UNITED NATIONS DEPARTMENT FOR POLICY COORDINATION AND SUSTAINABLE DEVELOPMENT CHAPTER 8: INTEGRATING ENVIRONMENT AND DEVELOPMENT IN DECISION-MAKING Prepared for THE UNITED NATIONS COMMISSION ON SUSTAINABLE DEVELOPMENT April 1995 HUMAN DEVELOPMENT, INSTITUTIONS AND TECHNOLOGY BRANCH SUSTAINABLE DEVELOPMENT DIVISION CONTENTS Paragraphs INTRODUCTION .................................. 1 - 3 GENERAL OVERVIEW AND METHOLOGICAL ISSUES ...... 4 - 12 REVIEW OF PROGRESS ACHIEVED, MAIN POLICY ISSUES AND EXPERIENCES ...................... 13 - 109 Integrating Environment and Development at the Policy, Planning and Management Levels .. 13 - 52 Providing an Effective Legal and Regulatory Framework ................................... 53 - 64 Making Effective Use of Economic Instruments and Market and Other Incentives ............. 65 - 72 Establishing Systems for Integrated Environmental and Economic Accounting ....... 73 - 86 CONCLUSIONS AND PROPOSALS FOR ACTION .......... 87 - 90 I. INTRODUCTION 1. Chapter 8 of Agenda 21 focusses on four interrelated issues in the context of integrating environment and development in decision-making. These include: (a) integrating environment and development at the policy, planning and management levels; (b) providing an effective legal and regulatory framework; (c) making effective use of economic instruments and market and other incentives; (d) establishing systems for integrated environmental and economic accounting. 2. The overview and analysis of these issues is based on material provided by Governments in their national reports to the Commission on Sustainable Development; organizations within the United Nations System; and non- governmental organizations. Several papers and documents were also consulted, including those from OECD, non-governmental organizations and individual authors. These have been referenced, as appropriate. 3. Many of the activities contained in Chapter 8 are directly related to activities also proposed within the context of Chapter 40, on "Information for Decision-making." This refers in particular to sections on data and information and on indicators. Where this is the case, reference to the relevant sections of the Secretary-General's Report on Chapter 40 has been given. Similarly, since the Report of the Secretary-General on "Financial resources and mechanisms for the financing of sustainable development" (Chapter 33) contains an analytical discussion of economic instruments, this material will be referenced but not repeated here. II. GENERAL OVERVIEW AND METHODOLOGICAL ISSUES 4. The purpose of integrated plans and strategies is to develop a consensual vision for the future and to identify common priority issues and key activities within a framework that provides for consensus building and planning, and the creation of the institutional support required for sustainable development. 5. It is understood that the strategy process, like decision-making in general, is adaptive and cyclical, encompassing five discrete but interrelated "stages." These are problem identification, policy formulation, implementation, monitoring and evaluation. Sustainable development strategies must be participatory and open to communication, both horizontally and vertically; they are integrative and inter-sectoral; and they are intended as a basis for action. 6. Traditionally, particularly in developed countries, national sustainable development strategies have taken as their starting point the management of natural resources and the improvement of environmental quality. Many developing countries have begun by expressing their environmental concerns through development planning and through specific sector-based development problems, such as desertification. In the former, the challenge has been to integrate environmental concerns into the policies of other sectoral ministries and into the practice of key sectors of the economy. In the latter, it has been necessary to expand the concept of development beyond more immediate economic concerns, and to understand the economic implications of sustainability. Much has been done within the past few years; however, one of the major obstacles in moving forward has been insufficient progress in developing methodologies and techniques for integrated planning and policy- making. 7. One attempt to respond to the methodological "vacuum" is the new area of environmental economics, which seeks to integrate the "economics approach," the "social" approach, and the "ecological: approach. Environmental economics may help to implement an integrated framework through modification of traditional procedures, in which natural resources are treated holistically as physical or ecological resource systems in their entirety (e.g., a river basin or a rainforest). This involves essentially a three step approach: determining the environmental and social impacts of a project or policy; (b) economically valuing environmental and social inputs; and (c) redesigning projects and policies to reduce adverse environmental and social impacts and to shift development toward a more sustainable path. 8. The basic concept is the "willingness to pay" (WTP), coupled with the "payments people are willing to accept" (WTA). Analysis may take place at project level, sectoral or subnational level, or economy-wide or national level. Problems may arise with environmental or social impacts that defy valuation (such as loss of biodiversity or human health hazards), but other techniques may be combined with WTP/WTA in a manner that helps better to prioritize the impacts and lead to improved decision-making. Overall, environmental economics is intended to suggest a "broad integrated conceptual approach in which the net benefits of economic activities are maximized, subject to maintaining the stock of productive assets over time, and providing a social safety net to meet the basic needs of the poor." 9. Methodologies provide the theoretical support to policies and plans. Institutional support is also necessary to bring people, interests and data together, as, for example, through National Commissions for Sustainable Development, and to implement the plans. For the later, an effective legal and regulatory framework is necessary. This should provide a normative framework for economic planning and market instruments, as well as an array of "command and control" methods. To date there is little evidence of new methodological work in assessing the consistency and effectiveness of legal and regulatory framework for sustainable development. However, some efforts may now be underway to remedy this situation. 10. Increased understanding of the use of economic instruments, market and other incentives is very important in order to integrate environment and development in the decision-making process and thereby achieve progress towards sustainable development. Economic instruments to protect the environment and resources have not been used significantly in many countries, although these instruments have been proven in many cases to be efficient. 