A Conceptual Framework for Integrated Economic and Environmental Planning in Asia A Literature Review
Authors: Peter King, David Annandale, and John Bailey1
Successive global conferences on sustainable development, such as the 1992 Earth Summit, have called for environment and economic dimensions to be planned at the same time and in the same institutions, without elucidating how this should be done. This literature review provides a conceptual framework for organizing the various approaches to integrated economic and environmental planning, along with supporting tools and techniques. The conceptual framework derived from this analysis illustrates the importance of vertical linkages between planning levels and highlights the paucity of integrated economic and environmental plans at the sub-national level in Asia. Both of these weaknesses need to be addressed if a nested hierarchy of integrated economic and environmental plans is expected to contribute to the achievement of sustainable development.
Governments and development specialists in Asia are struggling with a new paradigm. In one century, the world appears to have gone from a state of boundless nature to one constrained by resource limits (Hueting 1980, Catton 1982, Vitousek et al. 1986, Ponting 1990, Postel 1992). The emergence of global and national environmental degradation of an unprecedented scale has triggered a belief that past development strategies and planning approaches were too narrow and short-sighted (Turner 1988, Jacobson 1988, Caldwell 1990, ADB 1994a).
The complex intertwining of economic factors, natural resources, and environmental protection is no longer adequately handled by traditional planning techniques. Development planners and decision-makers are now expected to integrate social,2 economic, and environmental factors at all levels of planning (UNCED 1992). Of course planning alone, no matter how integrated, will not be sufficient for sustainable development to emerge. The fruits of integrated economic and environmental planning are only likely to be enjoyed in a social, cultural, and political milieu that is supportive (Parnwell & Bryant 1996).
This review examines the practice of integrated economic and environmental (E-c-E) planning in Asia at all levels and concludes that a nested hierarchy of integrated E-c-E planning could play a pivotal role in sustainable development in the region.
The paper is structured as follows. First, an outline of the historical evolution of integrated economic and environmental planning is presented. This provides a basis for a description of the application of integrated economic and environmental planning from the global level to the project level, with particular emphasis on Asia. The concept of planning "level" is expanded upon by way of a description of methodologies and techniques used at each position in the hierarchy. The final section of the paper deals with linkages between planning levels and the paucity of integrated economic and environmental plans at the sub-national level in Asia.
Over the period of the last decade, it has become clearer that economic, social and environmental factors must be thoroughly integrated at all levels of society, to avoid the unintended consequences of unilateral development in any one factor (Costanza 1991, Noorgaard 1988, 1989, Munasinghe & Shearer 1995), and to contribute to sustainable development (Sadler & Verheem 1996, Partidario 1996, Costanza et al. 1997). Excessive emphasis on economic development can lead to major pollution problems, which tend to have greatest impact on poor communities (Lecomber 1975, Daly 1980, Daly & Cobb 1989, Martinez-Alier 1987, 1991). On the other hand, excessive attention to nature conservation at the expense of economic development may not generate enough income to protect natural ecosystems (Goodland et al. 1991, Pearce & Warford 1993).
Planning is undertaken because a society wishes to influence the future rather than simply let it emerge through the vagaries of the market. Sadler & Verheem (1996) define a plan as a purposeful, forward looking strategy or design, often with coordinated priorities, options and measures, that elaborates and implements policy. Planning involves setting goals or targets, refining policies, setting minimum standards, allocating resources and providing funds for measures to achieve the stated aims and objectives (ORiordan & Turner 1983, Ortalono 1984). Implementation involves decisions about which programmes or projects should receive scarce funds (Braden & Kolstad 1991).
The integration of economic and environmental planning has a long history, possibly starting with the French sociologist Le Play (Le Play 1877), who recognized the need to integrate "folk-work-place" or in modern parlance "communities-economic activities-ecosystems". In the late nineteenth century, Geddes (1915) saw a parallel formulation of "ecosystem-function-organism" and coined the term "valley section" to encapsulate this integrative classification, later encompassed by the term "human ecology". Mumford (1938) extended the rural human ecology analysis by pointing out that cities are an extension of the countryside. McHarg (1969) applied the principles of Geddes (1915) and Mumford (1938, 1968) to design ecological living spaces in suburban USA, using techniques that anticipated the development of computerized Geographic Information Systems.
The modern environmental consciousness in mainstream planning activities dates from a string of environmental disasters in the 1960s, highlighted by mercury poisoning in Minamata, Japan, the pesticide revelations of Carson's (1962) "Silent Spring", the Torrey Canyon oil spill and others. These disasters captured the imagination and concern of the public through vigorous media attention (Goudie 1990, Brenton 1994).
