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Chapter One: Global Perspectives


Environmental policy issues

Regulation is still the core instrument of environmental policy. The industrialized countries enacted a 'first generation' of legislation in the 1960s and 1970s, aimed principally at protecting human health from the impacts of air, water and soil pollution. In the 1990s, many countries reformed their sectoral environmental approaches into better integrated strategic policies. Comprehensive environmental protection laws are now in place in the newly industrializing countries and other developing countries. Legislation concentrates on standards, bans, permits and quotas and, in some cases, specification of technologies or technical standards to be used in industry. These instruments have long been favoured because they promise certainty of outcome - though without costly monitoring and enforcement, this promise may not be realized.

Recognizing that regulation will be ineffective if poorly drafted, or not supported by adequate inspection and enforcement agencies, some developing country governments, notably in the Asia and Pacific region, have also increased their spending on environmental personnel. For example, the annual increase in the number of officials in central environment agencies in the Asian newly industrializing economies during 1989-94 was 7.6 per cent, compared with 4.7 per cent in all government organizations (ESCAP/ADB 1995). Command-and-control legislation has its limitations, however - notably the time needed to draft, enact and implement adequate laws, the inflexibility of regulation and possible cost-inefficiencies in implementation on the ground. In addition, problems with inspection and enforcement, especially in rapidly developing nations, appear to be worsening as limited capacity and resources face an explosion of industrial activity and urbanization.

The use of economic instruments for environmental management is gaining acceptance in the OECD countries and, increasingly, elsewhere. The most recent survey by the OECD Environment Directorate indicates that the number of economic instruments used by member states for environmental protection has increased by nearly 50 per cent over 1987 levels (OECD 1997).

There is also a clear trend towards the integration of environmental policy-making into the broader sphere of sustainable development. Following the Rio Earth Summit, many countries established their own national councils for sustainable development to address sustainability issues and coordinate national responses to the United Nations Commission on Sustainable Development (UNCSD). These bodies have been set up in more than 130 countries since 1992, and more than 50 countries have initiated official government mechanisms to formalize participation with the public and other stakeholders.

This increasing involvement of civil society alongside the public and private sectors is a significant new development in environmental governance. In North America, for instance, there were civil society consultations in late 1996 leading to the Hemispheric Summit of the Americas on Sustainable Development. Civil society groups in many parts of the world are involved in community indicator networks, watershed-based initiatives, efforts by the International Council for Local Environmental Initiatives, Habitat's network of community initiatives, and the environmental activities of indigenous people's and women's movements. This localization of national and global initiatives is an appropriate way to tackle many types of environmental problems and should become increasingly important in the future.

On the other hand, a worrying trend has emerged with the recent decline in environmental expenditures in many countries in the face of budgetary constraints. More positively, intergovernmental processes have not lost momentum. The series of United Nations conferences and summits on key issues of development, notably those concerned with environment and development (UNCED 1992), with small island developing states (SIDS 1994), population (ICPD 1994), human settlements (Habitat II 1996) and food security (WFS 1996), all explicitly addressed the role of natural resource conservation and environmental quality in achieving broadly-based development goals. A high degree of international consensus now exists on the principles and frameworks for action, although the practicalities of implementation remain an immense challenge. In a new pilot initiative, the United Nations Development Assistance Framework (UNDAF) has been launched in an attempt to provide a common framework for all development funds, programmes and agencies of the UN system (see box). The exercise also aims to improve coordination of follow-up action to global conferences and relevant decisions of the General Assembly.

 UN Development Assistance Framework

The United Nations Development Assistance Framework (UNDAF) is a key component of the Secretary-General's reform proposal. Action 10 (a) of his Renewing the United Nations: a programme for reform states:

'In order to achieve goal-oriented collaboration, programmatic coherence and mutual reinforcement, the United Nations programmes of assistance will be formulated and presented as part of a single United Nations Development Assistance Framework with common objectives and time-frame. Programme funds managed by each of the programmes and funds will be included in the document, but remain clearly identifiable. Preparations would entail collaborating programming and close consultation with Governments, including compatibility with Country Strategy Notes wherever they exist.'

In August 1997, the United Nations Development Group initiated a pilot phase to test the operationalization of Action 10 (a) in 18 countries. The experience gained will be used to guide the implementation of the UNDAF process in other countries.

Source: UNDG (undated)


One challenge is to develop integrated approaches to planning and analysis. A key constraint to the emergence of strong sustainability institutions is the fragmentation of research into disciplines, government units into sectors, and so on. Designing frameworks for linking across subjects and sectors, over various spatial scales, regions and themes, to give a more integrated perspective, is becoming essential to a full understanding of the planetary and human environments, as the range of subjects treated in this report illustrates. Just as important is the development of a cadre of trained professionals in integrated environmental assessment, equipped with appropriate analytical tools and models, and supported by global observing systems and other data collection processes. These will be important ingredients in the institutional preparations for sustainable development.

