Policy Options in Developing and Developed Countries

 

Policy Options in Developing and Developed Countries

What Developing Countries

Orange of policy options is available for governments in developing coy
even stand out (proper resource pricing (4) community involvement
clearer property rights and resource ownership, (4) improving economic
naves tor en poo, 9) raising the economic status or women, (6) policies’
abate industrial emissions, and (7) taking a proactive stance toward adapting
to climate change. Let's briefly examine each in tum.

Proper Resource Pricing he most obvious area tor reform is probably
enmeshment pricing policy, including subsidies, which can exacerbate to
Shortages or encourage unsustainable methods of production. Source
grams that were ostensibly designed to reduce hardships tor the very Don
have had little impact on poverty Ana nave Wolsey he-qualities,
High-income households have frequency Deena tine predominant beneficiaries
of environmentally damaging ener8Y wate, and agicultural subsidies. For

example, on average in developing countries, tne price paid for piped .water
is less than the total cost of supplying it. Due to ratonn ucn subsidies fre-
quently benetit only people with higher incomes. Much public water is sim
ply stolen-often by wealthy individuals. 1he result has often been a wasteful
and unsustainable use of resources. Even though elimination of misdirected
subsidies is a relatively costless (or proitable) way or protecting the environ-
ment, the political stakes are high where powertul eites stand to lose lucra-
tive government transfers.

Community lnvolvement Programs to improve enyironmental conditions
are likely to be most effective when they work in tandem with community net
Works, ensuring that program design is consistent with both local and national
objectives. The experience of development agencies has demonstrated that grase
roots efftorts can be more cost-etfecive because they generaly involve the use of
low-cost alternatives and provide jobs to local populations. When poor ocommu
nities truly benefit from public-wOrks programs, residents are often willing and
able to contribute much of the program costs. linstitutions facilitating coopert
tive management of common property resources can also be encouraged

Clearer Property Rights and Resource Ownership Investments in houSe
hold sanitation and water and on-farm improvements often represent a, lage
portion of lifetime savings for the poor, the loss of which can impose harsh eu
nomic consequences on households. Hence, the lack of secure tenure on ruta
or urban property can greatly hinder investment in environmental upgra
Legalizatnon of tenure can lead to improved living conditions for the pour a
increases in agricultural investments.
n many cases, hOwever, land reform may be necessary (SCe apeom
1S not uncommon for renters or sharecroPpers to lose the economc g
tneir farm investments because it is relatively easy for landlords tong
higher rents once the productivity of the land has been improved. irans


title to ternants may be the oniy means ot ensuring that financial rewards from
land-augmenting investments accrue to the inv
requned Where unequal distribution of land has lod 1 ls0 De
ivated high-quality land in close proximity too or uncul
ulavated by large numbers of landless workors 1 8nal lands
mmon property resource use is to continue, well-dosim

cies will be needed, taking into account what has hoon 1 g po
ditions in which they are moOST erective (see box 10.3).

will be needed, taking intO account what has been learned about te co

Programs to mprove the Economic Alternatives of the Poor Further
environmental devastation in rural areas may De avoidable in many cases
througnoa s ganon and sustainable farming tech-
niques, thne use or aternauve ruels, and the creation of barriers to erosion.
However, the economic costs ot each ot these alternatives are prohibitive for
the vast majority of impoverished family producers. Ironically, the greater
the environmental devastation, the less likely that a rural population will be
able to aftord alternative methods of production. It is theretore important that
government programs make crecit and land-augmenting inputs accesSible to
small farmers. By providing rural economic opportunities outside the home,
governments can als0 create alternative employment opportunites so that the
very poor are not torced to cultivate marginal lands; tor example, programs
to build rural infrastructure (roads, storage facilities, etc.) create local jobs,
alleviate population pressures on ecologically sensitive land, stimulate rural
development, and reduce the flow of rural-to-urban migration.

