This document discusses the problems that policymakers in developing countries face when committing to sustainable development. It outlines that sustainable development has no clear definition and leaves actors unclear on key issues. Policymakers are left with dilemmas around issues like sustainability without growth, imposing sustainability requirements, and defining and preserving natural resources. The document suggests policymakers address sustainability through environmental policy, growth and redistribution, and social equity to achieve social, ecological and economic sustainability.

1. Critically discuss the problems policy-makers in developing countries face if they
want to commit to sustainable development. Can you offer any solutions for
overcoming these problems?
Sustainable development (SD) has become the dominant development paradigm of
the twenty-first century, yet there is no clear agreement about what it entails. In short,
as Lele (1991) states, ‘sustainable development is a “metafix” that will unite
everybody from the profit-minded industrialist and risk-minimizing subsistence
farmer to the equity-seeking social worker, the pollution-concerned or wildlife-loving
First Worlder, the growth-maximizing policy maker, the goal-oriented bureaucrat, and
therefore, the vote-counting politician’. A distinction between the means and ends is
often not made in the development rhetoric, which presents many problems to policy-
makers in developing countries as they seek to commit to SD. This essay will begin
by defining SD, before looking at several salient implications for developing countries
as they interpret the concept of SD and finally conceiving a number of possible
solutions.
To begin with, several diverging definitions of SD may be forwarded:
‘Development that meets the needs of the present without compromising the ability of
future generations to meet their own needs’ (Brundtland Commission at WCED,
1987).
‘An obligation to conduct ourselves so that we leave to the future the option or the
capacity to be as well off as we are’ (Solow, 1974).
‘Making sure that substitute resources are made available as non-renewable resources
become scarce…ensuring that the environmental impact [is] kept within the Earth’s
carrying capacity to assimilate those impacts’ (Pearce, 1993).
‘In general terms, the primary objective is reducing the absolute poverty of the
world’s poor’ (Barbier, 1987).

2. The vagueness of the concept therefore leaves actors, such as developing country
policy-makers little consensus on issues of maintaining capital, equity and inter-
generational transfer of resources. The basic questions are: What is to be sustained?
For whom? And, for how long? In other words, the crux of the discussion hinges on
the interpretation of SD, which is poorly articulated. Yet, as Lele (1991) notes, ‘the
value of the concept, however, lies in its ability to generate an operational consensus
between groups with fundamentally different answers to those questions, i.e. those
concerned either about the survival of future generations, or about the survival of
wildlife, or human health, or the satisfaction of immediate subsistence needs (food,
fuel, fodder) with a low degree of risk’. Unsurprisingly, the role of economic growth
in achieving sustainable development becomes muddled. On the one hand, adherents
to weak sustainability argue that there is no fundamental contradiction between the
‘sustainable’ part and the ‘development’ (or, growth) side of SD. They argue that
poverty is largely responsible for environmental degradation, hence, the removal of
poverty (i.e. development) is necessary for environmental sustainability. On the other
hand, proponents of strong sustainability argue that economic growth is incompatible
with sustainability. In this view, the ecosystem is limited (so it is not possible to
‘create’ natural capital), hence there is a need to maintain natural capital to achieve
SD, with neither input from natural capital (resource), nor waste output (sink)
exceeding regeneration or assimilation rates. Thus, GDP growth should not be the
driving objective of policy and poverty reduction should be achieved through
redistribution and population control, not GDP growth.
Nevertheless, this leaves policy-makers in developing countries with several
dilemmas. For example, is sustainability without growth realistic? Can developing
countries have sustainability requirements imposed upon them e.g. population
controls, carbon trading? What can primary resource exporters do to compensate
natural depletion? Who defines what is a critical natural resource? How do we decide
what to preserve and what not?
Lastly, SD’s emphasis on equity and social justice is also rendered problematic by
interchanging them with terms like participation and decentralization. While some
local participation is clearly necessary in the process, it does not directly transfer
qualities of equity and social justice. The simple assumption that decentralization of

