E/CN.17/1994/2 GENERAL DISCUSSION ON PROGRESS IN THE IMPLEMENTATION OF AGENDA 21, FOCUSING ON THE CROSS-SECTORAL COMPONENTS OF AGENDA 21 AND THE CRITICAL ELEMENTS OF SUSTAINABILITY

United Nations

E/CN.17/1994/2


Economic and Social Council

 Distr. GENERAL
27 April 1994
ORIGINAL: ENGLISH


COMMISSION ON SUSTAINABLE DEVELOPMENT
Second session
16-27 May 1994
Item 3 of the provisional agenda*

        GENERAL DISCUSSION ON PROGRESS IN THE IMPLEMENTATION OF AGENDA 21,
          FOCUSING ON THE CROSS-SECTORAL COMPONENTS OF AGENDA 21 AND THE
                        CRITICAL ELEMENTS OF SUSTAINABILITY

                         Overview of cross-sectoral issues

                          Report of the Secretary-General

                                     CONTENTS

                                                   Paragraphs

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

I.  CRITICAL ELEMENTS OF SUSTAINABILITY ..................4 - 5

    A.  International cooperation to accelerate
        sustainable development in developing countries
        and related domestic policies ....................4 - 23

    B.  Changing consumption patterns ....................24 - 52

II.  FINANCIAL RESOURCES AND MECHANISMS ...................53 - 79

    A.  General considerations ...........................53 - 78

    B.  Proposals for action .............................   79

III. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES,

    COOPERATION AND CAPACITY-BUILDING ....................80 - 10

    A.  General considerations ...........................80 - 104

    B.  Proposals for action .............................     105

IV.  DECISION-MAKING STRUCTURES ...........................106 - 136

    A.  Institutional arrangements to follow up the
       United Nations Conference on Environment and
        Development ......................................106 - 127

    B.  International legal instruments and mechanisms ...128 - 136

V.  ROLES OF MAJOR GROUPS ................................137 - 153

    A.  Contributions of major groups to the thematic
        progress review reports ..........................139 - 142

    B.  Support for major groups at governmental and
        intergovernmental levels .........................143 - 153

________________________

   *   E/CN.17/1994/1.

                                INTRODUCTION

1.  The Commission on Sustainable Development, at its first session, requested
the Secretary-General to prepare an annual overview report on progress made in
the implementation of Agenda 21.  Furthermore, the Commission requested that
the report focus on the cross-sectoral components of Agenda 21 and the
critical elements of sustainability, and that they contain an analysis of
progress made, the main trends and the main problems countries face in the
implementation of Agenda 21 (E/1993/25/Add.1, para. 28 (a)).

2.  In accordance with the multi-year thematic programme of work adopted by
the Commission at its first session, the cross-sectoral thematic clusters of
Agenda 21 to be considered by the Commission on an annual basis are: (a)
critical elements of sustainability; (b) financial resources and mechanisms;
(c) education, science, transfer of environmentally sound technologies,
cooperation and capacity-building; (d) decision-making structures; and (e)
roles of major groups.  Moreover, the Commission decided that, during its
second session, particular focus should be given within cluster (a) to
chapters 2 and 4 of Agenda 21, within cluster (c) to chapters 34 and 37 and
within cluster (d) to chapters 38 and 39.

3.  The present report is prepared on the basis of analysis of information
available to the Secretariat by the date of submission, including inputs from
the Commission's ad hoc working groups, inter-sessional meetings hosted by
Governments, contributions from relevant parts of the United Nations system,
national Governments, major groups and other relevant sources.  National
information was provided by a limited number of Governments; therefore, the
assessment of progress achieved at the national level is illustrative rather
than comprehensive.

                  I.  CRITICAL ELEMENTS OF SUSTAINABILITY

            A.  International cooperation to accelerate sustainable
                development in developing countries and related
                domestic policies

            1.  Promoting sustainable development through trade

4.  The successful conclusion of the Uruguay Round of multilateral trade
negotiations can be expected to bring about the further liberalization and
expansion of world trade, enhance the trade and development possibilities of
developing countries and provide greater security and predictability to the
international trading system.  The paper submitted by the secretariat of the
General Agreement on Tariffs and Trade (GATT) provides a succinct appraisal of
the probable impact of the Uruguay Round (E/1994/43, annex, paras. 7-11), as
well as a review of discussions held by the United Nations Conference on Trade
and Development (UNCTAD) on follow-up activities to the United Nations
Conference on Environment and Development, including proposals for future work
(E/1994/47, annex, paras. 23-32).  Completion of the North American Free Trade
Agreement, enlargement of the European Union (EU), agreements on extending the
Customs Union of EU to include, in 1995, Turkey and some of the European
economies in transition, measures taken to strengthen a number of regional
trade arrangements among developing countries, and unilateral trade
liberalization undertaken by many developing countries since 1992 have all
contributed to improving the medium-term prospects for world economic growth
and for an even more rapid expansion of world trade.

5.  The quantifiable benefits of trade liberalization to developing countries
as a group are a small proportion of the benefits to the world as a whole, but
may none the less average about $20-25 billion per year in 1992 prices, or
about 2.5 per cent of their 1993 imports of goods.  These benefits will accrue
mainly to those developing countries that have been pursuing export- oriented
policies and that have a substantial manufacturing sector.  Certain categories
of developing countries, particularly those highly dependent on trade
preferences, those that are food importers and those dependent on commodity
exports, may not gain much and may in fact be harmed in the long run.  For all
developing countries to benefit more fully from trade liberalization, the
achievement of other objectives identified in Agenda 21, particularly with
regard to commodity trade, is important.  A domestic policy environment that
would, inter alia, remove biases against exports, discourage inefficient
import substitution, improve infrastructure important to trade, diversify
economies to reduce dependence on primary commodities and improve domestic
market efficiency would also increase the potential for gains from trade
liberalization.  Improved trade policies are facilitated by the international
collection and dissemination of appropriate trade data and information.  The
report proposed by the UNCTAD secretariat (E/1994/47, annex) describes its
recent work programme and other initiatives that have been taken since 1992
and others that are planned for the future to achieve some of these
objectives.

            2.  Making trade and environment mutually supportive

(a) Recent developments

6.  Despite perceptions by the general public to the contrary, many of the
multilateral trade agreements reached during the course of the Uruguay Round
do take into account environmental concerns to a considerable extent,
including the Agreement Establishing the World Trade Organization (WTO) (in
the preamble), the Agreement on Technical Barriers to Trade, the Agreement on
the Application of Sanitary and Phytosanitary Measures, the Agreement on
Agriculture, the Agreement on Subsidies and Countervailing Measures, the
Agreement on Trade-Related Intellectual Property Rights, the General Agreement
on Trade in Services (in article XIV) and the Understanding on Rules and
Procedures Governing the Settlement of Disputes.  The note by the GATT
secretariat describes the relevant provisions (E/1994/43, annex, paras.
13-20).

7.  These provisions, together with the improved framework for dispute
settlement, advance several of the trade, development and environment agenda
items in Agenda 21, paragraph 2.22 (c) to (g) and, especially, paragraph 2.22
(i), which states that Governments should encourage the principle of
[avoiding] unilateral actions to deal with environmental challenges outside
the jurisdiction of the importing country.  Environmental measures addressing
transborder or global environmental problems should, as far as possible, be
based on an international consensus.  Domestic measures targeted to achieve
certain environmental objectives may need trade measures to render them
effective.  Should trade policy measures be found necessary for the
enforcement of environmental policies, certain principles and rules should
apply.  These could include, inter alia, the principle of non- discrimination;
the principle that the trade measure chosen should be the least
trade-restrictive necessary to achieve the objectives; an obligation to ensure
transparency in the use of trade measures related to the environment and to
provide adequate notification of national regulations; and the need to give
consideration to the special conditions and developmental requirements of
developing countries as they move towards internationally agreed environmental
objectives.

8.  The UNCED follow-up activities of GATT were carried out by its Group on
Environmental Measures and International Trade, which concentrated on three
issues:  (a) trade provisions contained in existing multilateral environmental
agreements vis-a-vis GATT principles and provisions; (b) multilateral
transparency of national environmental regulations likely to have trade
effects; and (c) trade effects of new packaging and labelling requirements
aimed at protecting the environment.  A summary of the Group's discussion is
contained in the note by the GATT secretariat (E/1994/43/annex, paras. 41-71).

9.  With respect to future work in this area, the Trade Negotiations Committee
adopted a decision on trade and environment (see E/1994/43, annex, para. 72)
and agreed on a programme of work and a recommendation to establish a
Committee on Trade and Environment, with a two-year mandate, all of which were
adopted at the Ministerial Conference in April 1994.

10. Furthermore, in order to promote a dialogue between the trade, development
and environment communities, the Director-General of GATT is planning to hold
a symposium of environment and trade experts in the early summer of 1994. 
Details of the symposium and possible implications for follow-up work by the
WTO secretariat may be found in paragraphs 74 to 77 of the note by the GATT
secretariat.  It may be noted that these activities can be expected to advance
a number of the objectives mentioned in Agenda 21, notably in paragraph 2.22
(b) and (j).

(b) Selected issues in the trade, development and environment nexus

   (i) Environmental problems with transborder externalities

11. Where these problems have led to the negotiation of multilateral
environmental agreements (MEAs), there are principally two issues that arise:

(i) whether the trade provisions that they may contain are compatible with the
obligations of the Contracting Parties to GATT and (ii) whether multilateral
trade measures may be used against non-signatories to the MEAs.

12. With respect to the first issue, any finding of incompatibility may be
dealt with by obtaining three quarters of the GATT Contracting Parties to
agree to a waiver.  Obtaining such a waiver would be more likely the greater
the consensus underlying the environmental treaty itself.  Therefore, such a
treaty should ideally have the following characteristics:  (a) be open to all
countries; (b) be negotiated under the aegis of a universal forum; (c) have
participation of countries at different stages of development; and (d) have
good geographical coverage.  If these conditions are met, a waiver might be
successfully sought.  However, trade measures are second-best policies; what
is really sought is appropriate environmental resource management at the
national level.  When used at all, trade measures to enforce environmental
treaties would be expected to respect the principles agreed upon at UNCED in
this regard (see para. 7 above).  The issue of using trade measures to enforce
compliance with MEAs does not arise frequently.  Of some 150 such agreements
reached to date, only 15 contain trade measures.  Of course, the
burden-sharing arrangements that explicitly or implicitly are associated with
an MEA must be dictated by the principle of equity and cost-minimization
across countries for the Earth as a whole if they are to be acceptable.  In
such cases, agreement on the use of trade measures may be forthcoming.

13. As regards non-signatories to MEAs, compatibility of trade measures with
GATT provisions is a moot question.  The reason for being a non-party should
be addressed directly by a combination of technology transfer, financial and
technical assistance and other means.

14. A different issue arises in the case of regional transborder
externalities.  In such cases, a country experiencing adverse spillover
effects may wish to use a trade measure focused on the products causing
transborder pollution.  This would be an example of unilateral enforcing of
the polluter pays principle.  Even here a distinction has to be made between
cases where the transborder effect arises in the country imposing the
unilateral measure and cases where it is directed at efforts that arise in
some other country or in areas beyond national jurisdiction.  The
comparability of such unilateral measures with GATT measures is open to
question.  The remedy could well be that of regional agreements rather than
unilateral action.

