Economic and Social Council

 Distr. GENERAL
4 March 1996
ORIGINAL: ENGLISH

COMMISSION ON SUSTAINABLE DEVELOPMENT
Fourth session
18 April-3 May 1996


                    Integrating environment and development
                              in decision-making

                        Report of the Secretary-General

                                     SUMMARY

      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 such
efforts by, inter alia, strengthening coordination and establishing a code of
"best practices" on how both to do and to contribute to sustainable
development strategies. 

      The organizations and bodies of the United Nations system, in
cooperation with Governments and, as appropriate, non-governmental
organizations, should place a high priority on actions aimed at supporting
national coordination and planning activities related to the implementation of
Agenda 21.  Guidelines for national execution of projects and programmes
should be published and adopted by all external partners as part of a
harmonization strategy.

      Continued and strengthened support should be given to developing the
legal capacities of developing countries, particularly with a view to carrying
out reviews of national legislation related to sustainable development and to
implementing international legal agreements, as relevant.  

      Further works should be undertaken in integrated economic and
environmental accounting, particularly with regard to (a) continuing
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. 

                                   CONTENTS

                                                              Paragraphs Page

INTRODUCTION ..............................................     1 - 2       3

  I.  POLICIES, PLANNING AND MANAGEMENT ...................     3 - 11      3

 II.  LEGAL AND REGULATORY FRAMEWORKS .....................    12 - 15      5

III.  MAKING EFFECTIVE USE OF ECONOMIC INSTRUMENTS AND
      MARKET AND OTHER INCENTIVES..........................    16 - 17      6

 IV.  INTEGRATED ENVIRONMENTAL AND ECONOMIC ACCOUNTING ....    18 - 22      6

  V.  MAIN TRENDS IN THE FUTURE ...........................    23 - 25      7


                                 INTRODUCTION


1.   Chapter 8 of Agenda 21 (Integrating environment and development in
decision-making) covers four interrelated issues:  (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; and (d) establishing
systems for integrated environmental and economic accounting.

2.   It should be noted that many of the activities contained in chapter 8 of
Agenda 21 are directly related to activities proposed within the context of
chapter 40 (Information for decision-making), in particular the sections on
data and information and on indicators.  Discussion of such activities has
been omitted from the present report.  Similarly, since the reports of the
Secretary-General on changing consumption and production patterns
(E/CN.17/1996/5 and Add.1) and on financial resources and mechanisms for
sustainable development:  overview of current issues and development
(E/CN.17/1996/4 and Add.1), contain discussions of economic instruments, that
material is not repeated here.


                     I.  POLICIES, PLANNING AND MANAGEMENT

3.   A large number of countries have shown a commitment to an integrated
process of decision-making for sustainable development, which is a major
achievement in the aftermath of the United Nations Conference on Environment
and Development (UNCED).  Annex II to the background document relating to the
report of the Secretary-General on chapter 38 of Agenda 21 (E/CN.17/1996/16),
indicates that special institutional arrangements for coordinating issues
related to sustainable development either already exist at the national level
or are currently being planned in 148 countries, approximately 17 per cent of
which are developed countries; 13 per cent, countries whose economies are in
transition; and 70 per cent, developing countries.  Further, while some of
these institutions existed prior to 1992, clearly more than 90 per cent have
been established in response to UNCED.  Other, longer-standing bodies have, in
many cases, been restructured consistent with the requirements set by Agenda
21.

4.   The European Commission has approved a series of internal measures
intended to ensure the integration of environmental considerations in its
proposals on other areas of Community policy-making and is developing internal
methodologies for environmental assessments.  The impetus for sustainable
development policies and strategies arises also from the "pre-accession
strategy" of the European Community, which has recently developed Association
("Europe") Agreements with Bulgaria, the Czech Republic, Estonia, Hungary,
Latvia, Lithuania, Poland, Romania, Slovakia and Slovenia.

5.   Many of the coordinating mechanisms have a responsibility for preparing,
or providing information and consensus-building for, national strategies for
sustainable development.  How coordination is structured varies considerably. 
Some mechanisms are temporary, established for the specific purpose of
preparing a long-term strategy; some have been set up within existing
ministries, where coordination is developed around the preparation of periodic
national strategies; some are interdepartmental committees at the national
level only; some are consultative councils, established at both national and
regional or local levels, connected institutionally; some have both an
intergovernmental committee to coordinate among regions, provinces and States,
and a ministerial committee to provide a more political focus.

