INTRODUCTION The poor have traditionally taken the brunt of the blame for causing societys many problems.

The most recent accusation directed against them is that they cause environmental degradation. The general consensus seems to be that poverty is a major cause of environmental degradation. For example, in one of the conclusions of the Bruntland Commission report, which incidentally has been accepted as the blueprint for environmental conservation, it is explicitly stated that poverty is a major cause of environmental problems and amelioration of poverty is a necessary and central condition of any effective program to deal with environmental concerns. Along similar lines, Jalal (1993), the Asian Development Banks chief of the environment department argues, It is generally accepted that environmental degradation, rapid population growth and stagnant production are closely linked with the fast spread of acute poverty in many countries of Asia. The World Bank (1992) joined the consensus with its the World Development Report, where it explicitly states, poor families who have to meet short term needs mine the natural capital by excessive cutting of trees for firewood and failure to replace soil nutrients. Poverty and environmental deterioration are among the gravest challenges faced in the developing world today. These are interlinked and they reinforce each other in a downward spiral, and the increasing population exacerbates both. However, this relationship is complex and highly influenced by the socio-economic factors of a country or region. Poverty-environment nexus can be explained through two interlinked processes. In the first case, environmental degradation reinforces incidence of poverty by reducing the availability of natural resources and making the poor vulnerable to natural disasters. In other case, poverty force people to degrade the environment through over-exploitation, in the absence of other alternatives. Reduction of poverty has been the primary objective of the macroeconomic policies of developing countries like Bangladesh. Considering obvious nexus of poverty and environmental issues, there is an urgency to better understand the relationships and to identify the priorities. Characterizing Poverty Economists have traditionally defined poverty on the basis of household income or consumption, taking this as the best proxy for welfare. Using this approach, people are considered poor if their level of consumption falls below a given poverty line. This can either be relative; for example, a line set at 50 percent of average consumption for the country or region, analysis has traditionally aimed to understand the determinants of income poverty.

Now, however, the definitions are moving beyond this single dimension of poverty to include utility- and capability-based concepts. This includes inequality (both within a country or region and within a household), health, education, security, political voice, and discrimination (Sen 1981; Putnam 1993). Not all of these measures are necessarily at work in every context, but generally each is needed to capture something missing in the others (Ravallion 1996). Poverty analysis is thus now broadening to encompass an understanding of the determinants of these other dimensions (such as the factors that lead to poor child-nutrition outcomes). It is clearly more difficult to find a single measure for this multidimensional analysis, and most studies consider each dimension separately. 1 Various studies have attempted to group these dimensions of poverty. One approach employs a fivefold asset vulnerability framework, which includes labor, human capital (health and education), household assets (such as housing), household relations (mechanisms for pooling income and sharing consumption within the household) and social capital (potential for reciprocity within communities and between households) (Moser 1998). Other authors mention geographic capital to capture the evidence that certain geographic areas are persistently poor (Ravallion 1996). The 2000/2001 World Development Report groups the different dimensions of poverty as opportunity, empowerment, and security. Much recent work in the Bank follows this approach, but also includes capabilities (or human capital) as a separate category. 2 Figure 1 shows how different factors or determinants can influence different dimensions of poverty, affecting peoples opportunity, capability, security, and empowerment in many different ways. In this paper we have chosen the relationships indicated by solid lines (shown in figure 1) as examples of how these categories might relate to each other.

1 Bourguignon and Chakravarty (1998) attempt to find a composite measure taking into account elasticities of substitution between different dimensions of poverty. In general, however, analysts take each dimension separately. 2 The WDR includes capabilities within opportunity.

Defining Environment Environment generally refers to a natural-resource base that provides sources (material, energy, and so forth) and performs sink functions (such as absorbing pollution). The term can include resources that people relied on in the past but no longer rely on (either because they are depleted or because they have been substituted by some other resource or technology). Similarly, it can include resources that people do not yet use, but could use with a change in knowledge or technology (Leach and Mearns 1991). Environmental issues are often concerned with public or semi-public goods, such as an open-access air- and watersheds, or common-property grazing land. Some aspects of the environment can also involve private goods, such as air inside a house or workplace or household drinking water. In this paper we use the term environment in a broad sense to include these various meanings of the term. Environmental degradation is a subset of environmental change. The term degradation can be interpreted in different ways indicating different forms of land use (Blakie and Brookfield 1987). As a working definition this paper uses the term environmental degradation to imply: (a) Depletion: Damage to a natural resource system that affects present or future human needs negatively. This harms welfare indirectly by reducing productivity. We refer to depletion of a renewable natural resource beyond its rate of renewal, rather than depletion of a finite resource. (b) Pollution: Leading to damage to human health or decline in the capacity of the environment to sustain natural systems, thus directly harming welfare. Environment-POVERTY NEXUS ACROSS THE WORLD The poors exposure to environmental degradation is distinctive mainly for two reasons. First, the surroundings of the locations inhibited by the poor are often environmentally vulnerable or degraded. The areas where the poor can gain access are often fragile and hence the riskiest for health and income generation. Second, lack of strong resource base makes it difficult for the poor to opt out of the degraded environment and try to eke out living with alternative sources of

livelihoods which are less degrading. In that sense they are more victims rather than degraders of the environment. Thus there exists a two-way relationship between poverty and environment in the developing countries. Poverty causes environmental degradation, and in turn, the degradations in environment exacerbate poverty. Again, poverty is itself a product of unequal resource distribution between groups and classes. Environmental degradation depresses ability of the poor to generate income through two channels. First, it requires the poor to divert an increasing share of their labor to routine household activities such as fuel wood collection, and second, it decreases productivity of those natural resources from which the poor wrest their livelihood (Mink, 1993). Diverting labor. Environmental degradation can lower the labor productivity, even when they are healthy. For example, as fuel wood becomes scarce, poor households must spend an increasing amount of time collecting it. Time taken away from other productive activities like agriculture has an opportunity cost for the poor and can result in their lower incomes. Further, families are not able to compensate for this diversion of labor resulting in a reduction in household income from agriculture and deterioration in food consumption levels and nutritional status. All these have implication for the poors livelihood. Reduced productivity of the poors natural resources. Where the poor depend on biomass fuel and confront increasing fuel-wood scarcity, they often shift to using animal dung, fodder, and crop residues for fuel. Since reduced quantity of these materials are returned to the soil, its fertility may decline. Growth in rural population can put extra pressure on land resources resulting in shortening of fallow land in the community in the process. This too can have negative impact on the health of the soil and hence its productivity. Poverty may also constrain farmers ability to maintain soil productivity through more intensive application of variable inputs. Impact of poverty on resource management. The extreme poor struggling at the edge of subsistence levels of consumption are pre-occupied with survival strategies on a day-to-day basis. Their ability to plan ahead is often restricted to a critically short time horizon, measured in days or weeks. However, the horizon of the poor is short partly as a result of their high rate of pure time preference, which declines with income rise. They have less ability to save rather than present consumption. As a result they cannot opt for investment in natural resources, which is likely to give return in the medium- and long-run. A high subjective discount rate implies rapid resource extraction to meet present income or consumption needs, and low

investment in natural resources to improve future returns. This has dynamic implication for growth and subsequently on poverty reduction. Higher risks faced by the poor. Generally higher risks are faced by the poor than their rich counterparts from different sources. The poor farmers may perceive their access to land as tenuous because of conflicts inherent in it. With other claimants or overlap of different land # 3 rights, the poor are mostly marginalized. Better-off rural families are more likely to be able to establish farm claims to land where a transition is occurring from common property to private property system, or where there are lengthy and costly administrative procedures for establishing legal title to land. Under such circumstances, the poor peasants interest in longer-term investments in the productive capacity of land is likely to be severely diminished. Common property resource (CPRs) often serves as a form of insurance that the poor rural residents can turn to if they face setbacks in their primary income generating activities. A degrading environment significantly affects the access to this natural insurance of the poor. The poors constraints to manage risks. Poor households mostly at risk of falling below the subsistence levels of consumption treat available natural resources as an asset to be drawn down in times of emergency. The options for managing the resources are often limited or not always available to the poor. Their assets and agricultural stores are minimal and quickly depleted. Credit and insurance markets for the hardcore poor are frequently fragmented or non-existent. Again, women, who play a significant role in managing natural resources are frequently underserved by agricultural and forestry extension services. All these imply higher level of uncertainties and insecurities with implications on the management of environmental resources. However, environment affects poverty situations in three distinct dimensions (Jehan and Umana, 2002): a. by providing sources of livelihoods to poor people, b. by affecting their health, and c. by influencing their vulnerability Diagram 1: Dimensions of poverty and its linkages to environment Source: Grimble et al (2002). On the other hand, poverty also affects environment in various other ways: by forcing poor people to degrade environment, by encouraging the countries to promote economic growth at the expense of environment, and by inducing societies to downgrade environmental concerns, including failing to channel resources to address such concerns. Bangladesh very often experiences natural disasters like flood, cyclone, and drought and river bank erosion. While compared with not so high disaster-prone area within Bangladesh the level of migration of