Raising the Economic Status of Women Improving the educational attain
ment of women and increasing their range of economic alternatives raise the
opportunity cost of their time and may lead to decreases in desired family size
see Chapter 6). Education also tends to increase women's access to intorma-
tion concerning child nutrition and hygiene, a factor that has been linked to
rapid declines in child mortality. It 1s important that community-based envi
ronmental programs work closely with women because their own day-to-day
activities may largely determine pattems ot resource use and their ability to
meet the needs of their families is dependent on the sustainable management
of water and fuel supplies.

Industrial Emissions Abatement Policies Arange of policy options is avail-
able to developing-country govemments for the purpose ot limiting industrial
pollution, including the taxation of emissions, tradable emissions permits,
quotas, and standards. There 1s Some evidence to suBEest tnat the arst two
pOlicies, which are market-based, are more effective because they tend to
reward the more efficient producers, allowgreater fiexibiity tor ims, and are
Benerally easier to enforce. Regulations should be as simpie as possible and
must be enforceable. Additional incentives to adopt clean technologies may
DE provided through tax credits and subsidies specifically tied to the purchase
Or aevelopment of pollution abatement technologies. ironicaly, the hardest
nauistries to regulatę are thOse run by governments themselves because the
pront motive is often not a consideration and, as a general rule, 1t 1s aucu
1Or any group to regulate itself.


Proactive Stance toward Cimate change atna thvironmental Degra.
dation Proactive policies can help make the aevoping economy, in general,
and the poor, in particulat more resiet at odapt to climate change,
much of which is already inevitable. DAevetoping ations can implement and
continuously improve early warnin8 5ystems t cipate environmental
emergencies; promote retorestation, restore atural ecosystem barriers such as
mangroves, imprOve microirsurance program5, and construct storm shelters
flood barmers, and protected roads and bridges. 1o protect forest cover, it may
De eftective to employ the p0Or as guardians of these resources. Living on sit
hey are more likely than absentee owners to pay attention to poaching and ill
gal logging In many countre, nore goe apateny and account-
ability are also needed. Ihe empowement or e Poor and tneir organizations
can play an important role in protectg ue tturad tesources on which many
of the poor depend for their livennoods and in seein8 tnat government helps
meet their generally greater needs for assistance with adaptation

How Developed Countries Can Help Developing Countries

Industrial countries can help developing nations in their efforts to improve
the environment to development in three areas: (1) trade liberalisation, (2) debt
relist, and (3) financial and technological asses stance.

Trade Policies The locus of much current discussion concerting the environment
met is the desperate need to break the cycle of poverty and environmental
destruction in developing countries. howsoever, protectionism n agricultural
and other goods has caused international markets and thus earning capacity for
these developing-country products to shrink grammatically
Eliminating trade barriers against developing-country exports by stimulation
economic growth in the developing world, creating new job8, and encouraging
rural development could significantly reduce the level or absolute poverty.
In addition to trade barriers, the industrialised countries penallze
developing-country exports Dy heavily Subsiding their own agricultural sec
tors. Ihe resulting large surpluses are olten dumped on international markes,
untfairly undercutting the agriculrural exports or developing countries in mar-
kets for which they are presumed to have a comparative advantage. Keducing
the estimated so00 bilion in annual agricultural subsidies in developed cou
tries could help guarantee the success ot rural development eforts in develop
ing nations by reducing poverty and the environmental decay that it causes.
Developing counties would thereby reduce their dependence on the unsustail
able exploitation of rain forests and other resources to raise foreign exchange

