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p. 9 of 57 BACK | NEXT I. The Changing Environment Economic Transformation State of the Environment in the Region Counting the Toll Looking Ahead II. Driving Forces of Change III. Options and Opportunities IV. Toward Policy Integration V. Call to Action

Asian Environment Outlook 2001 : I. The Changing Environment

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Looking Ahead

It is difficult to predict with any certainty the future direction of different environmental problems in the DMCs. Under a status quo scenario, unless revitalized DMC economic activities stimulate environmental investment, it is generally agreed that environmental degradation will accelerate (Brandon and Ramankutty 1993; O’Connor 1994), perhaps presenting serious national crises (ADB 1997; Kato 1997; Panayotou 1996). Environmental degradation is likely to emerge as a major constraint on future economic development and poverty reduction within the region.

Governments in the Asia and Pacific region have been inconsistent, unpredictable, and at times, unfair regulators. In general, they have failed to develop information systems and databases essential to effective and fair regulation. Rules and regulations are poorly defined and frequently not enforced. Subsidies have been extensively used by DMC governments to benefit particular consumer classes (such as the poor, rural consumers, and residential consumers) and activities (such as irrigation and manufacturing fertilizer). But these subsidies tend to benefit the rich instead of the poor and damage the environment (ADB 2000). Continuation of poor environmental governance will condemn the Asia and Pacific region to a level of environmental degradation that will make the region barely livable.

Although industry is already the lead sector in most Asian economies, the next decades will see a significant expansion and replacement of the industrial capital stock. If the status quo remains, regional industry may follow the same destructive path taken earlier by the industrialized nations. Much of the growth may be highly polluting, especially from small and medium enterprises (SME), and it will concentrate in large cities where the combined loading from industrial and municipal wastes will overwhelm already weak municipal infrastructures.

The future of the global environment in upcoming decades depends on increased national participation in and compliance with international agreements and on the laws operating at national and global levels. One important dimension of such international agreements is the international transfer of technology, information, and know-how among countries.

To bring about the fundamental changes in behavior needed to make both present and impending investment in the Asia and Pacific region sustainable, developing countries must implement a number of interrelated reforms that are discussed in the subsequent chapters of this report. Chapter 2 explores the underlying driving forces that resulted in environmental problems in the region and the path these forces will take us. Chapter 3 discusses opportunities to redirect the current trajectory implicated by these driving forces and outlines an alternative vision for the Asia and Pacific region’s future. Chapter 4 shows that the most important and immediate change that can be adopted by the region’s policy makers is to integrate environ-mental concerns into mainstream economic development planning at all levels. Chapter 5 then challenges these policy makers to confront the issues raised by this report and identifies priorities for action.

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