III. MEASURES AND POLICY INSTRUMENTS USED FOR INTEGRATION

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C. Other measures

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5. Assessment of the effectiveness of the measures

The various measures outlined above are being implemented by the government in its attempts to integrate environmental concerns into policy-making. The measures have evolved over time and indicate the thrust which the government is adopting towards the management of the environmental and natural resources in the Philippines. From a purely command and control regime which vested much of the responsibility and authority in the national environmental regulatory body, the Department of Environment and Natural Resources, it has moved towards one which looks at the market as a possible mechanism for bringing about changes in the behaviour of firms and individuals that will lead to sound environmental practices. Likewise, the development of specific measures at the policy level which are not only the concern of the Department of Environment and Natural Resources has started (e.g., a new method for computing the economic internal rate of return for environmental projects for the purposes of foreign funding).

While the developments in the adoption and implementation of those measures are considered steps in the right direction, much has yet to be done. An analysis of the strengths and weakness of those measures is given below.

(a)Command and control measures

As discussed in the preceding section, CAC measures have defined areas of regulations, enforcement measures, and penalties and sanctions associated with any violations. The establishment of specific rules is not usually complicated and does not require voluminous data and estimation methodologies. It is expedient to formulate such rules, given the need to deal with an urgent issue. The enforcement of such rules vests the regulatory power in the Department of Environment and Natural Resources. The regional offices of the Department of Environment and Natural Resources issue two types of permits: an authority to construct permits and a permit to operate. Issuance of those permits enables the regulatory body to enforce the standards and other regulations it has established for sound environmental management.

The apparent advantages in the formulation of such rules are eroded when considering the way in which they are administered and enforced. The following problems usually arise in the enforcement of such regulations:

• Monitoring compliance with the regulations is time-consuming for regulatory bodies personnel. The time spent in monitoring could better utilized in initiating, supporting and implementing an environmental protection programme;
• The use of CAC measures often result in rent-seeking behaviour from agents, especially when the fines and penalties are relatively small and do not account for the true estimate of the damage resulting from a particular economic activity. For example, the regulating body is only able to impose a compromise penalty of P 1,000 in a case of failure to secure an authority to construct permit from the Department of Environment and Natural Resources;
• Existing regulations guiding the issuance of permits currently focus on the proper construction and maintenance of pollution control devices. While according to the authority vesting in the Department of Environment and Natural Resources it is empowered to regulate (through licensing) any increases in volume or strength of any wastes discharged as well as the construction, installation or operation of any industrial or commercial establishments which could cause an increase in the discharge of wastes. However, the current regulations on which permits are based under the Integrated Environmental Management Programme of 1995 do not yet take those aspects into consideration. Currently, efforts are being made to address the problem.

The use of MBIs in influencing the behaviour of individuals and firms to behave in an environmentally sound manner has long been urged. While the merits of employing such measures are properly understood, as evidenced by a Cabinet Resolution directing the use of MBIs, its implementation is hampered by a number of factors. MBIs currently used in Philippines are very limited. Most of them have encountered a number of problems which can be summarized as:

• The external costs resulting from conducting a certain activity is often difficult to estimate because of a lack of data. For example, environmental damage to health are often hard to estimate because of the lack of good epidemiological studies. Recent estimates from the Environmental and Natural Resources Accounting Project employ the dose response function used in other countries. Likewise, environmental damage is usually not confined to specific areas and cannot be traced to a specific polluting source, especially when there are a number of sources in a given area;
• Internalization of costs often means imposing taxes or additional charges on economic activities that pollute the environment. In most cases, there is resistance to the imposition of such taxes and charges in view of the fact that damage cannot easily be traced to a single source. For example, the largest lake in the Philippines, the 90,000-hectare Laguna de Bay, receives wastewater effluent discharges from some 986 factories around Metro Manila, as well as domestic wastes from septic tanks, and pesticide and fertilizer-laden agricultural run-off. Likewise, silt from the surrounding denuded areas and the eroded banks of its tributary rivers has resulted in the lake becoming much shallower. Imposing effluent charges on the discharge of the factories would mean subsidizing the wastes coming from the other sources and may not be a fair system;
• A lack of appreciation among other agencies of the merits and importance of MBIs as an instrument for sound environmental management. This is especially true if the agency concerned is the one responsible for the implementation of MBIs. For example, financial incentives for the use of sound environmental equipment and production processes may be seen as a mere revenue loss by the revenue-generating agency;
• The preceding problem is further aggravated by inadequate advocacy and information campaigns, based on empirical data, and sound technical analysis of the options. For example, the revenue loss argument may be countered by a reduction in government expenditures on probable risks that may be associated with poor environmental practice;
• Lack of capability on the part of the agencies or units which have mandates to use the measure as a regulatory mechanism for enforcing sound environmental practices and thereby comply with the standards set at the national level. This is particularly true for the local government units which have been given the responsibility for environmental management in their respective areas.
• The implementation of EGF is aimed at managing risks associated with the implementation of projects. The requirement of an EGF on a per project basis is intended to provide protection for innocent people from any eventuality arising from environmental impact and damage. Hence, the amount negotiated and set aside by project proponents for EGF should cover potential risks or the expected cost of damage associated with the implementation of each project. To date, however, it has been difficult to estimate (and monetize) the risks associated with biophysical, health, and economic effects of pollution. That has created a bottleneck in accurately introducing formal risks in the computation of the amount of EGF that should be required from proponent firms.

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