6.   In addition, at least among those countries that have submitted national
reports, virtually all of the countries, whether developed, developing or with
economies in transition, include in their coordinating mechanisms
representatives of major groups as either full or advisory members, in
addition to representatives of the relevant line ministries.

7.   Each mechanism has clearly been designed to meet the needs of a
particular political system, and the diversity is proof of the national
ownership of these bodies.  There is no single model, although there are
certain common characteristics recommended by Agenda 21, such as their
interdisciplinary and participatory nature.  At the same time, some have been
more successful than others in influencing policy that is not strictly
environmental.  It would be useful for countries to undertake case-studies of
how - and to what end - they have grappled with such issues as how to
interlink institutional units both horizontally and vertically; how to rank
problems and actions; how to encourage and accommodate popular participation;
how to develop an incentive framework; how to rely on and build capacity at
the same time; how to identify and gain access to the information needed to
make good decisions; and how to establish indicators of sustainable
development for monitoring and review. 

8.   Such case-studies, set in different economic, social and cultural
contexts, could serve as examples and provide some guidance on how countries
might proceed.  Here, countries must find their own way, but they can be
assisted by the international community. 

9.   Another area in which considerable progress has been made is in the
acceptance of environmental impact assessment (EIA).  Of those countries
reporting, almost all of them had mandatory EIA for projects and often
programmes when major environmental implications were anticipated.  Few,
however, included EIA as a part of policy-making.  Revision of already
existing laws and regulations for EIA is taking place in some countries with
economies in transition.  Generally, in all countries non-governmental
organizations are invited to participate in the assessments.  

10.  National strategies are developed at the national level but their content
is heavily influenced by decisions and agreements taken at the international
level.  For example, national decision makers represent countries that are
members of intergovernmental organizations, signatories to treaties and
recipients of loans and financial and technical assistance.  Consequently, at
least four different sets of actors can be identified, all of which may have
an impact on the development of a national strategy.  They include (a)
national decision makers; (b) intergovernmental bodies of relevance to
sustainable development; (c) conferences of the parties to international
conventions related to sustainable development; and (d) donor countries.

11.  The relationship of these different actors to national policies and
plans, as well as efforts under way at national and international levels to
begin to address some of these issues, are discussed in the addendum to the
present report.


                     II.  LEGAL AND REGULATORY FRAMEWORKS

12.  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.  Of those
countries that have provided reports to the Commission on Sustainable
Development this year, many indicate that national sustainable development
strategies have provided a framework for the review of existing legislation
and the drafting of new laws.  A few countries have also prepared framework
laws for this purpose.  In addition, national reviews and revisions of laws
and regulations associated broadly with the environment, including, for
example, issues of air and water pollution, waste disposal and recycling, and
biodiversity, are increasing, largely in the context of national environmental
strategies.

13.  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 on sound social,
ecological, economic and scientific principles.  Programmes also need to be
established to review and ensure compliance with the laws, regulations and
standards adopted.  There are an increasing number of efforts to address this
problem, by both national and international actors, but the task is immense
from both a methodological and an institutional perspective.  The challenge is
to view the problem in a holistic and integrated fashion, which is generally
contrary to the way legislation is passed and regulations are constructed.  

14.  Capacity-building of the relevant institutions is a prerequisite in many
cases.  This is taking place, but the resources are insufficient to the task. 
Coordination machinery, not only to relate laws to each other but also to
relate the obligations incurred under international law to national law, is
also essential.  Of those countries responding, almost all indicated that such
coordination does take place, generally either through interministerial groups
or in line ministries.

15.  Implementation of international legal instruments at the national level
varies.  Constraints to implementation are predominantly a function of
financial and human resources.  The trend towards both differentiated
responsibilities and the provision of resources and technology is likely to
increase the ability of developing countries to meet their legal obligations. 
Of note is the indication that national legislation to implement international
legal agreements may be applied to foreign companies operating in the country
(including multinationals, for example) less rigorously than it is to domestic
companies.


              III.  MAKING EFFECTIVE USE OF ECONOMIC INSTRUMENTS AND
                    MARKET AND OTHER INCENTIVES

16.  Policies, plans and legislation are important but cannot alone be
expected to deal with the problems of environment and development.  Prices,
markets and governmental fiscal and economic policies play a complementary
role in shaping attitudes and behaviour.  