3. activities will reinforce ecological sustainability is evidentially flawed (Jodha, 1987;
von Oppen and Subba Rao, 1980---p.616 Lele, 1991). Certainly, the ‘narrow-minded,
quick-fix and deceptive’ (Lele, 1991) manner in which participation has been
operationalized by mainstream SD promoters is erroneous.
It is helpful at this point to visualize O’Riordan’s ‘triple helix’ model of SD, where in
order to address the issue fully, it is necessary to incorporate a social, ecological and
economic dimension. Thus, policy-makers need to enable, environmental policy and
protection (through environmental assessment and participatory consultation) in the
ecological sphere; growth and redistribution in the economic sphere; and social equity
(through local government and civil society) in the social sphere. The problem is
threefold to achieve social, ecological and economic sustainability rather than
traditionally looking at in binary or even singular concerns. In the following sections,
this essay will examine issues that relate to these three different areas of SD,
focussing firstly on the poverty-environmental linkage, then issues of trade and finally
democratic empowerment.
Poverty-Environment linkage + SD
Markandya (2001) in a paper for the IISD questions the implications of the SD
literature on poverty. It can be said that whilst directly there is little that links the two,
there is however, in the Brundtland definition an explicit recognition of issues of
equity within and across generations, with a call to respect future generations in
meeting their own needs as our own. Therefore, SD must include the elimination of
poverty as allowing freedom to choose their own development. Given the validity of
poverty alleviation in achieving SD, we need to examine its relationship with natural
capital in order to inform policy decisions in the developing world.
An increase in poverty results in an increase in environmental degradation?
Several assumptions have become current in the SD literature, which need to be
examined in order to inform policy debate as these have critical impact on role of
different actors. To begin with there is a common misunderstanding that an increase
in poverty results in an increase in environmental degradation. Or, to be more

4. accurate, are there any correlations between changes in poverty and changes in
ambient environment? There is, in fact, no literature that shows with any certainty that
increases in poverty are correlated with increases in degradation, let alone that the
poor are the cause of degradation (Markandya, 2001). Forsyth, Leach and Schoones
(1998) through investigating the I=PAT equation1
as the basis for the downward spiral
between poverty and environmental degradation, argue that its strength is theoretical
rather than empirical.
Moreover, there is no evidence that an environment inhabited by the poor will be
more degraded than one inhabited by the rich. Jaganathan (1989) shows little
evidence that poverty was the driving force in deforestation or damaging changes in
landuse in West Java and Nigeria. Deninger and Mintzen (1996) show that the higher
the poverty in Chiapas and Oaxaca, Mexico, the lower the probability of land under
forest cover, yet the direction of causality was unclear. Aheyar (1998) and Linde-Rahr
(1998) reveal that lack of cash expenditure was seen as a constraint on effective soil
conservation and a negative relationship was observed between soil erosion and
annual income, though again without implication of causality. However, this neglects
the case that local institutions can lessen poverty and environmental degradation; that
environmental problems experienced by poor people might be different from those in
the international arena; that universal conceptions of environmental degradation do
not match growing evidence of what environmental change is really about; that
international concerns are not necessarily the same as the poor; and that poor people
can adopt many local, organizational and land management practices that decrease the
impacts of population/environmental degradation and change. In other words, poverty
and environmental problems are experienced locally. Additionally, poverty and
communities are heterogeneous.
Therefore, support can be given for the statement that social changes have resulted in
concurrent increases in poverty and environmental degradation. External factors
which are unfavourable to the environment e.g. agriculture, may include economic
policies and strategies pursued by the government. As De Janvry and Garcia (1988)
1
(I = PAT:environmental impacts = population growth + growth in affluence + changes in technology)