people faced with frequency of disaster is found to be significantly higher (see diagram 2). Impact of climate change on poverty in the Asian countries It is apprehended, perhaps rightly, that the health of Asian people, agriculture, forestry, water availability, coastal infrastructure, and land cover will be affected by changing climate patterns and more extreme weather events in the future. Moreover, food security is likely to be affected by changing variability of rainfall and ever-changing seasonal patterns. This has implications both for the economic growth of agriculture-based economies and also on the food security of the poor. Rain-fed agricultural systems will be affected by increased variability in the timing and intensity of the rains. In particular, high yielding varieties the basis for the green revolution in Asia may prove more susceptible to early flooding, Stalinization and drought than hardier traditional varieties. Food production will be affected by changing seasonal patterns and temperatures. In India, a temperature rise of 2C could lower yields of staple crops, wheat and rice by 10 per cent and reduce farm revenues by up to 25 per cent. Increasing frequency of El Nio events will cause declines in marine fish productivity along the coasts of south and Southeast Asia, affecting food security and fish exports in developing countries like Vietnam and Cambodia. Health will be affected both directly through increased mortality from extreme temperature and weather events, and also indirectly through increased incidence of vector-borne diseases and poorer nutrition. Malaria is currently mostly endemic in the South Asian and Southeast Asian region, but there are risks that it may spread as a result of changing climate, urbanization, irrigation, agricultural practices and deforestation. There is a risk of increased levels of respiratory problems as a result of increased frequency and extent of forest fires. Already there is a concern across Southeast Asia, that the forest fires are associated with intense droughts and could increase with climate change. The loss of forestry resources also has serious consequences for forest-related economic activities, livelihoods and ecosystem services. Water security is also likely to worsen across large parts of Asia, with implications for irrigated agriculture, human water consumption and hydroelectricity generation. It is estimated that even without climate change, Indias per capita renewable freshwater supply will fall by 40 per cent based on projections of population growth, water demand and run-off within the major river basins. Climate change could significantly worsen this picture, decreasing rainfall supplies to major river basins. Glaciers in the Himalayan mountain ranges will retreat further, as temperatures increase: they have already retreated by 67 per cent

in the last decade. Glacial melt would lead to increased summer river flow and floods over the next few decades, followed by a serious reduction in flows thereafter. Poor laborers and rickshaw drivers formed the highest proportion of the 1,000 people who died in India during an intense heat wave in May 2002, and the 1,400 deaths in the heat wave in 2003. Following disaster floods in Central Vietnam in November 1999, poor households were the slowest to recover, and unable to afford labor to clear their fields and return to agricultural production (DFID, 2004a). The very recent (2004) flood in Bangladesh affected more severely the ultra poor living in fragile areas like river banks, chars (land raised by siltation).

1.1 LINKAGES BETWEEN POVERTY AND ENVIRONMENT Since the 1970s it has been almost universally agreed that poverty and environmental degradation are inextricably linked. The World Commission on Environment and Development (Brundtland Commission) wrote (1987): Poverty is a major cause and effect of global environmental problems. It is therefore futile to attempt to deal with environmental problems without a broader perspective that encompasses the factors underlying world poverty and international inequality. The links between poverty and environment were also seen to be self-enforcing. The Commission also wrote: Many parts of the world are caught in a vicious downwards spiral: poor people are forced to overuse environmental resources to survive from day to day, and their impoverishment of their environment further impoverishes them, making their survival ever more difficult and uncertain. Today, the dominant viewpoint on poverty and environment reflects this image of a vicious downward spiral of need. Population growth and economic change are also seen to contribute to this process (see Brown et al, 1998). When rapid change occurs in ecologically vulnerable urban or rural areas (poverty reserves), then the environmental implications are greatest. Such views are generally pessimistic about managing environmental degradation and poverty. They are also associated with solutions directed at macroeconomic poverty eradication measures plus shortterm land management or protection schemes excluding certain land uses which seek to protect fragile ecosystems from encroachment by poor people. Such topdown approaches to poverty reduction and environmental protection have themselves come under critique both for their failure to meet local livelihood needs, and because exclusionary measures alone generally fail to protect

environmental resources when peoples livelihoods depend on them. Hence many donors and policy-makers especially since UNCED - have embraced more localized, community based approaches to natural resource management and sustainable development. However, all too often these approaches reiterate flawed assumptions about community, environment and their relationships, leading to disappointing results in operational terms.

The Environment-poverty Nexus: an overall perspective The environment-poverty nexus is a two-way relationship. Environment affects poverty situations in three distinct dimensions: by providing sources of livelihoods to poor people, by affecting their health and by influencing their vulnerability. On the other hand, poverty also affects environment in various ways: by forcing poor people to degrade environment, by encouraging countries to promote economic growth at the expense of environment, and by inducing societies to downgrade environmental concerns, including failing to channel resources to address such concerns. Environment matters a lot to poor people. Their well-being is strongly related to the environment in terms of, among other things, health, earning capacity, security, physical surroundings, energy services and decent housing. In rural areas, poor people may be particularly concerned with their access to and control over natural resources, especially in relation to food security. For poor people in urban areas, access to a clean environment may be a priority. Prioritization of environmental issues may vary across different social groups. For example, poor women, reflecting their primary role in managing the household, may regard safe water, sanitation facilities, and abundant energy services as crucial aspects of well-being for poor people. Some of the environmental degradation reflects truly global concerns, such as global warming and the depletion of the ozone layer. Some is international, like acid rain, the state of the oceans, or the condition of rivers that run through several countries. Some is more localized, though it may often occur worldwide, like urban air pollution, water pollution, or soil degradation. Even though poor people also feel the impact of global environmental degradation, it is local environmental damage that affects the lives of poor people more.

The impact of environmental degradation is unequal between the poor and the rich. Environmental damage almost always hits poor people the hardest. The overwhelming majority of those who die each year from air and water pollution are poor people. So who are those most affected by desertification and by the floods, storms and harvest failures brought about by global warming. All over the world, it is poor people who generally live nearest to dirty factories, busy roads and dangerous waste dumps. The loss of biodiversity is most severe for poor rural communities. Environmental degradation, by depleting the health and natural support systems of poor people, may make them even more vulnerable. Box 1 provides some quantitative estimates of the human impact of environmental degradation in the developing world. Because of the nature of the degradation, it is poor people in general who bear the brunt of this impact and with the poorest bearing the hardest burden. Impoverishment pushes them to the most ecologically fragile lands; they are at the bottom of the energy ladder and they are nearest to toxic dumps. Women also bear a disproportionate burden. Since mostly women and girls in developing countries stay indoors for cooking and other household work, they constitute 80% of the 1.8 million deaths from indoor pollution. The effect of biodiversity loss is the most severe for indigenous people, as they depend more on biodiversity for their livelihoods, energy, and medicine. BOX 1: IMPACTS OF ENVIRONMENTAL DEGRADATION IN THE DEVELOPING WORLD Water-related diseases, such as diarrhoea and cholera, kill an estimated 3 million people in developing countries, the majority of whom are children under the age of five. Vector-borne diseases such as malaria account for 2.5 million deaths a year, and are linked to a wide range of environmental conditions or factors related to water contamination and inadequate sanitation. One billion people are adversely affected by indoor pollution. Nearly 3 million people die every year from air pollution, more than 2 million of them from indoor pollution. More than 80% of These deaths are those of women and girls. Nearly 15 million children in Latin America are affected by lead poisoning. As many as 25 million agricultural workers 11 million of them in Africa may be poisoned each year from fertilizers More than one billion people are affected by soil erosion and land degradation.

Some 250 million people are at risk from slash crop yields. Desertification already costs the world $42 billion a year in lost income. Over the last decade, 154 million hectares of tropical forests, covering almost three times the land area of France, have been lost. About 650 million poor people in the developing world live on marginal and ecologically fragile lands. Source: UNDP (2002, 2000 and 1998 Deconstructing some specific environment-poverty myths Poor people are the principal creators of environmental damage. Not true. Even though poor people bear the brunt of environmental damage, the irony is that they are not its principal creators. It is the rich who pollute and contribute most to global warming. They are the ones who degrade the global commons, making resources scarce for poor people. In many areas, the non-poor, commercial companies, and state agencies actually cause the majority of environmental damage through land cleaning, agro-chemical use, and water appropriation. The rich also generate more waste and create stress on natures sink. Thus poor people become victims of the consumption levels and patterns of the rich. The per capita emission of CO2 in the developed world is 11 metric tons per year, compared to 2 metric tonnes in the developing world. The continent with the greatest share (74%) of dry land suffering from moderate to severe desertification is North America. In the Philippines, during the Marcos regime, 50% of the forest was lost to commercial logging a few hundred families shared $42 billion in revenue, leaving 18 million forest dwellers impoverished (UNDP, 1998). One of the environmental challenges that stem from growing poverty and environmental damage is that it pushes more and more people to the periphery to the most ecologically fragile land where they become even more vulnerable. Yet there are many examples in which poor people take care of the environment and invest in improving it. Population growth leads to environmental degradation. Theres no necessary correlation. While initially degradation may occur as population increases, what happens next is context-specific. Rapid population growth is not incompatible with sustainable management of the environment and in some cases, as has been demonstrated in the Machakos experience in Kenya, increasing population density is required for environmental sustainability.