The concept of development

 Measures of poverty

(Click image to enlarge)

Source: UNDP 1997

Many millions of people still suffer from different forms of poverty; more than 1 300 million are 'income-poor' and have to live on less than US$1/day

The concept of development was defined in the 1950s and 1960s as a largely economic process, in which wealth would trickle down and improve human welfare. Today this has now given way to much broader definitions of development. UNDP has focused on human development and issued a series of Human Development Reports exploring critical issues such as gender inequality, growth, poverty and consumption patterns (UNDP 1998 and previous years). It also calculates a human development index based on life expectancy, adult literacy, school enrolment and GDP per capita (see bar chart). The Rio Earth Summit in 1992 defined sustainable development, through its action plan Agenda 21, as a multifaceted process involving the full range of environment and development issues and requiring the participation of governments, international organizations and major groups. The World Bank has expanded its definition of wealth to include produced assets, natural capital, and human and social capital, with the latter generally being the major component of national wealth (World Bank 1997b).

 Human Development Index

(Click image to enlarge)

Note: not all regions correspond with those of GEO-2000

Source: UNDP 1997

UNDP's Human Development Index is a composite index based on life expectancy, educational attainment and income

Efforts to develop indicators of sustainable development have raised the challenge of defining such a broad subject through quantitative measures. The countries pilot testing national indicators of sustainable development in support of the UNCSD programme on indicators find they need at least 50 indicators to cover the major dimensions of sustainability (Government of the Czech Republic 1998). The UNCSD study calls for economic, social, environmental and institutional indicators covering driving forces, states and responses across all the programme areas of Agenda 21, with 134 indicators identified in the first phase. These activities have made clear how many dimensions there are to development. They also highlight the need to develop clearer targets and goals, and new indicators for the less tangible aspects of development including individual welfare, community cohesion, institutional development, knowledge and culture.

Science and research

The role played by scientists in advising intergovernmental policy processes on sustainable development has expanded rapidly. A number of international scientific research programmes for the global environment, such as the International Geosphere-Biosphere Programme, the World Climate Research Programme and the International Human Dimensions of Global Change Programme, are addressing the challenging questions raised by global change and human pressures. At the level of operational information gathering, an increasing number of national institutions and experts are contributing to the global monitoring efforts of the different global environmental observing systems: the Global Climate Observing System, the Global Ocean Observing System and the Global Terrestrial Observing System.

Scientists are also playing an increasing role in policy advice via participation in bodies such as the Intergovernmental Forum on Chemical Safety, the Intergovernmental Forum on Forests and the subsidiary scientific and technical bodies under the climate change, biodiversity and desertification conventions. These bodies provide scientific and technical input to intergovernmental negotiations and the implementation of multilateral environmental agreements.

A third role which has grown rapidly in importance is that of the independent scientific assessment processes; notable examples include the Intergovernmental Panel on Climate Change and the Joint Group of Experts on Scientific Aspects of Marine Environmental Protection (Fritz 1998). These activities are being stimulated by the concept of sustainable development, with its emphasis on the integration of environmental, economic and social concerns. A concept of 'new national systems of innovation' is emerging, which favours more interaction among universities, scientific research organizations, government agencies and the private sector. The net result should be an improvement in the scientific basis of policy-making (UNCSD 1998a).

While such research and improved environmental monitoring must continue, the need for further study should not be taken as an excuse for postponing action on critical environmental problems. In almost all areas, there is enough knowledge to initiate actions such as reducing harmful subsidies or organizing public/private partnerships for resource management. New information from research can then help to refine policy action. There is a particular need for more observations and information to improve the monitoring of policy effectiveness and to strengthen accountability.

Business and industry

Recent years have brought greater recognition of the complexity of environmental issues, and some withdrawal of government from the detailed oversight of industrial operations. Instead of legislative micro-management, objectives are set and the details of implementation left to industry. The response has been a trend towards greater corporate responsibility, realized through self-regulation, corporate environmental policies, voluntary codes of practice (such as the chemical industry's Responsible Care Programme), and the use of environmental audits and open reporting. Such initiatives are becoming more mainstream, particularly now that the total quality management concept has been extended to the environmental sphere through systems such as the European Union's Environmental Management and Audit Scheme (EMAS), the British Standards Organization BS7750 and the ISO 14 000 series of management standards.

 The economics of cleaner production

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Source: Rabobank 1998

Many companies are pioneering cleaner production systems under the rubric of 'industrial ecology', which aim to close substance loops and thereby reduce or eliminate toxic pollution and waste generation. Cleaner production has proved popular in industry, at least partly because the costs of this approach tend to diminish over time, while the costs of controlling pollution and cleaning up after the event become increasingly high as new regulations are introduced (see graph). A range of new tools, such as the eco-compass (diagram below), has been produced to aid in the ecodesign of new products and improve the environmental performance of existing products.