   (ii)     Domestic environmental concerns without international
externalities

15. The issues that arise under this heading are far more contentious than the
ones mentioned above.  Those, mainly in developed countries, who would tend to
place a higher value on environmental objectives than on economic efficiency
or economic development fear that GATT will lead to downward harmonization of
national standards, limit the goals that might be pursued through such
standards and limit the means that States can use to achieve environmental
objectives.  Developing countries fear that imposition of higher standards
based on the use of process and production methods (PPMs) even when no
international spillovers are involved, would simply lead to a proliferation of
trade restrictions without any discipline or restraint. They also fear that
the growing use of voluntary eco-labelling schemes in consumer countries might
constitute de facto non-tariff barriers to trade.

16. GATT does impose some discipline on national environmental regulations
that might have adverse trade effects and, in general, rules out the use of
trade measures to protect extrajurisdictional environmental resources.  The
extent to which this would slow the achievement of global environmental
objectives is probably not very great.  In the first place, more than 400
national environmental regulations that risk having adverse effects have been
notified to GATT without a single one being taken to a dispute panel.  In the
second place, nothing in GATT rules out domestic environmental policy measures
if they are equally applied to domestically produced and imported goods and if
they are non-discriminatory.  Indeed, under the Agreement on Technical
Barriers to Trade and the Agreement on the Application of Sanitary and
Phytosanitary Measures, measures are allowed to protect human, animal and
plant life or health or the environment; to ensure the safety of human and
animal food; and to protect human health.  These Agreements encourage but do
not require the use of international standards, and, in the case of health
risks, require the presentation of scientific findings, an evaluation of risks
and a justification of measures as necessary for health protection. Moreover,
under article XX, exceptions can be sought for environmental reasons, among
others, that which violate normal GATT disciplines.  However, where trade
restrictions might be involved, the bottom line is to place the burden of
proof on the country proposing restrictive trade measures to justify those
measures in terms of the legitimacy of the objective sought and the
appropriateness of the measure.

17. In discussing these issues further, four important propositions deserve
emphasis since virtually all Governments agree to them.  One is that there are
legitimate reasons for diversity in environmental regulations across
countries.  Secondly, differences in the relative costs of production
constitute the very basis for gains from international trade.  Thirdly,
differences in environmental regulations should not be regarded as a greater
source of distortion to market prices than those created by different systems
of taxation.  And fourthly, the unilateral imposition of environmental
standards extraterritorially is inadmissible.

18. With these propositions in mind, one might consider the issues that arise
from the following:  (a) an increasing interest in setting national
environmental standards on the basis of PPMs; (b) concerns arising from lack
of harmonization of national environmental standards; (c) concerns about the
potential adverse trade impact of certain measures such as "take-back"
obligations; (d) concerns about the possibly adverse effects on trade of
eco-labelling and (e) the impact on trade if all countries adopt purchasing
power parity (PPP), i.e., full internalization of environmental external
costs.

19. Regarding the use of PPMs, the papers prepared by the GATT and UNCTAD
secretariats provide useful discussions, which it would be redundant to
summarize here.  It may be noted that PPMs have rarely been used as the basis
for trade measures, exceptions being products produced with prison labour,
products containing chlorofluorocarbons (CFCs), and certain foods where the
processing methods may be deemed a close proxy for potential health hazards.
Most probably, PPMs should continue to be used sparingly since their
widespread use would contradict the logic of benefits from trade
liberalization owing to comparative advantage.

20. Regarding harmonization of standards, the principal issues are well
discussed in the papers by the GATT and UNCTAD secretariats.  It may, however,
be noted that one of the most loudly voiced concerns, that of the effects on
competitiveness, is a close ally of protectionist sentiments and is often
highly exaggerated in view of the fact that environmental compliance costs are
a small proportion of total costs.

                             3.  Proposals for action

21. The Commission may wish to take note of the proposed work programmes in
the papers prepared by the GATT and UNCTAD secretariats (see E/1994/43, annex
and E/1994/47, annex), which contain proposals for research, analysis, data
collection and dissemination, and technical cooperation to assist developing
countries in, inter alia, diversifying their trade to take advantage of
emerging markets for environmentally friendly products.  Some of these
programmes are being undertaken in collaboration with the United Nations
Environment Programme (UNEP) and are supported by the United Nations
Development Programme (UNDP).

22. Furthermore, the Commission may wish to consider the themes identified in
paragraph 101 of the UNCTAD report and decide to which theme it might attach
special importance.

23. In addition to reviewing the work on the trade, development and
environmental nexus of the World Trade Organization and UNCTAD, the Commission
may wish to consider the role it can play in evolving a consensus on trade and
environment linkages.

                         B.  Changing consumption patterns

                            1.  General considerations

24. At the United Nations Conference on Environment and Development, agreement
was reached on the importance of changing patterns of production and
consumption, particularly in developed countries, in order to reduce
environmental stress.  The focus of consumption patterns in chapter IV of
Agenda 21 leads quite naturally to a consideration of demand management as an
important area of policy.  Among the many concerns expressed about the impact
of significant changes in the consumption and production patterns in developed
countries are the following:

   (a) The levels of consumption per capita are so high as to reduce the
access of people in developing countries to basic goods and services by
reducing global savings needed for fixed capital formation;

   (b) The resource intensity of this consumption is such as to deplete
natural resources needed by developing countries for their own economic
development in the future;

   (c) Contemporary patterns of production and consumption generate a volume
of environmentally harmful by-products that swamp the absorptive capacity of
the globally shared environmental resources and that therefore threaten to
impose costs on developing countries that developed countries avoided in the
early stages of their own economic growth and industrialization.

25. The first of the concerns mentioned above has to be seen in the context of
what happens when the savings increase.  Actions taken to reduce levels of
consumption per se would reduce global demand and thereby worsen the export
prospects of developing countries.  However, if consumption was reduced by a
tax that financed a transfer of resources to developing countries, the results
would presumably be positive for developing countries.  Similarly, if
consumption in developed countries was reduced by a tax that caused the public
sector borrowing requirement to fall, long-term interest rates might be
reduced and this could favour investment in developing countries.
Macroeconomic policies are governed not only by sustainability concerns, but
also by a variety of other objectives like inflation management, employment,
and trade competitiveness.  Hence, the scope for the consideration of
effective policy measures of a macroeconomic nature in the work of the
Commission on Sustainable Development has to be viewed in the context of the
activities of other international forums.

26. The second of the concerns mentioned above dominated international
dimensions in the early 1970s when the "limits to growth" hypothesis focused
attention on the scarcity of natural resources as an input to production, an
argument that carried considerable force after the oil price shocks of the
1970s.  In this area, the behaviour of market prices, measures of reserve
adequacy and projected trends of material intensity of production provide
considerable guidance.  The consensus among students of natural resource
economics is that the emergence of serious scarcity of tradable raw materials
is unlikely over the next few decades.  Indeed, there has been considerable
concern expressed by developing country exporters of agricultural raw
materials and metals and minerals about the prolonged period of slow growth in
world demand for these products and the associated low (and often falling)
prices that they command in international markets.  A recent study of this
phenomenon concluded that the slow growth in consumption has been due to three
causes: 1/

   (a) Slower growth in world domestic product;

   (b) Changing structures of production in developed countries, with falling
shares of the relatively material-intensive branches of manufacturing;

   (c) Recycling and technological change resulting in inter-metal
substitution, and the replacement of agricultural raw materials and some
metals by synthetics.

27. Projection of future trends suggests little change in the situation of
metals and minerals but improved prospects for world consumption of
agricultural raw materials associated with the growing importance of markets
in the developing countries themselves.  The conclusions mentioned above in
connection with metals and minerals are strengthened by trends in the reserve
consumption ratios monitored by the World Resources Institute. 2/

28. The third area of concern, namely, environmentally damaging by-products of
contemporary consumption and production patterns, has many aspects, among
which are the following:

   (a) Emissions of greenhouse gases, including the impact of the transport
sector;

   (b) Release to the environment of toxic materials such as heavy metals,
hazardous chemical and acidic gases, including stratospheric ozone-depleting
gases;

   (c) Generation of solid waste resulting in disposal problems.

29. The magnitude and growth expected in these areas, given current patterns
of consumption and production, threaten such environmental resources as clean
air, clean water, fertile soil, many ecosystems and biodiversity.

30. In many developing countries some of these same concerns are present, and
are becoming increasingly perceived as important problems, especially where
urban agglomerations are large and growing rapidly.  In nearly all developing
countries, however, the most serious environmental degradation relates to
unsustainable land and water use patterns, which are among the direct
consequences of the efforts of people living in poverty to improve their lot
and, often, merely to survive.  Deforestation, desertification and the loss of
biodiversity owing to habitat destruction and the poaching of endangered
species are the result.  It is generally recognized, moreover, that without
the kind of economic policies that simultaneously reduce poverty and encourage
the movement of people away from marginal land and fragile ecosystems, there
is little prospect for improvement on the environmental front. 3/

                               2.  Policy approaches

31. From the foregoing sketch of issues related to consumption and production
patterns, it is obvious that many of the solutions will be found by directly
influencing methods of production through, inter alia, (a) development and
dissemination of more eco-efficient technologies; (b) a mix of regulations by
command and control and the use of economic instruments to encourage more
eco-friendly and sustainable production in industry, agriculture, forestry and
fishing; (c) increased use of "end-of-pipe" measures, e.g., sewage treatment
plants.  Measures of these types, of course, have direct impacts on patterns
of production.  In so far as their implementation or method of financing
changes the relative prices of inputs in production or of the goods and
services that are ultimately purchased by consumers, they can be expected to
lead indirectly to environmentally beneficial changes in consumption patterns. 
Since the work of the Commission on Sustainable Development on the follow-up
to Agenda 21 can be expected to address the efficacy of such measures in its
sectoral reviews, it may be useful in discussions of changing consumption
patterns in the context of chapter 4 of Agenda 21 to concentrate the work
programme of the Commission on issues related as closely as possible to the
patterns of final demand.

32. If environmental policy is to be cost-effective, it is important to
develop a framework for understanding the links between consumption of certain
products and their adverse impact on the environment, on the one hand, and the
consequences both for the environment and for the rest of the economy of the
changes that policy is meant to bring about.

33. One of the most useful analytic tools for this purpose is integrated
economic and environmental accounting.  Essentially, this may be understood as
a system for adjusting one of the principal macroeconomic aggregates of the
System of National Accounts, namely, net domestic product.  One adjustment
consists of computing a deduction for the net depletion of exhaustible
resources valued by their net prices, i.e., their marginal productivity in
production minus their marginal cost of extraction.  Another adjustment
consists of computing a deduction for the depletion of the stock of
"environmental capital" such as clean air, clean water, fertile soil, natural
ecosystems and biodiversity which provide environmental amenities. Such a
comprehensive measure combined with sector-specific quantitative indicators
will allow national policy makers to better appreciate the magnitude of their
problems, to set priorities among competing environmental needs, and to weigh
environmental needs against other claims where costs are an important
consideration.  Quantifying the costs and benefits of a number of policy
interventions in each major area of consumption would enable policy makers to
begin with policy measures having particularly favourable benefit cost ratios
(see illustrative framework for analysing elements of consumption and
consequences of change).

Illustrative framework for analysing elements of consumption and consequences
of change

                   [Note: this table is not properly formatted]

                               Consequences of trend pattern changes (through
                               reduced demand consumption etc.)

