Chapter 2 - 30 Nov · 2020. 12. 18. · CHAPTER 2: Chapter 2 2.1 Sustainable development: focusing...

Environmental sustainability under threat

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ter 2CHAPTER 2:

2.1 Sustainable development: focusing on sustainability2.2 Industrialization: pollution from export-led economic growth

2.2.1 Increasing pollution and toxicity-intensive industrial production2.2.2 Resource use – energy, raw materials and minerals2.2.3 Promoting more environmentally sustainable investment2.2.4 Driving firm-level eco-efficiency2.2.5 Improving access to environmental information and justice

2.3 Increasing demand for raw materials and energy2.3.1 Environmental, social and economic impacts2.3.2 Rising raw material prices and resource-use efficiency2.3.3 Energy demand and sustainable solutions

2.4 Pressure on water supplies2.4.1 Assessing the sustainability of the water supply2.4.2 Groundwater – at special risk2.4.3 Industrial water use2.4.4 Agricultural water use2.4.5 Unmet domestic water needs2.4.6 Meeting future water demand

2.5 Increasing pressure on ecosystems: intensive agriculture2.5.1 Agricultural production in the region: a decade of relentless growth and expansion2.5.2 Drivers of agricultural intensification2.5.3 Critical pressure points of agricultural intensification2.5.4 The impacts of agricultural intensification: land and soil degradation, air quality and

climate change2.5.5 Mitigating the impacts of agricultural intensification2.5.6 Capture fisheries and aquaculture production

Environmental sustainabilityunder threat

State of the Environment in Asia and the Pacific, 2005

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2.6 Urbanization and globalization of consumption patterns2.6.1 Rapid urbanization: a defining growth pattern in Asia and the Pacific2.6.2 Globalization of consumption patterns2.6.3 Environmental pressures exerted by urbanization and globalizing consumption

patterns2.6.4 Pursuing urban environmental sustainability: responses and initiatives

2.7 Climate change: a real threat to the region2.7.1 Climate change impacts in Asia and the Pacific2.7.2 Greenhouse gas emission trends2.7.3 Meeting the challenges of climate change: mitigation, the Clean Development

Mechanism (CDM) and adaptation2.8 Natural disasters in the region: a constant threat

2.8.1 Natural disaster distributions and types2.8.2 Vulnerability to natural disasters2.8.3 Linking disaster risk management with growth and development: the emerging

imperatives for coping with natural disasters

The robust display of economic strength in Asia and the Pacific belies the stark reality that economic

growth has been achieved at a very high cost to the environment. The pressures exerted on the region’s

ecosystems and natural resources have been tremendous and continue to mount as the drive for growth

intensifies. The decline in environmental sustainability is the result of unsustainable patterns of

production and consumption linked to four major trends: the growth of pollution and resource-intensive

industry; the intensification of agriculture; urbanization and globalizing consumption patterns; and a

heightening demand for raw materials, energy and water. While, in general, governments have

strengthened legislation and institutions, resulting in significantly improved environmental performance,

particularly with respect to pollution control, the rising environmental pressures exerted by expanded

consumption and production and resource-extraction processes threaten to overwhelm the progress

achieved so far. High future environmental, economic and social infrastructure costs, a growing

tendency to generate waste and the continuing decline of the region’s natural capital are the

unmistakable signs of an unsustainable growth pattern.

The continuing focus on improving environmental performance distracts attention from the critical

need to improve the environmental sustainability of economic growth patterns. Without doubt,

economic growth is a prerequisite for achieving significant reductions in poverty and addressing key

sustainable development issues. However, declining environmental sustainability represents a critical

political, institutional, social and economic threat for many countries in the region. Despite the overall

negative picture, there are many bright spots across the region. Several governments have taken

significant steps to improve the environmental sustainability of their growth patterns, and many stake-

holders are taking individual initiatives which need to be supported further and mainstreamed into

public policy, economic development planning and infrastructure development.


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2.1 Sustainable development: focusing onsustainability

Thirteen years after Rio: the dominance of the economicdimension

Since the 1992 Rio Summit, Asian and Pacificcountries have embarked on numerous initiativesaimed at translating the principles of sustainabledevelopment into tangible outcomes. Achievementshave been mixed, dictated by economic status,institutional capacity and political leadership,among other factors. New legislation that appliesmarket-based instruments, stronger environmentalregulation enforcement and other improvementsin environmental governance are just some of themajor breakthroughs observed.

However, a major precept of sustainabledevelopment, i.e. integration of environmentalobjectives in strategic, long-term and day-to-daydecision-making, has yet to be achieved. Developingcountries are not averse to pursuing structural andpolicy reforms in theory; but in reality, a long-termplanning perspective is needed to make the shiftto a sustainable development paradigm. Thehigh degree of political and economic risk that thisentails, means that a short- and medium-termdecision-making time frames tend to predominate.

Emphasis is thus placed on economic growthand advancing social progress rather than onenvironmental protection, a prioritization that isperhaps justified given the high levels ofpoverty that still exist in the region. Theoretically,economic growth is required to make resourcesavailable that can be used to reverse environmentaldegradation and improve environmental quality inthe long term. However, even in the best-performingeconomies in the region, consistently high rates ofeconomic growth and relative affluence have notresulted in lasting improvements in environmentalsustainability.

Why improvements in environmental performance arenot enough

Mounting environmental pressures in the Asian andPacific region are the result of unsustainable patternsof production and consumption reflected in four

major trends: resource-intensive and pollutingindustrialization; the intensification of agriculture;urbanization and changing consumption patterns;and a heightening demand for raw materials,energy and water. While, in general, governmentshave strengthened legislation and institutionsto improve their environmental performance,particularly with respect to pollution control, risingenvironmental pressures due to expandedconsumption and production activities andresource-extraction processes threaten to overwhelmthe progress achieved so far.

The premise that sustainable developmentcan be achieved by improving environmentalperformance may be creating a false sense ofsecurity and is distracting attention from the criticalneed to improve the environmental sustainability ofeconomic growth patterns. While the concepts ofenvironmental sustainability and environmentalperformance are closely linked, there are significantdifferences.

Action to improve environmental sustainabilityexplicitly seeks to maintain environmental pressureswithin environmental carrying capacity and refersto the capacity of economic growth and social changeprocesses to ensure that natural resources are notdepleted faster than they can be regenerated, andthat ecological systems remain viable. For economicgrowth to be environmentally sustainable, thedemand for ecological products and services shouldnot exceed the ecological products and services thatcan be provided sustainably in a particular area.An ‘overshoot’ reduces the ability of the naturalenvironment to provide ecological goods andservices to support human activity in the long term.

An affluent country can be expected to attainspecific environmental targets and alleviate specificsources of environmental pressure (for examplerelating to air pollution control) in the short term.However, where there is a high population density,growing environmental pressure due to changingconsumption patterns and an environmentalinfluence that extends beyond any country’s borders,mean that these measures are only likely to beeffective in the short to medium term, i.e. thatenvironmental sustainability is low. A less affluent


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country with a lower population density and largerendowment of natural resources is likely to exhibitlower levels of environmental performance, but stillbe inherently more environmentally sustainable.Therefore, high levels of environmental performanceand low environmental sustainability (and vice versa)can characterize the same country and are not strictlylinked at a given point in time.

