PRESS RELEASE
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In 2005, The Republic of Moldova completed their National Capacity Self-Assessment (NCSA), also funded and implemented by the GEF and UNDP respectively. This broad-based consultative process was borne out of the GEF’s 1999 Capacity Development Initiative, followed by the 2003 Strategic Approach to Enhance Capacity Building, both of which called for a more in-depth analysis of the underlying challenges that limited countries' ability to meet and sustain environmental outcomes. Notwithstanding Moldova's set of environmental laws, the country remains challenged to fully integrate environmental priorities within sectoral policies and plans, and to allocate the sufficient level of resources for their effective and sustained implementation. Like many other economies in transition and developing nations, the Republic of Moldova's environmental sector budget is very limited, constituting about 0.1% of the total national budget.
Taking into account the Republic of Moldova's on-going work to implement international Rio conventions, the Millennium Development Goals, reduce poverty, and achieve environmental sustainability, reforms have already been underway to strengthen the country's planning process through institutional and sector-specific development plans, all of which are tied to the country's Medium-Term Expenditure Framework (MTEF).
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In particular, the project will focus on the reform of environmentally harmful subsidies, develop green subsidies, and look at environmental charges in the agricultural and energy sectors. This will include improving the modalities for encouraging investments in eco-friendly technologies as well as improving targeted the regulation and operational management of Moldova's national and local ecological funds.
These capacity development efforts will be complemented by a training and public awareness programme targeted to increasing the understanding, value, and commitment to environmental fiscal reform by situating this exercise within the larger framework of national socio-economic and development priorities as outlined in the NDS. These reforms will also be integrated within local and central planning processes in order to institutionalize the capacities developed under the project. This includes ensuring that the reforms are consistent with the wider decentralization process already underway as part of the government's Joint Integrated Local Development Programme (JILDP).
This project will take a pilot approach to environmental fiscal reform, targeting five towns in Moldova. This project, like other GEF projects, is specifically structured to produce global environmental benefits by way of national environmental and development outcomes. For example, by reforming how ecological taxes and environmental charges are levied on polluting industries that produce smog, not only could this reduce local atmospheric pollution, but also make an important contribution to reducing transboundary pollution in the form of acid rain, and reducing greenhouse gas emissions.
Special consideration will be given to measuring the contribution of the project to meeting and sustaining Rio Convention objectives, measured through specific indicators, e.g., lower cost to using clean technologies, increased revenues through the removal of polluting subsidies are allocated to protected area management, and increased environmental charges for illegal waste disposal and landfill. This project will benefit from similar experiences in the development, testing, and application of environmental fiscal reforms in other countries, such as the GEF project halfway through implementation in Kyrgyzstan, and the extensive studies carried out by the Organisation for Economic Cooperation and Development (OECD).
For more information
Danielius Pivoriunas, GEF Sr Operations Officer, dpivoriunas@thegef.org
Alexandre Pinheiro Rego
Senior Communications Officer
arego@thegef.org