             Adverse          On        On economy
              impact       environment
 Consumption    on current     (including
   concern        trends         health)                  
Energy        Increasing      Decrease       ST  Income loss for traditional

         emissions       greenhouse     energy
         (CO2, SOx)       effects            producers
                         acidification

         Depletion of                   LT  Societal transition towards use
         non-renewable   Conservation   of other energy resources
         resources       of resources       

                                        (renewables)
Vehicles      Increasing      Better local   ST  Shift in traditional car

         local air       air quality    manufacturing
         pollution and                      and related sectors
         noise           Reduced CO2
                         emissions      LT  Development of other modes of
         Depletion of                       transportation
         resources       Improved

         (use of raw     urban          LT  Increase public transportation
         materials and   amenities
         space for
         infrastructure)

         Packaging       Generation of   Reduced        ST Loss of income and employment
         waste           generation of  for
                         waste              current packaging industry

         Inefficient
         use of          Fewer          ST  New opportunities for
         resources       resources      alternative,
                         used               recyclable packaging

                                        LT  Growth in consumer preference
                                        for more sustainable packaging

                           Consequences of trend pattern changes (through
                           reduced demand consumption etc.)

                  Adverse          On
                  impact       environment
 Consumption    on current     (including
   concern        trends         health)                  On economy

Water         Conflict over   More good      ST  Proper pricing, water becomes 
              access and      quality water      an economic commodity
              quality         available
                                                 

              Increasing      Reduced            Reduced potential for water 
              drought and     pressure on        rights conflicts
              erosion         ecosystems

              More damage
              to ecosystems

Cattle, beef  Increasing      Increase in    ST  Loss of income for timber and
and tropical  deforestation   CO2 sinks          beef producers
timber                                           
              Increasing      Preservation   LT  Sustainable yields 
              desertification of ecosystems      (alternative products)

                              Maintaining
              Increasing      biodiversity   LT  Opportunities for economic
              erosion                            diversification (e.g. tourism)

Fish          Depletion of    Preserving     ST  Loss of income to fisheries
              stocks          balance in         industry
                              ecosystems     LT  Sustainable yields

              Loss of         Maintaining    LT  Management of a common 
              biodiversity    biodiversity       property resource
                                                 

Other raw     Rising          Conservation   ST  Loss of employment and income
materials     environmental   of resources       in the extraction and primary
              impacts of      for future         production sectors   
              extraction      generations    
                                                 
              Growing         Reduced        ST  Stimulate R&D on substitutes
              depletion and   environmental  
              exhaustion      damage from    LT  Transition towards more use of
                              extraction         recycling processes
              Low uncertain   and                
              commodity       production
              prices                         LT  Greater price stability

    Source:  Bill L. Long, "Managing change:  the challenge of
sustainable consumption", paper prepared for the Symposium on
Sustainable Consumption, Oslo, 19-20 January 1994.

    Notes:  ST = short-term impacts.  LT = long-term impacts.

34. The economic agents whose behaviour as consumers could be the
target of policy measures include both households and
Governments.  The immediate objective of measures to change
consumer behaviour could, for example, be said to include the
following:

   (a) Reducing the material intensity of final consumption;

   (b) Reducing the energy intensity (especially of fossil fuels)
of final consumption;

   (c) Reducing the waste of water;

   (d) Reducing the content of environmentally harmful
substances;

   (e) Reducing the bulk of solid waste disposal;

   (f) Reducing direct threats to biodiversity.

35. There is considerable scope in developed countries for
improving energy efficiency.  One scholar has estimated, for
example, that energy intensities could fall by 1.1 per cent per
year through 2010, with no change in incentives, through slow
turnover of the capital stock; however, total energy use would
increase by more than one third.  Increasing the price of energy
by 50 per cent over its baseline level by 2010 could be expected
to lead to a more rapid introduction of currently known
energy-saving technology and this could lead to declines in
energy intensities of about 2 per cent per year, resulting in
only modest overall increases in total energy use.  Doubling
energy prices and accelerating the introduction of highly
fuel-efficient automobiles could lead to energy intensities
declining by 3.6 per cent per year (as they did in the 1979-1983
period) and to total energy use declining by about one sixth. 4/

36. Effective measures to achieve most of these goals incorporate
the principle of internalizing to economic agents the full
external costs that their behaviours impose on others when
environmental resources are treated as free goods.  The basic
principles that should be respected by policy makers in seeking
to internalize such costs include the polluter pays principle and
the full-cost resource pricing principle.  The former focuses on
the by- products of the production process itself and is
generally implemented by imposing a cost on the producer,
although the ultimate burden is shared between the producer and
the consumer in a proportion determined by the elasticities of
demand and supply for the product in question.  The resource
pricing principle is sometimes described as a "user pays"
principle.  It is concerned with getting correct market prices
for the natural resource inputs into production.  Briefly, this
rules out subsidies to the direct costs of production and
indirect subsidies through artificially low publicly administered
resource prices. 5/  The polluter pays principle may also be
extended with the cradle-to-grave principle of requiring that the
producer bear the environmental costs of a product throughout its
life cycle, e.g., by requiring producers to accept discarded
products for reuse or recycling.

37. Among the practices that might be encouraged are the
following:

   (a) Energy conservation;

   (b) Recycling;

   (c) Reusing;

   (d) Reducing packaging bulk;

   (e) Avoiding consumption of products from endangered species;

   (f) Encouraging consumption of products produced by more
eco-friendly processes.

38. Among the measures that are most likely to be cost-effective
in changing behaviour are economic instruments.  Economic
instruments operate by charging a price for the use of
environmental services.  Such instruments encourage reductions in
the ratio of environmental resources to final consumption and,
because some of the cost is passed on to consumers, households
have an incentive to shift from more resource-intensive to less
resource-intensive goods and services.  While other measures,
such as regulations conscientiously enforced, also increase
costs, economic instruments have a number of properties that
generally render them superior:  (a) they are more
cost-efficient; (b) they have dynamic effects; and (c) they
produce a revenue stream, which may be used to reduce other
taxes, especially those that discourage employment. 6/

                                         3.  Recent trends in national policies

39. Many Governments have been introducing specific measures
intended to encourage such practices as those mentioned above by
providing incentives to households.  A number of Governments are
using procurement policy to change consumption patterns directly
and to increase the effectiveness of incentives by, for example,
enlarging the market for products made from recycled materials. 
Consumer advocacy groups and environmentally concerned non-
governmental organizations have been increasing public awareness
of the need to change behaviour and of ways to do so.  In several
countries, government ministries responsible for environmental
matters organize public awareness campaigns and attempt to
reinforce values that support sustainable consumption patterns,
often in cooperation with ministries of education. Recourse to
moral persuasion is, however, unlikely to be effective by itself
in bringing about major changes in consumption patterns.  It can,
however, play an extremely important role in gaining popular
acceptance for measures such as taxes, charges and others, which
would increase the cost to consumers of maintaining unsustainable
consumption patterns.

40. Economic instruments are already being used to a significant
extent in developed countries as may be seen from the table which
catalogues slightly over 200 such measures classified as charges
on emissions, charges on products, deposit refunds, tradable
permits and enforcement incentives. 7/ Limited information
pertaining to 1987 and 1992 for eight countries is suggestive of
a trend towards increasing use of economic instruments. Moreover,
a number of recent initiatives is suggestive of their greater use
in the future.  These include the following:

   (a) Feasibility studies are under way in eight countries, with
six other countries stating their intention to increase their use
of economic instruments;

   (b) Belgium introduced a new set of product charges in 1994,
while Switzerland and Austria are considering specific proposals;

   (c) Denmark, Finland, Germany and Sweden are continually
adapting various incentive schemes;

   (d) The United Kingdom of Great Britain and Northern Ireland
is considering charges for waste water and other waste products.

       Economic instruments per country on 1 January 1992

           Charges on    Charges on            emissions
             products     Deposit           Enforcement
            (of which    (of which tax
             Tradable     nt
              user     differentiatio  refund     e     incentive
            charges)         ns)          s    permits      s

USA             5 (2)         6  (1)       4        8        2
Sweden          3 (2)         11 (2)       4                 2
Canada          3 (2)         7  (3)       1        2        2

Denmark         3 (2)         10 (2)       2
Finland         3 (2)         10 (2)       2
Norway          4 (2)         8  (2)       3
Australia       5 (2)         1  (0)       3        1        2
Netherlands     5 (2)         4  (2)       2
Austria         3 (1)         4  (2)       3

Germany         5 (2)         3  (3)       2        1
Belgium         7 (2)         2  (2)       1
France          5 (2)         2  (1)
Switzerland     3 (2)         2  (2)       1
Italy           3 (2)         2  (0)
Iceland         1 (1)         1  (1)       2

Japan           3 (1)         1  (1)
Portugal        2 (0)         1  (1)       1
Iceland         2 (2)         1  (1)
Greece                        2  (1)       1
Spain           3 (2)
UK              1 (1)         1  (1)

Turkey                                     1


    Source:  Organization for Economic Cooperation and
Development, Integrating Environment and Economics:  The Role of
Economic Instruments (Paris, 1994) (forthcoming).

41. Despite the growing interest in economic instruments and
their increasing use, there does not as yet exist sufficient
quantitative evidence to evaluate adequately the effectiveness of
their use in practice.  Experience of developed countries, none
the less, suggests a number of tentative conclusions:  (a)
economic incentives work best in combination with other
instruments, such as direct regulation; (b) product charges and
deposit refund systems are the most frequently used and rapidly
increasing instruments; (c) user charges for waste collection and
disposal, for sewerage and sewage treatment, are quite common;
(d) tax differentiation is widely used in the automobile
transport sector and appears to have led to increases in the
market share of unleaded gasoline; (e) an incentive impact is
apparently intended in about 45 per cent of the cases of emission
charges, but information necessary to evaluate the actual
incentive impact is available in only about 10 per cent of the
cases; (f) an incentive impact is intended in about 45 per cent
of the cases of product charges, but information necessary to
evaluate the actual incentive impact is available in about 50 per
cent of the cases.

42. In most European economies in transition, environmental taxes
have been common, but not designed for incentive effects.  They
have served primarily to generate revenues for earmarked
environmental expenditure programmes. This situation is expected
to change as enterprises increasingly become accustomed to
operating in a market environment and since the structure of
environmental charges is under review and is likely to be
modified.

43. Among the developing countries, there has as yet been no
substantial use of economic instruments.  However, their use in
the Republic of Korea, Taiwan Province of China, Thailand and
Indonesia was examined and compared with Japan in 1991 and 1992
by the Development Centre of the Organisation for Economic
Cooperation and Development (OECD).  All of these countries have
relied heavily on command and control in the past and most
continue to do so. The countries' policies were reviewed under
the following headings:  (a) resource and input pricing policies;
(b) environmental taxes, charges and subsidies; (c) environmental
trends; (d) deposit refund schemes; (e) tradeable permits and (f)
pollution control agreements. 8/

44. With regard to resource and input pricing, several countries
were found to be subsidizing the use of one or more of the
following:  pesticides, fertilizers, energy and water.  Taiwan
Province of China and Thailand were actually studying the
introduction of pollution taxes; Thailand has been discounting
tariffs on capital equipment for waste treatment and Indonesia
has expressed its intention to do so.  The Republic of Korea and
Thailand have environmental funds financed by fines or pollution
charges and, in the case of Thailand, by a levy on oil
consumption.  The Republic of Korea has a fairly extensive
deposit refund system and Indonesia levies a forestry deposit fee
refundable against replanting.  Singapore, which was not included
in the study, is the only country in East Asia utilizing a
tradable permit system, in this case, a system of auctionable
permits for ozone-depleting substances.  Pollution-control
agreements are in use in Indonesia in its effort to clean up 20
heavily polluted rivers.  The limited experience with economic
instruments was found to be encouraging and there was certainly
scope for expanding their use; in practice, this would need to be
combined with elements of command and control.