Environmental sustainability is thereforedetermined, in large part, by the patterns ofproduction and consumption, i.e. the way in whichhuman needs are met. Pollution control efforts thatdo not go beyond end-of-pipe approaches (such aswastewater treatment), contribute little to reducingthe long-term environmental impacts of the productionprocesses which extend beyond the limits of thefactory site. On the other hand, pollution controlefforts which adopt life-cycle analysis to reducepollution from the sourcing of raw materials,throughout the processing and manufacturingprocesses, and during the consumption and disposalof the manufactured goods, contribute both to a

more environmentally sustainable productionprocess and to better short-term environmentalperformance. Therefore, while action to improveenvironmental sustainability leads to improvedenvironmental performance, the reverse is notnecessarily true in the long term (see table 2.1).

The following subsections will explore theseissues and identify the environmental impacts ofunsustainable growth. The conclusion is thatcontinued economic growth is imperative in lightof the continuing and substantial need for povertyreduction. However, improving the environmentalsustainability of Asian and Pacific economic growthpatterns is becoming increasingly urgent.

2.2 Industrialization: pollution from export-ledeconomic growth

The shift from a reliance on income from agriculturalactivity to a reliance on industrial and service-basedactivity is a tenet of economic growth theory. SeveralEast-Asian economies have gone from being largelyagriculture-based to relying heavily on income from

Table 2.1 Environmental performance vis-à-vis environmental sustainability

Environmental performance

approaches

Short- to medium-term perspectives

Focus on improvements to existingmodalities of consumption andproduction and end-of-pipe solutions

Mainly implemented by government

agencies and private sector unitsresponsible for environmentalmanagement

Use traditional measures and indicatorsof environmental quality – e.g. extentof forest area, concentrations ofpollutants

Environmental sustainability

approaches

Long-term perspectives

Seek fundamental changes topatterns of socio-economic activity(consumption and production) tomake them more eco-efficient

Seek to improve decision-making

processes that impact on the use ofnatural resources

Require the involvement andsupport of all government agencies,the private sector and the wider

society

Seek to determine the impact of

patterns of natural resource use byfocusing on the linkages betweenthe use of environmental goods andservices and anthropogenic activity:for example, eco-efficiency of use

of ecosystem goods and services(e.g. pollution produced per unit ofproduction)

Planning and policy perspectives

Intervention in systems that impact

on the natural environment

Scope of responsibility

Measures and indicators


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industrialization in just one to two decades. In atleast 30 Asian and Pacific countries, more than 20per cent of the total GDP is earned by industrialactivity. Despite the rapid growth of the servicessector in almost all countries, export-ledindustrialization remains a defining feature of theAsian and Pacific region’s economic development,particularly in its developing countries.

Industrialization is a double-edged sword. Itincreases employment, prosperity and the opportunityto invest in a better future; at the same time, itgenerates pollution, intensifies competition for theuse of natural resources and changes lifestyles andconsumption patterns. Patterns of industrializationare therefore major determinants of environmentalsustainability.

The environmental impacts of industrialproduction depend on three factors: the scale ofindustrial activity; the types of industries making upthe industrial sector (for example, whether they aremore or less energy-, pollution- or water-intensive);and the eco-efficiencies of individual companies.This section explores all three aspects of regionalindustrial production.

2.2.1 Increasing pollution and toxicity-intensive industrial production

Figure 2.1 compares industrial production growthin the world, in the ESCAP region overall, and inESCAP developing countries. In overall industrialproduction, manufacturing and mining, theeconomies of Asian and Pacific developing countriesare racing ahead. In 1990, these countries accountedfor only 8 per cent of global manufacturing valueadded. They now account for almost 18 per cent ofglobal manufacturing value added, and over 70 percent of global developing country manufacturingvalue added. This is the result of an almost 70 percent increase in manufacturing value added in lessthan 10 years, from 1995 to 2003. The manufacturingsector’s share of value added in the GDP of Asianand Pacific countries (excluding Japan, Australia andNew Zealand) is estimated to have grown from 23per cent in 1990 to almost 29 per cent in 2003.1

Since 1995, the fastest-growing manufacturingactivities in Asia and the Pacific overall have includedthe production of food and beverages (beer, freshpork, cigarettes and refined sugar); office, computing,radio, television and other electrical equipment;cement; crude steel and ingots; and textiles (cottonyarn). From 1995 to 2001, production in thesesectors expanded in a range of between 20 and 45per cent.

Mining production(index, 1995=100)

90

100

110

120

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

World ESCAP countries Developing ESCAP countries

Figure 2.1 Industrial production indices

Source: ESCAP (2005). Statistical Yearbook for Asia and the

Pacific 2003, United Nations publication Sales No. 04.II.F.1(New York, United Nations).

Industrial production, general

(index, 1995=100)

60

70

80

90

100

110

120

130

140

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002


Manufacturing production

(index, 1995=100)

70

80

90

100

110

120

130

140

150

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002



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However, taking a closer look at the developingcountries in the region, industrial production growthis concentrated in slightly different sectors. Office,computing, radio, television and other electricalequipment, crude steel and ingots, transport equipment,chemicals, petroleum, rubber and plastic productsand cement take prominence as the fastest-growingareas of production. In addition to these sectors,the production of basic metals, fabricated metals,non-metallic mineral products and food is growingmuch faster in developing countries than developed,signaling a concentration of production in thesesubsectors in developing countries (Figure 2.2).

While a significant proportion of manufacturedgoods are exported, most of the pollution loadassociated with their production stays within theproducing country. Among the industries with highrates of growth in developing countries in theregion between 1995 and 2001 were those which,in the absence of stringent environmental regulationsand high levels of company environmental performance,are likely to have been relatively pollution-intensive,including metals, chemicals (including fertilizers),petroleum, rubber and plastic products, as well asthe food and beverages industries.2

Several studies have found that a growingproportion of global pollution was attributable toAsian developing countries during the 1970s and1980s.3 The growth in regional industrial activity has,logically, increased pollution loads. In one study, theWorld Bank shows that the quantity of heavy metalsaccumulating per year in Indonesia increased by afactor of almost 10, with similar increases in thePhilippines and Thailand and far exceeding the rateof growth in GDP from 1978 to the late 1980s.4

The increases in other pollutants (organic waterpollution, suspended solids, SO

x, particulates and

toxic chemicals) varied from two to more thaneleven-fold. These increases are indicative of the scaleof pollution loading that is likely to have taken placefrom the early 1990s to the present, years which weremarked by a rapid increase in industrial activitysupported by FDI infusions.

In terms of the toxic content of pollutionloads, the World Bank shows in another study thatthe toxicity intensity or unit volume of toxic releasesper unit of output value increased in 11 Asiancountries during the 1970s and 1980s; the fastestincreases in toxicity intensity were estimated tohave occurred in Indonesia, Pakistan and Malaysia.Looking again at the increase in production of eachof the sectors shown in figure 2.2, and comparing itwith the subsectoral toxicity indices produced by theWorld Bank in the early 1990s (Figure 2.3),5 it maybe concluded that the toxicity of Asian and thePacific production is continuing to increase, alongwith the tendency to pollute. Production inhighly toxicity-intensive sectors (such as thechemicals sector) is expanding rapidly. Other

-30% -10% 10% 30% 50% 70% 90% 110% 130%

Wood & wood products

Wool yarn

Wearing apparel, leather & footwear

Textiles

Paper, print., pub. & recording media

Food, bev. & tobacco

Cotton woven fabrics

Non-metallic mineral prod.

