Ukraine - Suggested priorities for environmental protection and natural resource management (Vol. 1 of 2) : Main report

Report No. 12238-UA Ukraine Suggested Priorities for Environmental Protection and Natural Resource ltv OAnagement (In TwoVolumes) Volume I Main Report June 15, 1994 Natural Re.urce Managem-nt Division Country Department IV Europe and Central Asia Region FOR OFFICIAL USE ONLY MICROGRAPHICS Report No: 12238 UA Type: SEC Document of the World Bank This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization  CURRENCY EQUIVALENTS AND ACRONYMS Currency unit = Karbovanets, abbrev. krb US$1 = 47,000 krb (as of June 1', 1994) Rbl = 7 krb (as of June 6, 1994) WEIGHTS AND MEASURES b Billion person- 1 person receiving 1 rem, or 10 people bcm billion n3 rem receiving 0.1 rem, or 1,000 people Bq becquerel : decay of one nucleus per second receiving 0 C I rem cm centimeter PMIO Particulate matter below 10 microns Ci curie (3.7 x 10' Bq) ppm Part per millior GJ Gigajoule (0.948 x 106 Btu rem Roentgen equivalent man: the amount of or 238.8 x 103 kcal) ionizing radiation equivalent to biological effect GW Gigawatt of one roentgen of x or gamma rays ha Hectare(s) 1 rem = I mSv kcal Kilocalorie (3.968 Btu) Sv Siwvert (mSv = millisivert) : international kg Kilogram (2.2046 Ibs) measure of the biological equivalent of an km2 Square kilometer absorbed dose of radiation. m Meter I Sv = 100 rem m3 Cubic meter (35.3147 cubic feet) t Ton (metric) mg Milligram tpa Tons per annum MW Megawatt toe Ton of oil equivalent MWh Megawatt hour (860 x 103 kcal) (= 10 million kcal = 39.68 million Btu) ng Nanogram &g Microgram CHEMICAL COMPOUNDS AND TECHNICAL TERMS AIP3 Aluminum fluoride NO, Nitrogen oxide BAP Benzo-a-pyrene 03 Ozone BOD Biochemical oxygen demand ODS Ozone Depleting Substances (BODs = over a 5 day period) PAH Polycyclic aromatic hydrocarbons Cd Cadmium Pb Lead Ce137 Cesium 137 pH Logarithmic indicator of acidity or alkalinity CFCs Chlorofluorocarbons Pu'39 Plutonium 239 cO Carbon monoxide so2 Sulfur dioxide CO2 Carson dioxide Sr9W Strontium 90 Cu Copper TSP Total Suspended Particles Hg Mercury VOCs Volatile Organic Compounds N Nitrogen Zn Zinc ABBREVIATIONS ANO) ACRONYMS CAC Command and Control MAC Maximum Acceptable Concentration CEE Central and Eastern Europe MAD Maximum Acceptable Discharge DPRA Department of Protected and MAE Maximum Acceptable Emissions Recreadienal Areas (MEl) MB Market Based EC European Community MEP Ministry for Environmental Protection ELA Environmental Impact Assessments MFO Ministry of Forestry ESP Electrostatic Precipitators MOA Ministry of Agriculture FGD Flue Gas Desulphurization MOH Ministry of Health FSU Former Soviet Union MOI Ministry of Industry GDP Gross Domestic Product NGO Non-Governmenxl Organization GEF Global Environmental Facility SPZ Sanitary Protection Zone Hydr6met Hydrometeorological Service UNCED UN Conference on Environment and IUCN Intetnational Union for Conservation Development of NAture and Natural Resources WHO World Health Organization  FOR OFFICIAL USE ONLY TABLE OF CONTENTS EXECUTIVTE SUNIMARY . .... ... ............ ....... I. INTRODUCTION AND BACKGROUND ON UKRAINE ..-1 A. Background . .......... ... ...... 1-1 B. The Difficuilt FCo(1nomiC Transition . . . . . 1-2 C. Background oni Health ...... ............... ........1.... ... I-5 D. Practical Principles to Consider in Setting Environmental Policy ............... 1-6 E. Overview of Subsequent Chapters ........... . .... 1-7 II. BACKGROUND ON POLLUTION PROBLENIS ......................... 11-l A. Urban Air Pollution ......................................... 11-1 B. Regional and Transboundar) Air Pollution Issues . . II-8 C. Water Quality Issues ........................................ II-9 D. Priorities for Drinking Water and Wastewater Treatment ...... ...... 11-21 E. Hazardous and Solid Waste Management ...... I-27 F. Other Potential Hazards ..... 11-29 G. Suggested Priorities ....... ............ ................... II-31 III. BUILDING THE INSTITUTIONAL AND REGULATORY FRAMEWORK ... 111-1 A. The Legislative Mandate .. III-1 B. Institutional Issues and Needs .. III-3 C. Regulatory Instruments: Standards, Permits and Pollution Fees .. 111-13 D. The Enforcement Dilemma ................................... 111-18 E. Role of EIA ......................... III-20 F. Public Participation and Environmental Education. . . 111-22 G. Financing Mechanisms for Environmental Investments .. 