ustainahle development has been defined as a process of change in which the exploitation of resources, the direction of investments, the orientation of technological development, and institutional change are all in harmony and enhance both current and future potential to meet human needs and aspirations. sustainable development is a global concern that faces all nations, especially those of Asia, where population and development are rapidly outpacing the resource base and the carrying capacity of the environment. Development and prosperity must continue, hut for growth to last over time, development must he linked to the environment. One of the most effective and often overlooked methods of promoting sustainable development is through the overhauling of government policies. Southeast Asia is a prime example of a region where policies can he rethought and reformed so that instead of increasing mnecessary environmental destruction, they promote sustainahle development. Most Southeast Asian countxies experienced a rapid growth of population during the postwar period due to medical and technological advances and major improvements in public health services. This population growth, coupled with rapidly increasing economic activity, has increased the pressure on the Southeast Asian resource base and given rise to new environmental problems. Poverty and income inequality have also influenced the way in which the population affects the natural environment. Because of these underlying pressures on the environment, the sustainable development of many Southeast Asian countries is being seriously threatened. On the other hand, most Southeast Asian countries have achieved unprecedented rates of economic growth that have made resources available for dealing with most of the environmental prohlems created. This article reviews the state of the environment in Southeast Asia, identifies the causes of environmental degradation, and proposes policy reforms for improved environmental management.
S
THEODORE PANAYOTO U Harvard Universitx Cambridge, M A 02138
Current environmental conditions Deforestation. At current rates of harvesting, timber reserves in Asia will last for less than 40 years. In South Asia, forest land was reduced from 320 million ha in 1850 to 175 million ha in 1980, while cropland increased correspondingly from less than 70 million ha in 1850 to more than 200 million ha in 1980. In Malaysia, arable land increased from 5640 km2 in 1900 to 48,060 km2in 1980 while closed forests declined from 240,000 km2in 1900 to 154,000 km2in 1980. In Thailand, forest cover has been reduced to 29% of total land area. It is projected that Asia's dominance of the world trade in tropical hardwoods will decline by the end of the century because of depletion of timber reserves and increased domestic wood consumption. Rates of deforestation are particularly high in timber-exporting conntries such as Indonesia and Malaysia and in countries that practice extensive agriculture such as Myanmar and Thailand (see Figure 1). The degradation of forests has threatened nontimber resources such as medicinal herbs and wildlife. Land degradation. Increasing populations and agricultural exports such as tea, rubber, and sugar have led to accelerated expansion of cropland in recent years. Because of the expansion of cultivation on steep slopes, rapid rates of deforestation, overgrazing, and inadequate
soil conservation, soils in Southeast Asian countries suffer from varying degrees of erosion, salinization, waterlogging, and desertification. As an example, the 43.000-ha Irrawaddy River Basin loses 139 tons of soil per hectare per year. Studies in Thailand show that soil loss is two to three times higher when vegetation cover is reduced from 80% to 20%. By 1980, 130 million ha of cropland in Asia were affected by waterlogging and salinization, most of it in China. Southeast Asian countries have adopted new landsaving agricultural technologies and inputs such as agrochemicals and high-yield crop varieties to compensate for a relatively poor and deteriorating agricultural resonrce base as well as for the limited ability to extend the land frontier in the face of rapidly growing populations. Rapid expansion of irrigation systems from the 1960s to the 1980s (see Figure 2) has led to both physical and environmental constraints. The number of dams in developing countries in Asia increased from less than 400 in 1950 to more than 20,000 in the 1980s. Future expansion of irrigated areas is more likely to come from improved management of existing systems than from the construction of new ones. Many Asian
2270 Environ. Sci. Technol., VoI. 27, No. 12, 1993
L013-936w93/0927-2270$04.00/0 0 1993 American Chemical Society
Water buffalo on Island of Symbaua, Indonesia
.