Fabricated metal

Cigarettes

Fresh beef & veal

Raw sugar

Refined sugar

Basic metals

Fresh mutton & lamb

Fresh pork

Cotton yarn

Cement

Chem, petrol., rubber & plastic

Transport equipment

Crude steel, ingots

Beer

Office, comput., radio, TV. & other elect. equipment

Asia-Pacific overall Asia-Pacific developing countries

Figure 2.2 Change in industrial production by subsector,1995-2001


Pacific 2003, United Nations publication Sales No. 04.II.F.1(New York, United Nations).


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toxicity-intensive industries growing rapidly in Asianand Pacific developing countries are those of crudesteel and ingot production, transport equipment,petroleum, rubber and plastic basic metals andfabricated metal products.

Facilities for the safe disposal, recycling orrecovery of toxic or hazardous waste are not widelyavailable in Asian and Pacific developing countries.Table 2.2 shows the trends in hazardous wasteproduction in Japan, the Republic of Korea and theRussian Federation. These figures include, in

Table 2.2 Hazardous waste production (thousand metric tons)

1992 1993 1994 1995 1996 1997 1998 1999 2000

Japan

Republic of Korea

Russian Federation

2 297

-

-

-

7 804

-

-

-

67 520

2 883

1 622

-

3 158

1 912

82 590

2 994

2 217

89 390

2 653

1 922

107 060

-

2 733

108 707

-

2 779

-

Source: UNEP, GEO data portal, accessed on 2 April 2005 from <http://geodata.grid.unep.ch>,data provider: Organization for Economic Co-operation and Development.

addition to hazardous waste from industrialproduction, other categories of waste includingbiomedical waste and domestic hazardous waste,such as batteries. China reportedly produces some10 million metric tons of hazardous waste,including 115,300 metric tons of radioactive waste,per year. However, less than 25 per cent of this totalis disposed of (mostly by landfill or burning), whileone third is stored in makeshift storage areas. Therole played by small waste processors which areill-equipped to deal with such wastes exacerbates theproblem. China mandated the licensing of businessesengaged in the collection and processing ofhazardous wastes in July 2004.6

Export-processing zones and industrial parksin the region have been a source of concentratedpollution emissions. While the availability ofwater, energy and pollution treatment and waste-management infrastructure is one reason whycompanies choose to locate to these centres, pollutiontreatment and waste-management services are notalways fully operational. In one country, a surveyof industrial parks showed that few had invested inwastewater treatment facilities. In other cases,industrial parks are known to operate pollutioncontrol equipment only when inspectors are due toarrive. Others operate without any provision forhazardous waste management, and in at least oneindustrial park waste-treatment facilities were notutilized by resident companies because charges fortheir use were viewed as being unfairly applied.

In countries in which there is limited capacityfor proper treatment and disposal, regulations thatprohibit hazardous waste disposal and trade canfoster the illegal hazardous waste trade. Reports ofillegally traded hazardous industrial waste havesurfaced. E-waste is one category of waste described

Figure 2.3 Linear acute toxicity index

Source: Brandon, Carter and Ramesh Ramankutty (1993).Toward an Environmental Strategy for Asia, World Bank

Discussion Papers No. 224. Chapter 4 pp. 65-73 (WashingtonDC, World Bank), accessed on 18 November 2005 from

<http://www.worldbank.org/nipr/work_paper/224-4>.

0 20 40 60 80 100 120

Soft drinksCement/lime and plaster

Sugar refineries

Carpets and rugsAgr. machine and equipment

Structural clay products

Food products Preserv ed fruit and v eg.

Dairy products

Electrical appliancesGlass and glass products

Wearing apparel

Soap, cleaning productsOils and fats

Electrical appliances

Cutlery, hand toolsMetal and wood machinery

Pottery and chinaPetroleum refineries

Sawmills and woodmills

Paints and lacquersNon-metal furniture

Fabricated metal products

Pulp and paperRubber products

Iron and steel

Non-ferrous metalsPrinting and publishing

Textiles

Plastic productsPaper container

Synthetic resins, plastic

Tanneries and leatherIndustrial chemicals

Fertilizers and pesticides


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Table 2.3 Transboundary movements of hazardous andother wastes (2000; metric tons)

Imports

Source: UNEP GEO data portal, accessed on 2 April 2005from <http://geodata.grid.unep.ch>, data provider:

Secretariat of the Basel Convention(Data as reported by parties to the convention).

Exports

China

Japan

Republic of Korea

Russian Federation

Georgia

Uzbekistan

Indonesia

Malaysia

Singapore

Thailand

Turkey

Australia

New Zealand

Papua New Guinea

-

3 924.0

17 380.4

8 082.5

935 632.0

152.0

61 068.8

125 875.2

-

-

-

302.2

11 100.0

-

3 346.0

1 539.0

60.4

96 988.0

273 409.0

930.0

240.0

4 947.4

19 548.5

193.04

888.0

24 918.3

1 465.7

2.89

as hazardous, and will be discussed in section 2.5.Substantial volumes of waste are traded legally (Table2.3).

Accelerated production by pollutingsubsectors, together with only marginal reductionsin the pollution emitted per unit of GDP in mostcases (see box 2.1), and a still-limited capacity todeal with the waste generated, indicate that a muchmore serious effort needs to be made to changeindustrial profiles and production patterns.

The prominent role of small- to medium-sizedenterprises (SMEs) in the regional industrialproduction sector is a significant barrier to improvingits environmental performance. Small industrialplants have been found to have much highermarginal pollution abatement costs than largeplants; per unit of output, small plants pollutemore than large plants. Small plants are lesslikely to invest in pollution-abatement technology orin environmental management expertise. However,

Box 2.1 Changes in air pollution and industrial organic water pollution intensities

Changes in the pollution emitted per unit of GDP, or pollution intensity, are an indicator of the polluting impactof economic growth patterns. Pollution intensities focus attention on the composition of the industrial sector aswell as on the environmental performance of firms in the industrial sector. High pollution intensities which havenot improved significantly with time, are indicative of economies which are locked into industrializationpatterns that are inherently polluting. One indicator of air pollution is total SO

2 emissions. Industrial processes

which involve coal and oil combustion, petroleum refineries, cement manufacturing and metal processingfacilities, as well as locomotives, large ships, and some non-road diesel combustion processes, are major sourcesof SO

2. This chemical is responsible for acid rain and impacts on respiratory health.

Over the period 1990-2000, most countries reduced the SO2 intensity of their economies. Each unit of GDP

earned resulted in the emission of lower amounts of SO2 by the end of the 1990s (Figure 2.4). However, a

far lower proportion of countries managed to reduce total emissions of SO2 (Figure 2.5), even where there have

been significant reductions in SO2 intensities. For example, China, with a SO

2 intensity reduction of more than 20

per cent in 10 years, still increased its total emissions in the same time period. Some countries are producingmore SO

2 per unit GDP than they were 10 years ago, such as Indonesia, Pakistan, Singapore, Sri Lanka and

Thailand. While the industrial sectors of Azerbaijan and the Russian Federation contribute roughly the sameproportion to overall GDP, the SO

2 produced by Azerbaijan for every unit of GDP is almost four times that of the

Russian Federation. This is largely a reflection of the composition of the industrial sectors in the two countries, aswell as of fuel quality, process differences and levels of technological advancement.