Until the late 1930s, significant soil degradation and erosion a large-scale population- induced degradation have been observed in the district. Between 1932 and 1990, the population of Machakos increased from 240,000 to 1.4 million. The population growth affected the situation positively in two ways. First, the concern about soil degradation led to such measures as bench terracing to conserve soil. In the 1950s more than 40,000 hectares of land were terraced and in the 1980s more than 8,500 kilometers of terraces were constructed annually. Second, increasing population density leading to land scarcity promoted investment, both in conservation and in high-yielding improvements. Integrating crop and livelihood production improved the sustainability of the farming system. Many social and institutional factors a good policy framework, better physical infrastructure, a secure land tenure system, indigenous technology, an improved health and education system facilitated the agricultural change in the Machakos district. The results have been impressive. Between 1930 and 1987, the productivity of food and cash crops increased more than six-fold. Horticulture productivity grew fourfold (Montimore and Tiffen, 1994). The Machakos experience clearly demonstrates that even in an area vulnerable to soil degradation, a large population can be sustained through a combination of endogenous and exogenous technological change supported by a conducive policy framework and much local initiative. The poverty-environment nexus basically stems from low incomes. Its not that simple. Arguments that maintain that poor people degrade the environment basically explain the poverty-environment nexus in terms of income levels only. The poverty- environment nexus is more complex. Questions of ownership of natural resources, access to common resources, the strength or weakness of communities and local institutions, the way information about poor peoples entitlements and rights to resources is shared with them, the way people cope with risk and uncertainty, the way people use scarce time all these are important in explaining the environmental behavior of poor people. Many of the natural resources that are degraded are communal property. Rights are ill-defined, often because they were originally defined within a local social and political framework that is no longer there. Institutions for managing common property that reflect the consensus of owners and can control use are lacking. In

ecologically fragile ecosystems, people tend to minimize risks, not maximize output, whether they are poor or rich. Over-exploitation of sources of fuel-wood is linked more to the time available to women than to their poverty status. There is a gender dimension, but not necessarily an income dimension. Many factors shape human behavior towards the environment, some related to poverty or affluence, others independent of either income or poverty. Revisiting conventional wisdom in the environment-poverty nexus Downward spiral hypothesis: The hypothesis maintains that poor people and environmental damage are often caught in a downward spiral. Past resource degradation deepens todays poverty, while todays poverty makes it very difficult to care for or restore the agricultural base, to find alternatives to deforestation to prevent desertification, to control erosion and to replenish soil nutrients. People in poverty are forced to deplete resources to survive, and this degradation of environment further impoverishes people (Ostrom et. al. 1999). While this can and does happen, as an overarching model, it is a rather simplistic view of a much more complex reality. Environmental degradation can sometimes be associated with poverty, but there is not necessarily a direct causal relationship. Other factors also shape human behavior to the environment. The danger of the Downward Spiral Hypothesis is that it may often lead to policies that either reduce poverty (often in the short run) at the expense of the environment or protect the environment at the expense of poor people. Environmental Kuznets Curve: The Environmental Kuznets Curve shows a relationship between air pollution and economic growth. It maintains that pollution will increase initially with economic growth, but if growth continues and as society becomes more affluent, pollution will be reduced. Thus, by measuring economic growth in terms of per capita income in an economy, it establishes an inverted Ushaped curve implying increases in pollution initially, but a decline as per capita income continues to grow. The Environmental Kuznets Curve has been severely criticized on conceptual, statistical as well as policy grounds (Banuri, 1998). Conceptually, an inverted U-shaped relation may exist between a few selected pollutants and income, but not necessarily at an aggregative level. In the area of statistics, there are the problems with aggregation, with identification of appropriate variables, and from weakness of the data. Evidence indicates that there is nothing inevitable about the link

between economic growth and environmental degradation. In fact, policies and institutions can significantly influence the Environmental Kuznets Curve. The removal of perverse subsidies, the internalization of externalities and the identification of property rights can change the relationship between income levels and levels of environmental degradation. Delinking economic growth and natural resource use If it becomes possible to use less and less natural resources in the production process, it would mean dematerialization of the production process and would imply delinking natural resources from economic growth. Studies have shown that resources can be used at least four times as efficiently as they are currently. Looking at the total impact of human interference with the biosphere, experts have concluded that material turnover should be reduced by at least 50% on a global scale. Since per capita resource use is five times greater in industrial countries than in developing countries, it has been asserted that sustainable levels of material flows will not be reached unless the material intensity in industrial countries is reduced by a factor of ten. The critical issue with regard to delinking is not to establish its advantages, but to face the practical question as to whether such a delinking is possible. There is historical evidence that it is possible in many areas. Between 1791 and 1830, the volume of coal used to produce one tonne of iron was reduced by over 50%. It has been shown that industrial countries could continue their present growth rates and yet reduce their energy use by a third. Technology has played a major role in the delinking process. Increases in productivity and efficient use of resources because of technological development have made it possible to get the same amount of output with lesser amounts of inputs. In a survey of four major materials such as cement, steel, copper, timber covering 11 countries (eight being industrial), the elasticity of material use to economic growth has been found to be zero from 1970-85, implying a delinking phenomenon. Per capita use rates of steel, timber, and copper have generally stabilized or even declined in industrial countries. Recycling also had an impact on the dematerialization process. It reduces both the demand for primary resources and many of the adverse environmental impacts associated with waste disposal. Every tonne of iron recycled not only replaces a tonne that would have been mined, but also avoids several tonnes of hidden material flows associated with iron mining and processing. Recycling can also save

energy: recycled aluminum requires only 5% of the energy needed to refine and smelt new aluminum from bauxite. Today in industrial countries, the recycling rate for paper is about 45% and for glass 50%, compared with 33% and 26% respectively in the mid-1980s. Recycling is yet to be of significance in developing countries. There are instances where private action in developing countries, particularly by women, has been quite successful. On the one hand, it has become a flourishing business and, on the other, it has contributed to the solution of waste disposal problems. However, recycling is not always environmentally benign, particularly where hazardous recyclable wastes are involved. Some concerns have been raised on various aspects of delinking. First, it has been argued that evidence of declining material intensities is restricted to certain specific materials. The issue is whether it can be generalized as a reflection of an aggregative picture in the production function. Second, in recent years, industrial countries are taking a large part of their production activities to developing countries. Thus the material intensity in industrial countries might have declined, but the same may not be true in developing countries. The issue then is whether overall delinking is taking place. Third, some of the recent studies have found evidence of re-linking even in industrial countries. These studies argue that the energy shocks of the 1970s and the heightened environmental awareness led to policy interventions that increased resource efficiency across a wide range. However, with the utilization of the unexploited opportunities, the economies returned to their long-term growth trajectory in which resource use rises with income. In spite of all these limitations, the delinking of economic growth and natural resource use has three important benefits: Delinking of economic growth and natural resource would mean dematerialization of both production and consumption. Economic activities would be undertaken at the same level, but with less resources. It would release resources that could be used in alternative areas of economic growth and human development. The new technology could also make industrialization in developing countries more affordable.

 If production were delinked from natural resource use in terms of using lesser and lesser amounts of natural resources per unit of GDP, it would also imply less environmental degradation. One corollary of delinking is that if economic growth is delinked from natural resource use, every country may be able to maintain its environmental space (defined as the amount of renewable and non-renewable resources that a country can afford) without depriving future generations of their rights to the same use of natural resources. The delinking issue has also led to the idea of a knowledge-based society, in which technology will be more human resource-dependent. Such a society could arrange both its production processes and consumption patterns with less dependence on natural resources. THE LINKAGES Environment-Poverty Relationship from Economic growth Viewpoint Economic development should help reduce poverty and improve the environment. But the unplanned development activities contribute to severe environmental degradation in developing countries. A significant problem in environmental regulation in developing countries arises from difficulties in controlling small scale enterprises, because of their limited financial and human resources, and low-level of technology.( Markandya,2000:12). The vulnerable are often the users of marginal resources and also dependent on the common resources of the community in which they live. (Dasgupta, 2001:10). Hence it is these groups that are most impacted when deforestation, soil erosion and other negative incidence occur, often as a result of natural disasters. (Dasgupta, 2001:10). We can here show a silent feature of infrastructure development activities such as construction of roads, railways, set-up of modern industrial units, massive industrial plantation, plantation of exotic trees, tea plantation, construction of office buildings, settlement of people in the hilly areas, unplanned and haphazard urban and industrial development process, modern agricultural production system and trade and commerce and business etc. that created tremendous ecological imbalance due to indiscriminate utilization and destruction of natural resources. Most traditional economic activities comprise the transformation of resources into products and services useful to human beings. Thus, regardless of the income level or stage of development, practically any economic activity would alter the state of the environment in one way or