11. Economic instruments give industry much greater flexibility in the means of compliance. They contribute to development of environmentally-sound technologies. In addition, as in the case of environmental taxes, they can serve a "double function" of reducing resource consumption and helping to stimulate employment by using the revenues to cut other distortionary taxes. 12. Conventional national economic accounting is restricted to market transactions and thus excludes a number of human activities pursuing non- market aspects of production and consumption. Integrated environmental and economic accounting, like environmental economics, attempts to value environmental services of natural resource supply, waste absorption and other amenities that can no longer be considered "free gifts" of nature. Thus, systems for integrated environmental and economic accounting aim at integrating environmental, social and economic aspects of sustainable development in a broader framework of national accounting, and should be seen as a complement to traditional national accounting practices. III. REVIEW OF PROGRESS ACHIEVED, MAIN POLICY ISSUES AND EXPERIENCES A. Integrating Environment and Development at the Policy, Planning and Management Levels 1. Improving Decision-making Processes 13. Economic, social and environmental considerations in decision-making may be reflected through the application of an integrating methodological approach, through the adoption of a framework that brings sectoral plans together into a more holistic approach, and through the inclusion of social and environmental parameters in sectoral economic planning. The establishment of structures, such as Sustainable Development Councils, may also assist in these processes, since they are intended to provide the mechanisms through which policy integration is achieved. 14. Several studies have recently been undertaken on decision-making for sustainable development. Each identifies various characteristics intrinsic to the process. Emphasis may shift, and the number of characteristics may vary, but all would agree that (1) decision-making must be driven by national needs, priorities and goals. External forces, such as multilateral and bilateral donors may (and do) in some cases provide the impetus for the process to begin, but these donors should do no more than facilitate, not dictate, the process. Externally-led processes carry another burden; regardless of how good they may be, they are likely to be perceived as tied to conditionalities, with more importance given to investment programmes than to the process itself. (2) decision-making must be multi-sectoral and integrative, aimed at overcoming institutional and policy fragmentation. Where relevant, this should include building on existing plans and strategies, within a framework. Cross-ministerial decision-making requires both strong political support and careful institutional development commensurate with the needs and conditions of the country; (3) decision-making must be participatory. Different from participatory implementation, which is usually project specific, this involves soliciting people's views in the policy formulation and management stages. It is important to keep in mind that "participation" requires time. A frequent criticism of some of the donor-driven processes is that, although they mandate wide participation, they tend to give even greater priority to meeting rapid deadlines. 15. Increasing numbers of countries are attempting to improve their decision-making structures for developing strategies, policies and plans for sustainable development, as reflected in the discussion on national sustainable development strategies, below. These efforts are largely due to the growth of awareness of the issues within countries and initiatives taken by governments. Organizations within the United Nations system and non- governmental organizations are also working with governments to assist them in this process. 16. About sixty governments are drafting Country Strategy Notes, with the support of UNDP and other entities in the UN System. These Notes could be vehicles for the integration of environment into overall development goals. FAO has been responding to an increasing number of requests from governments to assist them in incorporating environmental and sustainability objectives into their agricultural policy sets. The relationship among environmental problems, resource depletion and poverty and the ways in which development is promoted in the region are the concern of ESCWA. In cooperation with UNEP, ESCWA has initiated a project to assist countries in strengthening environmental management and planning capabilities, with sustainable development as the underlying principle. 17. One of the constraints encountered in trying to develop an integrated approach is the early state of the conceptual and methodological tools for evaluating non-market goods, amenities and externalities. FAO plans to organize an expert consultation on the subject for early 1995, and has developed a methodology to be used as a standard tool in undertaking economic assessment of production-related environmental effects. 18. Approximately fifty multisectoral sustainable development councils, commissions, etc., have been established. In general, these are intended to provide the institutional framework for the development of integrated decision-making, for the setting of priorities, and for "spaces for public participation." Efforts are now underway to explore these and additional roles for the councils, including, for example, the creation of regional alliances and representation in international fora. 19. A number of non-governmental organizations have been actively involved in improving decision-making structures. For example, the International Institute for Environment and the World Conservation Union (IUCN), with support from UNDP, CIDA and UK-ODA, have recently published a Handbook for the planning and implementation of Strategies for National Sustainable Development. The International Network of Green Planners has also been working on developing a methodology for sustainable development strategies. Friends of the Earth International (FoEI) is involved in a Campaign for Sustainability, which has engendered discussion and the initiation of integrated sustainable development plans in a number of countries. 20. Efforts are also underway in ensuring the transparency of, and accountability for, the environmental implications of economic and sectoral policies, as well as for trying to integrate sectoral policies into a larger framework. FAO, in collaboration with UNEP, has developed the World Soil Charter as a framework for the development of national soils policies to promote integrated land resources development plans. FAO is also assisting its member countries in the formulation and implementation of policies and strategic plans for economic development and in the areas of agriculture, food and nutrition, and forestry. ICAO is addressing the environmental problems associated with civil aviation. 