One water pollutant is organic water pollution, which is responsible for nuisance odours, fish kills andother radical ecosystem changes, particularly in standing water bodies. Industrial organic water pollutionintensities declined in most countries (Figure 2.6) between 1990 and 2000, but industrial emissions of organicwater pollution declined in far fewer countries during this period (Figure 2.7). The production patterns of China,India and Nepal have become much cleaner with respect to organic water pollution. Despite Cambodia’sdramatic reduction in industrial organic water pollution intensity, total organic water pollution dischargesincreased between 1990 and 2000 (Figure 2.6). Notable exceptions to the pattern of declining pollution intensitiesare Armenia, Mongolia and Kyrgyzstan, where industrial organic water pollution intensity has increased. Thefood processing industry is one of the most important sources of organic water pollution, but the production ofpulp and paper, chemicals, textiles and primary metals is also an important source of this type of pollution.


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Figure 2.4 Air pollution intensity, anthropogenic SO2

0

10

20

30

40

50

60

70

80

90

100

Kazakh

stan

Aze

rbaija

n

Chin

a

Uzbeki

stan

Russia

n Federa

tion

India

Kyrgyz

stan

Nepal

Pakistan

Turk

menist

an

Singapore

Bhuta

n

Mongolia

Vie

t Nam

Philippin

es

Thaila

nd

Sri L

anka

Indonesia

Aust

ralia

Bangla

desh

Georg

ia

Fed. S

ts. o

f Mic

ronesia

Arm

enia

Mala

ysia

Tajik

istan

Solo

mon Is

lands

Tonga

Papua New

Guin

ea

Kiribati

Cam

bodia Fiji

Vanuatu

Lao P

eople's

Dem

. Rep.

Republic o

f Kore

a

New

Zeala

nd

Brunei D

arussala

m

Japan

1990 2000

me

tric

to

ns

of

SO

pe

r U

S$

GD

P(1

99

5 c

on

sta

nt

US$

) 2

Figure 2.5 Change in anthropogenic SO2 emissions, 1990-2000

-100 % -50 % 0 % 50 % 100 % 150 % 200 % 250 %

SingaporeSri Lanka

Brunei DarussalamPakistan

IndonesiaThailand

IndiaAustralia

Viet NamNepalChina

New CaledoniaBangladesh

PhilippinesMalaysia

New ZealandMaldives

BhutanAzerbaijanFijiKiribatiJapanUzbekistanFed. Sts. of MicronesiaKazakhstanMongoliaSolomon IslandsDPR KoreaPapua New GuineaMyanmarTajikistanRussian FederationKyrgyzstanCambodiaTurkmenistanVanuatuLao PDRGeorgiaArmenia

Sources: Based on data from National Institute for Public Health (RIVM) and Netherlands Organization for AppliedScientific Research, the Emission Database for Global Atmospheric Research (EDGAR) 3.2. Acidifying Gases: SO

2:

Aggregated Emissions. Electronic database accessed on 12 January 2006 at <http://arch.rivm.nl/env/int/coredata/edgar/>;and OECD (2004). OECD Data compendium 2004 (Paris, OECD) (data for Australia, Japan, New Zealand, and

Republic of Korea); GDP: World Bank (2003). World Development Indicators 2003 (Washington DC, World Bank).


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Figure 2.6 Industrial organic water pollution (BOD) intensity

0

2

4

6

8

10

12

14

16

18

20

Japan

Singapore

Aust

ralia

Republic o

f Kore

a

New

Zeala

nd

Mala

ysia

Islam

ic R

ep. of I

ran

Thaila

nd

Pakistan

Philippin

es

Indonesia

Vie

t Nam

Russia

n Federa

tion

Chin

aIn

dia

Cam

bodia

Sri L

anka

Nepal

Bangla

desh

Aze

rbaija

n

Kyrgyz

stan

Mongolia Fij

i

Tonga

kg

org

an

ic w

ate

r p

ollu

tio

n (

BO

D)

pe

r

US$1

00

0 G

DP

fro

m in

du

stry

(1

99

5 c

on

sta

nt

US$)

1990 2000

Figure 2.7 Change in industrial organic water pollution (BOD) discharge, 1990-2000

-70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 110% 120% 130% 140% 150% 160%

Myanmar

Kyrgyzstan

Russian Federation

Mongolia

Republic of Korea

Azerbaijan

Japan

China

Philippines

New Zealand

Pakistan

Islamic Rep. of Iran

Singapore

Cambodia

India

Thailand

Nepal

Malaysia

Indonesia

Sri Lanka

Bangladesh

Armenia

Source: Based on data from the UNEP GEO Data Portal <http://geodata.grid.unep.ch>, data provider World Bank, WorldDevelopment Indicators, 2002; Industrial share of GDP: Asian Development Bank (ADB) - Key Indicators 2005, accessed on 23March 2006 from <http://www.adb.org/statistics > and United Nations Statistics Division National Accounts Main Aggregates

Database; GDP (constant 1995 US$): World Bank (2003). World Development Indicators 2003 (Washington DC, World Bank).


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large plants, because of their size, are likely to havegreater impacts on health and other pollutionstatistics.7

The aggregate environmental impacts of smallplants, particularly in clustered, highlypolluting industries, have also been found to besubstantial. One study of industrial pollution inTiruppur, India, where over 7,000 small textileproducing firms are located, estimates that thepollution load of total dissolved solids from 1980 to2000 was 2.35 million metric tons; of chloride 1.31million metric tons; of sulphate 0.12 million metrictons; of organic water pollution (COD) 0.09million metric tons; and of oil and grease 1,000metric tons. The accumulation of this pollution inand around Tiruppur has left the water unsuitablefor domestic or irrigation purposes and resulted ineconomic losses estimated at the values shown intable 2.4.

Dealing with the pollution from industryrequires targeted interventions within sectors.Figure 2.8 shows the relative subsectoral contributionsto organic water pollution by country.

Source: Based on data from World Bank (2004). World Development Indicators 2004 (Washington DC, World Bank).