5. analyze in a review of rural poverty and environmental degradation in Latin America,
the main factor was the high level of taxation (‘disprotection’) of the sector:
‘This lowered the return to land, making investment in soil conservation less
attractive. At the same time, subsidies to inputs such as fertilizers and pesticides,
which increased the attractiveness of agriculture, rarely reached the small producers’.
Additionally, there has been a failure of institutions to respond to the changing
demographic and technological changes. ‘Land tenure has remained concentrated and
the demise of the rental market has been damaging to small farmers. Security of
tenure remains a major issue for many of the poor, making investment in conservation
an unattractive option. The situation has been exacerbated by an “anti-peasant bias” in
rural institutions. Subsidized institutional credit and new technological options are not
easily accessible to small holders.’ In the case of Machakos, Kenya (Tiffen et al.
1994) local people are shown to reduce the impact of demographic, environmental
and economic change, although as Markandya (2001) has pointed out, this study does
not isolate the effects of population growth from other internal factors that have given
rise to its success. Despite yields increasing tenfold, erosion being arrested whilst
population increased sixfold, Tiffen et al. do not show how much of this was due to:
(a) the opening of land for all users, (b) investment in infrastructure, (c) access to non-
farm employment opportunities, (d) technological developments that were brought in
from outside the region (especially for maize) and (e) price incentives for products
that were relatively environmentally benign. As Markandya (2001) phrases it, ‘if the
population growth had been half of what it is, would the changes in land use have
been more or less environmentally beneficial?’ In any case, it shows that with the
right strategies, the larger population can be accommodated.
Where rural population growth is a matter of concern, evidence has shown that the
kind of policies that can be introduced to reduce the population pressure include
education (particularly of women), the level of agricultural employment and level of
nutrition and the extent of civil liberty all act to reduce the levels of total fertility (Sen,
1994; Dasgupta, 1995) and thereby, pressure on the natural resource base as well as in
some cases reducing poverty. In addition, general economic growth has been
negatively associate with population growth and so it has been argued that the former
will act to reduce population pressures over time (Markandya, 2001).

6. The broad policy implications of this research show that the macro-economic drive
for prosperity might increase environmental hazards affecting poor people. Lopez
(1997) notes that neither privatization nor elaborate traditional community regulations
are sufficient to guarantee that the institutional changes will be sufficient to protect
the natural resource base. Privatization can be negative if it leads to a ‘race to property
rights’, if it results in the creation of landless sub-groups and if the rights to
previously communal land cannot be maintained when the land is left fallow. Second,
that poverty reductions should remain the overarching goal, but should be separate
from the environmental agenda at a macro-scale. Lastly, international environmental
agreements over global environmental problems might create negative impacts in the
South. This is particularly so where there are strong attempts to integrate such
investment or policy into local concerns, such as international investment in
renewable energy technology or in the case of the Clean Development Mechanism –
where precedence of global environmental concerns may result in reduced
competitiveness of domestic companies in developing countries and potential lost
opportunity to integrate new energy policies into local agricultural and environmental
schemes.
Thus as Forsyth, Leach and Schoones (1998) have shown, we need a critical
evaluation of science-policy-institutional debates – especially where institutions still
accept the ‘downward spiral’ as a guiding principle in environmental policy when
there is a lot of evidence against it. This means privileging certain ‘environmental
narratives’ against others. Second, this also demands an engagement of civil society
vis-à-vis the State and Market – it is not a case of either/or, but creating synergies in
each sphere, focussing on institutions and access to endowments. Thirdly, the
challenge is to create sustainable livelihoods – enabling farmers etc. to gain the skills
to diversify income, involving issues of land tenure and an entitlements approach.
Studies show in the Philippines (Broad, 1994) how the poor become environmental
activists when their livelihood is threatened, when they have a sense of permanency
and when there are NGOs present. In West Africa, Guinea’s Kissigoudou people
actually planted forests, instead of degrading them by fire as was traditionally thought
(Fairhead and Leach, 1996). These examples show that rather than framing
environmental problems simply in terms of aggregate population pressure on a limited
natural resource base, a more ‘disaggregated entitlements approach’ (Mearns and