Debt Relief Wider access to international markets not only raises inco
but also improves the ability of heavily indebted countries to setvice t
deDt. Heavy debt servicing drastically reduces funds available to developu
country 8overnments for domestic social programs, including tho 13
to alleviate poverty and reduce environmental degradation (see ily
Dent forgiveness may be required if governments particularity n
indebted poor countries are to be given the flexibility to make the sweep
changes necessary to achieve sustainable development. designed Debt-for-nature swaps oner an attractive and mutually beneficial ways fo
g world to retire its foreign-denominated debt while guaranteeing detection of tropical rain forests.
environmental organise debefor-nature swap, a toreign, or the Nature Conservancy, working h conjurnction with a local environmen va tal organi2adon plurchases developing-country d
fraction, say, 30%%, of the face value. 1he debt is then exchanged for government
bonds denominated in the debtor-country currency1
he original foreign debt. The environmental organization pu
s thus adie to everage its funds by 230%. Income from the so o
maintain rain forest or wildlire reserves. In this way, the develoy
longer owes debt in scarce hard currencies and is able to set
for the preservation ot natonal resources. The foreign donor is able to make a
effective contnbution several times larger than the actual outlay of cash a
obtains a veroal 8uaiantee tnat tne endowment will be used to protect natural
resources. Althougn aebt-tor-nature swaps provided an exciting, albeit partial,
solution to tropical derorestation, a number of persistent economic and politi-
cal obstacles has imited the potenial scope of such programs, not the least of
which is tear or toreign control over domestic resource decisions.

Development Assistance Substantial new development assistarnce is nec
essary in developing countries to achieve sustainable development. 1hese
investments would be used tor a variety of programs to alleviate poverty,
provide services, and promote sustainable patterns of production. Additional
aid from developing countries earmarked for these purposes could have a
positive impact on developing-country environments (see Chapter 14), Even
greater sums would be necessary to maintain tropical rain torests, wnicn pro
vide benefits to the entire international community through reduced co

emissions. 1here are many tactics that can be evaluated on a case-by-case basis
tor cost-effectiveness. The most general approach 1s to support programs to
alleviate landiessness and pOverty, to heip eliminate the socioeconomic causes
of some or the tropical deforestation. pecific tactics include purchase of tim-
ber rights by national and international agencies, togetner with paying indig
enous communities to montor forest preservatio.i (as originally proposed byy
Conservanon international, an NGO). Preservation ettorts could be paid for
by the international community as a gloDal pudic gO0d.
ASSistance with adaptation to climate change 1s a critical element where
assistance is needed. Provision of greener technology to developing coun-
ries can help reduce greenhouse gases generally but will not in themselves
neip developing countries adapt to climate change. Frograms such as
GEF (Global Environment Facility) and REDD-plus, discussed earlier, are
important steps.

What Developed Countries Can Do for the

Global Environment

remaps most important, developed countries, which current consume over
o or the earth's resources, can directly contribute to global environs
provement through their own efforts to (1) reduce harmful emissions,
including greenhouse gases, (2) undertake KcD to develop green technolos
and pollution control for themselves and for aevelopin8 countries, and 3)
alter their own environmentally harmful patterns ot demand.
The composite photo in Figure 10.8 dramatically illustrates the unequal
global pattern of resource use. This image 1s a composite ot hundreds of pho
tos of the earth at night taken by satellite. Human-made igns draw attention
to high-income (as well as densely populated) regions, particularly Europe
the United States, and Japan. Highly populated and now upper-middle-income
coastal China also štands out. India is clearly seen, if less brightly; India is a
lower-middle-income country, but with high population density. The lack of
electric lighting in sub-Saharan Africa, the p0orest region, compares dramati.
cally with other population centers. Middle-income areas of very low popula-
tion density, such as the central parts of South America and Asia, are also dark
As the map suggests, much economic activity 1s located near seacoasts largely
for the simple economic reason that people can exchange goods utilising low-
cost shipping; for example the big cities of Brazil stand out. Differences in
economies with good and poor institutions also show up-most vividly across
the border between North and South Korea. Note that the per capita use of
lighting parallels the overall use of electric power and other resources. Thus,
the image also provides a vivid picture of the extraordinary unequal distr
bution of resource use that still prevails across high-, upper-middle, lower:
middle, and low-income countries.
The United States and other developed countries produce a majority or
the greenhouse gas emissions and consume a disproportionate share of nevi
ronmentally sensitive products such as ocean fish; their consumption o
energy, wood products, and raW materials is even more strikingly disproof
portionate. A substantial part of developed-d
ful. It seems clear that the world as a whole cannot consume at current
Or other developed-country levels; responsible consumption.