another and has the potential to cause a number of negative impacts in the form of unsustainable depletion of resources and deterioration in the quality of resources and the environment. For example, agricultural activities for producing food and generating employment and income in rural areas are the major sources of methane flow to the atmosphere. Commercial energy is the most crucial input which enables economic activities to take place but is the major source of carbon dioxide emissions into the atmosphere and, together with manufacturing and other user sectors, contributes significantly to atmospheric and aquatic pollution. The environmental impacts of household consumption activities are no longer negligible. The use of resources such as freshwater and the production of wastes are examples of two such impacts. The consumption of various forms of energy including the increasing use of fossil fuels by private vehicles, increases direct and indirect environmental stress through the burning of fuel are increasing day by day. In the agricultural sector in the region, particularly in Asia, pressure to increase production and improve the yield to cope with the growing population has led to the intensive use of fertilizers, pesticides and water for irrigation. There is no doubt that this process has contributed to the substantial increase in agricultural production and associated beneficial effects, including the reduction of rural poverty. However, such resourceintensive agriculture has also posed various environmental problems which, in turn, have an adverse effect on agricultural productivity. For instance, the overexploitation of freshwater resources has in some cases resulted in the drying-up of spring-fed rivers; the intensive use of fertilizers and pesticides has contributed to water pollution; and the overuse of surface water for irrigation has resulted in aquifer depletion, land subsidence or seawater/saline intrusion. In industry, the adverse environmental impacts of production activities are well known. For instance, the use of energy is essential for undertaking almost all industrial activities and operating transport infrastructure and services, but the production and use of a major part of the energy consumed in industry and transport have a detrimental environmental impact. However, the process of industrialization and economic development could entail improvement in resource efficiency and relative shifts into less resourceintensive industries, as well as the adoption of clean technologies and incremental improvements in the enforcement of environmental regulations,

which have beneficial mitigating impacts. Nevertheless, rapid industrialization in the region, the resulting increase in energy production and consumption and the associated pollution have often outweighed such benefits. Environment-poverty Four observations highlight the strength and importance of the interlinkages between the environment and poverty: Observation 1. The poor live in places which are ecologically more vulnerable and are forced to earn their living from low-productivity natural resources.8 The rural poor often live in low-lying, flood-prone areas, on steep mountain slopes or on dry land and possess low-productivity marginal land devoid of any irrigation facilities. The number of the rural poor in developing countries living on marginal land could be twice the number found on better-developed land.9 The urban poor are found in the shanty towns of big cities, which are often built on floodprone, lowlying areas or around city drains; many of the poor earn their livelihood from environmentally hazardous scavenging. Environmental deterioration in the form of land degradation, frequent flooding, increased pollution and other hazards reduces the income of both the rural and urban poor and worsens their health disproportionately by comparison with the rich. 8 Fifty per cent of the poor in Asia are found in fragile ecosystems and mainly remote and ecologically vulnerable rural areas. See International Fund for Agricultural Development Combating environmental degradation,(<http://www.ifad.org/events/past/hunger/envir.html>, 5 November 2002). 9 Department for International Development, United Kingdom, European Commission, UNDP and World Bank, Linking poverty reduction and environmental management, policy challenges and opportunities, January 2002, p. 5. Observation 2. It is commonly observed that poor households, especially in rural areas, derive their livelihood income from natural resources, for example, land resources for agriculture and water resources for fishing. It is also found that the poorer the household, the greater is the share of its income from environmental resources.10 In addition to providing a livelihood, the environment plays a very significant part in influencing the health of the poor; while the incidence of disease in poor countries is about twice that of rich countries, the disease burden from environmental risks is 10 times greater in poor countries.11 Environmental

degradation has a disproportionate negative impact on both the livelihood and the health of the poor. Observation 3. It is apparent that the intensity of suffering of the poor from the adverse impacts of environmental shocks is much higher than that of the rich. However, because of the lack of proper assets, the poor are less capable of coping with those impacts. The vulnerability of the poor to environmental shocks is much higher than that of the rich in both rural and urban areas. Observation 4. Against the background of the observation that the poor, especially in rural areas, derive a large part of their livelihood income from environmental resources, especially land resources used for agriculture, some of the practices they follow can be damaging to the environment. Clearing forest areas to create land for agricultural use, including slash-and-burn practices, is an example showing that the poor are responsible for environmental degradation. Certain consumption practices of the poor, such as damaging the forest to acquire firewood to be used for cooking and heating could also be detrimental to the environment. The urban poor, most of whom live in shanty towns and ghettos, often create unhygienic sanitary conditions because of their lack of access to formal toilet facilities. However, there is overwhelming evidence12 to show that the 10 It may be worth mentioning that a similar situation exists even at the level of countries; the shares of GDP (and exports) originating from sectors whose production is directly connected with environmental resources in poor countries are higher than those in rich countries. 11 Linking poverty reduction ..., op. cit., pp. 5 and 8. 12 As much as 70 per cent of the worlds consumption of fossil fuels and 85 per cent of its chemical products are attributable to 25 per cent of the worlds population who are not poor. The consumption pattern of forest products and many other commodities has the same direct inverse proportion to the size of the population of the top 20 per cent of the richest societies. See International Fund for Agricultural Development, op. cit. impact of poverty on the environment is weak compared with the damage to livelihood and health which the poor suffer owing to environmental degradation not caused by them. Against this background, the impact of poverty on the environment will not be taken up explicitly in the present discussion and analysis. It can be seen from the above arguments that the environment has strong linkages with the livelihood, health and vulnerability of the poor. These linkages need to be identified in some detail before options for appropriate policy interventions to benefit the poor can be studied. Environmental goods and services which are crucial to all, particularly the poor, can be classified into three broad categories: natural resources, environmental conditions, including environmental stresses, and the ecosystem. The nature and extent of their linkages with poverty, encompassing

the livelihood income and health of the poor, are somewhat different. These are discussed below. Natural resources Natural environmental resources can be atmospheric, land-based or sea-based. Of these, the resources which have a major bearing on the poors livelihood and health are the following: Land used for agricultural operations, including grazing land for animal husbandry, provides an important (often the only) source of rural livelihood. Land degradation, either natural or due to the overuse of chemical fertilizers, and the mechanization or depletion of groundwater, which increases soil salinity, could erode the most important modality of livelihood of the rural population, especially the rural poor, who do not possess the means to counter such adverse impacts. The widespread use of chemical fertilizer, pesticides and other chemicals for farming poses a formidable health hazard to the rural poor. Illiterate farm laborers who lack appropriate training in the use of poisonous chemicals are unable to read the instructions written on them and cannot afford protective devices can easily fall prey to a number of associated diseases. The poor, in both rural and urban areas, often do not have the luxury of access to safe drinking water. They have to rely on water sources which are frequently contaminated for various reasons. Waterrelated diseases such as diarrhoea and cholera kill a large number of people every year in the developing

Any improvement in water quality is likely to yield rich dividends in terms of improving, the health standards and productivity of the poor. Fishing provides income and protein for the poor living near the sea, rivers, marshy lands and swamps. However, in many developing countries fishing sources are commercially over harvested in an unsustainable manner, which has a negative effect on the livelihood of the poor. Many commercial fishing ventures result in a number of adverse environmental impacts which could constitute health hazards for the poor who are associated with them. Coordinating policies and programmes at the regional and subregional levels aimed at the conservation and sustainable development of fisheries forms an important element of the Plan of Implementation of the World Summit on Sustainable Development, of which poverty reduction to achieve the relevant target is a major objective. Other areas

highlighted in the Plan of Implementation that have implications for poverty are given in box IV.1. Forest products often provide livelihood income to the rural poor. Twigs and wood collected from forests provide a major part of the energy used by the poor for cooking and heating. Forests prevent soil erosion, flooding and mud slides in hilly areas during heavy rains. The unsustainable destruction of forests causes much misery to the poor, both directly and indirectly. Environmental conditions Worsening of the quality of atmospheric resources could be extremely harmful to the poorer sections of the population. There are two major environmental conditions which affect both the livelihood and health of the poor: Indoor air pollution due to the use of biomass fuels (e.g., wood, crop residue) for cooking and heating in poor households affects the health of a large number of people, causing various respiratory diseases. The incidence of this type of health hazard is higher in women and children as they face primary exposure. Nearly 2 million women and children die every year from indoor pollution.14 A large number of people (2.1 million) die every year from diarrhoeal diseases (including cholera) associated with inadequate water supply, sanitation and hygiene. According to WHO, the majority are children in developing countries. 14 Linking poverty reduction ..., op. cit, p. 9. As many of the poor live in ecologically vulnerable places (e.g., lowlands, mountain slopes, dry areas), atmospheric changes, both gradual (climate change) and sudden (disasters), can cause severe damage to the livelihood and health of the poor. Disasters, which include hurricanes, cyclones, floods and earthquakes, have been known to have a devastating impact on the poverty situation, giving rise a large number of new poor almost overnight. These concerns and the extent of such damage have been highlighted in a recent publication.15 Ecosystem Forests, grasslands and the coastal ecosystem, including coral reefs, provide a wide variety of services which contribute to the continuation of economic activities in both rural and urban areas. One important activity which exploits the existence of the natural ecosystem is ecotourism.