Previous environmental disasters, such as the Dust Bowl of the 1930s, had generated similar outpourings of concern, but the environmental issues of the 1960s and 1970s did not fade as quickly as previous environmental issues had done (Downs 1972, Stone 1987, Gardner & Stern 1996). The institutional response to such crises predictably led governments to establish new organizations, such as the US Environment Protection Agency and Council on Environmental Quality (Caldwell 1982), but also spawned new planning tools and techniques, most notably environmental impact assessment (EIA) (ERL 1988, Sadler 1994).
However, throughout the 1970s and 1980s, the impacts of numerous environmental disasters demonstrated that contemporary planning techniques and the new environmental agencies (even armed with their new tools and techniques) were incapable of properly protecting the environment.
Planning for Sustainable Development
Since the 1970s, an emerging expectation has been that planning should recognize the linkages between human-made and natural capital and integrate social, cultural, political, economic and environmental issues (Slocombe 1993, Serageldin & Steer 1994). The Stockholm Conference on the Human Environment in 1972 called for comprehensive planning to incorporate environmental concerns (Bartelmus 1986, Nicholson 1987).
In 1980, the United Nations Environment Programme (UNEP), the International Union for the Conservation of Nature (IUCN), and World Wildlife Fund (WWF) launched the World Conservation Strategy (IUCN 1980), linking living resource conservation and sustainable development. This was followed by the United Nations (UN) General Assembly adoption of a World Charter for Nature in 1982.
The World Commission on Environment and Development (WCED) (1987) concluded that sustainable policy paths require the ecological dimensions of policy to be considered at the same time as economic and other dimensions. Subsequently, the United Nations Conference on Environment and Development (UNCED) at Rio de Janeiro in 1992 produced Agenda 21, which called for national sustainable development strategies to be developed which would integrate social and economic development with the environment. Agenda 21 and earlier strategies did not prescribe methods for producing integrated plans (UNCED 1992), but assumed that sustainability would be built into existing planning processes. As exposed by the 1987 Brundtland Commission's report, Our Common Future, these excellent environmental strategies and plans were rarely linked to economic development plans, were never adequately financed, had little political support, and barely influenced major infrastructure or natural resource development plans (Carew-Reid et al. 1994).
The integration of economic and environmental planning tends to be thought of in the horizontal. If is also possible, however, to envisage planning taking place at different vertical levels.
This is a useful descriptive model, because it reflects the fact that economic and environmental planning can take place at five different jurisdictional levels, and at the level of individual development projects. Figure 1 presents this idea in a graphical form, where E-c-E planning is shown as taking place at the following levels: global; regional (supra-national), national, local, and project.
This is also a potentially useful prescriptive model, implying that integrated E-c-E planning might need to take place at the different levels of this "nested" hierarchy, if sustainable development goals are to be met. This idea will be pursued in more detail at the end of this article.
Attempts to integrate economic and environmental planning at the global level have accelerated substantially since the "second wave" of contemporary concern about environmental issues at the end of the 1980s. Efforts have focused on international environmental treaty-making , and on the development of non-binding strategic, sector, and action plans.
Treaties and Conventions
Global consensus has been largely achieved for environmental issues which do not threaten the fundamental economic basis of modern existence, such as ozone reduction, trade in endangered species, preservation of wetlands, pollution from ships, and long range transboundary air pollution. For more fundamental issues that impinge on national economic development options, such as global carbon dioxide reduction, consensus has been more elusive (Group of Green Economists 1992, Sachs 1993, Hempel 1996).
There are now several thousand treaties/agreements/conventions/protocols on environmental issues. UNEP publishes an on-line database on Selected Multilateral Treaties in the Field of Environment. Classification of the subject matter of treaties in the database is summarised in Table 1.
Few treaties specifically address the issue of integration between environmental and economic objectives, although it could be said that the framework conventions developed at the Earth Summit in 1992 (ie the UN Framework Convention on Climate Change, and the Convention on Biological Diversity) are a step in this direction.
Asian nations have a propensity to enter into international agreements concerning environmental issues which would (if implemented) have a significant impact on economies of the region, although the record to date in implementing such agreements is less than laudable (UNEP 1991). Brenton (1994) divides international instruments into (i) legally binding, entered into force, and changed behaviour; (ii) entered into force, but not changed behaviour, often because no enforcement mechanism was included; and (iii) non-legally binding texts. Governments are conscious of pressure from domestic interest groups to progressively move from type (iii) agreements to type (i) and thus strongly defend their positions even over non-legally binding text.
Strategic, Sector and Action Plans
The difficulties associated with obtaining political consensus for international treaties is one reason why these binding agreements have rarely dealt directly with integration of economic and environmental planning.