. .-
countries also use chemical pesticides as an indispens. able component to saving land and augmenting its productivity. The excessive and indiscriminate use of agrochemicals may damage the soil structure, pollute the water, and poison aquatic life. Water quantity and quality. Land is scarce in Southeast Asia, and the population dense. Water assumes critical significance in both agriculture and industry. Increased agricultural growth, rapid industrialization, and increased incomes exacerbate demands on water (see Figure 3). As the demand for water rises, the supply decreases or becomes less reliable as a result of deforestation, destruction of watersheds, sedimentation of reservoirs and irrigation systems, and overpumping of groundwater. Southeast Asian countries have an average of 4 km3 of fresh water per million people compared to the world average of 7.7 km3,and only one third of the estimated renewable water resources is available as a stable runoff. Along with the decrease of water supply, there is an increase of water pollution in the form of domestic sewage, industrial effluents, and runoff from land-based activities such as agriculture and mining. In Malaysia, 42 rivers officially have been declared “dead’ as a result of industrial wastes and sewage, and in Thailand 600,000 tons of hazardous waste annually find their way into rivers and canals. Marine resources are also being threatened by rapid population growth, urbanization, industrialization, and
L
different forms of raw material extraction. Coastal and marine pollution derives primarily from land-based activities such as agriculture, industry, and mining, and sea-based activities such as shipping, fishing, tourism (including haphazard coastal resort development,release of untreated effluents into the coastal area, and anchoring of pleasure boats on coral reefs), and offshore mining. Loss of biological diversity. Southeast Asia is one of the world‘s richest regions in biological resources, both terrestrial and marine. Many of the original species are being threatened by deforestation, overhervesting, draining of wetlands, and pollution. Densely populated Bangladesh and Hong Kong have lost more than 90% of their original wildlife habitat, and the Philippines and Viet Nam have lost about 80%. Along with the loss in the number of species comes the destruction of ecological systems, which may be as important. More than two-thirds of the worlds coral reefs are located in this area, and tourists and Sshing fleets are seriously affecting them. Energy consumption.Growth in energy consumption is an unavoidable concomitant of economic growth, structural change, and urbanization. Because industry is far more energy-intensive than agriculture, and urban centers are more energy-intensive than rural communities, industrialization and urbanization inevitably translate into higher energy demand (see Figure 4). Moreover, the growth in incomes that results from industrialization Environ. Sci. Technol., Vol. 27, No. 12, 1993 2271
increases demand for more living space and consumer durahles such as cars, re@erators, and air conditioners, all of which are energy-intensive. Energy consumption is estimated to have increased in the region by 75% over the past 10 years. At the same time, the increased production of energy [even hydropower, which appears to be environmentally henign) may involve enormous environmental impacts in terms of loss of forests, inundation of productive lands, loss of wildlife habitats, change of the ecological balance, extinction of species, and other unforeseen environmental and social impacts. Fortunately, there has been a trend in many countries for energy consumption t o increase more slowly than GDP, implying that energy use is becoming more efficient. Air pollution. Air pollution depends not only on the growth of energy consumption, hut also on the fuel mix. A shift toward natural gas, hydropower, and nuclear, geothermal, and solar power would reduce air pollution, whereas a shift toward coal, lignite, and oil would increase pollution [see Figure 5). Currently, air pollution in urhan sectors is most affected by automobiles and the burning of coal. Acid rain is also a growing transfrontier problem as countries increase their use of coal. In China, 600 million tons of coal were consumed in northern cities in 1990, hut southern cities received most of the acid rain. Causes of the degradation Environmental degradation and res o m e depletion transcend different economic systems, levels of development, rates of economic growth, and degrees of resource endowment; a certain level of environmental degradation is an unavoidable consequence of human activity. When environmental degradation is seen in the context of society's development objectives, not all resource extraction, deforestation, soil erosion, or water pollution is undesirable. The question is not why environmental degradation exists, hut why it takes forms and magnitudesthat are inconsistent with society's objectives. Misuse of resources. Many resources are overused, are wasted, and become more scarce. In many irrigation systems some farmers suffer from water shortages while others suffer from waterlogging. Increasingly scarce resources are also put to inferior, low-return, and unsustainable uses, when superior, highreturn, and sustainable uses exist. In 2272 Environ. Sci. Technol.. Vol. 27. No. 12, 1993
FIGURE 1
Percent average annual rate of deforestation (1981-85)
newable freshwater resour&-
". I
600
!L
$
500
Q
E 4
"
400
300 200
"
6 100 n
Source: References 1.2.