 The eco-compass

The eco-compass developed by Dow Europe is a useful tool for assessing the environmental impact of a product. The assessment is made by constructing a series of concentric hexagons, with each corner representing a different environmental dimension. These are (moving clockwise from the top of the diagram):

*  service extension (for example making products last longer);
*  revalorization (re-manufacturing, reuse and recycling possibilities);
*  resource conservation (renewability of materials used);
*  energy (consumed per unit of production);
*  material intensity (weight of resources used per unit of production);
*  health and environment (risks to people and ecosystems).

The concentric hexagons represent scores of 0-5, starting with 0 at the centre and 5 at the perimeter. All uses of the eco-compass must start with a baseline product, which is given a score of 2 on all six dimensions. The product to be compared is then evaluated on a factor basis for each dimension - for example, if the manufacture of the baseline product uses 100 kWh of energy per unit of production, and the new product uses only 25 kWh, the new product scores a factor of four. When scores are plotted for all six dimensions, the eco-compass takes on a new shape, making it easy to compare its environmental performance with that of the baseline.

Source: Fussler 1996, Rabobank 1998


Many of these initiatives are being undertaken in partnership with national governments or international organizations. During the 1998 UNCSD session, the Secretary-General of the International Chamber of Commerce reaffirmed the organization's commitment to bringing the 'financial, managerial and technical expertise' of industry and business to sustainable development. However, industry representatives emphasized that the sector is looking to governments to establish appropriate frameworks, such as legal and fiscal incentives, which would encourage speedier introduction of clean technologies and other measures (UNCSD 1998b).

Industry's environmental performance is being increasingly held to account by the general public. NGOs are emerging as unofficial industry 'watchdogs', in countries such as the Philippines as well as in more traditionally activist regions such as North America. Greater public scrutiny is being facilitated by right-to-know legislation enacted in many places, including Canada, the United States and the European Union. The Århus Convention on Access to Information, Public Participation in Decision Making and Access to Justice in Environmental Matters adopted in June 1998 is a good example.

Despite progress, however, there is often a gap between the environmental concern and performance of leading multinationals and large companies, and that of small and medium-sized enterprises (SMEs). The largest companies have both the resources to invest in environmental action and the visibility to motivate such action. Small companies, which represent a major part of industrial activity around the world, have neither. How to get the positive experience of businesses at the cutting edge of environmental involvement to filter down to the mass of industrial activity in SMEs below them is one of the unresolved challenges of the moment, though attempts are being made (EEA 1998).

 The UNEP Financial Services Initiative on the Environment

The UNEP Financial Services Initiative on the Environment is intended to help integrate environmental considerations into all aspects of the financial service sector's operations. A core part of the initiative is to foster endorsement of both the UNEP Statement by Financial Institutions on the Environment and Sustainable Development (written in 1992, revised 1997) and the Statement of Environmental Commitment by the Insurance Industry (1995), which commit signatories to incorporating environmentally-sound practices into their operations. More than 100 financial institutions and 80 insurance companies, from more than 25 countries, have signed their respective statements.


Service industries are also becoming more engaged in environmental issues. A recent survey of financial institutions worldwide indicates that the sector now has a high awareness of environmental issues. Respondents to the survey believed that environmental issues will become increasingly integrated with core business activities over the next decade, and that financial institutions will be more likely to look for transactional opportunities with environmentally-related businesses (UNEP 1995). Banks and other lending institutions are now considering 'environmental risks' alongside more traditional banking risks, and many lenders now operate screening practices as part of their asset management (OECD 1998 and 1997).

The insurance industry is another sector taking an active interest in environmental and sustainability issues. Liability for clean-up costs is one risk, and climate change from global warming is seen as a potentially serious threat to the industry's financial stability. Economic damage from weather-related disasters exceeded US$200 000 million during 1990-96, four times the total losses for the previous decade (Worldwatch Institute 1997). In 1995 the insurance industry, aided by UNEP, produced a Statement of Environmental Commitment which promised - or warned of - greater attention to environmental risks in core activities such as loss prevention, product design, claims handling and asset management (UNEP 1998).