Figure 2.8 Industrial organic water pollution, share by industry, 2000

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Singapore

Republic of Korea

Myanmar

China

Malaysia


Pakistan

Japan

Thailand

Nepal

Turkey

Russian Federation

Azerbaijan

Indonesia

India

Philippines

Kyrgyzstan

New Zealand

Cambodia

Mongolia

Armenia

AustraliaFood &beverages

Primarymetals

Paper &pulp

Chemicals

Textiles

Otherindustry

Table 2.4 Economic impacts of industrial pollution fromthe textile industry, Tiruppur, India

Annual economic cost

Rupees (millions)

Gross crop output

Forgone crop valuesa

Losses due to crop changesb

Fish productivity

Urban water sector costsc

2.52

52.6

41.3

1.47

98

Source: Appasamy, Paul, Prakash Nelliyat, N. Jayakumarand R. Manivasagan (2003). “Economic Assessment of

Environmental damage: A case study of industrial waterpollution in Tiruppur,” in Parkih, Jyothi K., and T.L. Raghu

Ram, eds. (2003). Reconciling Environment and Economics:Executive Summaries of EERC Projects (EnvironmentalEconomics Research Committee under the Ministry of

Environment and Forests implemented, World Bank Aided“India : Environmental Management Capacity Building

Project”) (Mumbai, Indira Gandhi Institute of DevelopmentResearch).

Notes:

a As a result of pollution, crops requiring irrigation are no longerproduced. Based on an estimate of the expected value offorgone crops.

b Difference between the value of previous irrigated cropsand existing rain-fed crops

c Replacement or opportunity cost for fresh water transport andsupply for Tiruppur due to the pollution of local water sources.

55 000

1 151 900

904 470

32 200

2 146 200

US$


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2.2.2 Resource use – energy, raw materials andminerals

Pollution loading and production of hazardouswastes are downstream impacts of the expandingAsian and Pacific industrial base; the upstreamimpact on resource use is also important to consider.Taking energy as one important resource, thesubsectors most often identified as being energy-intensive are those of transport equipment, crudesteel, chemicals, petroleum, rubber and plastic products,cement and non-ferrous metals, fabricated metalproducts and food and beverages. Again, many ofthese are among the fastest-growing in the region,and include sectors in which production is beingconcentrated in developing countries.

Higher global energy prices and pressuresto reduce greenhouse gas emissions to meetimplementaton commitments of the KyotoProtocol may promote the flight of energy-intensiveindustry to developing countries.8 Coupled with the(albeit declining) tendency of governments tosubsidize energy supplies to industry as an investmentincentive, growth in these industries is likely torepresent a growing financial burden and to impactnegatively on overall pollution loads.

Growth in energy demand is closely linked tothe growth in demand for minerals, as mineral-related industry tends to be energy-intensive. Theexpanding demand for metals is being driven by thegrowth in the construction sector and metal-basedproduction (e.g. electronic equipment, crude steel,transport equipment, basic metals and fabricatedmetal products) that has become concentrated inAsian and Pacific developing countries.

Water is another important input to industrialprocesses which is in short supply in some countries.Section 2.4 discusses how various industries impacton water resources. Two of the fastest-growing sectorsof production – transportation equipment and foodand beverages – have high water consumption rates.At the same time, while having a relatively low waterconsumption rate, the chemical industry requireshigher flows of water throughout its processes. Whenthis fact is considered along with the water pollutiongenerated, the growth of the chemical industry

regionally is likely to have an important impact onthe sustainability of the water supply. It is not onlya major source of water pollution, but also ofincreasing pressure on water resources.

The productivity of the use of such a valuableresource as water by the industrial sector varies widelyby country. Paradoxically, the economic value addedof industrial water use is the lowest in countries wherewater is already in short supply, such as Central Asiaand the Caucasus, China and India, as discussedin section 2.4. In response to pricing or scarcity,significant improvements in the efficiency of wateruse have been achieved, notably in the pulp andpaper and textile industries.

2.2.3 Promoting more environmentally-sustainable investment

The policy divide that separates those governmentinstitutions responsible for economic planning andindustry from those responsible for environmentalprotection is reflected in the limited attention thathas been paid to the impact of the national industrialproduction profile on the environmental outlook.This impact can be considerable: while the UnitedStates of America’s industrial output increased by 25per cent between 1990 and 2003, there was only a 2per cent increase in energy use, due to energy-efficiency technologies and slow growth in energy-intensive industries. In Canada, aggregate energyintensity remained relatively constant between 1990and 1997; energy-efficiency improvements werefound to have been partly offset by a growth inenergy-intensive industry.9

Strategic Environmental Assessment (SEA) isan assessment methodology designed for applicationat the planning stage of any development activity.SEA integrates environmental issues into theformulation of plans and programmes. An effectiveSEA process informs planners, decision-makers andthe affected public about the environmentalsustainability of strategic or policy decisions, facilitatesthe search for the best alternative and ensures aparticipatory decision-making process. SEA isattracting increasing interest from countries such asthe Republic of Korea, and can be applied to reducethe overall impact of industrial development.


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Planning that takes into account thepollution- and resource-intensities of variousindustrial subsectors must be supported byappropriate investment policy. East Asia and thePacific have higher savings and investment ratesas a percentage of GDP (at approximately 30 percent) than the world savings and investment rate ofjust above 20 per cent of GDP.10 These resourcesare invested in various ways to influence industrialdevelopment patterns, such as through portfolioequity investment, transnational companyinvestment (FDI), or debt finance (or loans). FDI-supported manufacturing for export has beenresponsible for a dramatic increase in exports andFDI also represents a growing share of GDP in manyAsian countries (Table 2.5).11 While labour costsremain one of the primary factors influencing thelocation of industry, the differences betweenpollution abatement costs in higher- andlower-income countries, as well as the increasinglyimportant role of intraregional FDI, are also likelyto feature among the factors encouraging the growthof these industries in developing countries.12

FDI infusions have directly supported growthin manufacturing subsectors such as mining,

chemicals, information and communicationtechnologies and transport equipment, amongothers. While “protectionist countries tend toshelter pollution-intensive heavy industry,”13 highlevels of FDI are said to promote cleaner manufac-turing practices and may be one of the reasons forthe reductions in SO

2 and organic water pollution

intensities observed in many countries (Figures 2.4and 2.6).

However, by expanding the scale of industrialproduction, the regional impact of FDI has been,overall, negative in environmental terms, not takinginto account any avoided environmental damage dueto pressure on environmental resources related topoverty. The assessment of FDI impact on theenvironmental outlook is complicated by theimplications of FDI in economic activity known tocause significant environmental damage, such aslogging and mining.

FDI is increasingly concentrated in just a fewcountries, intensifying competition for investment,and thereby possibly lowering environmentalstandards in competing countries in what has beentermed a “race to the bottom.” There are fourmitigating FDI-related developments that may beleveraged to reduce the environmental impact ofFDI-supported activity.

The first is that investments in the primarysector are expected to increase because of growingdemand for natural resources. The steel industryhas become a major target of FDI flows amongdeveloping countries. FDI inflows to Central Asiarose by 88 per cent in 2001, with resource-basedactivities, particularly in copper and zinc making upthe largest share of inflows. With a view to extractinggreater benefits from inward FDI, and in particularfrom investments targeting natural resources,several Latin American and African countries havetightened their regulatory frameworks.14 In contrast,some countries, such as India, allow automaticapproval of 100 per cent foreign equity investmentin prospecting, mining, processing and metallurgy(with some restrictions on precious metals).

The growing demand for natural resourcesmeans that the bargaining position (in terms of the

1999

Source: UNCTAD (2001). World Investment Report 2001

(Geneva, United Nations), in ESCAP (2001). Implications of

globalization on industrial diversification process and

improved competitiveness of manufacturing in ESCAP

countries (Bangkok, United Nations).