17.  These issues are discussed at length in two reports of the Secretary-
General that are before the Commission.  The addendum to the report on
changing consumption and production patterns (E/CN.17/1996/5/Add.1) reviews
instruments and approaches of particular relevance to that topic, including,
for example, extended producer responsibility, ecolabelling schemes, pricing
signals, public procurement, ecological tax reform, recycling and so forth. 
The addendum to the report on financial resources and mechanisms for
sustainable development (E/CN.17/1996/4/Add.1), evaluates the performance of
such economic instruments as pollution taxes, natural resource taxation and
emission trading schemes; subsidies; and approaches to strengthening the
revenue base of national environmental funds.  Innovative mechanisms for
financing the protection of the global environment are also discussed.


             IV.  INTEGRATED ENVIRONMENTAL AND ECONOMIC ACCOUNTING

18.  Integrated environmental and economic accounting seeks to integrate
environmental issues into conventional national accounts.  Conventional
national accounts have provided indicators for assessment of economic
performance and trends for a number of years, but the emphasis on integrating
environmental information into this process is relatively new, and it remains
somewhat controversial.  Among other areas, disagreement centres on which is
preferable:  monetary economic accounting through economic valuation of
environmental costs or benefits, or physical environmental accounting.

19.  A number of countries have attempted to develop systems of integrated
environmental and economic accounting.  Efforts in developed countries are
generally proceeding either on an individual country basis or through the work
of the Statistical Office of the European Communities (EUROSTAT); in eight
developing countries, projects are under way with the support of the United
Nations Statistics Division, the World Bank, the United Nations Development
Programme and the United Nations Environment Programme.  Pilot case-studies on
the application of techniques of integrated environmental and economic
accounting are taking place in three of these countries.  One country whose
economy is in transition has initiated a project on environmental resource
accounting.

20.  In the absence of an international consensus on how to incorporate
environmental assets and the costs and benefits of their use into the
internationally adopted System of National Accounts (SNA), the United Nations
Statistics Division developed a System for Integrated Environmental and
Economic Accounting (SEEA) as a satellite system of the 1993 SNA.  The SEEA
was presented in the handbook Integrated Environmental and Economic
Accounting, 1/ published in 1993.

21.  The World Bank supported the development of the SEEA and the handbook
during the early 1990s.  It then did further work on a genuine savings
measure, to be calculated within SEEA.  In an attempt to improve the empirical
base for decision-making, the World Bank recently published the first edition
of Monitoring Environmental Progress, which explores the strengths and
weaknesses of existing indicators and suggests avenues for further
development.

22.  Over the next two years, EUROSTAT will develop satellite accounts for the
system of national accounts, focusing on "environmental expenditures" and
depletion of marketed natural resources.  Certain financial information will
also be put in the context of associated physical measurements.  Related to
this is a project to develop a series of 10 environmental pressure indices. 
These combined with economic data will eventually be the first step to create
"green" SNA satellite accounts.  These two activities led by EUROSTAT,
together with a programme of research into the different valuation problems
found in trying to assess environmental damage, constitute an effort to put
"solid numbers on sustainable development". 


                         V.  MAIN TRENDS IN THE FUTURE

23.  At the national level there appears to be a trend towards a more
integrative approach to decision-making, although this has not always taken,
and will not necessarily take, the form of comprehensive sustainable
development strategies.  More attention, however, is being given at national,
bilateral and international levels to coordinating sectoral and "special
interest" plans, strategies and targets in a manner aimed at achieving
consistency, efficiency, effectiveness and movement towards an integrated goal
of sustainable development.  There is also considerable evidence that
decision-making at the national level is opening itself up to broader and, in
some cases, more decentralized participation.

24.  Less appears to be under way in the area of national legal and regulatory
frameworks.  Whereas most countries already have some process in place to
develop integrated strategies and develop plans on a regular basis, fewer have
comparable routine processes in the area of law.  Legislative reform requires
a strong cadre of people trained in law and well versed in the demands of
sustainable development.  There is no evidence that these cadres exist to any
great extent in most countries.

25.  Integrated environmental and economic accounting is likely to increase in
use, at least on pilot and experimental bases.  The challenge will be for the
necessary methodological work to keep pace with the attempts to implement it
at the national level.


                                     Notes

     1/  United Nations publication, Sales No. E.93.XVII.12.


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Date last posted: 3 December 1999 10:25:35
Comments and suggestions: DESA/DSD