7. Schoones, 1999) should be endorsed, where there is a role for diverse institutions in
mediating the relationship between different social actors and different components of
local ecologies.
A deterioration in the ambient environment hurts the poor more than the rich?
It has been shown that a deterioration in the ambient environment hurts the poor more
than the rich, since the vulnerable are often the users of marginal resources and also
the most dependent on the common resources of the community in which they live
(Markandya, 2001). Therefore depending on the policies that change the environment,
it can endanger the poor more than the rich. Markandya (2001) has argued that
transport policies are more ‘distribution friendly’ than energy policies, mainly
because transport environmental controls affect the rich relatively more than do
energy environmental controls. ‘The OECD (1994) has looked at trading programs for
emission, showing that tradable permit schemes are generally more efficient in
achieving environmental goals than command and control schemes and hence entail a
smaller increase in prices. Since such price increases were found to be regressive in
their impact, the smaller they are the less the regressive impact. Furthermore, most
actual schemes do not involve selling the initial allocation of permits to existing
polluters but providing them free of charge. This in turn can reduce the burden on
industry, compared to a tax, which is not rebated.’ This is particularly relevant to
environmental regulation in developing countries because of the difficulties arising
from controlling small-scale enterprises (SSEs), because of the limited financial and
human resources and low-level technology. Regulators frequently shy away from
such regulations, from fear of the effects these have on employment and incomes of
poor households. Nevertheless, studies of the distributional effects of the regulation of
SSEs, however, are very few. Lanjouw (1997) analyzing this sector in Ecuador has
shown to the contrary that employment in the pollution-intensive SSEs is not
concentrated among the poor, but among the urban, literate population. ‘Hence to the
extent that environmental regulations in the sector impact on employment, they do not
impact on the poorest. Furthermore, estimates of the impacts of large-scale losses of
employment in this sector on poverty are not large. Overall, he concludes that
arguments against the regulation of SSEs on the grounds of increases in poverty are
exaggerated’.

8. Economic development should help reduce poverty and improve the
environment?
As to whether economic development should help reduce poverty and improve the
environment, it has been suggested that the relationship between GDP and the quality
of the environment is inversely ‘U-shaped’ i.e. an ‘environmental Kuznets curve’.
Reasons to support environmental optimism state that the environment is a superior
good with an income elasticity greater than one since it promotes prosperity and
values becoming a ‘luxury good’ (Grossman and Krueger, 1995) – environmentalism
is for the rich; institutional environmental capacity is a superior good; economic
growth promotes innovation, cleaner technologies and increased research (Beckerman,
1995) therefore bringing later and less-polluting vintage capital with it; sectoral
changes favour less-polluting sectors and value growth does not equal growth in
resource input and pollution, through resource and energy efficiency; there is a
positive correlation between high income levels and education, so that people become
more aware of environmental issues and take a proactive role; economic growth often
mean there are better enforcements of contracts an better regulation of policies by
governments. They can also invest more in environmental improvement (Grossman
and Krueger, 1995; Barret and Crady, 1997); and economic growth can alleviate
poverty as a major cause and effect of global environmental problems. Conversely, it
is contested whether rich people care more about the environment than poor; whilst
pollution intensity might go down, absolute pollution levels may go up for example,
these that have a global impact and are long term e.g. carbon dioxide; cleaner
technologies can be high-risk technologies e.g. nuclear power stations (Ferguson et al.
1996); the use of cleaner technologies does not offset the scale effects of industries
(Torras and Boyce, 1998); with more choices there is more indiscriminate
consumption of goods and increased waste production; changes in the pattern of
output are limited with material goods being rather highly appreciated; there is an
ambiguous effect of sectoral changes on environment, especially at low income
levels; is becoming cleaner simply due to exporting the dirty industries to the South?
What happens when the poor become rich? Finally, the link between economic
growth bringing population growth rates down is quite weak and almost 60% of the
world’s population have yet to reach the level of income at the turning point of the