Table 2.5 Foreign direct investment stock as apercentage of GDP

1980 1990

South-East Asia

Asia and the Pacific

Developing countries

World

China

Hong Kong, China

India

Indonesia

Republic of Korea

Malaysia

Philippines

Singapore

Taiwan Province of China

Thailand

23.4

2.9

4.3

6.0

3.1

487.0

0.7

14.2

1.8

21.1

3.9

52.9

5.8

3.0

18.4

15.5

13.4

9.2

7.0

217.5

0.6

34.0

2.0

24.1

7.4

76.3

6.1

9.6

34.4

30.2

28.0

17.3

30.9

255.6

3.6

46.2

7.9

65.3

14.9

97.5

8.0

17.5


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ability to influence environmental outcomes) ofcountries with a rich natural resource base may beimproving.

The second opportunity for improving theenvironmental outlook of FDI-driven growth is thatincentives for investment are also shifting. Theperception of Asian and Pacific countries is changing– from that of a region offering low-cost labour anda rich natural resource endowment to one of a regionof consumers and investors in their own right. This seachange in perception is supported by two importantregional economic trends: trade liberalization andthe rise of consumerism. The power of consumersmay be harnessed creatively to promote higherlevels of corporate environmental responsibility byinnovations such as through ecolabelling schemesand corporate ratings and disclosure schemes (seesection 2.2.5). In the Republic of Korea, companiesappearing in a monthly listing of companies inviolation of environmental regulations suffered areduction in market value of their publicly tradedequities. The average reduction in market value wasfound to be of a similar order of magnitude as thatin other developing countries where similar listingswere published.15

The third trend is that FDI-originating countriesare demonstrating a willingness to assist developingcountries in avoiding the environmental impacts ofFDI. An example has been set by Denmark, whichused official development assistance (ODA) fundingto install a palm-oil waste processing plant inMalaysia to support a palm-oil processing factoryinvestment by a Danish company. Similarly, Canadaprovided nearly US$8.5 million to Peru to improveenvironmental regulation in the context of cross-border investment agreement negotiations. Canadawas also expected to include clauses asking Peru notto lower its environmental standards in order toattract investment and to enforce the law already inplace.16 While FDI arrangements between countriesare governed primarily by bilateral investmenttreaties,17 cooperation through regional economiccooperation secretariats such as ASEAN, SAARCand ECO could be developed to help countries toavoid a “race to the bottom.”

Fourthly, multinational companies areincreasingly setting a level playing field for all of theirsuppliers across the global supply chain. In responseto consumer demand for higher levels of corporategovernance and accountability for environmentalimpacts, environmental performance standardswhich apply to suppliers in a developed country likeGermany are more and more likely to apply equallyto suppliers in developing countries like China.

With respect to debt finance, some financeinstitutions are beginning to apply environment-related criteria in assessing the risk related to loans.Portfolio equity investments are also influenced byenvironmental criteria; investor perception of thegreater overall sustainability, higher corporategovernance standards and lower risk associated withgreen investing has supported the success of greenfunds in Japan, for example, as described in ESCAP’sState of the Environment in Asia and the Pacific 2000report.

2.2.4 Driving firm-level eco-efficiency

A comprehensive review of OECD implementationof sustainable development policy during the period2000-2004 concludes that “the strengthening of theenvironmental pillar of sustainable development hascome at a cost to the economic pillar, as a directconsequence of choosing relatively inefficientpolicies.”18 These findings confirm that environmentalregulations that result in high pollution-abatementcosts can have a negative economic impact. Does adeveloping country therefore have to forego economicgrowth based on industrial development in order toprotect its natural resources and the health of itscitizens, or does it have no choice but to weakenenvironmental regulations in order to seekopportunities to reduce poverty?

Identifying low-cost and effective policies tominimize the impact of industrialization is criticalto both the economic and environmental outlooksof the region. Environmental impact assessments(EIAs) are an important government policy tool forenhancing environmental performance. Cambodia,among other countries, is in the process of developingEIA guidelines, while many others still do not havelegislation relating to EIAs. However, even the most


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comprehensive EIA system requires high levels ofcorporate environmental responsibility to beeffective. The ADB, in its Asian EnvironmentOutlook 2005,19 concludes that “the businesscommunity’s actions hold the key to whether furtherrapid economic growth in this region can be achievedwithout undermining the basis for health andprosperity.” A fully engaged private sector is acritical missing element in regional sustainabledevelopment efforts; the State of the Environment inAsia and the Pacific 2000 notes that Asian andPacific firms are more reactive than proactive whenit comes to environmental issues.

By promoting more eco-efficient productionpractices, cleaner production contributes todecoupling industrial production and environmentaldegradation. Eco-efficiency concepts emphasize thatactions aimed at reducing environmental impactsacross the entire product or service life cycle can havesimultaneous economic and environmental benefits(Box 2.2).

Eco-efficient production requires a moresupportive policy framework. Appropriateenvironmental standards and regulations exist inmost countries to support traditional pollutioncontrol efforts, but enforcement remains a problemand there is less policy and institutional supportfor cleaner production efforts that upgrade theenvironmental performance of the entire life cycleof a product or service, or that reward sustainedpollution control efforts. Ineffective and unsustainableend-of-pipe approaches and waste are oftenencouraged by policy. For example, pollutiontreatment technology is subsidized, but technologiesthat improve water and energy efficiency, or processimprovements that reduce waste and pollution, arenot. Subsidies are provided to offset wastewatertreatment-plant capital costs but not for theiroperating costs, with the result that equipment isoften turned off to save money. Resource wastage(and by consequence pollution) is also encouragedwhen the inputs provided to industrial estates, such

Box 2.2 Cleaner production as a path to firm-level eco-efficiency

The term eco-efficiency was brought into popular usage by the World Business Council for Sustainable Development(WBCSD) in its 1992 report Changing Course. The WBCSD describes eco-efficiency, in the corporate context, asa management philosophy of “environmental improvement that yields parallel economic benefit,” achievableby “the delivery of competitively-priced goods and services that satisfy human needs and bring quality of lifewhile progressively reducing ecological impacts and resource intensity throughout the life-cycle to a level atleast in line with the earth’s estimated carrying capacity.” A two-year WBCSD project to develop a frameworkfor assessing and reporting eco-efficiency that is applicable across industries resulted in the publication of aguide to reporting company performance in relation to its eco-efficiency. It proposes that, at the firm level,eco-efficiency is measurable by the ratio of product or service value to the related environmental influence.Environmental influence can be interpreted as pollution or waste, resource use or other environmental impact(s)associated with the unit of production or service value. The WBCSD has identified seven success factors foreco-efficiency at the firm level:

• reduced material intensity of goods and services• reduced energy intensity of goods and services• reduced toxic dispersion• enhanced material recyclability• maximized use of renewable resources• increased material durability• increased service intensity of goods and services.

Cleaner production can encompass all of the above aims and therefore contributes to more eco-efficientproduction processes. Cleaner production is defined by UNEP as the “continuous application of an integratedpreventive environmental strategy to processes, products, and services to increase overall efficiency, andreduce risks to humans and the environment.” A central pillar of cleaner production is the life-cycle assessment,or analysis of the entire life cycle of a product or service to identify opportunities to minimize pollution, wasteand resource use and other environmental impacts. Life-cycle assessment begins with resource extraction andends with the waste generated when a product is used.

