sustainable development 20 years on from the ... - José Eli da Veiga

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In recent <strong>years</strong> there have been some successful experiences with policy coordination through
committees and other means of grouping institutions, which bring together a number of government
entities to address specific issues. Examples include the Inter-ministerial Commission on Climate
Change (CICC) in Mexico (see chapter VI) and the National Sustainable Development Commission
in Barbados.
There have also been some noteworthy experiences in the region relating to coordination of
actions among different political units. In Brazil, the Constitution provides that states may group
together to form metropolitan regions, urban agglomerations and microregions to carry out public
functions of common interest. In addition, the law defining the national policy on water resources
stipulates that the river basin —as opposed to the municipality— is the territorial unit responsible for
implementing this policy and creates river basin committees to that end. A <strong>20</strong>05 law also provides for
the possibility of establishing inter-municipal consortiums for the management of certain matters.
These include the inter-municipal consortium for the <strong>sustainable</strong> <strong>development</strong> of the trans-Amazonian
and Xingu regions (IPAM, <strong>20</strong>11). Another noteworthy initiative is the municipal partnerships in
Colombia (see chapter III).
2. Experience with the use of economic instruments for environmental management
Since the 1990s, several countries in the region have introduced economic instruments to complement the
direct regulation strategies that characterize the environmental legal framework. These instruments
include taxes, charges for the use of natural resources and on emissions, subsidies, tax credits, fiscal
incentives and special financial facilities for activities with positive environmental externalities, tradable
permits and certification.
However, an analysis of these experiences has shown that environmental authorities have
encountered a number of barriers in implementing these instruments, including unfavourable institutional
environments and public policy coordination problems (Acquatella, <strong>20</strong>01; Acquatella and Bárcena, <strong>20</strong>05).
A high percentage of the economic instruments developed were implemented for only a short time or not
at all (Acquatella, <strong>20</strong>09).
Two of the factors that may have influenced these outcomes are: (i) limited cooperation from
fiscal authorities and (ii) the high transaction costs involved in coordinating the implementation of
economic instruments across bureaucratic sectors (tax and environmental authorities) and levels of
government (central environmental authorities and municipal, provincial or other authorities)
(Acquatella, <strong>20</strong>09). Two patterns are in evidence: the emergence of resistance within the tax system to
the introduction of environmental goals and the existence of incentives that undermine the effectiveness
of environmental incentives.
It is difficult, in practice, to implement economic instruments aligned with environmental goals
and to integrate them into existing fiscal structures and sectoral policy incentives (such as energy,
transport or agriculture). The economic incentives that environmental regulators can manipulate directly
are relatively modest signals. If the underlying fiscal structure determining end-user costs is stacked in the
opposite direction, there is little possibility of installing a net marginal effect that can function as an
effective environmental incentive.