IV. CONSIDERATION OF MULTILATERAL TRADE AND ENVIRONMENT AGREEMENTS IN DOMESTIC POLICY FORMULATION

[ A | B | C | D | E ]

D. Mechanisms for incorporating agreements

The accepted view among the majority of world leaders since the Earth Summit in 1992 has been that development and environmental protection are not mutually exclusive alternatives. In order for Papua New Guinea to comply with the major trade and environment-related Conventions and agreements, the government needs to institute appropriate policies at the national and sectoral levels. At the national level, there is the need to:

• Get prices "right";
• Institute an environmental and natural resource accounting system;
• Establish a system of appraisal of public projects which accounts for environmental effects.

The way in which the government agencies appraise investment projects is crucial to the success of efforts to achieve sustainable development. Using the traditional cost-benefit technique, a project is potentially acceptable if benefits minus suitably discounted costs are greater than zero. Environmental costs are usually excluded from such an analysis. That procedure needs to be modified to ensure that the costs take into account any possible environmental damage and that the benefits include any environmental gains from the project.

At the sector level, the government needs to:

• Expand market-based incentive mechanisms for environmental protection;
• Increase monitoring and enforcement of environmental regulations and standards;
• Increase community and private sector participation in the appraisal of projects as well as the environmental approval process;
• Increase education, awareness and training.

If properly implemented, the proposed environmental regulation framework (chapter III, section D) will go a long way towards ensuring that Papua New Guinea meets its domestic and international environmental obligations. However, the proposed system is based exclusively on the command and control approach (i.e., the system comprises a command that says that polluters must not exceed a certain level of environmental quality, and a control that monitors and enforces the standard). However, that form of regulation is more expensive because the government must acquire information from polluters. Also, polluters have no flexibility in that they have to abide by the standard whatever costs are involved in abating pollution.

The same environmental standards can be enforced through incentive systems designed to get polluters to alter the technologies they use to produce or extract commodities. Some studies have suggested that the command and control approach may impose significant burdens on wealth creation (Jorgensen and Wilcoxen, 1990).

The case has already been made for increased monitoring to ensure compliance with environmental regulations. However, any increase in monitoring is dependent on the funds made available to the Department of Environment and Conservation and the Department of Mining and Petroleum.

An increase in the participation of local communities, NGOs and the private sector is required, both in project appraisal and the environmental approval process. In view of the limited capacity of the government agencies, consideration should also be given to involving NGOs in monitoring environmental regulations.

Finally, more programmes are needed for educating government officials and the general public about environmental issues as well as links between the environment and the economy. Financial resources are required for training government personnel in the areas of environmental monitoring and analysis, as well as in natural resource and environmental accounting and the integration of environmental concerns into traditional project appraisal methods.

Top