45. National reports received by the Department for Policy
Coordination and Sustainable Development of the United Nations
Secretariat contain some additional information on changing
consumption patterns.  The reports from developed countries cover
much of the same ground covered by OECD.  Estonia reported the
establishment of special charges for waste disposal.  Malaysia
reported on tax incentives to encourage the use of unleaded fuel,
encourage the use of catalytic converters, encourage the
processing of agricultural and chemical waste, encourage the
treatment and disposal of toxic and other hazardous waste and
encourage the importation and use of pollution-control equipment. 
Malaysia has also been experimenting with publicity campaigns,
for example, to encourage recycling, but has found that targeted
programmes, such as those conducted through schools, are more
effective than programmes directed at the general public.

          4.  Activities of international organizations

46. At the meeting of the Inter-Agency Committee on Sustainable
Development (IACSD) and through other communications, several
agencies described work under way on various aspects in this
area.  On the supply side, the International Labour Organization
(ILO) was examining the impact of changing technologies and
structural change on employment issues.  UNEP described a major
initiative, its Cleaner Production Programme, aimed at reducing
global industrial pollution and waste and the need to promote
management skills for eco-efficiency and sustainable industrial
development.  The Food and Agriculture Organization of the United
Nations (FAO) mentioned its work on food chains, e.g.,
alternatives to water-intensive agricultural production. On the
demand side, UNCTAD and UNEP described their proposed work
programme on eco-labelling; the Department for Policy
Coordination and Sustainable Development referred to its work on
consumer protection, which includes maintenance of the
Consolidated List of Products Whose Consumption and/or Sale Have
Been Banned, Withdrawn, Severely Restricted or not Approved by
Governments 9/ and assisting countries to implement the set of
Guidelines for Consumer Protection adopted by the General
Assembly in 1985. 10/  FAO mentioned its work on the CODEX
alimenataire.  The World Bank outlined its work programme on
indicators and on the use of economic instruments.

47. An interim version of a handbook on integrated environmental
economic accounting was published by the Statistical Division of
the United Nations Secretariat in 1993. 1/  UNEP and the
Statistical Division held a consultative expert group meeting in
December 1993 to advance agreement on a set of indicators
suitable for monitoring sustainable development.  This will be
followed by further studies in the context of an international
project on sustainable development indicators by the Scientific
Committee on Problems of the Environment of the International
Council of Scientific Unions (ICSU).  An intergovernmental
working group is then expected to evaluate this work in early
1995 and make recommendations to the Statistical Commission,
meeting later that year, which could lead to agreement on a
national questionnaire.

48. The Committee on New and Renewable Sources of Energy and on
Energy for Development, at its meeting in February 1994,
recommended to the Economic and Social Council the adoption of a
draft resolution to the effect that countries should pursue a new
energy path by using a combination of four options:  (i) more
efficient use of energy and energy-intensive materials;

(ii) increased use of renewable sources of energy; (iii) more
efficient production and use of fossil fuels; and (iv) fuel
substitution from high- carbon to low-carbon or non-carbon-based
fuels.  With respect to each of the options, the draft resolution
identifies many specific policy measures that might be used,
among which the use of economic instruments figures prominently,
and requests the Secretary-General to prepare a biennial
comprehensive report on world-wide progress in implementing the
resolution.

49. Outside the United Nations system, OECD is the most active
international organization working in this area.  Following the
request by the OECD Ministerial Council in 1993 for preliminary
work on the relationships between consumption and production
patterns and sustainable development, interest in this subject
has mounted rapidly in member countries and beyond.  In the light
of expanding interest, and taking into account the discussions in
the Oslo Symposium on Sustainable Consumption, in January 1994,
OECD is considering new work in this field to deepen
understanding of key consumption and production issues and
trends.  The goals would be to develop a solid conceptual
framework that could help support and guide future international
discussions, and promote actions by Governments in meeting the
challenge of moving towards more sustainable patterns.  The aim
of this analysis would be to establish a better basis for
determining the likely impacts (both short and long term) of
significant changes in consumption and production patterns in
OECD countries on national economies, international trade and
competitiveness, and the environment.  The work would take into
account broader international efforts and the outcome of the
meeting of the Commission on Sustainable Development in May 1994.

                    5.  Proposals for action

50. In order to facilitate a better understanding of the
interrelationships among consumption patterns, production
techniques, economic growth, population dynamics and
environmental stress, Governments are urged to (a) intensify and
expand their efforts to collect relevant data at the national and
subnational levels; (b) undertake projections and perspective
studies so as to appreciate better the consequences of present
policy stances and the possible impact of changing those
policies.

51. In order to provide the basis for exchanging experience among
countries on effective national policies, Governments are urged
to include in their national reports to the Commission on
Sustainable Development, specific changes in their legal and
regulatory frameworks and enforcement mechanisms intended to
achieve the following objectives:  (a) encourage greater
efficiency in the use of energy and resources, (b) maximize the
prevention of wastes, (c) assist individuals and households to
make environmentally sound purchasing decisions, (d) exercise
leadership through government purchasing,

(e) move towards environmentally sound pricing, and (f) reinforce
values that support sustainable consumption.

52. It would be useful to concentrate further work in the United
Nations on the following areas:  (a) measuring the impact of
consumption by means of appropriate indicators; (b) consumer
legislation, including eco-labelling and consumer protection; (c)
organizing exchange of experience, especially among developing
countries and economies in transition, with the use of economic
instruments; (d) examining the procurement policies of national
Governments and international organizations; (e) reviewing
progress in negotiating or implementing agreements to limit
consumption in specific areas such as CFCs and CO2; (f)
identifying the need to extend this process to other specific
substances; and (g) enhancing the role of education and consumer
awareness campaigns in changing consumption patterns.

             II.  FINANCIAL RESOURCES AND MECHANISMS

                   A.  General considerations

53. Agenda 21 represents an agreed political framework for the
financing of sustainable development.  It includes financial
commitments such as an increase in official development
assistance (ODA) flows and addresses other issues such as the
worsening of terms of trade, problems in the access to
international finance, the need for debt relief, national
policies for resource mobilization and innovative financing.

54. So far, the response to the financial recommendations and
commitments of Agenda 21 falls short of expectations and
requirements, even though the recent finalization of the
restructuring and replenishment of the Global Environmental
Facility (GEF) and the successful completion of the Uruguay Round
are encouraging.  At the international level, significant new and
additional financial resources other than those provided by GEF
have not been made available to developing countries, and at the
national level, increased efforts are necessary to stimulate
private and public savings and promote economic growth. 
Furthermore, most innovative international financial mechanisms
are still at the development stage and require further study.

55. The Inter-sessional Ad Hoc Open-ended Working Group on
Finance of the Commission dealt with these and other issues at
its meeting in New York from 28 February to 2 March 1994 and made
various recommendations in its report to the Commission (see
E/CN.17/1994/10).  Therefore, this overview will largely aim at
complementing the report of the Working Group and the report of
the Secretary-General prepared for it.

56. The United Nations and OECD Secretariats have begun informal
consultations to explore the possibility of classifying data on
ODA and other financial flows collected by the Development
Assistance Committee (DAC) in a way more suitable for monitoring
the financial objectives of Agenda 21.

57. Finally, a workshop in Kuala Lumpur was sponsored by the
Government of Malaysia and Japan to prepare for the
above-mentioned meeting of the Working Group on Finance.

               1.  Access to international finance

58. Developed countries need to make greater efforts to honour
the financial commitments made in Rio, including those of ODA. 
Aggregate official development assistance from DAC members
increased in 1992 by 5.8 per cent in nominal terms to $59.9
billion, but slightly decreased in real terms, i.e., making
allowance for changes in prices and exchange rates vis-a-vis the
United States dollar, by 0.3 per cent.  Contributions of DAC
countries to multilateral agencies rose by 19 per cent to $19.5
billion, mainly owing to higher contributions to the
International Development Association (IDA) and the regional
development banks.  Bilateral ODA from DAC countries, by
contrast, declined by 6 per cent in real terms in 1992.  In
particular, bilateral grants dropped by 12 per cent, owing mainly
to a fall in United States bilateral disbursements.  The group of
nine countries whose ODA to gross national product (GNP) ratio
was below the DAC average of 0.33 per cent in 1992 includes the
United States of America, Japan, Italy and the United Kingdom of
Great Britain and Northern Ireland.  Among them, these countries
provide almost 50 per cent of DAC ODA and therefore weigh very
heavily in the calculation of the DAC average.  The United States
(0.20 per cent), Japan (0.30 per cent) and the United Kingdom
(0.31 per cent) all reported declines in their ODA to GNP ratios. 
Italy (0.31 per cent) recorded a small recovery in aid volume and
its ODA to GNP ratio.  Spain (0.28 per cent) reported significant
growth on both accounts.  Ireland reported the lowest ODA to GNP
ratio of any DAC member in 1992 (0.16 per cent), but has
announced measures to secure an increase in its volume in future
years.  The newest member of DAC, Luxembourg, which joined in
December 1992, recorded an ODA to GNP ratio of 0.26 per cent,
owing to a temporary fall in aid volume.  In absolute terms, the
United States, at $11.7 billion (including the concessional
assistance represented by forgiveness of military debt), and
Japan, at $11.1 billion, remained the largest DAC donors in
absolute terms in 1992, followed by France ($8.3 billion) and
Germany ($7.6 billion).

59. It will be important to further strengthen the lending
capacity of multilateral institutions.  Multilateral institutions
have been the largest sources of net flows, both concessional and
non-concessional, to the developing countries and their share in
total net flows has increased over the past decade.  The
medium-term outlook is for increasing net flows in support of
structural reforms and the development process in a growing
number of countries, including the new borrowing member countries
in Eastern Europe and Central Asia.  Funding for these emerging
demands has been made possible through recent general capital
increases.

60. Furthermore, policies aimed at improving private capital
flows and foreign direct investment (FDI) should be strengthened. 
The record of financing from private sources has been mixed. 
While bank lending to developing countries has remained subdued,
non-bank financing, through securities markets (i.e., bonds and
equities) has continued to increase in the past few years.  As
concerns bank loans, commitments to developing countries have
fluctuated around a declining trend.  In the 1990s, they have
averaged about US$ 21 billion annually, with a sharp drop in 1992
being followed by some recovery in 1993.  In contrast to bank
financing, private (non-bank) market financing flows to
developing countries have continued to increase, although the
experience is highly uneven across market segments and across
countries.  These flows have taken the form of bond financing and
equity capital.  In the recent past, the structure of such flows
has shifted markedly towards increased reliance on bond financing
and reduced activity in equity markets.  FDI flows to developing
countries have been rising rapidly over the past decade,
totalling $56 billion in 1993.  FDI to East Asia exceeded $15
billion in 1992, up 15 per cent over the year, and China was the
largest recipient.  In Latin America, after a slight rise in
1990, FDI jumped almost 70 per cent in 1991, to $12 billion, and
a further 25 per cent in 1992, to nearly $15 billion.  Latin
American countries effectively converted a significant percentage
of their debt into equity stakes.  The trend has also been
impressive in the Middle East and North Africa region in the
1990s, from $1 billion to $4 billion, while in sub-Saharan
Africa, however, investments have stayed at 1986 levels, at $2
billion.