Ecotourism is often labor-intensive and employs persons from the most vulnerable groups in rural areas, including those in remote and isolated areas and islands. Some examples of other ecosystem services include the provision of natural habitat for wild pollinators that are essential to food crops; watershed protection and the maintenance of hydrological regimes (recharging of water tables) by natural processes, including rainfall; and the natural breakdown of waste products and pollutants. It is apparent that the livelihood and health of a large number of the poor are intimately related to the activities facilitated by the ecosystem and its services, and any deterioration in their availability on quality could be detrimental to the reduction of poverty. 15 M.H. Malik, The new poor, ESCAP, Bulletin on Asia-Pacific Perspectives 2001/02 (United Nations publication, Sales No. E.02.II.F.2), pp. 67-72. and environmental potentials. Strengthening the capacity of Governments, local authorities and communities to monitor and manage the quantity and quality of land and water resources and the adoption of policies and the implementation of laws that guarantee well-defined and enforceable land and water-use rights and promote legal security of tenure are important steps to be undertaken by Governments. Technical and financial assistance should be provided to developing countries as well as countries with economies in transition that are undertaking land tenure reform in order to enhance sustainable livelihoods. Biodiversity Biodiversity, which plays a critical role in overall sustainable development and poverty eradication, is currently being lost at an unprecedented rate owing to human activities. Several measures have been suggested to reverse this trend. These include the promotion of concrete international support and partnership for the conservation and sustainable use of biodiversity, including in ecosystems, at World Heritage sites and for the protection of endangered species, in particular through the appropriate channelling of financial resources and technology to developing countries and countries with economies in transition, and the provision of financial and technical support to developing countries, including capacitybuilding, in order to enhance indigenous and community-based biodiversity conservation efforts. IV. Environment-poverty nexus revisited: linkages and policy options Conservationists have shown concerns on this aspect. For example, it was indicated that the tourism development plan under the Governments economic

stimulus scheme for the archipelago of Koh Chang in Thailand could threaten its rich biological diversity and genetic resources. Most of the projects under the tourism master plan are likely to cause damage to the islands ecosystem. A study has found that the island is home to 1,513 species, including ferns, mosses, algae, lichens, fungi, flowering plants and various insects. It is alleged that efforts to develop the area for tourism without addressing environmental concerns adequately, could destroy these rare species. It has been found in another study that the construction of tourism facilities in Koh Chang would definitely drive away rare insects, particularly fireflies, which are a huge source of income for the local people.16 Firefly watching is one of the islands most popular ecotourism activities. This perpetuates the dilemma of whether to develop a resort to generate income opportunities or to put greater emphasis on the protection of the natural ecology. Such trade-offs could occur in a range of other similar concerns.17 Environmental Problems and Poverty With 80% of the country situated on the flood plains of the Ganges, Brahmaputra, Meghna and those of several other minor rivers, the country is prone to severe flooding. While some flooding is beneficial to agriculture, high levels of flooding have been found to be a retardant on agricultural growth[14]. On average, 16% of household income per year is lost due to flooding, with roughly 89% of the loss in property and assets. Of these, households engaged in farming and fishing suffer a greater loss relative to income[15]. A positive relationship exists between flood risk and poverty as measured by household income, with people living under the poverty threshold facing a higher risk of flooding, as measured by their proximity to rivers and flood depth[15]. Property prices also tend to be lower the higher the risk of flooding [16], making it more likely that someone who lives in a flood-prone area is poor and vice versa, as they might not be able to afford safer accommodation. Also, they tend to depend solely or largely on crop cultivation and fisheries for their livelihood and thus are harder hit by floods relative to their income. Important to the finances of farmers operating small farms is their self-sufficiency in rice and floods adversely affect this factor, destroying harvests and arable land.

Farmers hit are often forced to undertake distressed land selling[17] and in doing so, risk being pushed into or deeper into poverty. In areas hard hit by floods, especially disaster floods such as the 1988 flood, several researchers have found that many of the affected households have resorted to selling off assets such as land and livestock to mitigate losses[18][19]. Also, in an area hard-hit by poverty and prone to floods, it was found that many of the poor were unwilling to pay for flood protection. The main reason cited had been lack of financial resources although it was found that many of these people are willing to substitute non-financial means of payment such as labor, harvest or part of their land[19] The above is problematic as it creates a vicious cycle for the poor of Bangladesh. Because the poor may not be able to afford safer housing, they have to live near the river which raises their risk of flooding. This would result in greater damage suffered from the floods, driving the poor into selling assets and pushing them further into poverty. They would be further deprived of sufficient resources needed to prevent extensive damage from flooding, resulting in even more flood damage and poverty. It then becomes even harder to escape this cycle. Even those farmers slightly above the poverty line are but just one bad flood away from the ranks of the poor.

Policy Recommendations for Bangladesh Weve concluded in this study that the relationship between poverty and environment is indeed complex and a simplistic view of the poverty-environment link may lead to policies that reduce poverty at the expense of the environment or protect the environment at the expense of the poor. Overall, it is the non-poor wealthier farmers and encroachers, agricultural investors, influential politicians and corrupt government officials who use the most resources and have the greatest environmental impact. Some of the possible policy options are discussed below. Expand and protect the asset base of the poor

From the survey findings it was revealed that, 36 percent of the respondents were facing eviction pressure and 73 percent reported to have such pressure from the forest department (see Figure 5 and 6). Thus there is a serious urgency to create an environment where poor people can maintain their asset base. Policy makers should encourage policies that protect and strengthen the resource rights that the poor already have by focusing on the legal system, traditional authorities, local land boards and tribunals, the government, and other intuitions and policies that influence locallevel resource access, control and benefit-sharing. It should also help develop policies that augment the asset base of the poor through the expansion of environmental entitlements (for instance, through land reform or by turning over the management of resources like wetlands or forests to local groups). Protecting womens traditional use rights and securing land tenure rights for women should also be priorities. Many capacity building and community-based projects have been successful in preserving environmental resources, strengthening community rights-based approaches and establishing ownership of property and resources. For example, the government of Bangladesh in partnership with NGOs and with support from UNDP establishes natural resource management projects to prevent environmental degradation, promote sustainable use of resources, and ensure community participation in sustainable management plans. Reduce the vulnerability of the poor to natural disasters Key policy options in terms of mitigating the effect of natural disasters include strengthening early warning systems and indicators, participatory disaster preparedness and prevention capacity; supporting the coping strategies of vulnerable groups; and expanding access to insurance, emergency work programmes and other risk management mechanisms. Policy measures to address the poors vulnerability to environmentrelated conflict include improving conflict resolution mechanisms for natural resource management and addressing political questions that affect access and use. Incorporating women into these participatory planning processes as well as conflict resolution mechanisms and ensuring that emergency and recovery plans are gender-sensitive is critical. In order to accomplish these priorities, the government should engage all concerned institutions in improving local capacity that promotes local initiatives and self-sufficiency. Give poor a chance to co-manage forest resources Policies that allow the government and poor communities to join forces in improving and managing natural resources can work well when the resource has multiple stakeholders with conflicting objectives and unequal power. In the case of coinvesting, the state helps local communities improve resources they already own, such as an irrigation system; in the case of co-managing, the state gives local people specific benefits in

return for various responsibilities for protecting the resource (like a forest). In the survey findings we have also found that, respondents were in favour of natural forestation and greater participation of local residents in the forestation program (see Figure 16). Also, empowering, engaging and providing incentives to the poor for positive poverty-environment outcomes, intensifying collective efforts to manage and conserve biodiversity, and implementing community-based naturalresource management systems should be priority policy areas for policy making authorities. Ensuring that women and their organizations take part in the decisionmaking processes and benefit from these schemes is critical. Good practices include improved environmental conservation, access to clean water and sanitation, biodiversity protection, food security, and energy efficiency through comanagement practices. Develop rural infrastructure and alternative fuel for poor people Sixty six percent of the respondents were with the opinion that the fuel wood supply has decreased over the past five years (see Figure 10). Hence, policy measures should be designed to develop alternative fuel for poor people. Most technology development is directed toward the needs of the non-poor, and infrastructure development is heavily influenced by powerful elites. Supporting policies that spur the development of environmentally friendly technologies and infrastructure geared toward the needs to the poor, especially poor women, on whom the burden of environmental degradation and hazards largely falls, should be a priority in policy making. Priorities should include: rural energy services and community water access; garbage collection, and sanitation; renewable energy; and access to energy services (heat, light). Use of alternative fuels like bio-gas and other biofuels like solar energy should be explored and if feasible, should be popularized and made available to rural households at an affordable cost. Employ and compensate the poor Some macro-environmental improvements, such as the establishment of nature reserves and reduction in greenhouse gasses, are public goods whose economic benefits accrue only partly to poor local people. However, many such endeavours are labor-intensive and they offer employment opportunities for local communities, such as guards in national parks, forests and biodiversity reserves. These should be supported as these are win-win outcomes in policy options. Government or the appropriate authority should encourage policies that compensate the poor for managing natural resources sustainably, for instance by paying local farmers to control agricultural burning. Focus on energy services that are efficient Increasing the level of energy services can help people meet their basic needs. Indeed, small improvements in the

