Energy, environment and international financial institutions: the ebrd's activities in the western balkans

Abstract

This article examines the relationship between the EBRD's project portfolio in the Western Balkan energy sector, and the region's main energy and environment problems. It argues in favour of geographically centred appraisals of the environmental sustainability of multilateral energy investment. Empirical analyses have been placed within the context of this bank's broader policy mandate to support the reconstruction and development of, among other aspects, energy operations in the post-socialist states of Eastern Europe and Central Asia, while promoting environmental sustainability. The article categorizes the Western Balkans' energy and environment problems into two main groups: the failure to shift away from carbon-emitting sources of energy, and the inability to introduce efficient technologies in the generation, transmission, distribution and consumption of energy. It investigates the level to which these issues have been represented in the Bank's energy investment activities in the region. The EBRD's ability to fund energy and environment projects has been affected by, among other factors, the decision-making process within the relevant governments and the Bank itself. These processes are related to the structural legacies of central planning and the organizational cultures embedded within the EBRD at its inception.

Environmental Sustainability: A Case of Policy Implementation Failure?

“…Dominant interests, such as extractive industries, may influence what is politically feasible, resulting in a failure to deliver sustainability [41,42,44,46,49,58,60,73,81,93,[95][96][97]. An unstable political climate or corruption can further limit success [37,49,53,56,59,67,74,77,96,98]. An example was identified by Marcoux and Urpelainen [96], who found that corruption in some Organisation for Economic Cooperation and Development countries led to the overuse of agricultural pesticides.…”

“…Finally, some laws were actually impediments to achieving environmental targets [33,42,57,67,93]. Buzar [67], for example, found that statutory requirements in the West Balkans were restricting investment in the renewable energy sector.…”

“…Some authors pointed to the absence of appropriate laws [32,48,53,59,61,71,74,88,92,99,[108][109][110][111]. In other circumstances, legislation was present but either inadequate or not enforced [36,43,45,46,51,53,62,67,74,109,112]. A lack of land/property rights was also a significant barrier in the USA, Asia and Africa [30,34,50,69,98].…”

“…Case studies in Finland, Italy, the West Balkans and Australia indicated that failure may result where policies are not well developed, are not implemented fully, are not politically popular, or go against a prevailing political agenda [41,47,48,67,71,74,79,[92][93][94]. Dominant interests, such as extractive industries, may influence what is politically feasible, resulting in a failure to deliver sustainability [41,42,44,46,49,58,60,73,81,93,[95][96][97].…”

“…Finally, there was a lack of market instruments, and economic markets themselves inhibited the ability to address environmental issues [31,36,40,57,[59][60][61][62][63][64][65][66][67][68][69][70][71][72][73][74][75][76]. Fieldman [76] compared liberal market economies in the UK and USA with coordinated market economies in Germany and Japan in terms of their influence over pollution.…”