61. Efforts aimed at easing the external debt burden of
developing countries should be continued, especially for least
developed and other low-income developing countries with poorly
diversified exports.  Developing country debt is now better
provisioned by creditors and is being put to more productive use
by borrowers, thereby creating a greater debt-servicing capacity. 
Despite these positive developments, a number of trends give
cause for concern.  These concerns are particularly evident in
the poorest countries, as the situation in sub-Saharan Africa
illustrates.  Progress with economic reform has often been slow,
and the economic outlook is discouraging.  Expanded overall
resource flows and the improved debt situation for developing
countries as a whole have largely bypassed them. For many
countries, debt obligations are still well beyond their ability
to meet debt service payments, resulting in the build-up of
arrears.  Even for those that have been able to keep up with
obligations, many struggle to do so, leaving little foreign
exchange earnings for other purposes.  Some recent initiatives
reflect concern with this situation.  For example, the United
States is considering the cancellation of an important part of
its claims on the poorest African countries through existing
Paris Club arrangements (the enhanced "Toronto Terms").  Others
continue to press for the application of greater debt forgiveness
along the lines of the "Trinidad Terms".

     2.   National policy environment and the financing of
          sustainable development

62. Both developed and developing countries need to improve their
national policy environment in order to increase the availability
of domestic resources for the financing of sustainable
development.  National sustainable development plans and
strategies are an important instrument in this regard since they
can facilitate the development and implementation of policy
options.  It will, for example, be important to search for a
better mix between traditional regulation and the use of economic
instruments.  Command- and-control regulations such as
end-of-the-pipe effluent standards, end-of- the-smokestack
emission standards and mandated pollution-control technologies
have been the standard approach to environmental protection  in
developed and developing countries alike.  Poor performance and
high compliance and enforcement costs have encouraged many
developed and some developing countries to explore the use of
economic instruments either in support or replacement of command
and control regulations.

63. Economic instruments such as environmental taxes, effluent
charges and tradable emission permits are known to be more
cost-effective than effluence and emission standards or mandated
technology in attaining a given level of environmental quality. 
Furthermore, while regulations generate no revenues and require
large budgets and bureaucracies to manage and enforce them,
economic instruments, if properly designed, could simultaneously
reduce enforcement costs and generate substantial revenues for
environmental investments.  Moreover, economic instruments impose
significantly lower compliance costs on industry because they
allow polluters the freedom to choose their response so as to
minimize the cost of compliance.  For example, they can pay the
charges, reduce or treat their waste, change their input
combination, reduce their output, change their production
technology or move to a different location.

64. It will be necessary to address the issue of excessive
subsidies, too. Approximately one trillion United States dollars
a year, or 5 per cent of the world's GNP, is spent by developed
and developing countries on environmentally damaging subsidies,
on, among others, fossil fuels, electricity, agriculture, water
and pesticides.  Global reductions in these subsidies would
result in economically and environmentally beneficial changes in
favour of cleaner and more efficient industries and faster and
greener growth.

65. In addition, military spending should be cut.  The world
spends $1 trillion on the military every year, and many countries
expend more on the military than on social sectors.  In
high-income countries, military spending has been increasing at
roughly the same rate as gross domestic product (GDP). In
developing countries, military expenditure has been declining -
from 6-7 per cent of GDP in the late 1970s to about 4-5 per cent
in the second half of the 1980s.  This is in part accounted for
by drastic reductions in military spending in the Middle East and
in Latin America.

66. Finally, private sector involvement in the financing of
sustainable development should be encouraged.  For example,
private sector investment in environmental infrastructure could
be encouraged through the use of build- operate-transfer (BOT)
agreements.  This technique holds much promise, especially in
meeting the heavy investment requirements in such priority areas
as power generation, water treatment and distribution, and waste
disposal, as well as health education.  However, there is a need
to assist developing countries to put in place the necessary
legal and regulatory frameworks to accommodate the use of such
mechanisms, and to assist in the training of human resources to
identify, design, negotiate, implement and manage such
sustainable development projects.

      3.  Innovative financing for sustainable development

67. Access to international finance and domestic resource
mobilization could be significantly improved by pursuing more
rigorously the development and establishment of innovative
financial mechanisms.  Progress has been made, for example,
concerning mechanisms related to external debt.  Debt-for-
sustainable- development swaps are useful instruments for
providing short- term financial relief and include
debt-for-nature, debt-for-education and debt-for-habitat swaps. 
Moreover, environmental investment funds prove to be a promising
innovative mechanism.

68. If properly designed and operated, national environmental
funds can play a catalytic role in improving environmental
management, bio-diversity conservation, and sustainable and
equitable use of natural resources.  To date, environmental funds
have been initiated in 20 countries, or groups of countries. 
Together, these funds have received funding commitments of almost
US$ 300 million, and have had over US$ 50 million actually
transferred to them.  Funds in the Philippines, Bolivia and
Jamaica have developed to the point of making grants to field
projects (a total of almost 90 to date). Much remains to be done
to promote and encourage the further development of these funds.

69. Among the various innovative international mechanisms under
discussion are tradable permits on greenhouse gas emissions,
international emission charges and international charges on air
travel.  Tradable permits for CO2 emissions abatement fulfil the
condition established under article 3, principle 3, of the United
Nations Framework Convention on Climate Change, which states that
"measures to deal with climate change should be cost- effective
so as to ensure global benefits at the lowest possible cost"
(A/AC.237/18 (Part II)/Add.1).  The development and
implementation of an international tradable permits scheme for
CO2 emissions abatement must progress in stages.  In this regard,
the use of the joint implementation mechanism, under appropriate
modalities and guidelines, provides valuable practical experience
and helps to lay the basis for a multilateral tradable permit
arrangement.

70. International emission taxes could provide an effective
instrument for pollution control and reduction.  There are two
basic approaches to setting a tax.  In the case of a tax on
fossil fuel, Governments may determine the level of abatement
desired and then set a tax with a view to bringing about the
desired reduction in greenhouse gas emissions.  Alternatively,
Governments could determine the acceptable tax burden that the
international community would accept and allow it to produce the
concomitant emission reductions.  Either way, the potential
revenue flows could be enormous.

71. With regard to international charges on air travel, it is
argued that air transportation is a major consumer of fossil
energy and emitter of greenhouse gases.  High altitude flights
also contribute to the degradation of the ozone layer.  It has
been estimated that a 1 per cent charge on all passenger tickets
issued in 1989 would have generated $1 billion.  Seventy-five per
cent of this sum would have been contributed by airlines from the
seven major industrialized countries.  The revenues generated
could be made available to an international fund for the
promotion of sustainable development.

72. Unfortunately, most innovative financing mechanisms that are
under discussion require further study in order to assess their
feasibility.  The same applies to the establishment of a
multilateral forum to promote the coordination of fiscal and
financial policy reforms for sustainable development.

               4.  Financing of sectoral clusters

73. It will be necessary to continue reforming the financing of
sectoral clusters such as health, freshwater, human settlements,
toxic chemicals and hazardous wastes and make greater efforts at
developing mechanisms for financing the transfer of
environmentally sound technologies.  The focus should be on ways
and means of improving the access of developing countries to
international and national financial resources, the development
of tailor- made financial instruments and general domestic policy
reforms in support of resource mobilization, including a much
greater reliance on user charges.

74. Human health is a principal objective of sustainable
development and is vital to its achievement.  Cost recovery, cost
containment (by emphasizing preventive care over curative
services) and other domestic sources must be major sources of the
necessary funds, with ODA, serving as an essential catalyst. 
Cost recovery, however, faces the difficulties that population's
willingness to pay is usually higher for curative services than
for preventive services, and that ability to pay is severely
limited for the disabled and poor, who account for a high
proportion of those requiring health services.  Higher income
groups may need to bear more of the burden of public health-care
funding.  Health care requires predictable funding.  In turn,
financial resources on a sustained basis require a reorientation
from costing disease (budgeting for treatment of a particular
disease) to marketing health (emphasizing prevention and
allocating resources to health care in line with the productive
services it provides).  Investments under Agenda 21 not directly
related to health-care programmes, e.g., investments that promote
income growth, poverty reduction and pollution reduction, can
provide some of the most cost-effective means of achieving health
care benefits.

75. In many developing countries, people are willing to pay for
water but the majority of the population does not have access to
safe and reliable supplies.  The development of new water supply
systems and the rehabilitation of existing ones, together with
relevant institutional strengthening measures, would contribute
to reducing the incidence of water-borne diseases. It would also
improve the financial performance of water suppliers and,
indirectly, the public sector.

76. Internalization of external costs provides a principle to
follow in financing investments related to human settlements,
freshwater, and toxic chemicals and hazardous wastes.  For
example, transportation-related fees (e.g., road pricing) can be
used both to encourage the use of transportation methods that
generate less pollution and congestion and to generate the funds
necessary for investments in systems more consistent with
sustainable development.

77. Similarly, effluent charges, which have been used with
success in several developing countries, can be used to
discourage additional pollution of freshwater resources and to
generate funds for the clean-up of existing pollution problems. 
Revolving funds were used successfully to finance the National
Sanitation Plan in Brazil.  More complete cost recovery in water
supply systems would promote water conservation and raise funds
for system expansions and improvements.  However, measures must
be taken to ensure that changes in the structure of water rates
do not impose additional burdens on the poor or make it too
expensive for them to afford clean water.

78. In the case of toxic chemicals and hazardous wastes, steps
must be taken to ensure better compliance with international
conventions.  Moreover, the prices of toxic chemicals and
compounds that generate hazardous wastes typically do not reflect
the full environmental costs related to their use and disposal. 
Under the polluter pays principle, producers should be
responsible for the safe disposal of their waste products. 
Deposit legislation, under which the users of such inputs pay a
deposit that is refundable only when they account for the safe
disposal of the chemicals and waste, provide one possible
mechanism for making the user financially responsible for safe
use and disposal.  The international community should consider
ways of assisting developing countries to obtain effective
technology for addressing problems related to toxic chemicals and
hazardous wastes.

                    B.  Proposals for action

79. Proposals for action related to this section are brought to
the attention of the Commission in the report of the
Inter-sessional Ad Hoc Open-ended Working Group on Finance (see
E/CN.17/1994/10).

     III. TRANSFER OF ENVIRONMENTALLY SOUND TECHNOLOGIES,
          COOPERATION AND CAPACITY-BUILDING.

                   A.  General considerations

80. The period since the first meeting of the Commission on
Sustainable Development has been marked by a keen interest on the
part of all countries in the transfer of environmentally sound
technologies.  Developed countries have committed themselves to
ensuring that developing countries get the kind of technology
they need to protect the environment.  For their part, developing
countries are making serious efforts to make greater use of
sounder and more sustainable technologies, despite their limited
resources. It is widely recognized that, while technology and its
inappropriate use has caused many of the world's environmental
problems, environmentally sound technology is a critical element
in addressing these problems.  This is particularly true of
improved process technologies that increase the efficiency of
industrial processes and ensure that waste is captured and
recycled or treated as inputs or products for other processes.