111-24 IV. STRENGTHENING AIR AND WATER REGULATORY PROGRAMS .. IV-1 A. Suggested Changes in the Air Quality Regulatory Program .. IV-1 B. Proposed Changes in the Water Quality Regulatory Program .. IV-12 C. Short Term Action Plans and Long Term Compliance Programs .. IV-17 V. ADDRESSING ENVAIRONMENTAL PROBLEMS IN INDUSTRY . .. V-1 A. Background on the Industrial Sector .. V-1 B. Opportunities from the Economic Transition and Privatization .. V-2 C. Environmental Liability and Privatization .. V-4 D. Issues in The Metallurgical Industry .. V-9 E. Issues in the Chemical Industry .. V-20 VI. ADDRESSING ENVIRONMENTAL PROBLEMS IN THE ENERGY SECTOR .... VI-1 A. Issues in the Electric Power Industry: Investment M. --s and Nuclear Power Safety .. VI-1 B. Air Pollution From Thermal Power Plants .. VI-5 C. Environmental Problems Related to Coal Production and Use ......... ..... VI-15 D. Environmental Considerations in Oil Refining .. . VI-20 This document has a restricted distribution and may be used by recipients only in the performance of their official duties. Its contents may not otherwise be disclosed without World Bank authorization.  4 VII. MAINAGING THE LEGACY OF CHERNOBYL ........................ Vll-1 A. Outstanding Problems at Unit 4 and in the 30 km Zone ................. V11-2 B. The Likely Long-Term Health Impact .. . .................... ...... VII-5 C. Resettlement, Agricultural Measures and Food Control ................. VII-12 D. Compensation .......................................... VIf-18 E. Recommended Follow Up Actions Outside the 30 Km Zone .... .......... VII-20 VIII. 'CONSERVING RENEWABLE RESOURCES AND PROTECTING BIOLOGICAL DIVERSITY ...................... VIII-I A. Agriculture . ............................................ VIII-I B. Forestry . ............................................. VIII-10 C. The Protected Area Network ................................. VIII-15 D. Game Management ....................................... Vi11-26 IX. MEETING INTERNATIONAL OBLIGATIONS ....................... IX-1 A. Overview of Recent Agreements ................................. IX-1 B. European Protocols on Transboundary Pollution ....................... IX-2 C. Commitments Under the Montreal Protocol. .............. ............ IX-3 D. Reduction of CO2 and Methane Emissions ........................... IX-7 X. SHORT TO MEDIUM TERM PRIORITIES ...................... ..... X-1 MAPS 1 Sites of Industrial and Energy-Related Pollution, IBRD 24250 2 Major Protected Areas, IBRD 24249 ANNEXES I Recommendations for Technical Assistance 2 General Information: Population Density, Sources of Law, Energy Intensity And Data On Hazardous and General Air Pollutants 3 Overview of Pollution Problems in Selected Oblasts, Cities and Plants 4 Data on the Steel and Chemical Industries 5 Data on the Electric Power Industry and Recommendations for Four Thermal Powc Plants 6 Protected Areas: Descriptions and Related Information 7 Overview of Water Quality Monitoring 8 Management of Complex Air Quality Problems 9 Selected Information on US and EC Standards  Acknowledgements This study is a result of the cooperative efforts of Ukrainian and World Bank staff, aided by environmental authorities and technical experts from several countries. The task manager for the Bank was Kathleen Stephenson, and contributors included: Don Theiler, Jack Broadbent and Lars Moseholm (air quality); Erik Borset, Howard Carter, and Eugene Stakhiv (water quality and wastewater treatment); Roman Pyrih and Ray Pilcher (hazardous waste); Al Hubbard (thermal power industry); Nick Korens (chemical industry); Jean Raguin (steel indu,try); John Pesek (agriculture); Andrew Bond and Steve Berwick (biodiversity protection and nature reserve management); Anil Markandya (environmental economics); Jonathan Lash and Tatiana Zaharchenko (legislative and legal aspects); Tom Kearney, Ian Simm and Seth Rosen (institutional needs); Drs. Dan Hryhorczuk and Barry Levy (epidemiology and occupational health); Dr. Terry Anderson (radiation epidemiology); and Bjorn Larsen and Bilal Rahill (issives concerning international agreements). Messrs. Ron Hoffer and Tom Pace of the US Environmental Protection Agency (USEPA) kindly joined in the study missions and contributed to water and air quality sections of the report. John Palmisano provided information on market-based regulatory approaches. E & E Corporation provided additional comments on steel industry aspects. Anna Skliarenko and Galina Voitsekhovskaya (World Bank Resident Mission) provided crucial support for the team visits. The study team would like to thank the former and current Ministers for Environmental Protection, Yuri Scherbak and Yuri Kostenko, for their kind cooperation and that of their staff in the Ministry for Environmental Protection (MEP). Special thanks go to -iose staff who contributed heavily to the swdy and participated in related site visits: Vera Davydok, Sergei Michailov, Valeriy Osyka, Galina Shimanska, Natalya Simagina, Valeriy Sirenko, and Mikola Stetsenko. Many others at the local MEP branches were extremely helpful. They include the managers and staff of the following branches: Kiev, Dnipropetrovsk, Kamiansk, Kryvyi