level of commercial energy services available to the very poor could generate dramatic changes in their quality of life. One way to ensure that the poor do indeed benefit is to focus policy not on increasing the supply of energy (in other words, the supply of fuels or electricity), but rather on improving the level of energy services (such as efficient lighting and water-pumping technologies and efficient cookstoves). In many countries, projects are underway which provide appropriate, cost-effective energy solutions to rural poverty, improving the livelihoods of rural inhabitants through improvements to health, education, and enterprise development. Promoting cross-sectoral programming Though there has been some progress on the conceptual level (at least in term of seeing the role of poverty issues in environmental programming), operationally, poverty experts and environment experts, sitting in different ministries, by and large still work se tely, and environmental and poverty policy, plans, and programmes are developed on different tracks. The rigid functional divisions that characterize governments, as well as international development agencies, work against integration. 32 Government and NGOs have an important role to play in encouraging the development of cross-sectoral policies and approaches, promoting macro-level coherence for local-level impacts, and sharing what it learns with its partners to shape the policy agenda. Bringing the poverty dimension into environmental protection and resource management plans and considering environmental questions in national poverty reduction plans and strategies is something policy makers should strongly advocate. Underscoring the governance dimension There is no denying the fact that good governance is the linchpin of development; this is certainly the case when it comes to addressing poverty-environment issues. Empowering the poor and counteracting the influence of power strongholds can only be achieved through governance reform, such as improving accountability, transparency, participation, and representation at all levels. Priority areas include engaging poor and marginalized groups in policy and planning processes to ensure that the key environmental issues that affect them are adequately addressed; putting the poverty-environment needs of women and children higher on the agenda; implementing measures to tackle ills that stem from corruption such as illegal logging, unregulated mining, and the construction of huge power and water investments; and improving peoples access to environmental information. Promoting decentralization and local environmental management of both natural resources and environmental services is also the key.

Making womens equality an explicit goal Recognition that women are more seriously affected by the effects of environmental degradation and particularly vulnerable to environmental hazards like pollution and biological pathogens have led to many projects that address womens immediate needs as users of environmental services and managers of natural resources. Some of these projects have taken an instrumentalist approach that overburdens women; others have acknowledged that lack of property rights reduces womens capacity to conserve environmental resources, but have not then addressed this important fact. Overall, the aim of gender mainstreaming in environment projects and policies primarily has been to make those initiatives more effective in the short term and more sustainable in the long term -- not to promote equality between men and women. There is an opportunity for policy makers to promote equality by encouraging everyone involved to address underlying questions of property rights and access to and control over environmental assets. Environmental impact of the afforestation program Afforestation programs designed to encourage forestation should also consider the environmental impact of the foreign fast-growing tree species. Respondents in the survey claimed that land productivity, wildlife, fishing, medical plants etc. have decreased over the last five years (see Figure 10). Also interviews with the local residents revealed that, the high growth trees like Akshmoni consumes a lot of water and have a drying effect on the surrounding natural trees. All these claims, though not scientifically proven yet, deserve immediate attention and further studies. Before going for plantation, environmental impact assessment of a particular species of tree should be conducted. Regulating the protector Seventy one percent of the respondents blamed forest department for deforestation (see Figure 13). In different sections of the survey questions, respondents held forest department and other power pressure groups responsible for the decrease in forest resources. Hence, there is serious lack of understanding and transparency in the activities of forest department. Measures to involve local residents more in the afforestation programs and increasing the accountability of the forestry department should be taken by the policy makers. Championing capacity building At the national level, policies can contribute to a positive relationship between poverty and environment -- a virtuous rather than vicious circle. Many such policy options do not require additional resources, but rather depend upon reallocating investments toward the poor. Most policies, however, require significant investment in institutional strengthening and capacity building for integrated programming and pro-poor/pro-environment policy making.

Building national capacity has emerged as a particularly elusive goal in development cooperation, and initiatives in all sectors have constantly faced both a lack of necessary skill and weak institutions. And building capacity for integrated programming when ministries are organized along sectoral lines and poverty reduction and environmental protection/management plans are drawn up se tely is particularly challenging.

CONCLUSION An attempt has been made to review the interlinkages between the environment and poverty and selected policies and programmes which can minimize the adverse environmental impacts of economic growth. Against the background of the positive linkage between improvement in the environment and the reduction of poverty it can be argued that policies and programmes for improving the environment could form an important element of a pro-poor economic strategy to strengthen the impact of economic growth on poverty reduction. It is also found that certain policies (such as providing resource rights to the poor) centred directly on the poor people can improve the environment, and environmental interventions such as the prevention of land degradation and controlling indoor smoke pollution from cooking can improve the income and health of the poor. Despite the existence and application of a large number of policies and programmes, the track record for improving the state of the environment in the Asian and Pacific region does not denote the success of such instruments. The limited success of environmental policies is due to the economic aspects of the environment, which make the associated policies difficult to implement. Conceptually, there are three aspects associated with the environment which have an impact on the extent of environmental degradation, especially that created by human activities, and on the effectiveness of the policies for reversing such damage. First, a significant part of the environmental costs of human activities is intangible and thus difficult to quantify in monetary terms. Environmental impacts often occur over the long term, even beyond the generation of those responsible. Thus people (polluters) do not fully realize the costs (environmental degradation) of their actions.

Second, the environment has negative externalities, that is, the social costs of environmental degradation are always much higher than the private costs. It is difficult to design deterrent policies and instruments which reflect the true social costs. Third, the environment is a typical public good. It is non-rival in type: the quantity available for other people does not fall when someone consumes it. It is also nonexcludable; it is prohibitively costly to provide a good environment only to those who pay for it and prevent or exclude others from obtaining it. This is responsible for the free-rider phenomenon in the area of the environment: other agents are allowed to benefit, at no cost, from the effort of one agent to improve the environment. Under these circumstances, it is very difficult to provide a good environment through the market, where private motives are the major driving force. 37 ESCAP and ADB, op. cit. 297 IV. Environment-poverty nexus revisited: linkages and policy options The Governments role in designing and ensuring the success of policies and programmes for improving the environment cannot be exaggerated. In this regard, on the basis of the issues discussed in the previous graphs, certain broad observations can be made on the modalities for improving the effectiveness of environmental policies and programmes. First, the role of awareness-building of various agents, that is, consumers, producers, government bureaucrats and politicians, concerning different aspects of the environment is essential in securing stakeholder ownership in designing and implementing environmental policies. The use of all available media and means of communication, such as newspapers, television and the Internet, to focus group discussions/seminars for disseminating information on the various social costs of environmental degradation and the benefits achievable from improvement, is highly recommended. Second, the decentralization of the responsibilities for designing and implementing environmental programmes and policies is required for success. In formulating policies and programmes concerning the environment, the local-level state of the environment within a national environmental plan should be considered. The national plan is required to mainstream environmental issues and concerns, many of which have long-term implications, in the national development strategy, which often incorporates specific targets for economic growth. Third, the crucial importance of coordination needs to be highlighted in both the design and implementation of environmental policies. Environmental issues are

cross-cutting and involve a large number of sectors and a variety of agents, sometimes with conflicting interests. Broad consensus-building through proper coordination is required to ensure the equal commitment of various stakeholder groups to environmental causes. Fourth, maintaining good governance in executing policies and programmes in the area of the environment is of prime importance. Policies need to be designed in a participatory and transparent manner. Keeping in mind the public-good nature of environment, including natural resources and the high negative externalities (the social cost being much higher than the private cost) associated with environmental degradation, environmental policies require a corruption-free administration in order to ensure their success. Improvement of the environment is beneficial to everybody, to those currently living and those who are yet to be born. However, compared with the rich, the poor are more exposed to various types of environmental damage and thus stand to gain more from the improvement of the environment, which makes the associated policies truly pro-poor. Designing and implementing environmental policies are complex tasks; the multiplicity of agents with conflicting interests and the high negative externalities make the tasks these more difficult. The commitment of national Governments in this difficult area is of crucial importance. With respect to the Asian and Pacific countries, there is need for a periodic review of the environment policies and programmes and environmental situation of various countries, along with the strategies to reduce poverty. Through this exercise, Governments will be able to take stock of the situation and, if needed, readjust their priorities so as to achieve real sustainable development and poverty reduction. POLICY OPTIONS Against the background of the linkages detailed in the previous section and the thrust of the chapter, environmental policies can be classified into two broad groups: those which aim at reducing the adverse environmental impacts of economic growth, leading to an improvement in the environment in general and a consequent beneficial impact on the poor, and those which are targeted specifically at the poor and have a positive impact on the environment. These are discussed below. Enhancing environment-friendly economic growth and development At the United Nations Conference on Environment and Development, held at Rio de Janeiro in 1992, Governments committed themselves to adopting strategies for