81. The Government of Norway and UNCTAD sponsored a pivotal
workshop at Oslo in October 1993 on the transfer and development
of environmentally sound technologies.  This meeting focused on
conceptual and policy issues related to transfer, on supply and
demand-side issues of the technology-transfer process and on
identifying priority elements for an action programme.  The
meeting had a high level of expert participation, which made the
focus of the discussion pragmatic and specific.

82. The Governments of Colombia and the United States of America
jointly sponsored a workshop on transfer of environmentally sound
technology, cooperation and capacity-building, which was held at
Cartagena from 17 to 19 November 1993.  The meeting focused
particular attention on the sector- specific aspects of
technology transfer in the context of energy efficiency and
liquid waste management.  The discussion of these two sectors
provided useful insights into the generic issues of technology
transfer.

83. Both meetings laid a solid foundation for the Inter-sessional
Ad Hoc Open-ended Working Group on Technology Transfer and
Cooperation, mandated by the Commission at its first session. 
The report of the Working Group is before the Commission for
consideration at its second session (E/CN.17/1994/11).  These
inter-sessional processes have framed the debate on technology
transfer over the intervening months, pointing to the importance
of the dialogue that has taken place outside the formal framework
of the Commission.

84. The High-level Advisory Board on Sustainable Development also
considered in some detail new approaches to technology transfer
and its financing (see E/CN.17/1994/13).  The Board gave special
consideration to the ways in which government and the business
community can cooperate within a framework of appropriate
enabling conditions with a view to attracting private sector
investment.  The Board recognized that such an approach must take
place within a policy context and regulatory framework that
guides the market and ensures solutions that are both socially
and environmentally appropriate.  It was recognized, however,
that the ability of countries to attract foreign direct
investment varies considerably and is particularly weak in much
of sub-Saharan Africa and the least developed countries
elsewhere.  Technology transfer in those countries is likely to
depend on ODA, as is support for technology related to public
sector activities of water supply and waste disposal.

85. Governments of both developed and developing countries have
moved forward on practical programmes to promote technology
transfer and cooperation. Technology transfer is an important
policy theme for development cooperation among many developed
countries and is becoming one of the main criteria for assessing
project proposals.

                1.  Developed country experience

86. Several developed country Governments are making greater use
of existing international clearing-houses, such as the
International Cleaner Production Information Clearing-house
(ICPIC) of UNEP, which identifies waste-reduction methods,
upcoming events, documents, cleaner production experts and
alternative information sources.  Some Governments are also
making use of UNEP's INFOTERRA as an in-country focal point for
environmental information exchange and referral service.  It
helps to identify and describe, inter alia, national vendors of
pollution-control equipment, energy-efficient technologies,
services and equipment.

87. The Government of Japan helped UNEP establish an
International Environmental Technology Centre which will play a
key role in promoting the transfer of environmentally sound
technologies to developing countries and countries with economies
in transition.  This Centre is equipped with a database of
environmentally sound technologies from countries all over the
world and promotes training, consulting, surveys and research. 
It also handles information on technology for the sustainable
environmental management of cities, freshwater lakes, marshes and
river basins.  Another country has established three National
Environmental Technology Advancement Centres to provide
technical, managerial and financial expertise to small and
medium-sized enterprises that develop and commercialize
environmental technologies.

88. Several developed countries are concerned with energy
technologies, energy-efficiency programmes and energy research. 
The United States helped to establish the World Energy Efficiency
Association (WEEA) which will serve as a world-wide
clearing-house for information on energy-efficiency programmes,
technologies and measures.  The United States of America also
adopted a National Energy Policy Act, which aims to facilitate
the transfer of renewable energy technologies and services to
developing countries.  A collaborative partnership with the
Government of India in science and technology seeks to foster
innovation in the electric power sector.

89. The public energy research programme of Finland focuses on
energy production and supply, including new technologies for
combustion and gasification, combined with environmental research
and energy conservation. Energy conservation research has been
focused on developing technologies for various energy-consuming
sectors such as construction and industrial production.  These
research efforts have resulted in energy sector products and
services that are highly competitive internationally.  The
Government of Norway has completely reorganized its research
council system and additional positions have been established at
the universities for professors to concentrate their research on
environmental issues.  Transfer of environmentally sound
technologies will likely be a key priority on the research
agenda.  The use of remote sensing for the study of
desertification and erosion is a topic of joint research between
a developed and a developing country.

90. The Commonwealth Secretariat, through its environment and
science and technology programmes, provides, at the request of
and financed by member Governments, technical assistance to
developing country members aimed at strengthening their
capacities to properly apply science and technology in solving
environmental problems (e.g., remote-sensing techniques for
managing natural resources, technologies for increasing energy
efficiency, waste management and appropriate integrated crop
protection techniques for the efficient control of pests). 
Particular emphasis is given to the dissemination of information
on environmentally sound technology assessment, adaptation and
management, through training programmes and advisory services.
The Commonwealth Network of Information Technology for
Development (COMNET- IT) has considerable potential to enhance
dissemination of information on environmentally sound
technologies among member countries.

91. The OECD Development Assistance Committee has responded
directly to the need for approaches and mechanisms for
implementing the UNCED agreements on institutional capacities,
capacity-building and financial arrangements for environmentally
sound technology cooperation.  The DAC members, in January 1994,
agreed on a common frame of reference for the wide range of
actors in developed and developing countries, with particular
attention to lessons from aid, enabling conditions and
implications for respective actors. Effective technology
transfer, cooperation and capacity-building for sustainable
development builds on the earlier examination by DAC of
technological change in the least developed countries. 12/  A
working paper that is intended to guide sectoral work will be
revised as work progresses on different sectoral needs and as
more analysis is done on actual experiences. As part of the
attention to sectoral needs, OECD, jointly with UNEP and the
United Nations Industrial Development Organization (UNIDO), is
exploring ways that DAC donors might assist developing countries
to encourage the use of technologies for cleaner industrial
production.

92. The Government of Canada has started an Environmental
Technology Commercialization Programme.  It is an $80 million
fund for the demonstration and commercialization of new
environmental technologies as well as the development and
demonstration of resource and energy conservation programmes. The
Government of Norway is financing the transfer of know-how
programmes in waste minimization and cleaner production
strategies.

93. There are a large number of capacity-building and training
programmes being sponsored by developed countries for the benefit
of developing countries and countries in transition.  The
Government of Belgium in particular is fostering scientific
cooperation between several countries of Central and Eastern
Europe on environment and technology issues.  More than 100
fellowships have been provided in specialized research
programmes.

94. On the finance side, the Government of Finland has a
pre-mixed concessional credit scheme which has been used for
transferring environmentally sound technologies, particularly
pulp and paper, energy production and waste-water treatment
technologies, to developing countries. Because of new rules, more
concessional credits will be extended to projects in the areas of
infrastructural development and environmental investments.
Increasing attention is being paid to the environmental aspects
of projects financed by pre-mixed concessional credits.  Finland
also has a Fund for Industrial Development Cooperation, which was
established to promote economic and social development in
developing countries by transferring human and material
resources.  The Fund's main instruments are equity participation,
loans, guarantees and the financing of feasibility and other
pre-investment studies.  The bulk of the funds have been used for
forestry, forest industries, energy and transportation.

                2.  Developing country experience

95. Several developing countries have not yet benefited from the
transfer of technology and many have not yet been able to
organize necessary studies to assess national experience with
technology transfer.  For many, human, technical and financial
resources are still not adequate, imposing severe restraints on
domestic capacity to meet Agenda 21 requirements.

96. Malaysia chairs a Consultative Group on Technology
Management, which is a decentralized, cooperative network
comprising technology managers, economists, planners,
environmentalists, lawyers, bankers, engineers and senior
corporate executives.  Financial support for the programme on
science and technology management has been requested from
international sources and some developed countries have
responded.

97. The African Regional Centre for Technology (ARCT) reports
that, in its effort to enhance regional technological capability,
the Centre continues to deal with a host of technology-related
issues, which include but are not limited to policy, funds,
linkages, external assistance, environmental impact, social
preference and cultural heritage, and private sector
participation.

98. Technology transfer, for instance, plays an important role in
the implementation of its activities.  The Centre's philosophy on
transfer of technology is based on:  (a) technology needs
assessment and (b) technology acquisition, adaptation,
optimization and development, and diffusion.

99. The above implies transfer of hardware and services; transfer
of skills for operation and maintenance of production systems;
and transfer of technological capacity, including design and
reverse engineering.  According to ARCT, technology transfer,
commercialization of technological research results and the
process of technological change, as a whole, have not taken firm
root in many African countries for a number of reasons.
100.National official technology policies that could guide
technology developmen t and promotion are rare.  Furthermore, the
focal points of the technology executing organs of Government are
in a state of constant uncertainty, with rapid changes of status
and direction.  The organs are also plagued by a series of
problems including a lack of policy and irregular as well as
inadequate funding.  There is also a lack of general political
will and a lack of commitment to technology as a vital strategic
variable for development.  The above, in combination with other
factors, has led to the waste of human resources owing to brain
drain and unbalanced manpower development.  The general
population prefers imported technologies to locally generated
ones.  Thus, commercialization of locally generated research and
development (R&D) results becomes extremely difficult.

101.Very often, African researchers and industrialists do not
have the appropriate scientific conditions, owing to the
non-existence of a well- organized scientific and technological
community that participates actively in solving development
problems.  These researchers are generally isolated and affected
by the absence, in their own country, of valid interlocutors in
their areas of specialization.  In the same way, information is
inadequate. Furthermore, the participation of African researchers
in international scientific events (seminars, symposia,
congresses etc.) is most often hindered by the lack of financial
means to cover registration, travel and/or subsistence fees. 
This results in their almost chronic absence from the forums in
which scientific and technological world events are being
discussed.

102.Moreover, the limited possibilities of national markets, the
complementarity of resources (e.g., cereals, horticulture,
livestock, sea products and forestry) according to environmental
specificities (e.g., Sahelian, equato- Guinean, coastal and
equatorial zone) and the scarcity of resources (human, physical
and financial) make it particularly important to avoid
duplication and to promote subregional, regional and
international cooperation.

             3.  Countries in transition experience

103.While reports from countries with economies in transition are
limited, it is clear that many of these countries are dealing
with old and, in many cases, outdated industrial technologies
that are marked by high energy use and high material consumption
per unit of output, with limited pollution control and consequent
adverse impacts on the environment.  New industrial technologies
are being introduced very slowly owing to the lack of financing. 
Special attention is being given in several countries to energy
production and consumption, with particular emphasis on energy
use rationalization and conservation and development of new
technologies that rely on new and renewable energy resources. 
Attention is also being given to the transportation sector,
agriculture and waste management.

104.In sum, the issue of transfer of environmentally sound
technologies is one of the topics of Agenda 21 that is getting
widespread and serious attention by most countries and
international organizations.  More needs to be done in terms of
collecting better information about how and which technologies
are being transferred.  A great deal of technology transfer is
taking place through foreign direct investment and there is an
urgent need to develop better sources of information and
reporting on what is being done and by whom.

                    B.  Proposals for action

105.Proposals for action related to this section are brought to
the attention of the Commission in the report of its
Inter-sessional Ad Hoc Open-ended Working Group on Technology
Transfer and Cooperation (see E/CN.17/1994/11).

                 IV.  DECISION-MAKING STRUCTURES

     A.  Institutional arrangements to follow up the United
        Nations Conference on Environment and Development

106.Chapter 38 of Agenda 21 addresses the institutional structure
necessary for the implementation of decisions taken during the
Rio Conference.  Emphasis is given to the institutional
arrangements within (a) the United Nations system, (b) national
Governments and (c) non-governmental organizations and major
groups.  The first two of these are discussed below.  Major
groups and non-governmental organizations are addressed in a
separate section of this overview.