The same problem does not confront the so-called "soft laws" that are presented in declarations, strategic plans, sector plans, and action plans. As a consequence, many of these initiatives that have developed since the Stockholm Conference on the Human Environment in 1972 do treat the issue of economic and environmental integration seriously. Significant examples are presented in Table 2.
The Development of Global Planning
To the extent that there is a common approach to planning and implementation of global treaties, strategic plans, sector plans and action plans, it is generally as shown in a simplified version in Figure 2.
Implementation of the agreements may be according to a time frame set down in the document or may rely on follow-up meetings or protocols or subsequent national legislation and government programmes. Following the failure to implement many previous global agreements, public commitments of funding arrangements for implementation have been sought during recent international summits or meetings. For comprehensive agreements, such as Agenda 21, separate organizations may be established to monitor implementation, or an existing organization, such as a UN body may be assigned this role.
Tools and Techniques used in Global Planning
Underpinning many global agreements and plans are complex computer models which have served to alert the scientific community of potential and emerging global crises.
Some of these models integrate economic and environmental parameters. For example, the World3 model, which underpinned The Limits to Growth (Meadows et al. 1972), consists of 149 equations and tables, including 18 on population, 81 on economics, and 18 on natural resources and pollution. This kind of modelling approach has been often criticized (Sanderson 1994), primarily because such models can be made to produce continued growth or collapse depending on assumptions about unknown, and possibly unknowable, parameters (Cole et al. 1973, Lehman 1981).
Regional Sustainable Development Plans
Leading up to the 1992 Earth Summit, several regional comprehensive economic and environmental plans were prepared, such as:
Our Own Agenda - Latin America & Caribbean (1990)
Economic Policies for Sustainable Development - Southeast Asia (1990)
Environment and Development: A Pacific Perspective, and The Pacific Way - Pacific Islands (1991)
Our Own Agenda (Latin American and Caribbean Commission on Development and Environment (LACCDE) 1990) was supported by the Inter-American Bank and United Nations Development Programme (UNDP). It clearly recognized the linkages between developed and developing countries, claiming that industrialized countries have incurred an ecological debt to the world. It appears to anticipate a negotiation with the "North" to recover this debt at Rio de Janeiro.
Economic Policies for Sustainable Development (ADB 1990) was seen as the Asian regional response to the Brundtland Commission's challenge, laid down in Our Common Future, to prepare regional and national plans for sustainability. With funding from ADB and co-financing by Denmark, Finland, Norway and Sweden, seven developing countries, (Indonesia, Korea, Malaysia, Nepal, Pakistan, the Philippines and Sri Lanka) agreed to participate.
Environment and Development: A Pacific Perspective and the companion volume The Pacific Way: Pacific Island Developing Countries' Report to UNCED, grew out of a process initiated by the South Pacific Regional Environmental Program (SPREP) and was financially supported by ADB and UNDP (ADB 1991a). The process enabled SPREP's 27 member countries, to prepare a consolidated position for UNCED. In particular, The Pacific Way contains the priority actions for sustainable development for the 14 Pacific Island Developing Countries (PIDCs).
Regional Growth Plans
In addition to regional plans that consist of joint planning by more than one country, there is a subset of regional plans which involve parts of countries combining to prepare "regional growth plans".
Throughout the Asian region, there are many growth triangles (or quadrangles), that seek to combine the comparative advantages of adjacent countries. These include:
Golden Quadrangle - Burma, Laos, China and Thailand;
Northern Triangle - Peninsular Malaysia (Kedah, Perak, and Perlis);
Southern Thailand (Satun, Songkhla, Yala, Narathiwat, and Pattani);
North Sumatra and Aceh in Indonesia;
Southern Triangle - Johore, Singapore and the Riau Islands of Indonesia;
Eastern Triangle - Malaysia, Brunei, Indonesia, and southern Philippines;
South China Triangle - Taiwan, Hong Kong and southern PRC; and
Tumen River Triangle - North Korea, northern China, Mongolia, and Russia (Lilley 1994).
International River Basin Plans
As defined ecosystems, international river basins offer the potential for an integrative economic and environmental planning approach (Downs et al. 1991).
Possibly the earliest international river basin plan in Asia was for the Mekong River Basin, initially involving the lower riparian countries of Thailand, Laos, Cambodia and Vietnam. The Interim Committee for the Development of the Mekong River Basin was established in 1957. One of the earliest regional plans prepared for the basin was the Indicative Basin Plan for the Mekong River, (MRC 1970). A Revised Indicative Plan for the development of land, water and related resources of the lower Mekong Basin was released in 1987. Since then more than $70 million has been spent on planning and management in the Basin (Webster 1995). In 1995, the lower riparian countries agreed to reconstitute the Mekong River Commission (MRC) and the upper riparian countries, Myanmar and PRC were invited to join. Less comprehensive plans have been prepared for the Ganges and Salween Rivers.
