United Nations
Commission on Sustainable Development

Background Paper


                                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
Comments and suggestions: DESA/DSD