21. WHO is trying to ensure that major social factors, such as human health, are included in integrated policies. UNFPA is working to give population issues a central place in policy and analytical frameworks and the decision- making process aimed at sustainable development. 22. To further the integration of social considerations in sustainable development policies, ILO is working directly with the national structures and other bodies involved in the implementation of national plans and strategies, with an emphasis, among others things, on issues of employment, poverty alleviation and training. Designed to contribute to a deeper understanding of the social dimensions of environmental change in developing countries, the UN Research Institute for Social Development (UNRISD) is undertaking a research project to ascertain how social factors and government policies influence the way people use and manage natural resources; how different social groups are affected by environmental degradation; to what extent and in what ways local people manage resources on a sustainable basis; and what impact conservation programmes have had on patterns of natural resource use and people's livelihood. 23. Following the Marrakesh Ministerial Decision on Trade and Environment, GATT will take up the linkages between trade policies, environmental policies and sustainable development as a priority in the new World Trade Organization (WTO). At its first meeting, the WTO General Council will establish a new Committee on Trade and Environment. Reference is made to the Report of the Secretary-General on Trade and Environment (E/CN.17/1995/____), for more detailed information on this topic. 24. Participatory decision-making, as noted, is intrinsic to the concept of sustainable development strategies. This includes the need of individuals, groups and organizations to participate in Environmental Impact Assessment (EIA) procedures and to know about and participate in decisions, particularly those that affect the communities in which they live and work. Already at an early planning stage, individuals, groups and organizations should have access to information held by national authorities relevant to environment and development, including information on products and activities that have or are likely to have a significant impact on the environment, and information on environmental protection measures. In this process, it is important to ensure the active participation of youth, as well. 25. Following an ECE meeting on Environmental Rights and Obligations in the Hague, in July 1991, the Netherlands is the lead country of a task force to examine the experience in individual countries regarding the application of Principle 10 of the Rio Declaration and to identify areas for possible cooperation. In addition, in the Lucerne Ministerial Declaration (1993), the ECE was called upon to draw up proposals for legal, regulatory and administrative mechanisms to encourage public participation and to provide, in cooperation with informal sectors, training and education for this purpose. This is high on the agenda in preparations for the 1995 Ministerial Conference, "Environment for Europe," to be held in Sofia (Bulgaria). 26. The right to public participation and access to relevant information is also taken into account in a number of legally binding instruments, including the Framework Convention for Climate Change and those instruments for which ECE provdes secretariat resources. 27. UNDP is increasingly promoting participatory approaches to ensure public access to decision-making processes, particularly through its Sustainable Development Network Programme (SDNP). In 1992, FAO designated "people's participation focal points" in each technical unit of the organization, and the theme of "people's participation" is a major item in FAO's Special Action Programme based on Agenda 21. 28. A number of national governments have established various fora to provide local authorities, NGOs and representatives of Major Groups an opportunity to participate in decision-making for sustainable development. Non-governmental organizations play a vital role in the shaping and implementation of participatory democracy. They may participate at the international level, for example, in the "Environment for Europe" process and in the preparations for the 1995 Ministerial Conference in Sofia, Bulgaria, together with informal sector organizations from business and industry and European parliamentarians. Another approach is to organize fora at the country level, involving all of the main actors and to establish a coordinating committee to assist the process of consultation and implementation. Such fora may provide an interface between local communities and the national government. This is now being done, for example, to assist in the implementation of the National Action Programmes for the Convention to Combat Desertification. 2. Improving Planning and Management Systems 29. For a detailed discussion of data and information, as well as of the use of indicators as a tool for decision-making, please refer to the Report of the Secretary General on Chapter 40 of Agenda 21, "Information for Decision- Making." 30. Computerized models, combined with indicators, are one way to help elucidate policy options for decision-makers. One example is the Computerized System for Agricultural Planning and Policy Analysis (K2) being designed by FAO to allow the construction of alternative medium- or long-term scenarios for the agriculture sector of a country. Similar approaches have been used by WHO and UNEP for analyzing environmental health risks through the HEAD-LAMP project (Health and Environment Analysis for Decision-Making). These are also discussed within the context of the Report of the Secretary General on Chapter 40 of Agenda 21. 31. Environmental Impact Assessment (EIA) is a generic term that embraces both an administrative process and a set of analytical techniques designed to predict and appraise environmental impacts of development proposals. Increasingly important in this process is economic analysis, as a planning and evaluation method. 32. It has great flexibility and wide applicability. Promoted through Agenda 21 and a number of international legal agreements, it was originally developed as a project planning tool. In fact, most, if not all, modern environmental conventions require EIA whenever there is a potential transboundary effect. In recent years, it has been expanded to be applied to government policies, other strategic level decisions, programme evaluation, and auditing or reviewing development activities. 33. IIED has been working on a modified EIA that draws on methodologies of social impact assessment, participatory appraisal procedures and environmental economics. The approach proposes an iterative process focussing on specific issues, such as hydropower dams, irrigation schemes, refugees and displaced people. 