9. Kuznets curve (Ferguson, 1992). It would, therefore, be prudent not to follow the
Environmental Kuznets Curve path due to the high environmental damage costs, the
high cost of raising quality ex post, the problem of environmental thresholds and
irreversibilities of resource depletion and other damages before reaching the turning
point and the damage to human health and economic productivity. Torras and Boyce
(1998) have shown that alleviating poverty will not necessarily help reduce
environmental pressures and indeed may even increase them. On the other hand,
protection of the environment will often have a pro-poor benefit, the more so when it
relates to green issues then to brown ones. An integrative approach is therefore in
order, with the acknowledgement that sustained growth will contribute to the
alleviation of poverty more than any other single measure. At the same time, the
policies of openness, consensus and transparency should ensure that particular
policies and programmes are not implemented if they have serious adverse
implications for particular groups in society. Again, the institutional focus is
paramount for mediating poverty-environment linkages. Torras and Boyce (1998)
highlight how greater inequality in distribution of power leads to more pollution,
therefore, citizens’ demand and vigilance and advocacy are often crucial in inducing
policies and technological changes which reduce pollution. People are more
motivated and value the environment more due to more choices/alternatives through
an increase in political and civil freedom (Barret and Crady, 1997). Furthermore,
there is evidence that for countries in the upper-income range that rising average
income is associated with renewed deterioration in some dimensions, hence rising
prosperity is not associated with perpetually improving environmental quality.
Indicators have to take into account all types of assets…such as humans or
physical capital. There is a lot of causal evidence to indicate…it does depend on
how the costs are distributed.
The issue of trade and the environment is another key debate for policy-makers of the
South. Bhagwati (1993) as a neoclassical free-trade economist argues that economic
growth through free trade enables governments to tax and raise resources for a variety
of objectives, depending on the kind of growth and how it affects the environment i.e.
the type of trade affects the demand for a good and the supply of pollution. He cites
how cities around the world saw sulphur dioxide pollution fall with the rise in per
capita income. Through allocative efficiency, each country will have less of the

10. industry whose pollution it fears relatively more than the other countries do, instead
allowing countries to specialize in their own comparative advantage. Being open to
trade also means, according to Bhagwati (1993), dynamic efficiency and the constant
pressure for technical and institutional progress due to competition all over the world
– being close to the technological frontier is therefore good for the environment
because processes and products are more energy saving and efficient. By suspending
trading rights we would begin to undermine the openness of the trading system and
the predictability and stability of international markets. He proposes that sanctions can
be appropriately invoked unilaterally to defend universal moral laws.
Daly (1993) on the other hand, argues that balanced international trade should be used,
but it should not be allowed to govern a country’s affairs at the risk of environmental
and social disaster. In other words, sovereignty is essential and the real debate is over
what kinds of regulations are to be instituted and what goods are legitimate – it is still
a market responding to incentives. Daly argues against the Environmental Kuznets
Curve, since growth is increasing environmental costs further than benefits from
production. Identifying the second law of thermodynamics, he underlines that entropy
is always increasing and the universe is constantly becoming more disordered as
energy and matter become less available for use – resource depletion and pollution
being essentially two sides to the same problem.
As the above debate over trade shows, there are essentially two issues at stake here:
one, that strict environmental regulation is seen as reducing a country’s
competitiveness and second, that economic growth through trade liberalization is the
way forward for increasing prosperity in developing countries. However, it is argued
here that both are incorrect assumptions or at least have little evidence to support their
arguments and the policy implications are contradictory to received understanding.
Does strict environmental regulation reduce a country’s competitiveness?
Firstly, empirical evidence does not support the claim that strict environmental
regulation reduces a country’s competitiveness. Countries do not compete like
football teams so that one loses by importing as much as possible and the other wins
by exporting as much as possible. While it is true trade responds to changes in relative

