The Role of Government for Sustainable Management Systems

Pastor C. Paa, Jr.


Government incentives towards achieving certain goals are always needed. Therefore government policies should focus on giving priorities towards reshaping the economic, social and political sustainability of the country. Sadly, incentives such as subsidies and tax exemptions initiatives in most countries are designed only to produce economic gains, which are mostly a quick fix for ailing economies. Agricultural subsidies such as fertilizer and pesticides, forest clearing, cash crop productions and irrigation systems result in environmental damage. As well, road building encourages more use of vehicles and results to urban sprawl claiming land and creating greenhouse gas pollution.

Such incentives must be eliminated to promote a sensible environmentally sustainable economy. However, it is not enough to just eliminate these bad incentives but rather incentive rewards must be thought of for ecologically sound practices, which will make them attractive. An example is the US Conservation Reserve Program, which rewards farmers for conserving soil. Farmers are rewarded $120 per hectare in rental payments, for planting trees and grass on their most erodible land.

Trade is also one area that governments must look into because it is trade that determines which materials are used and transported to different parts of the world. Trade barriers in the forms of import quotas, tariffs, export subsidies and domestic price supports are undesirable because they restrict competition in the global marketplace. A freer trade environment will eliminate these trade distortions and improve economic efficiency. When third world countries become economically stable, then they can focus more on the improvements of the environment.

Governments therefore should consider one overarching guideline: No net environmental damage. This means that for any project that might destroy forests, add carbon into the atmosphere, or pave over grasslands, additional investments must be required to compensate for these damages. For example, if building a commercial mall will destroy a forested area, investment must be required to reforest an equivalent area elsewhere. Although this might not be a complete compensation, at least some of the ecological benefits of the original forest will be recaptured.



Source:

Brown LB, Flavin C, Postel S. 1991. "Reshaping Government Incentives" In Saving the Planet: How to shape an environmentally sustainable global economy. 500 Fifth Avenue, New York, N. Y. 10110: W. W. Norton & Company, Inc. 131-140 p.