Terminal evaluation
Main Conclusions and Recommendations1
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Main Conclusions and Recommendations163.
This report presents the findings of the Terminal Evaluation of the UNDP-supported-GEF-financed Project “Strengthening capacities to undertake environmental fiscal reform to meet national and global environmental priorities” (Moldova). This terminal evaluation was performed by an Evaluation Team composed of Mr. Jean-Joseph Bellamy and Dr. Victor Cotruta on behalf of the United Nations Development Programme (UNDP). The budget for the environmental sector in Moldova was very limited; it constituted just under 0.5% of the total national budget in 2009 and 2010 and was 0.69% in 2011. Most of this funding covered staff costs and did not allow the Ministry of Environment (MOE) to implement its core activities nor to promote necessary policies. In the other sectors, environmental concerns were virtually non-existent. Although the agriculture sector benefited from 3.1% of the national budget in 2009, only limited environmental issues figure on the sector’s development plan. In addition, existing environmental pollution charges earmarked in the Law on Payment for Environmental Pollution that constitute the revenues of the National and Local Environmental Funds have mobilized only around US$ 15.6 million of revenues for the NEF’s, and around US$ 685,000 of revenues for the LEFs in 2009. These limited resources did not allow important environmental investments in Moldova in order to support the implementation of national and local environmental policies that have demonstrable benefits for the global environment. It was found that this lack of resource allocation to the environmental sector was attributed to three main root causes:
One of the top priorities identified through the National Capacity Self-Assessment (NCSA) conducted in Moldova in 2004-2005 was a call to launch an economic fiscal reform programme for global environmental management meeting national and global environmental commitments. This assessment found four main constraints: (i) a tax system whereby the payment of charges for environmental pollution was not specified within the Tax Code; (ii) an assessment of natural resources that was under-developed, whereby the market price did not reflect the real economic value of land; (iii) a weak environmental penalties and compensations scheme that prevents to be a deterrent to reduce pollution, degradation, or over-exploitation; and (iv) an inadequate financing for environmental protection. On the basis of this assessment, 3 main areas were identified for priority capacity development objectives:
As a response to these issues, constraints and priorities, this project was developed to create conditions, financial incentives and disincentives, and decreased opportunity costs to undertake actions that deliver global environmental outcomes. The project was to initiate and pilot EFR instruments targeted to meet Rio Convention objectives and ensure their integration within national plans and policies, especially in national taxation and within the decentralization process in Moldova. The project was to establish a strong basis for the institutionalization of an EFR programme at the national level with the support of concerned governmental institutions such as MOE, the Ministry of Finance, and other line Ministries through the establishment of a Moldovan EFR Commission that would initially be established as a project steering committee and eventually evolve to continue as Moldovan EFR Commission. The Environmental Fiscal Reform (EFR) project was a UNDP supported, GEF and the Government of Moldova financed project. It was funded by a grant from GEF of USD 510,450, a grant from UNDP of USD 110,000 and an in-kind contribution estimated at USD 500,000 from the Government of Moldova, OECD and UNDP. It started in November 2011 and will end at the end of September 2015 after a 9-month time extension. The Ministry of Ministry of Environment and OECD were the implementing partners of this project. The objective of the project was to build capacities for implementing environmental fiscal reforms (EFR) that would produce increased national and global environmental benefits through the adoption of selected subsidies, fees, fines, taxes and other appropriate fiscal instruments. This objective was to be achieved through three outcomes (and 8 outputs):
This terminal evaluation report documents the achievements of the project and includes five chapters. Chapter 1 presents the main conclusions and recommendations; chapter 2 presents an overview of the project; chapter 3 briefly describes the objective, scope, methodology, evaluation users and limitations of the evaluation; chapter 4 presents the findings of the evaluation. Lessons learned are presented in Chapters 5 and relevant annexes are found at the back end of the report.
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