Regional Environmental Plans
The Association of South East Asian Nations (ASEAN) Strategic Plan of Action on the Environment 1994-98 (ASEAN 1994) is an example of the perceived benefits from regional cooperation on environmental issues. The ASEAN Plans began in 1977 and have been revised four times since then. The objectives of the current plan are to:
respond to Agenda 21 recommendations requiring priority action in ASEAN;
The Plan contains ten strategic thrusts and 27 supporting actions to attain the objectives. Although less advanced, similar regional environmental planning exercises are developing in South Asia (through the auspices of the South Asian Cooperative Environment Programme), and in the South Pacific (via SPREP).
The Development of Regional Planning
Regional Sustainable Development Plans
The planning approach taken by Our Own Agenda was essentially descriptive, starting with a comprehensive inventory of environmental and natural resources degradation, representing a hundred years of non-sustainability (LACCDE 1990).
The relevant conditions for sustainable development were considered to be:
Each condition generated a set of recommended actions. To develop the details of the strategy, a follow up Environmental Action Plan in Latin America and the Caribbean was to be developed with UNDP assistance.
For Economic Policies for Sustainable Development (ADB 1990), country studies were commissioned to examine the extent to which recent development policy and practice took sustainability into account. Particular attention was paid to the relative importance of pressures on the resource base from the combined effects of population growth and the intensity and type of economic activities. Each country report recommended policy modifications to protect the needs of future generations as well as to enhance current economic welfare. The country studies were incorporated into a synthesis report for the region and debated at a Ministerial-level Conference on Environment and Development in Asia and the Pacific, which resulted in a regional declaration of political support for sustainable development, carried forward to the Earth Summit in 1992.
A similar planning process was adopted in Environment and Development: A Pacific Perspective (ADB 1991a). To start the process, national reports were compiled by a task force of government officials, consultants and NGOs, for each PIDC. These were mostly based on the format provided by the UNCED Secretariat for country reports. The synthesis report, Environment and Development consisted of summaries of the country reports, followed by a synthesis chapter and then priorities for future action. The Pacific Way is a shorter executive summary summarizing the issues and constraints to sustainable development and the consensus on priority actions.
The other forms of regional planning appear not to have been as comprehensive in either economic or environmental dimensions (Downs et al. 1991). Regional growth plans have concentrated on economic parameters, international river basin plans have concentrated on water resources management, and regional environmental plans have generally ignored the economic dimension. Hence there are few useful methodological insights to be drawn from these planning approaches.
National Environmental Plans
Many of the global and regional planning initiatives already introduced in this paper have resulted in a requirement for countries to produce national-level responses. A wide variety of plan types has evolved. Table 3 presents a categorization system for national environmental plans. These plans exhibit varying degrees of integration of economic and environmental factors.
Virtually all countries in the Asia Pacific region have undertaken some form of national environmental planning (Chia 1987). Most often these planning initiatives have been donor driven and focus on the environment, with economics as a less important consideration. Table 4 provides a selection of examples.
The Development of National Planning
To overcome the problems of previous national sustainable development plans (especially the lack of integration with national economic planning), National Strategies for Sustainable Development (NSDS) have been proposed by IUCN as the ideal planning approach to implement Agenda 21 (IUCN/IIED 1993). A NSDS is defined as a participatory and cyclical process of planning and action to achieve economic, ecological and social objectives in a balanced and integrated manner (IUCN/IIED 1993).
To prepare a NSDS, the Guidelines (IUCN/IIED 1993, Carew-Reid et al. 1994) set out ten steps:
define goals, targets and standards;
A unique approach has been adopted by the Netherlands in drawing up its National Environmental Policy Plan 2 (NEPP2 1994). Firstly, it was based on the earlier NEPP1 (1989), which drew up a strategic, long term policy plan and set out policy objectives for 2000 and 2010. Secondly, it evaluated experience with implementation of NEPP1, as the basis for drawing up NEPP2. Thirdly, it explicitly linked international, regional, national, and local objectives. Finally, it was based on consultation and written agreements with specific target groups, responsible for implementation of mutually agreed, quantitative targets, linked to the overall carrying capacity of the environment. It also clearly recognized the financial implications for each target group and explicitly highlighted the macro-economic impacts.
Tools and Techniques used in National Planning
Recognizing that much of the statistical data in developing countries is of little use for planning integrated economic and environmental futures at the national level, sustainable development planning may need to be supported by: environmental information systems; state of the environment reports; natural resources accounting; and, environmental indices.
