United Nations Environment Programme (UNEP)
Environment Outlook-1 - The Web version

Chapter 3: Policy Responses and Directions

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Latin America and the Caribbean

Regional Initiatives

The last years have witnessed the growth and strengthening of subregional agreements, initiatives, and alliances in LAC. While these have mainly aimed at developing and promoting regional economic and social issues, they also incorporate environmental and sustainability issues. Such agreements include the Andean Pact (Pacto Andino), MERCOSUR, the Andean Corporation for Promotion of Development (Corporación Andina de Fomento), the System of Central American Integration (Sistema de la Integración Centroamericana), the Initiative for the Americas (Iniciativa para las Américas, which includes the United States and Canada), and the North American Free Trade Agreement (NAFTA, which includes Mexico).

Box 3.16.

Green Accounting

A number of countries in LAC, including Chile, Colombia, Costa Rica, and Mexico, are using some form of green accounting or natural resource accounting. Green accounting addresses the shortcoming of traditional national accounting, known as the System of National Accounts (SNA). Green accounting is based on the concept that a proper assessment of a country's income and wealth needs to account for the contributions of activities made by all sectors of the economy and their impact on resource depletion and degradation. Traditional SNA ignores the value of resources (on and in the ground) as well as the value of environmental degradation. Therefore, it gives a false impression of income and wealth and often leads policy-makers to ignore or destroy the environment to further economic development. Incorporating the real value of natural resources as well as their depletion and degradation allows for better allocation of priorities, thereby helping to address the causes of current major environmental problems including the over-exploitation of natural resources such as forests.

To date there have been two main approaches to green accounting. The first approach is to create separate or "satellite" accounts alongside the traditional national accounts, which capture changes in natural resources but do not integrate them within the framework of the traditional SNA. Satellite accounts are the most common form of environmental accounting now in use. These accounts allow for the valuation of resource use and depletion as well as estimations of expenditures for environmental protection to be made. This valuation allows countries to maintain accounts of annual resource use and depletion. While satellite accounts are linked to the existing system of national accounts, they are not an integral part of them.

The other approach is to integrate environmental accounts with the traditional SNA. For this approach, countries must modify their existing system of national accounts to incorporate environmental assets, such as subsoil reserves. The integration of natural resources, however, is limited to easily valued resources (such as oil, coal, and timber) and as yet does not account for all environmental aspects, particularly environmental pollution.

The United Nations Statistical Division (UNSD) is co-ordinating the development of a more all-encompassing and integrated green accounting system. In the early 1990s, UNSD proposed a new accounting framework called the Integrated System of Environmental and Economic Accounts (IEEA). The system integrates environmental issues into conventional national accounts. Some countries, such as Colombia and Mexico, have experimented using this system, although in parallel to the traditional SNA rather than as the traditional system. In the long run, the IEEA system could replace the traditional SNA and thereby make the environment an integral part of national accounting systems.

From green accounting systems such as the IEEA, green indicators can be developed to augment traditional economic indicators such as GDP. Green indicators take into account the environment, while traditional indicators such as GDP, drawn from the traditional national accounts system, have little or no consideration for the environment. The eco-domestic product (EDP) is one such green indicator-an environmentally adjusted measure of net domestic product. EDP helps to highlight the value of resource depletion missed by GDP. For example, a country that exports minerals but has limited remaining reserves would show an EDP that is significantly lower than its GDP. Such green indicators would serve as an aid to policy setting and enable more informed decision-making regarding resource allocation and economic development. Of course, better accounting does not necessarily result in better environmental policies.

In recent years, some specific environmental treaties, conventions, and agreements have also been signed, including the Treaty of Amazon Co- operation (Tratado de Cooperación Amazónica), the Caribbean Convention for Environmental Protection, the Caribbean Action Plan for the Sustainable Development of Island States, the Program of Action for Tropical Forestry (Programa de Acción Forestal Tropical), and the Permanent Commission of the South Pacific (Comisión Permanente del Pacífico Sur).

In Central America, the treaties and alliances include the Central American Alliance for Sustainable Development (Alianza Centroamericana de Desarrollo Sostenible), the Central American Commission of Environment and Development (Comisión Centroamericana de Ambiente y Desarrollo, CCAD) (see Box 3.17), and the Central American Council of Forests and Protected Areas (Consejo Centroamericano de Bosques y Areas Protegidas). With the signature of NAFTA, a North American Commission on Environmental Cooperation has also been created to guarantee that the free trade agreement does not harm the environment.

These alliances, agreements, and commissions indicate growing recognition of the need to confront environmental problems at a regional level and to jointly plan the sustainable use of regional natural resources. Large ecosystems, such as Amazonia, the Andes, the Central American tropical forests, the Southern Pacific, and the Caribbean small island states are similarly considered. The treaties also serve as vital catalysts in sparking international co-operation among NGOs, Governments, and international institutions in designing and implementing environmental policies. Regional and subregional alliances have also played a fundamental role in the preparation of technical documents establishing guiding principles, appropriate management procedures, and strategic policies on regional environmental issues (CCAD, 1992; CDEA, 1992; CDMAALC, 1991; UN, 1994).