some count&., areas where the soil is suitable for fruit trees or other perennials that would yield higher returns are often planted with maize or cassava for a few years and then abandoned as yields decline. Renewable resources are also being treated as extractive resources. Tropical forests are being harvested at several times their rate of regeneration, which suggests that they are being mined rather than managed for sustainable yields. Underuse of resources. Other resources are put to a single use when
multiple uses would generate a larger net benefit. Tropical forests are managed for timber production alone when their use for nontimber goods, water, soil Conservation, and biological diversity would generate a higher return. Resources and byproducts are not being recycled, which would generate economic and environmental benefits. In Sumatra, state factories that are allowed to dispose of their waste into rivers free of charge are throwing away palm oil byproducts, which can be processed into marketable
fertilizer. Thus a socially profitable economic activity is lost, and palm oil waste has become Sumatra's single most severe water pollutant. IneBcient use of resources. Local communities are being deprived of their customary rights of access to resources even though they may be the most effective managers of the resources. The people who live in forests and depend on them for survival are the ones who have the specialized knowledge necessary for sustainable management. They also have a tradition of maintaining these resources on a sustainable level, but their knowledge is often not utilized. Lack of investment in the protection of the resource base is another missed opportunity that would generate a positive return. For example, farmers throughout Asia fail to invest in land developmentand soil conservation that would reduce erosion and improve irrigation. Greater costs are being incurred than necessary because of a lack of investment. The opposite extreme is the overinvestment in many fisheries, where much more labor and capital is engaged than is needed to obtain current yields. Policy dimensions. The economic manifestations of environmental degradation occur because of a disassociation between scarcity and price, benefits and costs, rights and responsibilities, and actions and consequences. This disassociation exists because of a combination of policy and market failures. Policy failures are cases of inappropriate intervention in a fairly well-functioning market, or attempts to mitigate market failures that result in even worse outcomes. Market failures are institutional failures attributable partly to the inherent nature of certain resources and partly to a failure of the government to establish the fundamental conditions markets need to function efficiently, such as secure property rights over resources. Population, poverty, development, and industrialization are not the root causes of environmental degradation. Market and policy failures are the fundamental causes, and both are within the domain of national and local governments. It is in the presence of massive market and policy failures that population growth, poverty, and even economic growth become proximate causes or contributing factors to environmental degradation.
Reforms and incentives The first policy reform priority is to eliminate policies that create per-
Environ. Sci. Technol., Vol. 27, No. 12, 1993 2273
verse incentives to deplete resources and degrade the environment beyond the level that would result in an unregulated market. Unless perverse incentives are removed, project investments aimed at improved utilization and conservation of resources are unlikely to succeed. Eliminating policy distortions will usually reduce government expenditures and may even generate additional budget revenues. The overall objective of policy reform is to reestablish the link between resource scarcity and resource prices that has been severed by a constellation of subsidies, perverse incentives, and market and institutional failures. Examples of such failures include insecure land tenure, open-access fisheries and forests, and unaccounted-for environmental externalities. Allowing resource scarcity to he reflected in increasing resource prices would stimulate efforts to reduce the growth of demand through resource conservation, improved efficiency, and substitution. In Sulawesi, Indonesia, water pricing is used to improve irrigation efficiency and to fund the management of the watershed area of the irrigation system, which has been declared a national park. The Dumoga Bone National Park illustrates how an irrigation project can be planned to include provisions for watershed protection and conservation while fulfilling the objective of economic growth. Resource scarcity and environmental costs can also be more accurately reflected by removing price supports and subsidies for resourcedepleting and polluting products and replacing them with depletion and pollution taxes. This will change relative prices and expand resource supply through recycling, exploration, imports, and the development of substitutes. For example, reductions in subsidies and import duty exemptions for farm equipment and land-clearing machinery would have several positive side effects on resource use and the environment because subsidies of landclearing machinery tend to promote unsustainable development, especially in the tropics. Alternatively, sustainable policies such as the promotion of tree crops would encourage diversification of the economy away from soileroding crops-maize, wheat, and cassava-toward high-value perennial export crops that benefit the environment.