34. EIA procedures may vary between countries, with respect to the degree of administrative discretion, public review, legal standing to appeal or initiate the EIA process, inquiry mechanisms and links with land-use planning and pollution control regulations. Nonetheless, efforts are being made among some countries to harmonize their approach to EIA. 35. ECE countries have made provisions for compulsory EIA of projects which may have adverse effects on the environment. EIA is also seem as being a part of the planning and decision-making process. Within OECD, a project is underway to achieve greater coherence with regard to environmental assessment policies, procedures and practices as applied to Official Development Assistance. 36. ECE itself is placing emphasis on the application of an ecosystem approach as a new instrument to support decision-making. It is a departure from the earlier focus on localized pollution and management of separate components of the ecosystem in isolation; it takes into account the social, economic, technical and political factors that affect ways in which humans use nature. As the ecosystem approach requires planning based on ecosystem boundaries rather than on political or jurisdictional borders, it also calls for increased intergovernmental cooperation at all levels. The Convention on the Protection and Use of Transboundary Waters and International Lakes (Helskini, 1992) is an example of such cooperation. 37. Non-governmental organizations have also contributed to the developing of both methodologies and information for environmental impact assessment. For example, IIED, WRI and IUCN are collaborating on an International Environmental and Natural Resource Assessment Information Service, which will, inter alia, make environmental assessment information more widely available to policy analysts and development planners in both developing and developed countries. IUCN also administers an environmental assessment service, to assist its members and partners. 38. Multilateral financial institutions (MFIs) have been exploring the most effective and efficient ways in which to apply environmental assessment methodologies, particularly for co-financing. Following a meeting in September 1993, an "Environmental Subgroup" of the MFI Co-financing Group was established and agreed to meet on an annual basis, giving priority to the following: (i) environmental assessment and intermediary lending; (ii) environmental assessment and privatization; and (iii) environmental assessment for 'green projects. 39. Integrated management may also be promoted through the establishment of guidelines. An example includes the guidelines recently formulated by UNHCR to include environmental concerns in its operations. The ECE Committee on Environmental Policy, at its first session, finalized and gave general approval to the Guidelines on Integrated Environmental Management in Countries in Transition. The ECE Committee on Human Settlements has also prepared guidelines for sustainable human settlements planning and management. The IAEA/UNEP/UNIDO/WHI project on assessment and management of the health and environmental risks of energy and other complex industrial systems has produced a procedures guide which is being restructured on the basis of experience gained in case studies. Another collaborative project (CEC/IAEA/IBRD/IIASA/OECD-NEA/OPEC, UNIDO, WMO) has developed methodologies, computerized data bases and models for the integration of health and environmental concerns into the comparative assessment of different electricity generation options. 40. During the past fifteen years, nine international legally binding instruments, four conventions and five protocols have been developed in the ECE on air pollution, environmental impact assessment, industrial accidents and transboundary waters. The importance of these legal instruments, as effective tools to promote integrated management approaches to sustainable development with particular emphasis on transboundary areas, is growing in view of the Commission's increasing membership, and, consequently, the growing potential for transboundary environmental problems. A number of other international legal instruments, such as the Multilateral Fund of the Montreal Protocol, assist developing countries to develop national programmes, strategies, plans and policy instruments to implement their respective agreements within the context of their integrated management approaches. 41. WHO, in collaboration with UNDP, is sponsoring a technical cooperation programme in over twenty countries, which aims at incorporating health and environment concerns in sustainable development planning. Guidelines based on the experience will be published in 1995. Many of the UNDP country programmes contain components to strengthen decision-making processes. In addition, programmes such as the Management Development Programme, focus attention on the public sector and its interaction with the private sector and civil society organizations. The UNSO programmes, "Strategic Framework Process" aims at establishing consultative mechanisms for the definition of priorities as a basis for policy development. A new initiative, the Public Private Partnership for the Urban Environment, developed jointly by UNDP and the Business Council for Sustainable Development, aims to promote concrete interactions between the public and private sectors, with NGOs and the academic communities as relevant supporting partners as a process that leads to integrated management. 42. Corporate environment reports are becoming a means for companies not only to communicate their environmental performance, but also for use as a tool for integrated management systems, corporate responsibility and the implementation of industry voluntary codes of conduct. Reporting guidelines have been established by several groups of industries. These include the United States-based Coalition for Environmentally Responsible Economies (CERES), the European Chemical Industry Council (CEFIC), the Public Environmental Reporting Initiative (PERI), the Global Environmental Management Initiative (GEMI), the World Industry Council for the Environment (WICE), and the Canadian Chamber of Commerce, among others. GEMI, for example, has designed a self-assessment programme that allows companies to evaluate their performance for each of the sixteen ICC Business Charter principles against four performance levels (compliance, systems development, integration and total quality). The International Standards Organisation (ISO) established the Strategic Advisory Group on the Environment (SAGE) in 1991 to integrate the environmental dimension into its standardization efforts. This also led to the inauguration of a new ISO Technical Committee (TC207) that will develop an Environmental Management Standard over a two-year period. Other voluntary efforts on the part of the private sector may include eco-audit schemes and eco-labelling schemes, to encourage production and purchase of products with the least harmful effects to the environment throughout their life cycle. 