An example of the co-operation initiated by these agreements is the Treaty of Amazon Co-operation (Tratado de Cooperación Amazónica). With its signature, a Special Commission for the Amazonian Environment was created in 1989, which operates eight environmental programmes in different countries. Important efforts such as the Amazonian Network of Protected Areas (SURAPA) operate as a result of these programmes, allowing for co-ordination of subregional efforts. Through their joint environmental programmes, the Caribbean Countries played an extremely important role in the preparation of the Programme of Action for Small Island States presented at UNCED, and in the organization of the Global Conference on the Sustainable Development of Small Island States held in Barbados in 1994. These two events have played a major role in raising awareness and promoting discussion on the critical problems of sustainability for small island states.

Another positive programme that has emerged from the plethora of agreements in Central America is the Alliance for Sustainable Development (Alianza Centroamericana de Desarrollo Sostenible). Initiated in October 1994 by the seven Central American Presidents, this has been instrumental in promoting co-ordinated bilateral or multilateral actions for the management of protected areas, particularly those located along national borders, through the establishment of neighbouring reserves and biological corridors spanning borders. The Alliance has emerged as a forum in which various interested parties discuss and identify priority actions. In 1995, for example, to implement the forestry, biodiversity, and environmental law commitments made by Alliance signatories, CCAD and The World Conservation Union (IUCN) convened a planning workshop in Panama to identify priorities and collaborating organizations across the region. Some 100 representatives from Governments, NGOs, the business sector, research institutions, and grassroots organizations from the seven Central American countries attended (WRI, 1995).

There is also an annual Meeting of the Ministers of the Environment for LAC organized in co-operation with UNEP's regional office for LAC. Its main objectives, as reiterated at the Ninth Meeting in Cuba in 1995, are fourfold: to guide the implementation of the environmental agenda of LAC; to identify opportunities for regional co- operation in environmental matters conducive to the implementation of Agenda 21; to propose measures to achieve greater effectiveness and coherence in the regional planning and implementation of the environmental agendas of international agencies; and to reach agreement on common positions concerning topics of importance to the international environmental agenda with implications for the LAC region (UNEP, 1995a).

Box 3.17.

Central American Commission for Environment and Development (CCAD)

The Central American Commission for Environment and Development (CCAD) is an excellent example of regional-level policy setting in Central America. It was created in 1989 by the Presidents of Central America and is composed of the heads of the ministries and agencies most directly responsible for environmental policy in each of the seven Central American countries.

The organization seeks to influence regional decision-makers by facilitating the exchange of information and by providing a forum in which different interest groups can address specific regional issues. CCAD's principal mission is to promote policy co-ordination, develop new funding, build institutional capacities, make information available, and foster citizen participation in addressing the region's pressing environmental and development problems.

CCAD has expanded from mainly a forum for discussions of issues of common concern among Ministers responsible for the environment to an organization involved in planning related to regional environmental and development issues. The Commission is now building its capacities to gather, organize, and distribute information on environment and development in Central America.

CCAD brings together representatives of Governments, NGOs, grassroots groups, and international institutions to discuss and analyse problems and develop policy recommendations and action plans. It has designed a consultation methodology for elaborating action plans and international conventions across the region. Hundreds of individuals representing diverse interests discuss and rank policy proposals for consideration by Presidents and Parliaments.

Examples of policies discussed include the Central American Tropical Forest Action Plan (PAFTCA) sponsored by CCAD in 1991. This initiative has drawn technical and financial support for better forest management. The Forest Action Plan included the Regional Convention for the Management and Conservation of Natural Forest Ecosystems and the Development of Forest Plantations. Signed in 1993, the convention provides a framework for policy and institutional reform in the forestry sector.

To pave the way for legal reform across the region, CCAD helped create other regional bodies to bridge gaps between Governments and civil organizations. The Central American Inter-Parliamentary Commission on the Environment (CICAD), for instance, brings together representatives of the legislatures from the seven countries to press for ratification of international conventions and policy reforms in national congresses.

Acting on reports of toxic waste dumping, CCAD and CICAD joined forces to help set up regional networks of NGOs and Government bodies to monitor the dumping of wastes. Late in 1992, the seven countries signed an agreement to ban the importation or international transport of a wide range of hazardous materials. Coupled with the networks' information and public education campaigns, the ban is making illegal waste dumping difficult in the region.

Other legal and institutional co-operation mechanisms within CCAD's area of competence are the Central American Convention on Climate Change (signed in May 1995), the Central American Convention on Biodiversity (signed in June 1992), and efforts to promote the adoption of the Central American Development Strategy or Central American Alliance for Sustainable Development in 1994. More recently, CCAD has participated in the creation of the Central American Fund for Environment and Development.

Throughout Central America, CCAD is also helping strengthen national environmental agencies to foster public participation in decision-making. In 1994, it initiated a project to train the staff of Government environment agencies in Central America in participatory methods for policy formulation.

CCAD has access to the highest levels of policy-making. This accounts for its success in getting NGOs, Ministers, and Presidents to endorse its initiatives and proposals. The prestige that Presidential support affords CCAD, the organization's commitment to democratic processes, and its policy to remain small and agile are instrumental to its success.


WRI. 1995. Policy Hits the Ground: Participation and Equity in Environmental Policy. World Resources Institute. Washington.

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