sustainable development (needs).18 The challenge has been to achieve convergence between the growth and environment objectives of development through the integration of economic, social and environmental dimensions by the use of appropriate policies. These policies can be broadly classified as economic policies and institutional policies. Economic policies National long-term planning mechanisms, strategic plans and sustainable development plans: the need for coordination Achieving economic, social and environmental objectives for a country requires coordination between many agents, namely, government, producers, consumers and domestic and foreign investors; policies, namely, sectoral, fiscal and monetary, and trade policies; and institutions, including regulatory agencies and the judiciary. There are various subdivisions within each group, for example, the Government consists of many ministries which deal with many areas, from finance to construction and the environment; and producers may be big corporate entities, SMEs or self-employed. It is only natural that there should be conflict between the objectives of so many entities. Bringing harmony into the functioning of these groups to enhance a countrys welfare (of which poverty reduction and improving the environment are major components) calls for the recognition and identification of various trade-offs and the realignment of individual goals and policy instruments under a win-lose as little as possible framework. National planning mechanisms which constitute the articulation of such a framework spell out the objectives, concerns, goals, policy options and strategies of various agents, groups and organizations. Whereas elaborate plans for socioeconomic development have a long history, those which deal explicitly with environmental concerns and sustainable development issues are relatively recent and came into being to a considerable extent after the adoption of Agenda 21 at the Rio Conference. A number of countries have formulated elaborate sustainable development plans. For example, in 1995, the Republic of Korea prepared Green Vision 21, which integrated long-term environmental policies with development needs. Under this broad vision, the relevant ministries, especially the Ministry of Environment, the Ministry of Commerce, Industry and Energy and the Ministry of Construction and Transportation, developed their own annual plans and strategies for action. Viet Nams Environmental Vision 2020, National Strategy for Environmental Protection, 2001-2010 and National Environmental Action Plan, 2001-2005

address long- medium- and short-term issues of environment and economic growth. Official environment protection visions, integrating economic development and the environment, exist in at least 37 countries of the Asian and Pacific region.19 Some examples of these are Chinas 19 ESCAP and ADB, State of the Environment in Asia and the Pacific 2000 (ST/ESCAP/ 2087). 279 IV. Environment-poverty nexus revisited: linkages and policy options Agenda 21, Vision 2020 (Malaysia), the Singapore Green Plan, 2012 National Conservation Strategies (India), the National Policy on the Environment (Uzbekistan), the National Strategy for Ecologically Sustainable Development (Australia) and the National Environment and Development Strategies, 1993 (Samoa). As examples, the major features of three selected sustainable development plans, the Singapore Green Plan, Australias National Strategy for Ecologically Sustainable Development and Chinas Agenda 21, are given in table IV.1. The objectives of the plans are to ensure that economic growth and development take place with minimum damage to the environment. They emphasize the conservation of natural resources and the reduction of environmental pollution. The adoption of clean technologies has often been explicitly considered as a major modality for balancing growth and environment objectives. Strategies for achieving these objectives include raising environmental awareness and education and promotion of the 3P (people, public sector and private sector) partnership. Implementation methods incorporate a broad range of initiatives from the inclusion of environmental issues in school curricula to the formulation of legislation and laws to induce environmental protection. Financial resources for implementing environmental plans come primarily from Governments, and are augmented by bilateral and multilateral donors. Sectoral policies Visions and strategies of sustainable development must be supported by sectoral action plans that fulfil national obligations under global environmental conventions such as the need to contain greenhouse gas emissions, the conservation of biodiversity and the phasing-out of ozone-depleting substances, while ensuring adequate growth of the sector. Sectoral plans and policies have also been developed to address concerns about agricultural land and water. Against the background of the importance of these sectors in the environment-rural poverty linkage, the associated policies require special mention. For example, forest land is often used to augment agricultural land and trees are cut indiscriminately to satisfy the growing demand for wood. In

order to counter deforestation, which has a negative impact on the livelihood and vulnerability of the poor, especially in rural areas, a shift towards plantation forestry is a policy option which can be pursued. This type of shift will relieve the pressure on national forests and at the same time enable the development of reliable sources of industrial raw material and contribute to strengthening the income-earning potential of the persons associated with this sector. Several countries of the region are pursuing the development of plantation forests and simultaneously withdrawing national forests from the production of wood, which is used as industrial raw material. For example, China has one of the most extensive plantation forestry programmes in the region. It is planned to plant some 26 million hectares of forest in the Yangtze and Yellow river basins by 2030. In India, farmers in three states established a total of 26,000 ha of poplar plantations in 1990 which are now used to provide raw material for industries such as match boxes and plywood. There have been changes in the policies and strategies for protecting and improving the quality of available freshwater resources. Instead of expanding the supply of freshwater, emphasis has been put on demand management and wateruse efficiency, conservation and protection. An integrated approach to water resources management in line with Agenda 21 has been accepted as an effective policy option. Multisectoral and multidisciplinary approaches are needed to rehabilitate degraded water quality and ensure the provision of a safe drinking water supply. In many countries of the region, this need has been translated into action plans for cleaning up rivers, canals, lakes and other water bodies: the Murray Darling Basin Agreement (Australia), the pollution control plans for three rivers (China), the Ganga Action Plan (India) and the Love Our Rivers Campaign (Malaysia) are some examples. The reduction of pollution loads through proper waste-water treatment, reuse and recycling of domestic sewage and industrial waste water, the introduction of appropriate low-waste technologies and strict control on industrial and municipal effluents are essential elements of these action plans. Instruments for implementing policies: command and control and market-based instruments Command and control-based mechanisms utilize the power of the State in forcing the agents, that is, producers and consumers, to adhere to environmental standards. For example, the management of forest resources in many countries uses a system of awarding licences for logging with the threat of cancellation as a penalty

mechanism. In another sector, fishing, in which many of the poor earn their livelihood, a quota system is applied to keep the catch within sustainable limits. A number of countries have used command and control mechanisms to regulate effluents, emissions and disposable wastes. Economic and Social Survey of Asia and the Pacific 2003 Command and control measures have often focused on particular sectors which are of primary importance to the poor. For example, Indonesias PROKASIH Programme, started in 1989, aimed at ensuring that industries install waste-water treatment systems. Initially, attention was focused on the worst industrial pollution occurring near 24 highly polluted rivers with the goal of reducing their pollution load by 50 per cent.20 The objective was subsequently expanded; more rivers were brought within the purview of the control measures and the pollution standards were also increased. Command and control measures have also been applied to control air pollution. For example, a unique Vehicle Quota System to control the number of vehicles is in operation in Singapore, thereby reducing traffic congestion and emissions from fossil fuel. Under this system the number of new vehicles allowed for registration is predetermined annually. The quota for new vehicles takes into account the prevailing traffic conditions and the number of vehicles taken off the road permanently, while the supply-demand condition of the market determines the price of new vehicles.21 The requirement for the success of the command and control system is the ability to use the power of the State to identify violations by continuous policing and then to enforce the associated penalties. These actions require substantial financial and human resources and a well-functioning judicial system. In most countries, resources are scarce and the judicial system is slow in handling non-criminal cases. A market-based fiscal incentive, a disincentive system which seeks to influence the behavior of producers and consumers by enabling them to choose the most appropriate measures based on their own assessed cost and benefit, is considered a viable and often preferable alternative to the direct command and control system and is implemented in various countries of the region. In contrast to command and control measures, these are self-regulatory in nature and require less policing and fewer court actions. As these instruments are often administered at the local level, like other fiscal instruments, they result in increased revenue/savings for local governments and municipalities. Some of the popular market-based instruments are user charges, an increase/decrease in targeted subsidies and a deposit refund system. These are described in table IV.2 below. 20 ESCAP and ADB, op. cit., p. 265. 21 D. Goh, Certificates of entitlement

(<http://www.geocities.com/MotorCity/Pit/8858/ November 2002).

singapore/taxes.htm>,

Institutional policies and institutions Policies and programmes, whether economic, social or environmental, cannot be implemented effectively without the support of an interconnected network of institutions at different levels national, subnational and local. In addition to the apex institutions for example, parliament and the judiciary, institutions include administrative bodies, such as ministries, departments, councils and committees, which, in general, deal with policies and programmes belonging to specific areas. Institutional policies refer to the legal, normative and regulatory framework which enables the policies to generate the intended impact. For example, the environment ministry, the institution which is primarily responsible for implementing environmental policies, cannot carry out pollution control programmes (either through command and control or by using a market mechanism) without clearly defined pollution norms and legal penalties for not adhering to the norms. Agenda 21 emphasizes the important role of institutions and institutional policies in underscoring the critical importance of reshaping the decision-making process in order to integrate environmental and developmental concerns into decisionmaking.22 To achieve this aim, the institutions and policies (which have a bearing on the environment) of various sectors/areas need to be well coordinated not only horizontally but also vertically. Horizontal coordination between institutions will avoid conflict and exploit complimentarities, thus enhancing the impact of policies. Vertical coordination requires the existence of institutions at different levels from the national to the community level, and interaction between them. It ensures peoples participation and ownership, without which all policies, especially environmental policies, will not be effective (see diagram). Although there is room for improvement in the coordination mechanisms, the modalities for horizontal coordination on environmental matters already exist in many Asian and Pacific countries. For example, in Tonga, the Development Coordination Committee is the mount economic planning and coordinating body.23 Its standing members are the Deputy Prime Minister and senior representatives of selected ministries. In Fiji, the National Planning Office is required to have discussions with all ministries during the pretion of policy. If policies have economic or financial implications, the Economic Strategy Committee, chaired by the Prime Minister and comprising such ministers as the Minister of Finance, reviews the policies. In Malaysia, the National Planning Council is the highest planning body in the country and is in charge of the coordination and implementation of development programmes. The