3. Data and Information: Development and Promotion of Indicators for Sustainable Development 43. Reference is made to the discussion on this topic in the Report of the Secretary-General for Chapter 40 of Agenda 21, on "Information for Decision- making." 4. National Strategies for Sustainable Development 44. A number of national strategic planning approaches have been introduced by both governmental and non-governmental actors. These may include traditional national development plans, produced by national governments; National Conservation Strategies, led by IUCN; National Environmental Action Plans NEAPS), led by the World Bank; National Tropical Forestry Action Plans, led by FAO; National Plans to Combat Desertification, led by the Permanent Committee for Drought control in the Sahel (CILSS); National Energy Assessments, led by the World Bank; Integrated Regional Economic/Environmental Development Planning, led by the Asian Development Bank; various environmental strategies, country environmental profiles and State of the Environment Reports, prepared by organizations of the UN system, governments, bilateral donors and NGOs; the UNCED/CSD National Reports; various Green Plans; Convention-related National Plans; and, the country poverty assessments being planned by the World Bank. 45. Some of these are sectoral; others multi-sectoral. Sectoral plans have an advantage in that they focus the maximum expertise within a Government (and, ideally, from among a variety of stakeholders); the objectives may be clearly expressed; and the institutions of Governments are generally established to implement and monitor plans at a sectoral level. The disadvantage, however, is that the totality of plans across sectors may have inconsistent and incompatible objectives. Moreover, issues of "sustainability" tend to be marginalized and too often become the residue after economic plans have been formulated. 46. In addition, in the absence of a broad, multi-sectoral approach, the tendency to equate environment with sustainable development remains strong. Sustainable development does not just imply interjecting environment here and there into the policy process. It demands a paradigmatic shift. For this purpose, Agenda 21 calls upon Governments to adopt a national strategy, building upon and harmonizing the various sectoral economic, social and environmental policies and plans that operate in the country. These strategies should be multisectoral, participatory processes of consensus building, to ensure socially responsible economic development while protecting the resource base and the environment for the benefit of future generations. 47. Over 100 countries have now drawn up medium- or long-term environmental strategies. The number of strategies for sustainable development is less clear. However, one may presume that, since approximately fifty national commissions for sustainable development have been established, efforts are at least underway to develop as many sustainable development strategies. 48. UNDP has assisted in the development of national sustainable development strategies and national Agenda 21's as requested by governments. Virtually all of the organizations of the UN System assist Governments to integrate sectoral plans (e.g., agriculture, health, water) into national sustainable development strategies. 49. At the same time, concern has been expressed over the plethora of related strategies being requested of governments. OECD, at the December 1993 DAC High Level Meeting, took special note of the dangers of putting too much stress on formal plans and bodies, since this might be at the expense of fostering the natural emergence of processes and of generating action at the point where it is appropriate and needed, by the relevant authorities, communities, enterprises and individuals. In addition, the High Level Meeting took note of the danger of a donor-driven proliferation of planning requirements for developing countries. Generally there was agreement that introduction of national environment action plans (NEAPs), as a condition for ODA financing, needed to be carefully monitored to ensure that the above- dangers were avoided. 50. The IACSD has also expressed concern that, as countries consider formulating sustainable development strategies, they are likely to be overwhelmed by the infrastructural and institutional requirements of already existing sustainable development and environmental strategies and programmes established both by the organizations of the UN system and bilateral agencies. International legal instruments, as well, though entered into freely by a country, impose a number of requirements, including, in most cases, periodic reporting. All of this collectively places an undue burden on governments, contributes to overlapping responsibilities, creates confusion and wastes resources. 51. At its fifth meeting (1-3 February 1995), the IACSD agreed on the need to rationalize requests for elaboration of national environment/sustainable development strategies and plans, and to work toward developing frameworks in which sectoral plans can be accommodated. Pilot projects in a few countries could help to define appropriate models. It was agreed that UNDP would take the initiative to convene a meeting of an open-ended task force to continue discussion on national strategies and reporting requirements. The issue of streamlining reporting will be on the agenda of the next meeting of the IACSD. 52. Coordination at the national level constitutes one of the greatest and most complex problems facing sustainable development strategies. As noted above, a large number of strategic initiatives have been launched, many of them recently, with little or no attempt to harmonize the approaches and structure established by each of the strategies. The integration of international (and national) initiatives is only possible in the context of clear national priorities. Lack of consistency between initiatives and the lack of control over them may have a number of adverse consequences, including duplicative work, financial costs, wasted time and effort, and a lack of direction. This is another powerful reason for countries to establish their own, internally-generated, sustainable development strategies, as frameworks for coordination and blueprints for the appropriate coordinating machinery. B. Providing an Effective Legal and Regulatory Framework 53. Laws and regulations suited to country-specific conditions are among the most important instruments for transforming environment and development policies into action, not only through "command and control" methods, but also as a normative framework for economic planning and market instruments. However, much of the law-making in many countries seems to be ad hoc and piecemeal, or has not been endowed with the necessary institutional machinery and authority for enforcement and timely adjustment. 