Employment policies and changes

High technology is promoting the emergence of 'post-industrial' economies in the wealthier OECD countries, which are characterized by shifts away from heavy industry and manufacturing, towards services, high-technology industries such as software, and the cultivation of high value-added niche markets. The resulting decentralization, labour mobility, personal flexibility and higher skill levels requires a transformation of work force skills and working habits. Unfortunately, the industrial transition is occurring more rapidly than the adjustments that the labour market can make, leading to considerable structural unemployment, labour unrest and social tensions. Nevertheless, opportunities abound to reduce the environmental pressures created by more traditional work patterns dependent on commuting by private car and working in energy-intensive commercial buildings. For example, traffic congestion and air pollution might be reduced through encouragement of telecommuting, or on-line working. Another trend is the expansion of employment opportunities in the relatively new sector of environmental technologies and services, which have risen dramatically since the 1980s. In 1990, the environmental equipment and services industries and environment-related activities in the OECD countries employed nearly 8 million people (OECD 1996).

Consumer awareness and information

 Towards sustainable fish and forests

The Marine Stewardship Council

The World Wide Fund for Nature (WWF) formed a conservation partnership with Unilever in 1996 to create market incentives for sustainable fishing by establishing an independent Marine Stewardship Council (MSC). The MSC's mission is to work for sustainable marine fisheries by promoting responsible, environmentally-appropriate, socially beneficial and economically-viable fisheries practices while maintaining the biodiversity, productivity and ecological processes of the marine environment. 

The Council is establishing a set of globally-agreed principles and criteria for sustainable fishing, developing a process for international implementation and conducting test cases for certification of fisheries.

Only fisheries meeting these standards will be eligible for certification by independent, certifying firms accredited by the MSC. Products from fisheries certified to MSC standards will be marked with an on-pack logo. This will allow consumers to select fish products that they know come from sustainable, well-managed sources, thus creating a market incentive for industry to shift to sustainable fishing practices.

The Forest Stewardship Council

The Forest Stewardship Council (FSC) was founded in 1993 to support environmentally-appropriate, socially beneficial and economically-viable management of the world's forests. It is an association of Members consisting of representatives from environmental and social groups, the timber trade and the forestry profession, indigenous people's organizations, community forestry groups and forest product certification organizations from around the world.

The FSC is introducing an international labelling scheme for forest products, which provides a credible guarantee that the product comes from a well-managed forest. All forest products carrying the FSC logo have been independently certified as coming from forests that meet the FSC Principles and Criteria of Forest Stewardship. Forest inspections are carried out by FSC-accredited certification bodies. Certified forests are visited on a regular basis to ensure they continue to comply with the Principles and Criteria.

The FSC also supports the development of national and local standards that implement the international Principles and Criteria of Forest Stewardship at the local level. These standards are developed by national and regional working groups which work to achieve consensus amongst those involved in forest management and conservation in each part of the world. FSC has prepared guidelines to help working groups develop regional certification standards.

Source: MSC 1999 and FSC 1998


Thanks to widespread economic growth, 3 000 to 4 000 million people have experienced substantial improvements in their incomes and standards of living since the 1960s (UNDP 1997). Overall consumption, unsurprisingly, has risen dramatically to what is probably an unsustainable level. Nevertheless, there are encouraging signs of real interest among consumers in more environmentally-sustainable products and services, and a growing number of initiatives by business and NGOs to supply this new market. For example, concerns over declining fish stocks have prompted Unilever and the World Wide Fund for Nature to form the Marine Stewardship Council, which will establish industry-wide principles for sustainable fishing (see box right). Fish harvested according to the Council's standards will be eligible for certification, or eco-labelling, so that consumers can choose to buy the more sustainable product. A similar certification scheme has been launched by the Forest Stewardship Council to guide consumers towards wood products from sustainably managed forests. A number of cooperative organizations have sprung up to promote the 'Fair Trade' movement, which aims to achieve fair prices for small farmers who produce coffee, fruits or vegetables using environmentally-friendly methods. Such products are beginning to move from niche markets to the mainstream: Fair Trade coffee, for example, now commands five per cent of the UK market (IIED 1997). A small but influential number of companies has taken the decision to 'green' their product lines, for example, through the use of organic cotton in clothing.

There are also the other third of the world's people, the poor who have not benefited by improved standards of living. They need to be empowered with the knowledge and minimal resources necessary to ameliorate their own situation in ways that are also environmentally sound and sustainable. The benefits of environmental science and management should not be reserved only for the well-to-do and educated, but should also be translated into forms accessible to all the world's population.

Agenda 21 and subsequent declarations stress the critical role of education in instilling greater understanding of the concept of sustainability in the next generation. 'Greener' and more integrated educational systems can foster appreciation of the ways in which economic, social and ecological systems are interdependent. In an increasingly urbanized society, the formal educational system is called upon to replace environmental learning that once took place through direct contact with nature. Progress so far appears disappointing, however. It is difficult to introduce new subjects into school curricula, and limited change is visible in most university curricula (UNU 1998), although there has been rapid growth in the specialized environmental courses now offered by universities throughout the world. The mass media have played an important role in raising public awareness on the environment, especially in relation to disasters, but environmental coverage is still superficial and scattered.

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