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Towards a Better Environmental Policy in the Productive Sectors of Latin America and the Caribbean : Recent Environmental Policy Experiencies and Challenges.

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Presentation on theme: "Towards a Better Environmental Policy in the Productive Sectors of Latin America and the Caribbean : Recent Environmental Policy Experiencies and Challenges."— Presentation transcript:

1 Towards a Better Environmental Policy in the Productive Sectors of Latin America and the Caribbean : Recent Environmental Policy Experiencies and Challenges in Mexico, Colombia, Bolivia, Brazil, and the Caribbean Regional Policy Dialogue First Meeting of the Environment Network Inter-American Development Bank Ricardo Samaniego Centro de Políticas Públicas (Public Policy Center) ITAM-Mexico April 4th, 2002

2 Conditions for Success of Environmental Public Policies in Productive Sectors 1.Include environmental considerations and corrective measures in sectoral decision making. oPollution and degradation carry high social costs (illnesses, work absence, soil degradation and resource depletion); oFirms in productive sectors must take into account social costs in their production decisions 2.Harmonize sectoral policies with general environmental goals, at the least possible social cost. oPublic policy tools oCoordination mechanisms oEnvironmental cost-benefit evaluation systems within productive sectors 3.Simultaneously achieve: oConditions for sustainable development oMantain competitiveness and growth possibilities for productive sectors

3 Environmental Policy Tools and Mechanisms in Productive Sectors 1.Tools that modify decisions in productive sectors: Regulatory framework, economic tools, voluntary tools, communication and information 2.Policies that reduce the environmental impact of production decisions: goods produced, infrastructure 3.Understanding, aceptance and adoption of policies in productive sectors and institutons involved according to responsibilities and areas of competence: Productive sectors, federal government, Congress, state governments and Congresses, municipal governments, international agencies, business associations, NGOs 4.Creation of coordination mechanisms: cabinets, megasecretariats, environmental units at secretariats or ministeries, environmental authorities in sectoral decision making entities

4 Tools Used in Productive Sectors of Latin America and the Caribbean 1.Command and control: limits to the permissible levels of emissions; use of specific equipment or processes; norms and regulations; hazardous waste transportation and storage. 2.Voluntary tools: voluntary agreements and commitments between authorities, sectors and firms 3.Economic tools: Pricing and rates of public sector goods and services; fiscal and financial tools; creation of markets for tradeable permits, deposit-reimbursement systems, establishment of property rights. 4.Construction of environmental infrastructure: with private sector participation (drinking water provision, wastewater treatment, confinement of hazardous wastes); in public enterprises (oil refineries, electricity, natural gas) 5.Communication and information: registries, public campaigns, education programs

5 Recent Experiences is Productive Sectors of Latin America and the Caribbean Mexico: Energy and industrial sectors(chemical and sugar) Colombia: Mining, energy (hydrocarbons, natural gas, electricity) and industrial sectors Bolivia: Mining, hydrocarbons (oil and natural gas) and manufacturing sectors Caribbean: Tourism sector (Tobago, The Bahamas, Barbados) Brazil: Industrial sector (case study on determining factors for environmental compliance applying a compliance and non-compliance cost model)

6 Mexico Traditional ToolsEconomic ToolsCoordination Mechanisms o “Command and control” (most traditional tools): LGEEPA; Official Mexican norm, licenses, permits, environmental impact reports o Voluntary: environmental audits, environmental management systems, rules for voluntary compliance, agreements o Emissions registry and pollution transfers, National Crusade for a Clean Mexico o Public good’s pricing and rates o Gasoline surcharge o Wastewater discharge fees ZZero tax on anti- pollutionequipment imports o Environmental insurance (hazardous waste transportation) o Deposit-reimbursement systems (tires, used motor oil, batteries) o EEstablishment of property rights (hunting) o Inter-sectorial cabinets and commissions, CFMR, CFC o Coordination mechanisms for industrial inspection and enforcement and enviromental audits (Profepa) o Pricing committees in hydrocarbon energy sector o Inter-institutional groups for electricity rates setting o Local legislatures for approval of water tariffs PROBLEMS o Long and bureaucratic process o Risk of “regulatory capture” and vested interests on the part of the authority o Discretionary powers of authority o Lack of political incentives to charge those who pollute o Low collection of environmental fees o LLack of environmental institutions and markets o Low representation of business in the design of rules and regulations (big firms mainly) o Lack of coordination between Semarnat, tax authority, finance and Economics ministries, business associations and local governments