54. To integrate environment and development in the policies and practices of each country effectively, it is necessary to develop and implement integrated, enforceable and effective laws and regulations that are based upon sound social, ecological, economic and scientific principles. Programmes need also to be established to review and enforce compliance with the laws, regulations and standards that are adopted. 55. The legal systems in many countries have developed piecemeal, over many years and in conditions no longer relevant. Often, legal provisions are too general, inadequate, uncoordinated and inconsistent with modern planning practices. One of the major needs in all countries is the development of a framework of national laws and regulations, policy guidelines and relevant institutional frameworks to support the sustainable development process in its entirety. 56. The enactment and enforcement of laws and regulations are also essential for the implementation of most international agreements in the field of environment and development. The Report of the Secretary-General on an "Overview of Cross-sectoral issues" (E/CN.17/1994.2) prepared for the second session of the CSD, shows that national compliance with these international legal instruments is hampered by lack of sufficient capacity and lack of adequate financing. A consistent and integrated legal framework would help to use human and institutional resources more efficiently and effectively. 57. UNDP and UNEP are collaborating on a major programme to assist in the development of environmental law and institutions in Africa. The programme is presently being implemented in ten countries. UNDP has also assisted countries as requested through the country programmes or through other projects in the formulation or revision of environmental legislation. 58. Many of the UN system organizations, as well as convention secretariats and NGOs produce guidelines for the legal framework at the national level for implementation of the respective conventions; many also have programmes for capacity-building and training in the legal aspects. UN/DOALOS has published guides to the implementation of some of the highly technical or complex provisions of the United Nations Convention on the Law of the Sea relating, inter alia, to the drawing of baselines, marine scientific research and the definition of the continental shelf. IMO, for example, has issued guidelines for safety and environmental maritime programmes. ECE is promoting the establishment of judicial and administrative procedures for legal redress and remedy of actions affecting the environment and development that may be unlawful or infringe on rights under national law or international conventions. ESCAP provides technical assistance to countries in the region to enhance national legislative capacities in the field of environmental laws and agreements and, with IUCN, in establishing a Regional Law Center at the National University of Singapore. ICAO is conducting a study on enhancing its Standards (contained in the Annexes to the Convention on International Civil Aviation). 59. ECE regularly provides support to Governments to make laws and regulations more effective by organizing workshops and seminars on, for instance, air pollution, water management, EIA, and other areas. In 1993, ECE and UNEP jointly organized four workshops to assist countries in Eastern and Central Europe to strengthen environmental legislation. ECE is also establishing a regional advisor service that will provide specialized training for assessing laws and regulations for sustainable development. UNEP undertakes activities for the development of national environmental legislation and institutions in many countries, in all regions. It also sponsors, with UNITAR and other organizations, a number of training programmes in the field of environmental law. UNESCO and its IOC undertake activities aimed at strengthening the scientific and institutional capacity of developing countries to implement international agreements in the areas of competence of the Organization, especially regarding biological diversity, oceans and climate change. The World Bank has a number of projects involving technical assistance for national environmental legislation and institutions in developing countries. IAEA has a programme for education and training in radiological protection and nuclear sfety to enable developing countries to build up the infrastructures necessary to ensure implementation of international basic safety standards. 60. A project has been proposed for implementation by the International Development Research Centre of Canada, in cooperation with the United Nations and other organizations within the UN system as well as significant NGOs active in the field of sustainable development law, to establish, in the first phase, a theoretical, integrative framework for sustainable development law at the national level; during the second phase, to develop a framework pliable to local cultural, social and philosophical (jurisprudential) differences; and, in a third phase, to promote capacity-building. 61. National laws and regulations for sustainable development should ideally be derived from or developed to support a sustainable development strategy. In fact, virtually everywhere, laws and regulations pre-exist these strategies. They have been developed in the context of conservation and environmental concerns, of sectoral objectives and plans, and in relation to international law. As noted above, there is a need to review these laws at the national level and to place them within a coherent national framework. This refers especially to the "operational" part of a law. 62. Laws are also normative and incorporate into their text specific philosophical dispositions. This has been made transparent at the international level, where recent international legal instruments have brought into law a number of innovative principles unique to sustainable development. These principles will be further discussed and identified, in the context of reporing to the Commission on Chapter 39 of Agenda 21 in 1996. They should also be taken into account in reviewing national legal and regulatory measures for sustainable development for their consistency, relevance, and comprehensiveness. 63. Regarding the monitoring of compliance with international legal instruments, implementation and verification measures are being reviewed by virtually all of the relevant convention secretariats. Compliance would also be facilitated if common understanding could be reached and practical rules, criteria and procedures developed and agreed upon, on complex issues of responsibility and liability for transboundary environmental impact. 64. Few conventions establish mechanisms which allow the public (individuals and NGOs) to provide information on the compliance by individual Parties directly to the governing bodies of the conventions. This is an area in which future attention should be directed. C. Making Effective Use of Economic Instruments and Market and Other Incentives 1. Improving or reorienting Governmental policies, particularly in view of experience with economic instruments and market mechanisms. 