success of vertical coordination between institutions dealing with environmental matters depends on the emphasis given to decentralized decision-making and the creation of decentalized institutions as well as the linkages between them. Effective vertical coordination ensures that environmental issues and concerns at the local level, especially in small towns and rural areas, are given due consideration in designing policies and programmes. The involvement of local institutions in formulating and implementing policies is essential as they are directly in touch with problems in their areas of operation and may have useful insights as to appropriate solutions. Local institutional structures can comprise many forms, from municipal councils or commissions in urban areas to village councils in rural areas. The role of subnational institutions and local governments in the formulation, implementation and monitoring of policies and programmes on matters related to the environment has expanded in the post-Rio era. In many countries, provinciallevel environmental agencies have been set up 22 Sections 1 and 2 of Agenda 21 (<http://www.un.org/esa/sustdev/agenda21text.htm>, 9 November 2002). 23 ESCAP, Integrating Environmental Considerations into Economic Policy Making: Institutional Issues, Development Papers, No. 21 (ST/ESCAP/1990). and local governments have been given the responsibility for formulating and implementing local environmental protection plans (local Agenda 21). For example, in Japan, local authorities are involved in the implementation of environmental laws, regulations and guidelines and the measurement and control of pollution. Out of a total of 248 local governments in the Republic of Korea, 159 are formulating local environmental plans. Provinces, autonomous regions and municipalities in China have also formulated their own local Agenda 21 plans regarding management of the environment. Similar efforts have been made in many other countries, including Indonesia, Malaysia, the Philippines, Thailand and Viet Nam.24 The local municipal governments are in principle closest to urban environmental problems, such as air and water pollution and the lack of industrial waste disposal facilities. They are capable of participating effectively in the administration of control measures. In China, there are municipal environmental protection commissions consisting of local leaders, other commissions and bureaucrats. These commissions are responsible for implementing policies and coordinating activities at the local level; these, in turn, are assisted by the environmental protection departments of municipal governments. In Fiji, the Suva City Council is the largest

local government entity and deals with environmental issues; in terms of implementation, it relies on different departments to carry out its plans. The Health Services Department in Fiji plays an important role as it is in charge of garbage collection, waste disposal and drainage control. The problem of squatters, with its serious environmental implications, is also addressed by the Health Services Department. Village councils and committees are common in the rural areas. They can play a significant role in monitoring rural environmental problems, such as soil degradation, deforestation and depletion of fish stocks. In Samoa, the traditional Polynesian decision-making system is reflected in the structure of most political and social organizations. Village councils decide on all matters pertaining to the village and its land and sea resources. One of the important features of this decision-making system is the emphasis placed on consensus. People avoid conflict by consensus agreement among peers. Meetings involve as many stakeholders as possible. In the villages, the village council discusses all matters concerning village life, especially when there are conflicts over resource use. In Nepal, there are various district and village development committees. As a result of the decentralization policy, these committees are empowered to undertake village and district development activities. These activities have had a tremendous positive impact with regard to new road construction, irrigation, drinking water, forest management, etc. 24 ESCAP and ADB, op. cit., pp. 260 and 261. For instance, areas of degraded and semi-degraded forest land are allocated to these local bodies for management, controlled exploitation and reforestation. This has improved the quality of land and prevented the massive destruction of forests. The Annapurna Conservation Area Project in Nepal is an illustration of the successful decentralization of planning and decision-making.25 Although there have been several attempts to enhance the importance of local institutions, their role has been mostly confined to participating in environment-related activities in some specific sectors. There are very few mechanisms enabling local institutions to participate and provide inputs, directly or indirectly (through regional institutions), into the formulation of overall development policies and to voice their concerns on environmental matters. In order to overcome the limitations mentioned earlier, the creation of an apex local (urban or rural) council with representation from various local government departments would be beneficial and it could present local views in a regional council. In this way, local issues and concerns, including those related to the environment, would be directly presented at the regional level and indirectly in national policy-making bodies (through the regional entity). Legislation, laws, rules and guidelines (norm-setting) aimed at improving the environment and conserving natural resources fall under the general rubric of institutional policies.

A very good description of the subject can be found in an ESCAP publication26 and is not reported here. Policies directed at the reduction of poverty as well as improvement of the environment A large number of policies and programmes are available which address both poverty reduction and environmental improvement. These can be classified into two broad groups: the first group refers to those policies that strengthen the asset base of the poor and also help to protect the environment and the second includes those related to the improvement of governance, especially in the management and monitoring of the environment, and strengthening the coping mechanisms of the poor. In the first group, major policies include ensuring the property rights of the poor, supporting rural community-based projects, especially social forestry, and giving the poor access to environmentally clean technologies. 25 ESCAP Virtual Conference, The Annapurna Conservation Project (ACAP) (<http:// www.unescap.org/drpad/vc/conference/ex_np_125_acp. htm>, 11 November 2002). 26 ESCAP and ADB, op. cit., chap. 11. Property rights of the poor The property rights to resources, that is, land, water and trees, play an important role in the environment-poverty linkage, especially in the rural areas. As the rural poor often rely on customary and informal arrangements, they are deprived of formal private property rights and, at times, exploited. Uncertain ownership conditions have a negative impact on agricultural productivity by inhibiting investment and reducing incentives for resource conservation. The situation can be reversed by ensuring property rights through policy interventions. For example, the formal issuance of legal titles in Thailand in 1984 was beneficial for agricultural productivity and thus provided the necessary incentive and financial resources for investing in soil and water conservation. A large number (15.5 million) of land titles were distributed to 2.2 million households, of which 35 per cent were below the poverty line. A study has shown that this action has resulted in an 8-27 per cent increase in agricultural output.27 In India, tenancy reforms, the enactment of land ceiling legislation and the distribution of surplus (over ceiling) land to the poor was very successful in the State of West Bengal. The tenancy reform programme which began in the late 1960s through Operation Barga, a movement to register sharecroppers and provide them with tenurial security through legal enactment and social mobilization, was very beneficial to the landless poor. A large number of sharecroppers (1.5 million) were formally provided with security of tenure.28 Of these, 38 per cent belonged to the downtrodden class (dalits and scheduled

castes, who are the poorest of the poor). Although, by and large, providing ownership of land to the poor should enhance their income-earning capabilities and their interest in resource conservation, Governments have to make sure that the land does not end up with rich persons or speculators, which would defeat the objective of this policy.29 Social forestry Social forestry is the sustainable management of trees and forests by farmers, landowners, industries or community-based organizations in order to provide forest products and services to meet local needs. It is distinguished from commercial forestry by the extent of stakeholders involvement, their decision-making powers and the benefits that accrue to them. The principal stakeholders in social forestry are the people who live in the local communities located close to the forest. Such communities often 27 Linking poverty reduction ..., op. cit., p. 20. 28 Venkatesh Athreya, A creditable record, Frontline, vol. 19, Issue 04 (<http://www. flonnet.com/f11904/19040810.htm>, 2 August 2002). 29 PMs title deeds proposal panned, Bangkok Post, 3 December 2002. encompass a large number of poor people who cannot afford to live in better places. Fundamental to social forestry is the employment of these people to manage the trees so as to improve their economic and social condition. Social forestry includes a wide range of activities, such as treeplanting, agroforestry, management of natural forests, watershed management and the collection of nonwood forest products. At times, social forestry touches upon other sectors, such as the energy sector, when families plant and harvest fuelwood for domestic cooking and heating, or the agricultural sector, when farmers use trees to enrich soil, produce fodder to feed livestock and plant windbreaks to protect crops. The importance of the sustainable development of forestry has been highlighted in the Plan of Implementation of the World Summit on Sustainable Development (see box IV.1). A large number of countries in the Asian and Pacific region have adopted social forestry as an important modality for improving the environment and providing a livelihood income to the rural poor (see box IV.2.). Strengthening environment-poverty monitoring There are substantial lacunae in the availability of data that capture environmentpoverty interlinkages. In many cases, environmental data focus on environmental changes without measuring their impact on the poor, and poverty data do not capture environmental concerns. This situation can be remedied by devising appropriate environment-poverty indicators. Indicators such as deaths from acute respiratory infection by income class could quantify the state of environmental

health. Similarly, the extent of dependency indicated by the proportion of income generated by using primarily natural resources can be an indicator of poverty; a reduction in the extent of dependency can indicate a possible reduction in poverty. Substantial research has already been done to identify effective environmentpoverty indicators.36 However, efforts to collect country-level data on these indicators are not really adequate. Institutional mechanisms are also needed through which the information on these indicators could be analysed and used for designing policies to improve the environment and reduce poverty.