11. prices and therefore a shift in prices resulting from environmental regulation will
affect patterns of international trade, a number of studies suggest that environmental
control costs account for a small proportion of total cost to industry, on average less
than 3% of total costs (Dean, 1991) and find little evidence that they lead to
significant reductions in output. Furthermore, the suggestion that the imposition of
strict environmental regulation in developed countries will cause so-called ‘dirty
industries’ to flee to countries with less stringent environmental standards is also
unsupported by empirical evidence (Williams, 1993). Evidence shows that neither the
industrial flight hypothesis nor the pollution haven hypothesis can be substantiated
(Dean, 1991). According to Williams (1993):
‘Direct foreign investment is influenced by a range of factors, and the share of
environmental costs in output value is too small to be an important component in
firms’ decision-making. In other words, the savings to be made from relocation are
insignificant.’
In some instances the reverse is propounded, that far from transactional corporations
seeking pollution havens, their activities in developing countries can improve
environmental quality:
‘Because it is cheaper for multinational corporations to use the same technologies as
they do in industrial countries, these firms can be a potent source of environmental
improvement’ (World Bank, 1992).
Other reasons for dirty industries not migrating include: some just cannot migrate, e.g.
electricity production, where a lot of electricity would be lost in transit; high transport
costs of moving goods e.g. cement production needs to respond quickly to the
demands of the consumer; dirty industries are usually partly exempt from
environmental regulation in place of origin since they often use scare-mongering
tactics to persuade policy-makers in allowing them to stay; manufactured capital and
skilled labour force is important for a company in locating e.g. good infrastructure,
political stability and a good concentration of competitors are not always available in
developing countries; it is usually cheaper to copy advanced production processes
from the developed country origin so that capital outflow is hardly ever due to
environmental regulation but rather owing to cheaper labour costs or proximity to
markets; and multinationals tend to fear a loss in reputation e.g. Union-Carbide,
Bhopal disaster, Nike sweatshops in the Far East and Shell’s exploitative policies in
Nigeria.

12. More liberalized trade policy is an effective tool for poverty alleviation in
developing countries?
With reference to the second assumption that more liberalized trade policy is an
effective tool for poverty alleviation in developing countries, the only thing we know
is that economic growth leads to increased trade, not vice versa (Rodrik…). And as
Amsden and Hikino (1994) maintain ‘foreign capital typically lags rather than leads
industrial development’. According to Robert Wade (2002) there are several reasons
to be sceptical of globalization’s role in the reduction of world poverty and inequality.
Depending on how it is measured, three out of the four methods used show world
income distribution to be widening in what is universally heralded as a globalizing
world . Using market exchange rates to convert national income (GNP per capita) into
a common numeraire (US$), world income distribution is shown to be stable (in
relative terms) or widening (in absolute terms) for several decades. Using decile
measurements of inequality (i.e. richest tenth of population versus the poorest tenth),
then world income polarization has increased unambiguously. If one measures the
entire distribution and weights countries equally (e.g. China = Uganda), then world
inequality is shown to increase at least since 1980. Lastly, if the entire distribution of
population is taken but countries are weighted by population then income inequality is
constant or falling since 1980. However, when the last set of results are examined
more carefully, we can see that as 38% of the world’s population, China and India
grew faster than the rest of the world as a whole and thus unsurprisingly world
poverty has seen a decrease. Nevertheless, this omits inequality at the margins and
using the second method it can be shown that there are unequal trends within China
where, for example, the difference between the richest and poorest in certain
provinces has risen from 7 in the early 1990s to 11 in the late 1990s. In other words,
world income distribution has become more unequal over the past to decades in
absolute terms.
Therefore, if globalization is used to describe ‘changes in levels of openness’ (Wade,
2002), then China and India as ‘globalizers’, had very low trade/GDP in 1977, when
economic growth began to take off. It has only been in subsequent decades that these
protectionist measure have been relaxed. This defies the trade liberalist’s argument