65. At its second session, the Commission decided to address the issue of the use of economic instruments in the context of changing consumption and production patterns (Chapter 4 of Agenda 21), and it inter alia, requested the Secretary-General "to prepare an analytical report on the use of economic instruments and other policy measures for changing consumption patterns in developed countries, with special reference to the sectoral issues on the agenda of the Commission at its third session, as an input to the Ad Hoc Open- ended Working Group on Finance." This material is contained in the Report of the Secretary-General on Financial resources and mechanisms for the financing systainable development (E/1995/ ) and will not be duplicated here. 2. Increased understanding of the role of economic instruments and market mechanisms; cooperation for research and analysis of key issues. 66. A number of specific studies and programmes are underway within the UN system to understand better the role of economic instruments and market mechanisms, including that earlier referred to in relalation to sustainable production and consumption patterns. Interrelationships between economic instruments, more traditional instruments including regulatory mechanisms of the command and control type and voluntary agreements are being examined by the Joint Working Group of the ECE in the country reports on the environmental/economic situations in transition economies. UNDP is working with the United Nations Statistical Division (UNSTAT) to promote the integration of environmental accounts and the use of economic instruments in macro-economic planning where these will support the implementation of environmental goals. WHO, in collaboration with the World Bank, is embarking on a review of country applications of economic instruments as a means for protecting human health in relation to environmental hazards. 67. IMO and UNCTAD are cooperating with respect to the development of an economic instrument on port waste facilities. Cooperation is expected to be further enhanced in immediate future. A study is being undertaken by ICAO on the choice of regulation and charging to achieve reductions in aircraft emissions. 68. A working paper by the IMF reviewed the theoretical efficiency of three types of environmental taxes: taxes on emissions or Pigouvian taxes; taxes on productive inputs or consumer goods whose use is related to environmental damage; and environment-related provisions in other taxes. A survey of environment taxes in 42 countries, drawn from developing countries, economies in transition, and industrial countries, illustrates that the use of environment taxes differs dramatically from the recommendations of environment tax theory. This divergence between the theory and practice of environment taxes can be attributed to several factors: environment taxes are difficult to implement; there are many factors that impede their effectiveness; and their introduction may be discouraged by their implications for other policy objectives. 69. Studies, by OECD and others, on the effectiveness of different types of economic instruments show that the use of economic instruments could be further enhanced in the future. Additional research, analysis, education and exchange of information regarding the use of economic instruments and their social, distributive and international trade implications is also being undertaken, as noted, within the framework of the work programmes for issues relating to consumption and production patterns (Chapter 4) as well as to the transfer of environmentally sound technologies (Chapter 34). 3. Enhancing understanding of sustainable development economics. 70. Agenda 21 requests institutions of higher learning to strengthen studies in sustainable development economics and organizations with expertise in this area to provide training sessions and seminars for Governments and officials. 71. Since sustainable development economics is a new area for many institutions and organizations, considerable progress is only to be expected in the long run. At the same time, work in this area is taking place in Ministries, Commissions, and institutions throughout the world. 72. One example of the attention being given to this area is the International Experts Meeting on Operationalizing the Economics of Sustainable Development hosted by the Philippine Government, 29-31 July 1994. The purpose of this meeting was to provide inputs to the third session of the Commission on Sustainable Development and to assist the Government of the Philippines in its efforts to integrate sustainability in decision-making. This meeting provided the opportunity to discuss the role of economics in relation to sustainable development, and especially in relation to the issues of finance, trade, technology and natural resources. D. Establishing Systems for Integrated Environmental and Economic Accounting 1. Strengthening international cooperation 73. The United Nations Statistical Division (UNSTAT) has proposed concepts and methods of integrated environmental and economic accounting in its recently published handbook on this subject.. The publication is intended to make existing methodologies generally available in order to eventually facilitate a broad consensus on an integrated accounting framework. It reflects the results of international workshops, seminars and expert group meetings, discussing the links between environmental accounting and the System of National Accounts (SNA). The proposed SEEA has been developed as a satellite system of the SNA and is thus fully compatible and comparable to conventional national accounting. 74. The discussion of environmental accounting needs to be continued to strengthen consensus on widely acceptable concepts and methods. At the same time, their feasibility is being tested by implementing the SEEA in several countries at different stages of development. The results of the theoretical discussion and of the empirical work will be used to prepare a revised version of the handbook. 75. High demand for assistance in national and subnational programmes has revealed an urgent need for training in developing countries, impaired by the absence of trainers in this new and emerging area of national accounts. International seminars have been or are being carried out by UNSTAT in collaboration with UNDP, UNEP and the regional commissions in all the regions of the world. Case studies conducted by UNSTAT also include analytical elements to demonstrate the use and application of adjusted macro-economic indicators in planning for sustainable economic growth and development. 76. Early results of case-studies indicate that the information available is limited. Ad-hoc estimates need to be replaced by regular and improved data collection. 