Environmental Information Systems
The NSDS Guidelines recommend that a Sustainable Development Information System should be developed as an integral step in the planning process, comprising:
trends in resources and ecosystems, their quality and quantity, and ecological limits;
policy and economic signals underlying resource/ecosystem use;
The major aims of SERs are to: improve understanding by decision makers of the state of the environment over time so that they can evaluate the results of past actions and identify emerging problems; improve public understanding about the state of the environment; foster the necessary mandate for action; and incorporate environmental considerations more fully into the decision making process. Although few developing countries have legislation requiring regular reports on environmental quality, there is a trend towards annual reports of varying quality and coverage (OECD 1992).
Generally the scope of SERs includes: discussion on the adverse effects of economic activities on the environment; the status of resource use and population pressures; changes in environmental quality over time; effectiveness of previous policies, plans, or legislation; and, emerging problems requiring attention. Most SER reports compile and analyze existing environmental data.
In addition to the statistics collected nationally, UNEP has produced annual SERs since 1974 and a Global State of Environment Report (1972-1992) (UNEP 1992). UNEP is also committed to the release of biennial Global Environment Outlook (GEO) reports, leading up to a decadal Global State of the Environment in 2002. Its first report, GEO-1 was released in 1996.
The Economic and Social Commission of Asia and the Pacific (ESCAP) has produced similar reports for the Asia-Pacific region (ESCAP, 1990, 1995). UNEP's Environment Assessment Program - Asia Pacific is working towards a common framework for national SERs, to be consolidated into a regional SER in the year 2000, which in turn would become an input to a global report in 2002 (UNEP 1994).
Natural Resource Accounting
Natural resource accounting or environmental accounting3 involves modifying the UN System of National Accounts (SNA) to reflect environmental and natural resource issues (Ahmad et al. 1989). Major adjustments to the SNA to reflect these broader dimensions involve inclusion of defensive expenditures to protect or restore the environment, and deductions for the depletion and degradation of natural resources. The UN Statistical Commission, mandated to revise the SNA, decided to maintain consistency and recommended interim satellite accounts linked to the SNA (Ahmad et al. 1989). A Handbook of Integrated Environmental and Economic Accounting has been prepared (and tested in Mexico, Papua New Guinea and Thailand) and has become the international standard for this approach (Meyer 1993).
In Asia, some empirical work on satellite accounts has been undertaken (Repetto et al. 1987, Magrath & Arens 1987). Natural resource accounting efforts are being undertaken in Indonesia, India, Thailand, Papua New Guinea, Nepal, Pakistan, PRC, and Sri Lanka, but to date, no country has overhauled its core national accounting system to incorporate natural resource depletion, or include other environmental valuations (Meyer 1993).
An Index of Environmental Quality, which would measure the defensive and repair costs to achieve international minimum environmental quality standards, would be a useful complement to the Human Development Index and GNP (ADB 1994c, Harvard University 1995). However, acceptable national standards vary from country to country, casting doubt on the damage repair cost approach. Also, the costs of remediation imply a technology choice and the repair mechanism itself may have unintended side effects, which may lead to double counting of benefits or under-estimation of costs. It is also difficult to incorporate social issues such as equity or gender differences, although these may have a major bearing on perceptions of environmental quality. Finally, the large amounts of data required may not be available in many developing countries. These methodological problems have led to a simpler "environmental diamond" approach, based on principal components analysis, akin to the World Bank's "development diamonds" (World Bank 1994, ADB 1994c). These diamonds scale factors on vertical and horizontal axes for each country, compared to an accepted standard.
While regional economic development planning has a long history (Isard 1960, Friedmann & Alonso 1964, Boudeville 1966), the environment tended to be omitted until the late 1970s (Gilpin 1986, Hufschmidt 1969). Geographically based sub-national plans in Asia have been undertaken at the level of river basins, integrated area development regions, provinces, islands, and biosphere reserves.
River Basin Plans
During the 1960s, large-scale river basin plans were popular, many funded by the World Bank, such as the Cisanggarung, Brantas River, and the Citanduy River Basin Plans in Indonesia. For the Ganges River in India, a Central Ganga Authority was created and an Action Plan prepared in 1986.
In Bangladesh, the Flood Plan Coordination Office (FPCO), under a nation-wide Flood Action Plan (FAP), commissioned a series of regional water resources studies (FPCO 1994), corresponding to major river basins. The total cost of the 26 FAP studies and pilot projects was about US$150 million over a period of 5 years. It resulted in 65 investment proposals in the water sector amounting to US$3 billion.