Rih, Donetsk and surrounding communities, Mariiupil, Luhansk, Zaporizhzhia, Odessa, Lviv, Ivano-Frankivska, and Transcarpathia. Without the contribution of these people, this study would not have been possible. The study team would also like to thank Andriy Demydenko, Director, International Department, and his staff and Vasyl Kostitsky, former Deputy Minister, for their assistance during the study. Staff of various other agencies also participated and were very helpful: the Ministry of Health (especially Drs. Serdyuk, Antipinko and Prodanczuk); the Ministry of Industry (especially Mr. Rudoy); the State Committee on Geology (especially Messrs. Havrilenko and Yakolev); the State Committee on Water Resources; and the Ministry of Electric Power. The study team also would like to express its appreciation to the managers and staff of numerous industrial plants and municipal Vodokanals, who took time from their busy schedules to cooperate in the study. The chapter on the impact of Chernobyl was undertaken with the collaboration of MinChernobyl, and special thanks go to Minister Georgy Gotovchits, First Deputy Minister Boris Prister and Alex Stoloroff, International Department. A conference to discuss the priorities for environmental protection in Ukraine outlined in this report was held in Kiev in November 1993. Andriy Galyapa, Director, Scientific and Technical Department, organized the conference for MEP under the general direction of Yuriy Ruban, First Deputy Minister. Their contribution is also very much appreciated.  Priorities for Polution Abatement Priority Industrial Cities or Areas with Serious Pollution Problems Air Pollution Industrial Sources Kostiantynivka Secondary lead/zinc smelter Conmnunities around Donetsk * Steel, chemical, coal industries Mariiupil Steel and coking plants Zaporizhzhia Various industrial plants, including steel plants and an aluminum smelter Kryvyi Rib Steel and iron ore industries Kamiansk (Dniprodzerzhinsk) Metallurgical and chemical industries Dnipropetrovsk Various industrial plants Odessa * Refining, chemical and port activities Communities in Luhansk oblast e Coal and chemical industries * Indicates scattered household/small industrial coal use Water Pollution (Sites of industrial or Affected Waterbody serious municipal discharges) Zaporizhzhia Dnieper River Odessa Black Sea Mariiupil Azov Sea Dnipropetrovsk Dnieper River Kaniank (Dniprodzerzhinsk) Dnieper River Kryvyi Rik & nearby mining sites Inhulets River Lysychansk-Siverskodonetsk area Siverskodonets River Luhash: coal minig areas Siverskodonets River Sevastopil Black Sea Mykolaiv (Nicolayev) Dnieper River Hazardous Waste Management-Priority Areas Chernobyl: disposition of srcophagus; food quality control; low cost remediation Dfnipropetrvosk, Luhansk and Donetsk Oblasts Other potential sites at scattered military and chemical plants Other SItes of Concern (some near areas of naura value or seniive waterbodies) High pressure ammonia pipeline across southern Ukraine to Odessa (potential hazard) Varfius other cities along Black and Azov Seas (e.g,Yalta) with insufficient wastewater treatment Various cities in western Ukraine with overloaded wastewater treatment plans, refineries and chemical plants discharging into the northeem Buh (tnfbutary of Vistula), Dniester and Prut Rivers, sources of transboundaiy water pollution. Signfiant Non-PoInt Sources Air Pollution Water Pollution Small boilers or stoves Erosion of soil and water runoff (especially coal W) Chemicallpesticide spills durirg tranpn ort storage Automobile transporttion (reduced now, but a potental future problem)  UKRA1 ENVIRONMENTAL STRATEGY STUDY EXECUTWE SUMMARY Introduction 1. Ukraine's large industrial and energy base is the source of serious pollution problems in several parts of the cointry. This is most vividly exemplified by the smoke belching steeltowns of southern and southeastern Ukraine. In the drive to meet production goals in the past, and absent competitive pressures or market signals, resources have been wasted, modernization has been delayed, and very little investment funds have been allocated through the planning system to install or upgrade pollution controls. The heavy industrial pollution in some cities is surely a hazard to the health and productivity of workers and people in surrounding communities. The emphasis of the past on supply, rather than on more efficient use of resources, has also put pressure on agricultural lands and other natural resources. Yet Ukraine remains a country of rolling agricultural landscape, wooded hills and gentle wetlands, still rich agricultural base-- and many natural and cultural heritages--should be protected for future generations. 