13. that open economies have the fastest growth and their policy implication for
developing country governments to raise the economy’s integration into the world
economy. China has achieved an annual growth rate of nearly 10% (The Economist,
2004) largely on the back of protectionist measures. The problem is that even in a
more ‘globalized’ world, ‘spatial clustering’ (Wade, 2002) of high value-added
activities means that benefits are contained predominantly in the already high cost,
high wage zone of the world economy. As Ha-Joon (2003) says it is about ‘getting
history right’, using Frederick List’s argument to show how developed countries
‘kicking away the ladder’ of infant industry protection once they achieved
industrialization, was a way of depriving developing countries the same route to
industrialization. The US was tariff protection’s most ardent user, with US industries
being the most sheltered until 1945. Tariff protection was nearly 40% when the US
had three-quarters the income of Britain, yet now following the WTO agreement,
developing countries at most have a 32% tariff rate (India) when income per capita
PPP2
is one fifteenth of the US (Ha-Joon 1997). Hence, the productivity gap is greater
than ever before and yet tariff protection is at its lowest ever. The basic point is that
despite the ideology of free trade, in reality, some sectors are ‘developmentally more
nutritious’ than others, based on technologies that are not available to everyone or
knowledge and skills that are not universal. It suggests that for a country to specialize
in the activities it does best may not be optimal (as per Ricardo) and that new
specializations and new productive capacities should be brought in. Therefore,
development is not just about doing more of what you already do well (exploiting
comparative advantage) but being able to do new things well (creating new
comparative advantages). As Alice Amsden (1997) advocates, it is about ‘bringing
production back in’:
‘Whereas the exchange functions of markets tend to become more perfect as
economies mature, the production functions deliberately and purposefully grow less
perfect’.
Hence, certain sets of institutions need to be used to create proprietary production
processes, firm specific skills and other ‘competitive assets’ or ‘getting the prices
wrong’(ibid). This creates a role for the State because movement into new sectors is
not a natural process as it is risky, uncertain and costly and whilst it has been shown
2
(PPP = purchasing power parity)

14. that the more the government intervenes, the more rent-seeking becomes prevalent,
there is no evidence to show the opposite is true. The policy implications for
developing countries are that protection is an instrument for achieving development,
but it should be temporary, targeted and not excessive (Shafaeddin, 2000). More
sceptical policy makers would argue that infant industry protection should only occur
in small, peripheral states that are not significantly connected to the world economy
and also where technological advance is slow, such as capital goods like ship building
(Roberts, 2002). In the end, theory cannot determine the level of protection and no
general rule can be drawn. Moreover, not all countries have the essential conditions
for industrialization. Yet, the initial costs should be offset by discounted social
benefits reflected in lower cost of production in subsequent periods (Shafaeddin,
2000). Ideology aside, laissez-faire simply never existed:
‘The road to the free market was opened and kept open by an enormous increase in
continuous, centrally organized and controlled interventionism’ (Polanyi, 1944).
Should trade sanctions should be employed against countries with ‘lax’
environmental standards?
As to the question of whether environmental trade sanctions should be employed
against countries with ‘lax’ environmental standards, it is a bit like comparing apples
and oranges. Trade sanctions should only be used to address trade problems, whilst
environmental concerns are best dealt with environmental policies. Not only would it
be difficult to get worldwide cooperation with drawn out negotiations but the degree
of success is questionable. National sovereignty over natural resources has been
secured since UNCHE in 1972, therefore imposing sanctions would be a violation of
this. It would also tempt countries to use an environmental issue as an excuse to
protect domestic industries from trading freely, not only out of proportion with the
threat but would not necessarily help the environment or adhere to WTO trade rules.
Unilateral trade sanctions enacted over environmental concerns will be viewed by
many developing countries as Northern ‘eco-imperialism’. Hence, environmental
trade sanctions do not suggest how to improve the environment and any sanctions
imposed should be done multilaterally or through the UN system. State non-
compliance with environmental commitments is often due to administrative, technical