Integrated Area Development Plans
In the 1970s, recognizing that rural development was extremely complex and involved many government departments and cross-sectoral activities, integrated area development projects became fashionable, such as the Nusa Tenggara Timor Integrated Area Development Project, Indonesia; Pahang Barat Integrated Area Development Project, Malaysia; and Palawan Integrated Area Development Project, Philippines. Typically, these projects involved large study areas with investment plans in infrastructure, institutional capacity building, beneficiary participation etc., but limited attention to environmental issues (Siwar & Mustapha 1988, Hewson et al. 1991, Porter et al. 1991).
Integrated Economic-cum-Environmental Plans
In the 1980s, the ADB built on the long established regional planning processes in Latin America (OAS 1984) and commissioned a series of integrated E-c-E plans (Table 5). A detailed analysis of the sub-national E-c-E approach, as applied in Asia, is dealt with in King (1999). Table 5
The Development of Sub-National Planning
The Department of Regional Development of the Organization of American States (OAS) prepared one of the most influential reports on the incorporation of environmental considerations into regional development planning (OAS 1984). Since 1969, OAS has assisted 25 Latin American and Caribbean countries to prepare 75 integrated E-c-E studies at the sub-national level. These studies cost more than US$50 million and formulated about US$3.8 billion in development projects, about half of which were under implementation. The OAS planning process is summarized in Table 6.
At its core, this process consists of the following steps:
In Asia, the OAS approach has been refined by the Asian Development Bank (ADB 1988). The key difference between the processes is that OAS recommends that all groups likely to conflict over resource allocation should be invited to participate in the analysis phase, and conflicts should be resolved through third party mediation, before positions harden. Perhaps reflecting greater sensitivity to public participation in the Asian region, the ADB approach places less weight on conflict resolution and suggests that conflicts should be handled predominantly by decision-makers.
Tools and Techniques used in Sub-National Economic and Environmental Planning
The development of quantitative investigation in sub-national planning in the 1960s led to increasingly complex modeling exercises, such as Forrester's Urban Dynamics Model (Forrester 1969), although contemporary computer limitations hampered such developments (Chadwick 1971). While mathematical modeling has remained a useful adjunct to integrated economic and environmental planning at the sub-national level, there are few proponents today who would advocate modeling as the only tool. Reality has proved to be more complex than the most complex of models (Zuchetto & Jansson 1985, FAO 1986).
More qualitative approaches, in which quantitative models may be embedded, are now favoured (Fedra et al. 1993). The development of GIS software, which can manipulate massive amounts of spatially related data, and data-rich remote sensing images has led to a resurgence of interest in modeling approaches (Fedra & Kubat 1993). For example, GERMINAL (Prilaz-Droux & Musy 1994, Prilaz-Droux et al. 1994) uses GIS to provide a global representation of the territory to be planned and allows spatial entities to be displayed.
Local Sustainable Development Plans
One of the successes following the Earth Summit in 1992, has been the number of Local Agenda 21 plans prepared (Gordon 1994, CSD 1997). By 1995, the International Council for Local Environmental Initiatives (ICLEI) found that more than 2,000 local governments from 49 countries had prepared local Agenda 21s. Examples of best practice were placed on the Internet as part of the United Nations Conference on Human Settlements (Habitat II) (ICLEI 1995). Over 330 European cities signed the Aalborg Charter "Towards Sustainability" and the Lisboa Action Plan: From Charter to Action, in October 1996. The Commission on Sustainable Development concluded that local level strategies and plans have proved more successful than many of those at the national level, primarily because of NGO/grass roots participation in decision making.
Comprehensive Local Plans
Wilson (1980) described five categories of local planning (i) rational (centralized, comprehensive, mechanistic), (ii) incremental (politically influenced marginal adjustments), (iii) mixed scanning (situational, combining both of the above), (iv) general systems (interactive, integrative, and iterative), and (v) adaptive learning (decentralized, participative, humanistic, futures oriented). Daneke (1986) assumed that some hybrid of the general systems and adaptive learning approach would satisfy the legitimate concerns of small communities, although there have been few practical applications to date (Kaiser et al. 1994, Branch 1985) and many regulatory agencies are intensely resistant towards adaptive learning approaches.
Virtually all countries in the Asian region require local structure plans to be prepared, particularly for urban development (Potter 1985). Some significant documented examples include (i) Shanghai (Fung & Freeberne 1981), (ii) Singapore (Wang & Tan 1981), (iii) Bombay (Deshpande & Arunachalam 1981), (iv) Bilaspur (Khan 1990), (v) Karachi (Herbert 1982), (vi) Ankara (Tekeli & Okyay 1982), (vii) Durgapur (Sivamakrishnan 1982), and (viii) Chandigarh (Sarin 1982).