                    1.  United Nations system

(a) General Assembly

107.Consistent with paragraph 38.9 of Agenda 21, the General
Assembly, taking into account the agreement to undertake an
overall review of Agenda 21 in 1997, called upon the Commission
on Sustainable Development to monitor and review the
implementation of Agenda 21. 13/

(b) Commission on Sustainable Development

108.At the request of the General Assembly, 13/ the Economic and
Social Council set up a high-level Commission on Sustainable
Development as a functional commission of the Council, to ensure
effective follow-up to the Conference, to enhance international
cooperation and rationalize the intergovernmental decision-making
capacity for the integration of environment and development
issues, and to examine progress in the implementation of Agenda
21 at the national, regional and international levels.  The
Commission, which meets annually, is composed of 53 Member
States. 14/

(c) High-level inter-agency coordination mechanism

109.In paragraph 38.16 of Agenda 21, the need for a high-level
coordination mechanism under the direct leadership of the
Secretary-General to ensure coordinated system-wide response to
the follow-up to UNCED was stressed and it was recommended that
this task be given to the Administrative Committee on
Coordination (ACC).  The Conference also recommended that ACC
consider establishing a special task force, subcommittee or board
on the implementation of Agenda 21.

110.Immediately after the Conference, the Secretary-General
established an ad hoc task force of ACC.  Upon recommendation of
the task force, ACC, at its second session in 1992, decided to
establish the Inter-Agency Committee on Sustainable Development
as a subsidiary body, to identify major policy issues relating to
the follow-up of UNCED by the United Nations system and to advise
ACC on ways and means of addressing them so as to ensure
effective cooperation and coordination of the United Nations
system in the implementation of Agenda 21.  Participation in
IACSD is at the level of senior officials.  It is open to all ACC
members, but the core membership comprises UNEP, UNDP, ILO, FAO,
the United Nations Educational, Scientific and Cultural
Organization (UNESCO), the World Health Organization (WHO), the
World Bank, the World Meteorological Organization (WMO) and the
International Atomic Energy Agency (IAEA).  The Department for
Policy Coordination and Sustainable Development chairs the
Inter-Agency Committee.

111.IACSD has met three times since its creation.  The most
recent meeting took place from 2 to 4 March 1994.  IACSD has
designated specific organizations of the United Nations system as
task managers for each of the chapters of Agenda 21.  The task
managers are to establish a network of collaboration and
information exchange, maintain intensive interaction and contact
within the United Nations system, catalyse joint activities and
programmes and develop common strategies.  IACSD adopted an
agenda for its task managers consistent with the Commission's
multi-year thematic programme of work.  Consequently, at its
third session, IACSD reviewed the report of the task managers for
the relevant chapters of the cross-sectoral clusters as well as
for toxic chemicals, hazardous wastes, freshwater, human
settlements and health.  It identified a number of areas in which
collaborative or joint actions could be taken either to fill
existing gaps or to strengthen the ongoing work of the system.

112.In addition, ACC has noted that Agenda 21 and the Commission
on Sustainable Development are having a profound and far-reaching
effect on the programmes and priorities of the organizations of
the United Nations system.  Currently, they are undertaking an
intensive review of their work programmes, reordering their
priorities and, wherever feasible, shifting resources in order to
concentrate on assisting countries in meeting the key objectives
of Agenda 21 in their respective areas of competence.

(d) High-level Advisory Board on Sustainable Development

113.In response to Agenda 21, paragraph 38.18, and the
endorsement of the General Assembly, 15/ the Secretary-General
appointed the High-level Advisory Board in July 1993 to give
broad consideration to issues related to the implementation of
Agenda 21, taking into account the multi-year thematic programme
of work of the Commission, and to provide expert advice to the
Secretary-General and, through him, to the Commission, the
Economic and Social Council and the General Assembly.

114.The first meeting of the Board, in September 1993, was
largely organizational.  The second meeting, in March 1994,
focused on three broad themes 16/ and gave particular emphasis to
the need for new linkages.  These include global through regional
to national and subnational institutions, linking Government to
the world of business, industry and commerce, in partnership for
technology transfer and cooperation.  It also refers to linking
the institutions of the United Nations system to one another and
to non-governmental entities in the world of science,
environment, sustainable development, humanitarian relief,
business, industry and commerce, labour and many other sectors of
society.

115.For its third meeting, in October 1994, the Board has decided
to focus on the following three topics:  (a) linkages between
economic, social and political development in a changing world,
with an emphasis on food, population growth and migration, and
trade and environment; (b) capacity-building, focusing on
value-based education for sustainability; and (c) concrete ways
of forging alliances.

(e) Secretariat support structure

116.Effective 1 July 1993, the Secretary-General of the United
Nations established the Department for Policy Coordination and
Sustainable Development, as one of three new departments at
Headquarters in the economic, social and related fields.  This
new Department provides substantive support for the Economic and
Social Council and the Commission on Sustainable Development, as
well as to specific negotiating processes launched by the General
Assembly, such as the Intergovernmental Negotiating Committees
for a Framework Convention on Climate Change and for the
Elaboration of an International Convention to Combat
Desertification in Those Countries Experiencing Serious Drought
and/or Desertification, particularly in Africa. The Department
also provides support to the High-level Advisory Board on
Sustainable Development and other expert bodies.  It assists the
Secretary- General in the exercise of his responsibilities for
system-wide coordination through the substantive servicing of ACC
and its subsidiary machinery, including the Inter-Agency
Committee on Sustainable Development, and it monitors the
implementation of Agenda 21, ensuring effective follow-up to
UNCED, including preparations for the Global Conference on the
Sustainable Development of Small Island Developing States.

                     2.  Country experience

117.In the responses provided by member States, a number of
important trends related to decision-making for sustainable
development were discerned, and these are discussed below.  The
spirit of innovation has encouraged countries to provide
information on steps being taken.  While statistically one cannot
speak of the respondents as "representative", they provide models
for decision-making structures.

(a) Sustainable development policies and plans

118.Sustainable development and environmental management plans
are being established at the national level and, in many cases,
at the district/provincial and local levels.  Some of these plans
are policy frameworks; others set specific targets and goals. 
Most are comprehensive and cross-sectoral.  In some cases,
sectoral environmental plans have been created on the basis of
the overall plan, but the opposite is also true. Existing
sectoral plans have been integrated into a single national plan.
Some of the plans are designed for implementation in the near
future; some are embedded in five-year plans; and some are
projected over a period of a decade.  In some cases, countries
are carrying out comprehensive reviews of the consistency of
their existing policies and plans with the activities called for
in Agenda 21.

119.Many developing countries are, however, faced at times with
conflicting pressures for the preparation of national sustainable
development strategies, national environmental action plans,
national conservation strategies and other international requests
for centralized plans to deal with environment and development
issues.  There is a need to rationalize these planning efforts at
the national level to ensure efficient use of limited resources.
United Nations system organizations, such as UNDP and the World
Bank, in particular, are examining ways in which strategic
planning can be consolidated and streamlined to avoid duplication
of efforts.

120.Several countries have also established national plans to
comply with the more recent and anticipated international
sustainable development agreements, including those concerned
with biodiversity, desertification, forests and climate change.

121.Policy frameworks and plans are increasingly being supported
by the necessary legal framework, and much of the existing
environmental legislation is under review.  However, support to
developing countries for the strengthening of their capacity to
establish national legal frameworks for sustainable development
is greatly needed.

122.Approximately one third of the countries that responded
strongly supported the use of environmental impact assessment at
both the decision-making and the project level.  The Government
of Sri Lanka, for example, noted that it had established
environmental impact assessment cells and oversight committees in
all of its project-approving agencies.

(b) Economic instruments and environmental accounting

123.Several countries have initiated environmental taxes and
charges.  In Hungary, a tax on gasoline is the source of an
environmental fund.  In the Netherlands, new environmental taxes
cover fuels, uranium, groundwater and waste, and a levy on
ammonia is being introduced.  Several countries are reviewing
waste disposal and examining policy instruments to encourage
recycling.

124.The importance of environmental accounting was emphasized, as
was the need to develop indicators for sustainable development
that are both easy to understand and applicable on an
international level.  In the Netherlands, national indicators are
used for the National Environmental Policy Plan, published every
four years.  The future course of reporting on the implementation
of Agenda 21 can be greatly enhanced with the development of
sound sustainable development indicators.

(c) National structures

125.Many countries have established inter-ministerial bodies to
coordinate the work of all ministries in sustainable development. 
In some cases, these bodies are chaired by the Prime Minister, or
his/her equivalent, but most are chaired by Ministers of the
Environment.  Norway has two national coordination bodies - one
for sustainable development within the country, and the second
for international environmental questions.  Malaysia has several
federal-state coordinating mechanisms for specific issues related
to Agenda 21.  Designated "Green Ministers" for each department
have produced "green housekeeping" strategies in the United
Kingdom, with efforts to develop environmental management systems
at local and central levels by the end of 1994.  A few of the
countries have also appointed high-level advisory panels, both
standing and ad hoc, to advise the Government.

(d) Public participation and information

126.The ability of the public - of individual citizens - to
participate in decision-making for sustainable development is
considered to be extremely important in many cases.  Some
countries have established ad hoc task forces of individuals to
assist them in making decisions on specific issues.  Round tables
- at federal, provincial and local levels - are used to build
consensus among representatives of important groups and sectors
and to discuss candidly environment-economy issues.  In the
United Kingdom, a Citizen's Environment Initiative is
communicating between the Government and citizens.  The
Government of Iceland has established a National Environmental
Assembly, which will meet regularly and serve as a forum for
exchanging views regarding sustainable development.  The creation
of corresponding environmental assemblies at the local level are
also being encouraged. Legislation that guarantees the right of
the public to have access to information on environmental affairs
is also becoming common.

127.The need to improve access to information on sustainable
development at local, national and international levels was
emphasized.  The Government of Japan underlined the need to study
cooperation for the promotion of global- scale integration of
geographic information.  The Government of the Netherlands noted
that it has established a network of experts, known as Green
Planners, to exchange information on the structure and content of
environmental plans and strategies.  The Government of Canada
indicated that it is developing an information system to identify
and communicate information about the implementation of Agenda
21.

       B.  International legal instruments and mechanisms

128.Information on legal instruments that were open for signature
at Rio, namely, the Framework Convention on Climate Change and
the Convention on Biological Diversity, as well as on the
International Convention to Combat Desertification in Those
Countries Experiencing Serious Drought and/or Desertification,
particularly in Africa, recommended in Agenda 21, is provided in
the addendum to this report.

129.Other recent developments in international law relevant to
Agenda 21 include :

   (a) Basel Convention on the Transboundary Movement of
Hazardous Wastes. On 25 March 1994, the Conference of the Parties
adopted a ban on all hazardous waste exports, including for
recycling, beginning 31 December 1997. The export of hazardous
wastes produced in any of the OECD countries to any non-OECD
country for final disposal is banned with immediate effect;

   (b) United Nation Convention on the Law of the Sea.  This
Convention will enter into force on 16 November 1994.  At that
time, the Secretary-General will be called upon, inter alia, to
assist in the establishment of two new bodies, the International
Seabed Authority to administer the deep seabed regime, and the
International Tribunal for the Law of the Sea.  He will also be
responsible for setting up and servicing the Commission on the
Limits of the Continental Shelf.