Sources: UNEP Cleaner Production website, accessed on 12 November 2005 from < http://www.uneptie.org/pc/cp/understanding_cp/home.htm#definition> and <http://www.iisd.ca/consume/unep.html>; Schmidheiny, S. (1992).

Changing Course (World Business Council on Sustainable Development).


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as electricity, are subsidized as part of investmentpromotion policy. In addition, where pollutionabatement costs are perceived to increase productioncosts unnecessarily and so reduce industrialcompetitiveness, environmental regulations areoften relaxed.

Rather than taking advantage of the existingopportunities to prevent pollution and waste fromthe product design stage to product disposal,companies therefore tend to opt for end-of-pipetechnology. Asia has the dubious distinction ofbeing the fastest-growing market for the end-of-pipetechnology that makes up a major part of a globalenvironmental technology market valued at US$477billion in 2003.20 At the same time, the limitedcapacity for monitoring of pollution and waste andthe sometimes weak enforcement of environmentalregulations provide little impetus for improvementin corporate environmental performance inmany countries. Although there is evidence ofrising judicial activism on environmental issues,policies generally do not encourage the use ofnew technologies, or cleaner production andeco-efficiency initiatives.

More recently developed innovative policiesand programmes have shown that incentive-basedmeasures can have dramatic impacts and represent amore efficient way of reducing pollution – thecarrot and the stick together are far more powerfulthan the stick alone. Innovative approaches that havebeen applied in the region to promote cleanerproduction and eco-efficiency are described below.

National cleaner production programmes and policy

National cleaner production programmes seek tosupport industry in making technological andprocess changes that reduce pollution and otherforms of waste generation, as well as resource use.National cleaner production centres have beenestablished with the assistance of UNIDO andUNEP in China, Indonesia, the Republic of Korea,Sri Lanka, the Russian Federation and Viet Nam.UNEP notes that there has been more progress oncleaner production in countries in which nationalcleaner production centres have been establishedthan in others.21 Developed countries, in particular

Japan and Australia, are leading the way in promotingcleaner production, but several initiatives indeveloping countries have also clearly demonstratedstartling and perhaps unexpected economic benefits,as reported by UNEP.22 National policies on cleanerproduction have been adopted in China andIndonesia, with China adopting a comprehensiveCleaner Production Promotion Law in 2002.

The Samut Prakarn Cleaner Production forIndustrial Efficiency (CPIE) Project implemented inThailand involved more than 423 manufacturingindustry members. The UNEP Production andConsumption branch reports that by the time theproject ended in April 2003, the project had achievedimpressive results. The total estimated after-taxsavings for programme participants from water,wastewater and electricity reductions over theperiod of 2003 to 2007 alone is estimated at a netpresent value of approximately US$10 million – ascompared with an investment (project budget) ofUS$6.5 million. The following direct benefits forproject participants and the environment werereported:

• 1.24 million m3 in reduced water/wastewater per year;

• 9.4 million kWh in reduced electricity useper year;

• 7 million litres in reduced diesel oil use peryear; and

• Cost savings to participants of over US$3.2million per year.

The project is also reported to have generatedsignificant benefits for the Government of Thailandand for Thai society. The reported estimated valueof these benefits are as follows:

• over US$1 million per year in increasedtax revenue;

• US$198,000 per year in industrialproductivity gains;

• US$67,000 per year in savings fromreduced greenhouse gas emissions; and

• US$190,500 per year in savings fromreduced land subsidence.

The Viet Nam Cleaner Production Centre alsoreports significant cost and resource savings from itstechnical assistance services (Table 2.6).


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Industrial ecology and industrial waste exchange

Industrial ecology matches waste streams andproduction processes across multiple industries toturn what is pollution and waste for one industryinto a resource for another. There are industrial ecologyinitiatives in at least 11 countries of the region.23

Japan’s eco-towns (see chapter 7, box 7.2) areindustrial zones in which zero-emission concepts arepromoted through industrial symbiosis andrecycling. In one low-tech example, the eco-cement

plant in Chiba Prefecture uses ash, the by-productof incineration processes, to make cement byadding natural limestone. Waste is reduced, alongwith the costs of disposal of and expenditure onthepurchase of virgin aggregate. In another promisinginitiative, the Eco-Industrial Estate Developmentin the Jababeka Industrial Estate of West Java hasbeen established to promote waste exchange on theindustrial estate and the production of organicfertilizers from liquid and solid palm-oil industry

Source: Website of the Viet Nam Cleaner Production Centre, accessed on 23 March 2006 from <http://www.un.org.vn/vncpc/>.

Table 2.6 Cleaner production in Viet Nam

Products(no. of companies)

Location Projectstarted in

Investment(US$)

Benefits in demonstration year

Jelly (1)

Sugar (1)

Noodles (1)

Agar-agar,seafood (3)

Printingpaper, tissues,

carton (2)


carton (6)


carton (3)

Dyed fabric,thread (5)

Dyed fabric,thread (8)

Dyed fabric,zippers,

thread (4)

Wire andnets, steelpipes (2)

Beer (1)

Viet Tri

Can Tho

Ho Chi MinhCity

Hai Phong,Ninh Binh, DaNang,� Ho Chi

Minh City

Phu Tho, NhaTrang

Phu Tho, HoaBinh, Nghe An,

Dong Nai,Khanh Hoa, HoChi Minh City

Phu Tho, HoChi Minh City

Ho Chi MinhCity, Hanoi,�

Nam Dinh,Hanoi, Ho Chi

Minh City

Nam Dinh,Hanoi, Ho Chi

Minh City

Nam Dinh, HaiPhong

Ninh Binh

2003

2001

2000

1999

2003

2001

1999

2003

2002

1999

1999

1999

0

0

5 000

13 230

45 266

346 000

74 000

411 009

73 950

8 900

36 500

2 900

Savings of US$5,717; 10% reduction in modified starchuse, 0.1% reduction in electricity consumption

Savings of US$88,000

Savings of US$363,000; reduction of up to 10% in green-house gases (GHG)

Savings of US$55,000; reduction of up to13% in airpollution, 78% in GHG, 34% in solid waste, 40% inchemical use, 78% in electricity consumption,13% in coalconsumption

Savings of US$1,681,243; reduction of up to 22% inelectricity consumption, 13% in fuel consumption

Savings of US$500,000; reduction of up to 42% in waste-water, 70% in COD loadings�

Savings of US$344,000; reduction of up to 35% in airpollution, 15% in GHG, 20% in fibre loss, 30% in waste-water, 24% in electricity consumption, 16% in fuel oilconsumption, 20% in coal consumption

Savings of US$509,598�

Savings of US$477,000; reduction of up to 30% in chemicaland dye stuff use, 28% in fuel consumption, 35% in waterconsumption, 4% in reprocessing, 14% in low-quality products

Savings of US$115,000; reduction of up to 14% in airpollution, 14% in GHG, 20% in chemical use, 14% in fueloil consumption

Savings of US$357,000; reduction of up to 15% in airpollution, 20% in solid waste, 5% in electricity consumption,15% in coal consumption

Savings of US$23,400; increase in production capacityof 13.4%;�reduction in consumption of� raw materials(7.0%), water (14.0%), electricity (11.3%), coal (13.3%)and filter media (6.6%)


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wastes.24 The Philippine Business for the Environmentis a non-profit organization that has developed anindustrial waste exchange network which matchesindustrial waste generators with buyers and recyclers.Buyers benefit from low-cost or free material; sellersgarner savings on disposal costs.