Traditionally, decisions on which projects to fund and implement relied on a combination of political decisions and calculation of rates of economic return from alternative projects, compared to the opportunity cost of money. Economic analysis was aimed at the single objective of economic efficiency, in the belief that this would lead to overall improvements in social welfare or quality of life (Pezzey 1989). Environment and ecology were separate worlds of scientific endeavour and if they were taken into account at all, it was as an add-on or separate investigation and largely peripheral to the decision making process.
Today, integrating environmental considerations into economic development projects is being approached from three supportive directions. First, impacts are identified and mitigation measures proposed through environmental impact assessment (EIA). Second, strategic environmental assessment (SEA) addresses the environmental impacts of policies and development strategies, sectoral plans, and the cumulative impacts of a series of projects. Third, externalities are internalized in the economic analysis, through environmental economics techniques.
Environmental Impact Assessment
In the early 1970s, industrialized countries introduced EIA as a powerful tool to incorporate environmental considerations into project design, passed new environmental laws, and created environment protection agencies (Rau & Wooten 1980, Shabecoff 1985, Wathern 1988, Ellis 1989). By 1974, an estimated 6,000 EIAs were being prepared every year in California alone, indicating vigorous application of the new technique (Fowler 1982).
More recently, it has become obvious that while EIAs as separate, stand-alone exercises can play a useful, supporting role for development planning, there ia a need to incorporate environmental considerations more directly into other planning mechanisms (Westman 1985, Clarke & Herington 1988). The first step in this process has been to integrate EIAs into feasibility studies, so that proposed remedial measures could be built into the project design and the costs of mitigation and monitoring plans could be incorporated into the project cost-benefit analysis prior to funding decisions (Ludwig et al. 1991). However, the choice of which projects to study (and ultimately fund) was still based mainly on economic criteria and the EIA could only modify the project design or, in extreme cases, recommend against the project proceeding (Carpenter 1981).
Despite these limitations, EIA has remained as the leading tool for incorporation of environmental considerations into project design and implementation (Bisset & Tomlinson 1984, Bailey & Finucane 1989, ADB 1993b, Wood 1995). At the Earth Summit+5, the Commission on Sustainable Development reported that about 70 percent of countries now use EIA (CSD 1997). EIA has been adopted in nearly all Asian countries since the late 1970s (ADB 1991b, ADB 1993b, ADB 1994d, Brown et al. 1991, Nay Htun 1988). Thousands of EIAs have been completed in Asia. From 1980-85, 445 EIA reports were prepared for medium and large projects in PRC alone (Wang Huadong 1993).
Over the past 30 years, the supporting tools and techniques for EIA have become more sophisticated, involving expert systems, modeling, hypermedia, geographic information systems etc. (Canter 1977, 1985, 1986, Holling 1978, Golden 1979, Fedra et al. 1987, Woodcock 1990, Fedra 1991).
Strategic Environmental Assessment
The success (or in some views, failure) of EIA at the project level has provided an impetus for attempts to extend the use of EIA to sector reviews (Ballofet & Associates 1994, World Bank 1993)), for strategic plans, public investment programmes, and for policy assessment (Therivel et al. 1992, Sadler & Verheem 1996)).
Therivel et al. (1992) rationalize the extension of EIA approaches to encompass strategic environmental assessment on the grounds that policy formulation and implementation infrequently benefit from wider review and many countries, like the United Kingdom, from the 1970s onward have abandoned comprehensive national planning. Countries which appear to be moving in the direction of insisting on SEA for policies, plans and programmes include the European Union, parts of the USA (more than 130 programmatic environmental impact reports are produced annually in California), Germany, New Zealand (as a requirement under the 1991 Resource Management Act), Netherlands (since 1987), and Canada. To date there are no developing countries in Asia that have a mandatory requirement for SEA.
At the other end of the environment-economics spectrum, economists have begun to realize that conventional project economic analysis may be flawed and environmental considerations provide systematic evidence of market failures (Page 1977, Howe 1979, Fisher 1981, Hufschmidt & Hyman 1982, Costanza et al. 1997).
Gradually, economic tools are being developed to account for the environmental implications of development projects. These tools use (i) the market value of directly related goods and services (changes in productivity, loss of earnings, opportunity cost, cost effectiveness analysis, preventive expenditures); (ii) surrogate market values (property value, wage differential, travel cost, marketed goods as environmental surrogates); (iii) potential expenditures (replacement costs, relocation costs, shadow projects); and (iv) contingent valuation (bidding games, take it or leave it experiments, trade-off games, costless choice, delphi techniques, input-output models, linear programming) (Dixon et al. 1986). Few of these techniques have been used in project planning to date (Perrings 1987, Barbier et al. 1990, Costanza & Perrings 1990, Farber 1991, Munasinghe 1993, Munasinghe & Cruz 1995). To guide planners in using these new techniques, there are several manuals such as Manual for Policy Analysts (OECD 1995) and Workbook for Environmental Economics (ADB 1996).