Structural modifications consistent with growing incomes and expanding material wealth can change the role of natural resources. Rather than being sources of materials and dump sites for waste, resources can become sources of environmental amenities and of improved quality of life. Inherent in this type of policy reform are well-defined property rights and internalization of the costs and benefits of using resources. Consideration of the environmental, economic, and social side effects of public projects and macroeconomic policies is especially important. In the Arabari Forest experiment in India, villagers who initially were causing rapid deforestation by illegally harvesting trees for fuel became the voluntary protectors of the forest resource. When they were assigned the rights over the forest and offered alternative employment opportunities, they became committed to its conservation. Outlook for 2000 and Beyond Unless effective measures are taken to halt resource depletion and reverse environmental degradation, Southeast Asia will enter the 21st century with fewer forests, more degraded lands, increasing water shortages, and more crowded and polluted cities. Although incomes are certain to grow during the 1990s and poverty may be cut to half its current level, the quality of life will suffer unless environmental degradation is brought under control. In the past, with a few exceptions, Southeast Asian countries have relied on inflexible and largely unenforceable command-and-control regulations such as land zoning, effluent standards, harvesting quotas, and logging bans to regulate resource use and protect the environment. The continuing and even accelerating environmental degradation in many countries attests to the relative ineffectiveness of command-and-control regulatory systems. Southeast Asian countries will need to focus on designing appropriate incentives for sustainable development-particularly in the agricultural and forestry sectors, which provide the majority of employment and income opportunities in the region. Despite its many definitions, the core idea of sustainable development does not suggest a rollback of industrial or agricultural development, but rather an attempt to ensure that natural resources are valued properly, taking into account both private and social costs.
2274 Environ. Sci. Technol.. Vol. 27. No. 12. 1993
The task of policy makers will be to promote those development strategies that internalize social costs. The acquisition of relevant data on a regular basis will allow policy makers to make accurate inferences concerning the state of the environment and to provide decision makers with a base line against which t h e effectiveness of different projects, programs, and policies can be assessed. The proper valuation of natural resources is critical in designing economic incentives that will induce environmentally sound development policies. With domestic policy reforms and regional and global cooperation, the Southeast Asian region can continue rapid economic growth and poverty alleviation while minimizing resource depletion and environmental destruction. This is the challenge of sustainable development in the 1990s. Acknowledgment I acknowledge the valuable assistance of Kottayam Viswanathan Natarajan, Jr. References (1) World Bank. World Developmenr Re-
port Oxford University Press: Oxford, U.K.. 1991. (2) World Bank. World Developmenr Report Oxford University Press: Oxford, U.K.. 1992. (3) World Resources Institute. World Resources-A Guide ro Global Environmenr 1992-93; Oxford University Press: Oxford, U.K.. 1993.
Theodore Pnnoyotou i s u Fdlow of rhe tforvordInstrti!tr oflntprnarionol Development and 11 lecrurpr rn the Depotimsnr of Eronomirs or Horvurd Universlrv. He i s olsu u mpmbcr of rhP CPnter far Tropical Forsst Science. / l e hos advised governments ond institurps in Asia. Africo. and Eostprn Europe. as well as inrernorional insrilulions. on the inrerocrions between rhe norural re. source Dose and economic development. Ponoyorau sewed for a decade as visiring professor and resident advisor in Southeast Asia. ond recently coourhored a multivolume environmenrol policy studv ot the Thailand Dpvelop menr Reseorch lnsrirute in Bangkok.