130.    The Government of Austria is sponsoring an International
Symposium on Environmental Law, from 14 to 16 April 1994, which
is expected to provide an input to the work of the Commission in
the area of international legal instruments.

131.    Furthermore, a few countries provided suggestions for
areas in which new international agreements might arise.  These
include:  (a) environmental destruction during military conflict;
(b) effective management of fish stocks on the high seas; (c)
converting the forest principles into an international
convention.  Emphasis was also placed on early adoption of the
Nuclear Safety Convention and on further studies for coordination
of activities in existing mechanisms for dispute settlement.

                      Proposals for action

132.    Many developing countries are faced at times with
conflicting pressures for the preparation of national sustainable
development strategies, national environmental action plans,
national conservation strategies and other international requests
for centralized plans to deal with environment and development
issues.  There is a need to rationalize both the international
requests for such plans and the planning efforts at the national
level to ensure better use of limited resources.

133.    Capacity-building and technical support to developing
countries needs to be enhanced in order to strengthen their
capacity to review and update their national legal frameworks for
sustainable development.

134.    Environmental impact assessment is recognized as an
essential tool for decision-making and project evaluation.  There
is a need to further strengthen countries' capacities to carry
out effective impact assessment methodologies.

135.    The work on environmental and sustainable development
indicators needs to be accelerated to improve the reporting
process with respect to the implementation of Agenda 21 as well
as national sustainable development strategies.

136.    There is a need to improve access to information on
sustainable development, at the local, national and international
levels, and legislation should be encouraged that ensures the
public's right of access to information on environmental affairs.

                    V.  ROLES OF MAJOR GROUPS

137.    The relationship of the Commission on Sustainable
Development to major groups 17/ is described in chapter 38 of
Agenda 21.  It includes, among other things, receiving and
analysing inputs from major groups on Agenda 21 implementation at
all levels; enhancing dialogue between these groups and the
Commission; designing an open and effective mechanism of
participation; and expanding the role of major groups in the
United Nations system (paras. 38.13 and 38.43).  Furthermore,
chapters 23 through 32 of Agenda 21, covering nine major groups,
contain additional suggestions on the particular supportive
relationship the Commission, the United Nations system and
Governments may establish with each group.

138.    The summary review below focuses on:  (a) inputs received
by the Secretariat from major groups on the 1994 themes for
review by the Commission and (b) the extent of relevant
"supportive relationship" with governmental and intergovernmental
bodies.  A more detailed review of the role and contribution of
major groups to Agenda 21 implementation can be found in the
background paper prepared by the Secretariat.

A.  Contributions of major groups to the thematic progress review
reports

139.    Official submissions of reports by major groups to the
thematic progress review for 1994 (involving both sectoral and
cross-sectoral themes) were fewer than expected.  At the time of
writing, the Secretariat had received formal thematic submissions
from nine groups, of which two were from groups based in
developing countries.  Some groups among the nine submitted
multiple thematic reports as well as other written material
relevant to Agenda 21 in general.  Altogether, about 40 groups
made written submissions, of which 13 were from groups based in
developing countries.  Some of the written submissions involved
policy and programme proposals, information on the group s
activities in general, and requests for information or financial
support for various planned projects under Agenda 21.

140.    The apparent lack of quantity does not, however, indicate
an absence of major groups in various national or international
efforts to implement Agenda 21.  Although the term "major groups"
and the present exercise of reviewing the activities of major
groups are new, non-governmental involvement in environment and
development is not.

141.    The Secretariat, and the United Nations organizations in
general, monitored dozens of NGO newsletters, other relevant
publications and several electronic networks, and participated in
NGO-organized conferences and other meetings.  This monitoring
exercise confirmed that there is a great deal of ongoing NGO and
other major group activity as follow-up to Agenda 21.  Lack of
written submissions from major groups, therefore, appears to be
more relevant to other factors than to lack of interest,
commitment or involvement.  Among those factors are lack of human
and financial resources (primarily on the part of developing
country major groups) and lack of clarity on how the United
Nations system and Governments will operationalize the activities
in the major groups chapters of Agenda 21, particularly given the
upcoming review by the Economic and Social Council of NGO
participation in the United Nations.

142.    A significant reason for the lack of written inputs is
that many major groups place greater priority on fieldwork than
on report-writing.  The latter requires a reallocation of scarce
human and financial resources and a reorientation of priorities,
which are not easily justified given the absence of a clearer
understanding of how and to what extent their reports are likely
to influence the Commission process.

        B.  Support for major groups at governmental and
intergovernmental levels 18/

143.    The preamble to section III, chapter 23, of Agenda 21
identifies two main objectives in this context:  implementing
Agenda 21 requires broad public participation in decision-making,
and, to accomplish this, there is a need for new forms of
participation. 19/  Since there is no generic chapter on "major
groups", the objectives of the preamble are considered for this
purpose.

144.    The Secretariat received no inputs from major groups
assessing their level of participation in decision-making at the
national or international level.  The content of the term "broad
public participation in decision- making" may need to be
operationalized at the national and international levels to
generate the needed inputs in the future.

145.    The reports received from organizations of the United
Nations system indicate some emerging positive trends in terms of
"new forms of participation", including participation in
decision-making, if the latter is defined as participation in
programme design and planning through formal committees or
reliable consultation mechanisms.  The effectiveness of these
trends is yet to be seen.

146.    A number of problem areas need to be dealt with in order
to meet the objectives presented in the preamble to section III. 
Among these are (a) the lack of clear "participation" criteria,
particularly given that the major groups community is highly
heterogeneous and constantly changing; and (b) institutional
limitations primarily on the part of intergovernmental
organizations in being able to accommodate greater major group
participation.

147.    It is, however, likely that the emerging trends will
increasingly become the rule rather than the exception.  Overall,
both governmental and intergovernmental institutions increasingly
acknowledge the actual and potential contributions of some or all
of the nine major groups to sustainable development.  For
example, many national reports received indicate the importance
of the particular role of local authorities in implementing local
Agenda 21s, as well as in building participatory local coalitions
and providing links between local communities and national
institutions.  Similarly, many national reports indicate the role
and better education of women in family health care and the local
management of toxic chemicals and hazardous wastes as a crucial
link between international and national policies.  Some United
Nations agencies and Governments also suggest additional "major
groups" such as the elderly, the disabled and the media. This
might be interpreted as a commitment of governmental and
intergovernmental actors to an evolving and growing involvement
of major groups in sustainable development.

                      Proposals for action

148.    There is a clear need to improve the quantity and quality
of information relevant to the role and contributions of major
groups.  The Commission may wish to request that Governments and
intergovernmental bodies provide information on the extent of
involvement of major groups organizations.  This information may
include, among other things, the following areas:

   (a) Involvement of major groups organizations in sustainable
development activities, including participation in project
design, implementation and evaluation at the national, regional
and international levels;

   (b) New and innovative ways to increase and enhance the
quality and quantity of consultations with major groups
organizations;

   (c) Relevant indicators such as financial and other resource
allocations, and successes and failures related to the
institutional and/or technical assistance provided;

   (d) Identification of bottlenecks and suggestions for future
needs to overcome them.

149.    The Commission may wish to request detailed and periodic
surveys of major groups in sustainable development to identify
the specific actors, assess needs and collect innovative
suggestions.

150.    The Commission might also consider requesting the
production of a coordinated series of "success stories" related
to the involvement of major groups in sustainable development
efforts of United Nations agencies as well as of Governments. 
Such a series can be managed by the Secretariat and might be
coordinated through the Inter-Agency Committee on Sustainable
Development.

151.    The Commission might consider a more proactive role with
respect to the participation and contribution of major groups to
Agenda 21 implementation.   This might encourage seminars and
round tables on the thematic topics of each year as well as
relevant conferences co-sponsored by major groups, United Nations
agencies and the Commission secretariat.

152.    The Commission may wish to discuss how best to utilize
inputs from major groups in the reports and other information,
discussion and negotiation processes.  An annual or biannual
publication composed of inputs from major groups could be a
beginning to signalling to major groups that their efforts and
inputs are not ignored.

153.    The Commission may wish to urge those United Nations
agencies with field offices and other national or regional
presence to increase their efforts to create and enhance support
to major groups.  Such support could include institutional,
technical, managerial and financial assistance, training and
transfers.

                              Notes

   1/  Ulrich Hoffmann and Dusan Zivrovic, "Demand growth for
industrial raw materials and its determinants:  an analysis for
the period 1965-1988", UNCTAD discussion papers, No. 50, November
1992.

   2/  Recent trends in the use of material resources and their
environmental consequences may be found in World Resources
Institute World Resources 1994-95 (New York, Oxford University
Press, 1994), in particular chap. 1, "National resource
consumption".

   3/  Ibid.

   4/  Lee Schipper, "Energy efficiency and human activity: 
lessons from the past, importance for the future", paper prepared
for the Symposium on Sustainable Consumption, Oslo, 19-20 January
1994.

   5/  United Nations Conference on Trade and Development, "The
effect of the internalization of external costs on sustainable
development" (TD/B/40(2)/6 of 7 February 1994.

   6/  David Pearce, "Sustainable consumption through economic
instruments", paper prepared for the Symposium on Sustainable
Consumption, Oslo, 19-20 January 1994.

   7/  Paragraphs 40-42 are derived from Organisation for
Economic Cooperation and Development, Integrating Environment and
Economics:  The Role of Economic Instruments (Paris, 1994)
(forthcoming).

   8/  Paragraphs 43 and 44 are derived from Organisation for
Economic Cooperation and Development, Economic Instruments for
Environmental Management in Developing Countries (Paris, 1993).

   9/  United Nations publication, Sales No. E.91.IV.4.

   10/ General Assembly resolution 39/248 of 9 April 1985, annex.

   11/ Handbook of National Accounting:  Integrated Environmental
and Economic Accounting (ST/ESA/STAT/SER.F/61) (United Nations
publication, Sales No. E.93.XVII.12).

   12/ Organisation for Economic Cooperation and Development,
Managing Technological Change in Least Developed Countries
(Paris, 1991).

   13/ General Assembly resolution 47/191 of 22 December 1992.

   14/ See Economic and Social Council decision 1993/207 of 12
February 1993.

   15/ General Assembly resolution 47/191, paras. 29-31.

   16/ The three issues were (a) linkages between economic,
social and political development in a changing world; (b) new
approaches to finance and technology; and (c) the establishment
of new partnerships between the United Nations system and other
bodies active in the field of sustainable development.

   17/ Agenda 21 identifies the following as "major groups": 
women, children and youth, indigenous people, non-governmental
organizations, local authorities, workers and trade unions,
business and industry, scientific and technological communities
and farmers.  "Major groups" is a term specific to Agenda 21
rather than a widely accepted term, referring to the set of
actors that belong neither to the governmental nor to the
intergovernmental spheres.

   18/ The 139 activities listed in section III of Agenda 21
primarily refer to how the role of major groups can be enhanced,
encouraged and supported through governmental and
intergovernmental action at the local, national, regional and
international levels through institutional, financial and human
resource-sharing and transfers.

   19/ According to the preamble, "new forms of participation"
include, among other things, participation in environmental
impact assessment procedures and in decision-making, with a
direct effect on the immediate community; and access to
information on environment and development held by national
authorities such as information on products, activities and
environmental protection measures.

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Date last posted: 1 December 1999 12:18:30
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