7 Colombia Traditional ToolsEconomic ToolsCoordination Mechanisms o Environmental impact assessments in energy projects o Complete, well organized and easily accessible environmental information system. o 3% of gross hydroelectricity sales for financing protection activities o Forestry development o Pollution Charges and fees o Tax incentives for clean technology adoption o Well defined regional and national legal authority (except in big cities) o Enviromental councils with private sector participation (Environmental National, Technical advisor for Environmental Regulation, Regional Corporations Directors) o Coordination mechanisms in energy sector- related public agencies PROBLEMS o Heterogeneous and frequently non harmonious or coherent o Uncertainty and delays o Focuses attention on procedures and not on achievement of goals o Obsolete effluent standards (except in Bogota) o Insufficient hazardous waste regulation o Uneven follow up and monitoring between regions o Law 99 of 1993 favors economic tools but authorities give priority to “command and control” o Forestry development creates over- exploitation o Low revenue collection for overestimated pollution rates o Low success of tax incentives to adopt clean technologies o Inexperience of environmental authorities on consensus agreements o Protagonic private associations in the design of manufacture sector policies o Poorly defined competence in big cities

8 Bolivia Traditional ToolsEconomic ToolsCoordination Mechanisms o Law 1333, regulatory rules o Environmental licensing o Environmental information system o Incentives to improve energy efficiency in industrial processes by adopting clean development mechanisms for water, energy and industrial input use (Vice Minister of Energy and Hydrocarbon and National Chamber of Industry) o Regional and sectoral planning processes o National Development Council (provided for in legislation) o State Councils on the Environment (they exist but do not work) PROBLEMS o Wide gap between regulation and social, economic, technological and institutional reality o Insufficient and inoperative legislation; focused on “command and control”; discretional; complex and vague o Prevalence of small firms, difficult to monitor o Little information on emissions o Legislation provides for it, but it has not been implemented o Little institutional capacity to apply pollution charges or provide economic incentives for the adoption of clean development mechanisms o Lack of institutional capacities of municipalities, prefectures and sectoral entities at the national level o Lack of agreements with productive sectors o Little social participation in environmental policy o Public sectoral entities without capabilities and incentives to take into account environmental considerations.

9 Tourism in The Caribbean Traditional ToolsEconomic ToolsCoordination Mechanisms o Environmental impact studies required for all tourism projects o Water quality standards and building regulation close to the beach o Fishing regulation. o Deposit-reimbursement systems for massively consumed bottles; Eenvironmental fee on imported durable goods; differential prices for solid waste collection; tax exemption for solar water heaters o User fees per volume of water used o Tax incentives (construction of rain water holding tanks and imported equipment to save water in hotels) o National comprehensive planning o Coordination between hotel owners and the government for tourism planning o Coordination between productive sectors and authorities for environment conservation PROBLEMS o Long and difficult process of tool development o Impact of domestic policies on regional competitiveness o Hard to implement due to lack of institutional framework up-dating o Fragmentation of legislative effort and political awareness o Lack of knowledge on consumption behavior and patterns in order to define tools o Lack of a comprehensive policy framework that effectively incorporates coordination mechanisms o Lack of administrative and financial continuity for environmental management o Weakness of political consensus and supporting bases to establish efficient and effective mechanisms

10 Industrial Sector of Brazil Traditional ToolsEconomic ToolsCoordination Mechanisms o Highly demanding and strict regulatory framework (illegal pollution can be punishable) o Regulations that range from licensing to systematic inspections o Agreements to avoid considerable fines o Limited monitoring systems o Fees and charges for water rights o Fees and charges for industrial waste effluents o “Goods and services circulation” tax and transfer environmental criteria to municipalities o Recognition and awards for improvements in environmental performance by the industrial sector (non government initiative) o Coordination between Environmental Protection Agencies (EPAs) and judges to take into consideration legal and social issues when creating sectoral environmental policy o Negotiation mechanisms between communities and NGOs with non- compliant companies o Citizen complaint mechanisms before EPAs and judicial system for business environmentally non compliant PROBLEMS o Weakness and inaccesibility of the wealth of information for environmental management o Poorly developed evaluation, follow-up and monitoring systems o Weak institutional framework; administrative discontinuity o Lack of understanding and experience on the part of technical teams in the design and implementation of tools o Lack of a legal framework o Fragility of institutional framework; administrative discontinuity o Insufficient coordination, integration and participation of stakeholders (economic actors, socia groups, regulators) in defining sectoral policy objectives and goals

11 Environmental Policy Challenges Institutional: Improve and complete the legal framework; overcome weaknesses or lack of institutions (especially regional and municipal); create enviromental markets; encourage competition; dismantle protectionism Operational: Eliminate the discretionary power of authority; streamline the long bureaucratic processes; enhance monitoring capabilities. Policy: Ovecorme lack of incentives to impose taxes, fees and charges; achieve agreements based on plurality in Congress. Budgetary: Provide sufficient human, technical and financial resources, achieve multi-annual budgeting and negotiate based on higher environmental priorities

12 Invitation to Discussion: Environmental Policy Challenges in Productive Sectors Can environmental public policy have any influence to improve sectoral environmental performance in the short term? How about in the long term. What are the main challenges? Can the strict application of regulations influence compliance efficiently? To what extent is it possible and convenient to expand the use of economic tools in environmental management? Can competitiveness, low costs and growth be harmonized with environmental compliance and enviornmental quality improvements? What can participants in meetings such as the Regional Policy Dialogue contribute to enhancing environmental policy in our region’s productive sectors?

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