2. Strengthen national environmental accounting systems 77. The System of integrated Environmental and Economic Accounting (SEEA) was developed as a satellite system of the 1993 SNA, which already incorporates certain aspects of natural resources accounting. However, it appears in several cases that the initiative of environmental accounting has been taken by agencies such as the Ministries or Departments of Environment or research institutes, rather than statistical services, revealing high demand for integrated accounting information from the user side. Country projects conducted by UNSTAT aim at assisting countries in meeting this demand by establishing the SEEA as a routine system in the national statistical services or other agencies dealing with national accounts. 78. UNDP is collaborating with UNSTAT in an effort to assist governments in integrating environmental accounting in the national accounting process, and to use these accounts as basic information for decision-making regarding development priorities. The programme being developed with UNSTAT will also include components on the application and integration of economic instruments where such can effectively contribute to achieving environmental as well as developmental goals. 79. The World Bank, Eurostat, IMF and OECD have worked closely with the United Nations for the past decade, to better incorporate environmental concerns into the latest revisions of the SNA framework. The FAO Statistics Division is in the process of finalizing the Handbook of Economic Accounts for Agriculture which covers the economic activities relating to agriculture, forestry, fisheries, food and environment, consistent with the concepts recommended by the United Nations' System of National Accounts. Insufficient data and an inadequate concept of measurement for non- reproducible tangible wealth are constraints to the speedy completion of this project. 81. Several countries have experienced considerable progress in implementing natural resource and environmental accounting at a national level. Among the countries are, inter alia, Canada, Finland, France, Indonesia, Japan, Mexico, the Netherlands, Norway, Papua New Guinea, Philippines, Republic of Korea, and the United States. The absence of effective programmes in many countries are often caused by budget restrictions, institutional inertia, the complexity of the issue, lack of expertise and lack of political willingness to integrate environmental concerns into the decision-making process. 3. Establishing an assessment process 82. Once enough countries have conducted pilot studies or national programmes in integrated environmental and economic accounting, the result will be reviewed, with regard both to assessing the results and refining the methodology contained in the SEEA. An umbrella project is envisaged as a joint effort between UNSTAT and UNDP with a view to improving the coordination of national programmes, and the international comparability of adjusted macro- economic indicators. 4. Strengthen data and information collection 83. UNSTAT is focusing its work on three major areas: (1) environment statistics (2) environmental and sustainable development indicators; and (3) integrated environmental and economic accounting. These programmes are expected to improve the data bases for integrated environmental and economic analysis by means of environmentally-adjusted (monetary) economic aggregates and (physical) indicators of environment and sustainable growth and development (see also Chapter 40). 84. ESCAP and ECA have established programmes to develop and implement environment statistics and integrated economic and environmental accounting as well as assisting countries in implementing methodologies through workshops, seminars etc. 85. The conference of European Statisticians has undertaken extensive work on the formulation of the statistical requirements for environmental studies and policies, and on the development of standard statistical classifications in particular areas. An experimental Compendium of Environment Statistics preceded the 1992 Regular Compendium, prepared as part of the establishment of the International Environmental Data Service (IEDS). In the conceptual work, a shift has occurred in the work programme of the Conference of European Statisticians towards (i) statistics on economics of the environment and (ii) physical environmental accounting (the monetary counterpart being dealt with by UNSTAT). 5. Strengthening technical cooperation 86. UNSTAT, UNDP, UNEP and other organizations of the UN system have been providing ad hoc advisory services to selected developing countries and helping to identify financial and substantive support for the implementation of the above activities. IV. Conclusions and Proposals for Action 87. Governments should continue their efforts to establish national commissions for sustainable development and integrated, participatory strategies for sustainable development. In that context, organizations within the United Nations system and other relevant organizations should support this effort through further methodological work, particularly with reference to the following: models for environmental economics; the impact of economic instruments; and the use of integrated economic and environmental accounting. 88. The organizations of the United Nations system, in cooperation with Governments and, as appropriate, non-governmental organizations, should place high priority on actions aimed at supporting national coordination and planning activities related to the implementation of Agenda 21, with particular emphasis on developing frameworks for national strategies in which sectoral plans can be accommodated. 89. Organizations in the United Nations system and other relevant organizations should organize regional level workshops to explore, discuss and further develop methodological approaches to integated planning for sustainable development, drawing upon, for example, work being done in environmental economics, valuation, natural resource accounting, and integrated economic and environmental accounting. 90. UNSTAT and other relevant organizations of the United Nations system, other intergovernmental organizations and non-governmental organizations, should further the work in integrated economic and environmental accounting, particularly with regard to the following: (a) Continuing the methodological development for consensus building; (b) promoting the implementation of national programmes by supporting and motivating national statistical services; and (c) strengthening technical cooperation in this area. In addition, in the medium term, the relevant organizations should: (a) revise international methodologies, notably the United Nations handbook on Integrated Environmental and Economic Accounting; and b. Initiate data collection and dissemination for possible uses in Earthwatch and the envisaged complementary Development Watch.
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Date last posted: 2 December 1999 13:22:30