Integrating Environmental Considerations into the Economic Decision-Making Process
Introductory note : key issues
This website contains four volumes of background readings on integrating environmental considerations into economic policy making processes. It comprises empirical and analytical material gathered on (i) the institutional mechanisms and (ii) the types of environmental assessments used by governments for the integration of environmental concerns into economic policy-making processes in selected countries in the Asia-Pacific region. At present, development strategies in the region are heavily focused on fostering economic growth, using the private sector as the primary vehicles for undertaking the related economic activities. Such emphasis often does not pay due attention to the detrimental environmental effects of the modalities used to implement the strategy. Increasingly, the need to protect the fragile environment, and thus make economic development sustainable in the full sense of the term, is receiving the attention of policy makers. Strategies to balance environmental concerns with the promotion of economic growth are becoming a major aspect of government policies and plans, although those strategies are constrained by a combination of factors. Integration of environmental considerations into economic policy decisions requires (i) institutional framework to facilitate such integrated approach, (ii) effective communication between the environment and economic policy makers to enable for meaningful policy making, as well as (iii) effective policy tools which lead economic actors to incorporate environmental factors into determinants of their economic decision making.
Institutional mechanisms, which comprise formal rules and standards, informal norms, and the organizational structure that defines and enforces the rules, are important, and indeed crucial, because they provide government at all levels, federal, provincial and local, with instruments to frame and implement policies. The credibility, transparency and predictability of the institutional environment reduces transaction costs and defines the incentive structures in; the economy for the emergence of competitive markets. The efficacy of the institutional mechanisms and the interaction between them is dependent to a large degree on: (a) the powers and functions delegated to each agency with well-defined tasks; (b) the scope of the tasks specified; (c) the resources, both financial and human, available for executing the tasks; and (d) the degree of commitment and political will exhibited by the leadership. In the present context, given the segmented and compartmentalized structures of the governments in the region, designing institutional mechanisms which emphasize a cross-sectoral approach to the integration of environmental concerns with economic policy-making processes is, perhaps, one of the most difficult challenges facing policy makers.
The Brundtland Commission emphasized in its report that "governments must begin now to make the key national, economic and sectoral agencies directly responsible and accountable for ensuring that their policies, programmes and budgets support development that is economically and ecologically sustainable" (World Commission on Environment and Development, p. 20). Agenda 21 of the Rio Conference reiterated it even more forcefully, stating that "an adjustment or even a fundamental reshaping of decision-making, in the light of country-specific conditions, may be necessary if environment and development is to be put at the centre of economic and political decision-making" (United Nations, p. 65). It called, inter area, for ensuring the integration of economic, social and environmental considerations in decision-making at all levels, a cross-sectoral approach to planning, the adoption of integrated management systems, the strengthening of data collection, the adoption of national strategies for sustainable development, and the enhancement of training, education and research for capacity-building.
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