2. Ukraine is now going through a difficult economic transition, suffering high inflation and declines in GDP. Over time, macroeconomic policy changes and economic reform should bring structural changes, accountability at the enterprise level, and opportunities for modernization, which in turn should stimulate economic growth and at the same time ease environmental pressures. But those changes will take time to realize. 3. Major investments in modernization and end-of-pipe pollution control are general;y unaffordable right now. Practically speaking, most environmental investments will be funded through enterprises' internal generation of funds or financing capacity and through adequate user fees for energy supply and municipal services; it is likely that there will be very limited public investment in pollution control. Those enterprises offering good prospects for joint ventures (giving them a source of equity) or which are prospering on their own are likely to be the ones that will be able to afford most quickly needed investments in modern processes or "end of pipe" pollution control. Similarly, communities which are able and willing to pay for improved municipal services are more likely to be the ones which will enjoy early investments in better water and wastewater treatment. This argues for policies which encourage private domestic and foreign investment as quickly as possible, in order to stimulate new, profitable economic activities. 4. In view of severe resource constraints in the economy, what steps can be taken in the short to medium term to reduce environmental problems and pressures on natural resources? The following principles are suggested in setting priorities for environmental protection over that time frame: o As an immediate measure, encourage low cost, short term actions in individual industrial and municipal plants to improve safety, conserve water and energy, and reduce pollution in the workplace caused by sloppy housekeeping and insufficient maintenance. In particular, reductions in air pollution in some plants is critical. o Build up the institutional capacity and regulatory infrastructure necessary for practical and effective environmental management, in parallel with the economic transition and privatization, as investors will seek a stable, credible regulatory framework. In so  ii Ukraine Environmental Strategy Study doing, establish reasonable environmental standards and plan a phase-in period to meet environmental targets, rather than trying to achieve all targets at once. o Focus regulatory efforts (and campaigns to introduce short term action plans) on those industries and cities where occupational health problems are critical or where the health of nearby communities is seriously affected by hazardous pollution. o Encourage projects which have economic payoffs while also reducing environmental pressures (e.g. energy conservation). Also, encourage more substantial environmental investments over the medium term in areas of high economic or touristic value, where there are opportunities for revenue generation and thus the ability to pay for those investments. o Protect important natural or agricultural areas that could suffer severe or irreversible damage, if steps are not taken soon, or where preventive measures are especially cost effective. 5. Environmental authorities will need to be practical; inevitably, they will face conflicts between what is 'do-able" and what may be a desired goal or priority in terms of the extent of pollution. A balanced, two track strategy is suggested: (i) trying to achieve some pollution reductions in the short to medium term in the most nolluting plants, some of which are the weakest in terms of economic outlook; and (ii) -noving ahead with accelerated pollution abateme,it plans in plants or cities which can afford more tapid progress. In many cases, environmental authorities will need to think in terms of promoting small, low cost interventions over the next five years, beginning with pilot programs. 6. Introduction of Short Term Action Plans. One of the major themes of this study is that, despite the constraints on resources, much can still be accomplished. Problems of worker safety or pollution in industrial plants are not solely a result of technology. They occur also because of lack of attention to safety, poor housekeeping and maintenance, and general lack of supervision. There are opportunities to take quite inexpensive actions at the plant level now which could improve safety and reduce pollution, particularly in the workplace itself. They include: o introduction of better safety procedures and equipment to reduce the high level of industrial accidents; o aggressive cleaning, housekeeping, and attention to materials handling and storage to reduce fugitive emissions and accidental spills; o repair and maintenance of process and pollution control equipment to reduce leaks;