Application of the available techniques in Asia includes (i) extended cost-benefit analysis of the Nepal Hill Forest Project (ADB 1996); (ii) change in productivity method for mangrove areas in Irian Jaya (Ruitenbeek 1994); (iii) dose-response relationships to calculate the health impacts of air pollution control in Jakarta (Ostro 1994); (iv) extended cost benefit analysis for a soil conservation project in the Loess Plateau in PRC (Magrath 1992); and (v) contingent valuation for water supply projects (Whittington et al. 1991).
Development of environmental economics techniques is moving towards comprehensive computer modeling, combining general ecosystem models and economic models (Bockstael et al. 1995). Ecological-economic models include (i) extended cost benefit analysis, (ii) extended physical-economic models with resource inputs and waste output, (iii) ecological evaluation models, and (iv) resource and pollution impact models (Braat & von Lierop 1987, Braat & Steetskamp 1991).
Mumford (1968) stressed that the human relationship to the environment should extend simultaneously on various levels, such as the small community, the village, the town, the region, the country, and the world. If one of these links is missing, the interaction between the individual and the larger community is invalidated, and the human relationship to the environment is degraded to one of isolation or disruption. However, there appears to have been no systematic attempt to develop mechanisms to provide strong vertical linkages between different planning levels or to even test that they exist.
Comprehensive planning at one level may be futile if the other levels are not planned with the same consistency and aimed at common goals. The failure of centrally planned economies, where local initiative and pragmatic planning were actively stifled for the larger national cause, provides ample warning that assumptions about global goals must be constantly tested against local realities. National, regional, and global political authority need to be better balanced and integrated with local levels of governance (Hempel 1996).
One promising development in creating vertical linkages is the Polestar Project at the Stockholm Environment Institute (1995). The Polestar project aims to develop and apply appropriate methods, concepts and data for sustainability planning. The project has three dimensions: capacity building, sustainability studies, and global scenarios. To support these studies, the project has developed a micro-computer tool, the Polestar System, for entering economic, resource, and environmental information for examination of alternative development scenarios at sub-national, national and global levels.
Institutionally, considerable promise is offered by the Netherlands' approach to its National Environmental Policy Plan (NEPP2 1994). This national plan is explicitly linked to various international commitments and the commitments entered into by the regional European Community, and includes negotiated agreements (declarations of intent) with industry sectors, municipalities and regions, provinces and water boards.
To summarize, consistency between all planning levels and an ability to aggregate or disaggregate plans is an essential characteristic of a truly integrated planning approach. The simplest check is to ensure that each plan (except for project and global levels) is at least linked into the levels above and below. However, there are no well-developed tools or techniques to systematically test these linkages. While genuine consultative processes at the local level are essential, merely aggregating thousands of local plans cannot form the basis of global action. Civic consciousness, ecocentric attitudes, and a truly democratic social environment are prerequisites for sufficiently fertile ground for the seed of integrated economic and environmental planning to take root.
A nested hierarchy of integrated E-c-E plans may make a pivotal contribution to achieving sustainable development in the Asian region. However, there is no evidence that such a vertically integrated planning system is in place in any Asian country and there is little attention being paid to bringing such a system into being.
Multilateral donors have an important role to play in fostering such planning, including provision of training to environmental and economic planners throughout the region. Such support will also result in a forward pipeline of sustainable investment projects, a matter of considerable interest to all multilateral donors.
The key level of intervention appears to be at the sub-national level, where there is a remarkable paucity of integrated E-c-E plans in Asia. The OAS/ADB integrated E-c-E planning model (modified where necessary) provides a suitable basis for such planning. A detailed analysis of sub-national E-c-E planning is presented in King, Annandale and Bailey (1999).
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1. Peter King is Senior Project Specialist (Natural Resources), Asian Development Bank, David Annandale is Lecturer, School of Environmental Science, Murdoch University, and John Bailey is Associate Professor, School of Environmental Science, Murdoch University.2. Throughout the discussion on sustainable development, the shorthand term "social" is assumed to include all forms of human-to-human interaction. Thus "social" includes community formation, stakeholder participation, institutional settings, ethnicity, cultural groups and traditions, political processes and conflict mediation, etc.
3. Natural resource accounting attempts to correct national accounts for the depletion of natural capital, while environmental accounting is a broader exercise involving more complex issues of defensive expenditures, damage repair costs etc.