternatives. The Country Environmental Analysis (CEA) should provide a review of existing comparative analyses of life cycle costs of all electricity generation options  and, if needed, recommend additional analyses in order to guide future energy development as well as the appropriate social, environmental, and tax policies.
Account for Agricultural Losses: Given that Kosovo has the real potential for substantial agricultural losses resulting from coal mining pollution, coal combustion pollution, lack of irrigation water, soil contamination, and land conversion, the CEA needs to provide an estimate of aggregate costs to agricultural production. In addition, the CEA needs to provide a comprehensive understanding of how all the environmental damages to agriculture threaten the overall objectives and goals of the Agriculture and Rural Development Strategy 2009-13, including: increased farming; increased income levels; improved quality standards; and increased employment opportunities.
Account for Climate Change Costs: Climate change impacts can be monetized using estimates of the social cost of carbon—the valuation of the damages due to emissions of one metric ton of carbon.
Water Supply Shortages: The CEA should provide the environmental and economic costs of water consumption/supply shortages (e.g., opportunity costs), specifically associated with existing and planned lignite power generation. The CEA should emphasize the development of a comprehensive policy, as well as an institutional and planning framework for water resource management in the Iber-Lepenc system.
Include Mercury Damages: The CEA should prioritize establishing the mercury contamination levels for water and soil and should obtain the mercury emission levels from the current and planned coal plants. The CEA should estimate the costs to cognitive development and cardiovascular disease due to mercury exposure from coal plant emissions.
Improve Estimated Air Pollution Health Costs: The CEA should fix several shortcomings in the air pollution health costs, including: PM concentration exposure levels for rural populations; increased wage rates; peak PM concentrations for acute health effects; ALRI mortality baseline based on high value from comparison countries; and a higher PM concentration exposure for the population of Obiliq.
Funding Sources: As the CEA notes, the Ministry of Environment and Spatial Planning’s already low budget is being reduced further. This will make compliance and enforcement of existing and new environmental protection plans and policies very difficult. The CEA needs to emphasize that funds are immediately needed for clean enterprises, water treatment, land, and environmental monitoring.
Action Plan: The CEA needs to prioritize an action plan to prevent predicted severe environmental costs and societal damages. The action plan needs to be based on comprehensive comparisons of abatement options.
Attachments:Draft Country Environmental Analysis Fails to Account for Significant Pollution Costs (English version)
 See: Kammen, Daniel M., Maryam Mozafari and Daniel Prull, 2012. Sustainable Energy Options for Kosovo: An analysis of resource availability and cost. Renewable and Appropriate Energy Laboratory, University of California, Berkeley. January 2012.
 For costs of mercury emissions from coal-fired power plants causing mental retardation and lost productivity in the form of IQ detriments see Trasande et al. Trasande, L., P. Landrigan & C. Schechter. 2005. Public health and economic consequences of methyl mercury toxicity to the developing brain. Environ. Health Perspect. 113: 590–596; and Trasande, L., C. Schechter, K. Haynes & P. Landrigan. 2006. Mental retardation and prenatal methylmercury toxicity. Am. J. Ind. Med. 49: 153–158.