15. and financial constraints. Sanctions can, therefore, exacerbate rather than solve the
problem of non-compliance (DFAIT, 2003).
Instead, we need,
‘A diversity of environmental quality standards, supplemented where feasible, by
minimum process standards. Frameworks for establishing minimum standards should
be agreed on by all affected countries and will need to recognize and address the
transitional difficulties that might be faced by lower standard countries, particularly
developing countries. Another concern with harmonization – that it may stifle
innovation – can be dealt with by designing standards, which specify desired
environmental results, rather than particular production technologies. There may be
cases for temporary protection according to multi-laterally agreed guidelines, in
situations where the introduction or tightening of environmental measure leads to a
sudden increase in imports that threatens a domestic industry’ (IISD, 1994).
CONCLUSION
As Devlin and Yap (1993) maintain ‘there are inherent market failures in the natural
resource sector. Many environmental benefits have public good characteristics. They
cannot be turned into marketables nor can access to them be easily prevented. Thus,
environmental policy management, even in a market framework, requires an active
state role to adjust private to social costs and benefits (Reed, 1992). Ultimately,
environmental stability and economic efficiency can be mutually reinforcing goals.
However, the environmental economics debate has indicated that the pursuit of
economic efficiency in the absence of a prior definition of environmental values will
lead to environmental degradation. Environmental effectiveness requires the setting
by public authorities of acceptable environmental limits. Once the acceptable
framework is set, market efficiency can be pursued. But the problem to be solved is
how to determine environmental boundaries. World prices are clearly not the “right”
environmental prices.’
‘Rio… recognized that future strategies could fail if adequate financial resources were
not forthcoming and mechanisms for implementation identified (Howlett, 1993).’
There is a need for raising levels of education, especially that of women and a focus
on the role of the human agent in conservation activities, referred to as ‘capacity
building’. The so-called ‘principle of subsidiarity’, whereby decisions are made at the

16. lowest practical level in the community, must apply in matters concerning the
environment. ‘Top-down development rarely works without bottom-up incentives for
the population to take part in the process. And, as the genuine needs of communities
become a factor in planning, almost inevitably, fewer and fewer capital-intensive
projects will emerge as priorities (Sandbrook, 1991).’ Examples of micro-hydro in the
Hindu Kush bringing light to isolated communities and biogas from cattle dung giving
villagers cooking gas on tap in Rajasthan, all point the way forward for small-scale,
locally controlled, sustainable projects in the developing world (Simms et al. 2004).
Moreover, total debt of developing countries has risen to over $2 trillion, up by 8% in
1995 alone, as well as 80% of all global capital flows being targeted at only 12
countries that are not the poorest (O’Riordan, 2000). 50 countries spend more than a
third of their wealth creation on debt repayments, which all adds up to serious erosion
of the capacity of the Third World nations to manage their way to SD. If this flow of
capital could be halted or even reversed, this would provide the greatest single source
of funds for SD and for the implementation of programmes of soil conservation,
sewage treatment, child survival, public health-care, public transport investment and
energy-efficiency amongst the poorest third of the human population (Imber, 1993).
As O’Riordan (1998) characterizes it, SD is a process of four stages: First, it is about
secure wealth creation – continuous, durable and self-regenerative; second, SD entails
stewardship, or being aware of the uncertain consequences of actions and the need to
reform science; thirdly, empowerment is paramount for responsibility and autonomy
by generating self-respect, guaranteeing legitimacy and ensuring accountability; and
lastly, revelation, in recognizing common futures and therefore compensating through
reconstructed liability and co-operation. Policy-makers in the developing world face
the unenviable task of reforming not only their actions towards the natural
environment, but also constructing strategies for economic enterprise and also
institutional frameworks of social equity and sustainable ethics.
As Holling (1992) so aptly puts it:
‘Sustaining the biosphere is not an ecological problem, nor a social problem nor an
economic problem. It is an integrated combination of all three. Effective investments
in a sustainable biosphere are therefore ones that simultaneously retain and
encourage...renewal in society, economies and ecosystems. For nature it is biosphere
structure, for business and people it is usable knowledge and for society as a whole it
is trust’.

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