Certification schemes as economic incentives

Reliable ecolabelling schemes are poised to contributetowards making important long-term changes toproduction (and consumption) behaviour. Growingenvironmental awareness, heightening consumerpower and increasing investment in Asia and thePacific as a consumer base, all serve as opportunitiesto utilize this tool proactively, providing incentivesfor improved corporate environmental performance.Ecolabelling schemes have been establishedin Indonesia, Japan, the Republic of Koreaand Thailand among other countries.25 Greenprocurement, which encourages the procurement ofenvironmentally friendly products, stimulates andsupports cleaner production initiatives by buildingon the establishment of reliable ecolabelling schemes.In Japan, more than 95 per cent of governmentprocurement in 2002 met eco-friendly procurementrequirements; among the products procured, thehighest increases in green procurement activity wererecorded in uniforms and air-conditioners.26 TheRepublic of Korea’s 2004 green purchasing law wasprojected to result in an expansion of the domestic“green market” from US$2 billion to US$5 billionbetween 2004 and 2006.27

The ISO 14000 standard28 remains the keyreference point in discussing certification schemesaimed at improving organizational environmentalperformance. It has a much larger influence onbusiness-to-business transactions than ecolabellingschemes aimed at the general public consumer.The Government of the Republic of Korea hasestablished its own certification scheme, the“Environment-Friendly Company CertificationSystem”, which provides for voluntary action toimprove performance against a company-specificenvironment-related target. Only 28 businesses werecertified by this system in 1995; by 2004, thisnumber grew to 157.

Levying of pollution charges

Pollution charges are just one in a suite of economicinstruments that can be applied to improveenvironmental performance, and have beenidentified by the World Bank as one of the threeapproaches that work to “clean up” corporatebehaviour without sacrificing growth.29 At least threeexamples can be offered to support this distinction.In China, each one per cent increase in waterpollution charges reduced industrial organic waterpollution by about 0.8 per cent and each one percent increase in the air-pollution levy reduced airpollution by about 0.4 per cent. In the Philippines,an environmental user fee for the discharge oforganic water pollution into the Laguna Lakereduced organic water pollution (BOD)discharges from pilot plants by some 88 per cent.This charge system was based on fixed fees withstepped increases linked to increasing volumes ofdischarge, as well as a variable fee determined by theconcentration of pollutants in discharge water. InMalaysia, taxes on pollution from oil palms in thelate 1980s were credited with substantial reductionsin polluted effluent.

The difficulties of setting charges at a level highenough to penalize polluting behaviour without over-charging (i.e. the level at which the marginal cost ofabatement is equal to the marginal benefit) have beennoted. The charges applied by Chinese authoritiesfor wastewater treatment and for SO

2 emissions, for

example, have been noted as being substantiallybelow the abatement cost. In the Republic ofKorea, the 1993 Waste Production Charges Systemwas established to cover the costs of waste treatmentand the disposal of items and waste less amenable torecycling. The system reduced the amount of wasteproduced, but did not generate enough revenue tocover the costs of disposal and treatment. It was alsonoted that the amount of waste produced declinedimmediately after the charge was introduced, butrose again soon afterwards. In addition, as thedeclines in waste production occurred in tandemwith fluctuations in GDP, it was difficult to separatethe effects of changes in economic activity from theimpacts of the charge system and other wasteminimization policies in force at the time. The


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Republic of Korea’s waste production chargessystem was being revised at the time of writing thisreport.

Other types of charges which have beenconsidered include tradeable pollution permits andlife-cycle assessment taxes. Both have beenidentified as having potential positive impacts, butthe capacity of developing countries to implementthem is questioned.

2.2.5 Improving access to environmentalinformation and justice

One of the most powerful tools for reducing theenvironmental impact of industrial activity is accessto information. Access to environmental informationis a tenet of sustainable development, enshrined inPrinciple 10 of the Rio Convention, and indirectlyimproves polluting behaviour in a number of ways.Access to environmental information:

• promotes accountability for pollution;• promotes awareness of environmental issues;• promotes public participation in policy

formulation and decision-making;• supports access to environmental justice;

and• supports investment decisions that take

into account environmental risks, as assessedbased on environmental information.

Increased access to information in supportof the enforcement of constitutionally enshrinedenvironmental protection state obligations is beingsupported by the enactment of freedom of informationacts in the Republic of Korea, Thailand and thePhilippines; legislation is pending in Bangladesh,India, Indonesia, Pakistan and Sri Lanka.30 In arelated development, the Indian Supreme Court’sMonitoring Committee on Hazardous Wastes haspromised to ensure online public access to effluentand emissions data from large industrial units.

The Access Initiative is a global coalition thatworks to stimulate progress at the national level onlegal frameworks for access, dissemination ofinformation, participation and access to justice anddecision-making processes. At the request of civilsociety and governments, the Access Initiative

undertakes assessments of access to environmentalinformation in which governments participate.Assessments have taken place in Indonesia andThailand.

The Aarhus Convention on Access to Information, PublicParticipation in Decision-making and Access to Justicein Environmental Matters

The Aarhus Convention has been hailed by UnitedNations Secretary-General, Kofi Annan, as “themost impressive elaboration of Principle 10 of theRio Declaration.” Entering into force on 30October 2001, it had been ratified by 37 of its 40European and Central Asian signatories by November2005. The convention links environmental withhuman rights. It broadly provides for access toenvironmental information (including publicinformation disclosure), public participation andaccess to justice. The convention has assistedregulatory and monitoring agencies to obtainfinancial and political support for improvingmonitoring and compliance, as well as for makingchanges in national legislation consistent withPrinciple 10.

Ratifying parties must ensure that theyrespond to requests for environmental informationfrom the public. The convention identifies the timeframe and conditions under which a request shouldbe responded to, or refused. It also identifies the basic

Principle 10 of the Rio Declaration on

Environment and Development*

“Environmental issues are best handled with the

participation of all concerned citizens at the

relevant level. At the national level, each individual

shall have appropriate access to information

concerning the environment that is held by public

authorities, including information on hazardous

materials and activities in their communities, and

the opportunity to participate in decision-making

processes. States shall facilitate and encourage

public awareness and participation by making

information widely available. Effective access to

judicial and administrative proceedings, including

redress and remedy, shall be provided.”

*Adopted at the United Nations Conference on Environ-ment and Development, Rio de Janeiro, Brazil, 1992. Seefull text at <http://www.un.org/documents/ga/conf151/aconf15126-1annex1.htm> accessed on 23 April 2006.


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institutional provisions to be put in place andthe types of information to be provided, as wellas the formats in which this information shouldbe provided, and requires regular state-of-the-environment reporting. With respect to publicparticipation, it focuses on the processes andinformation to be provided to facilitate publicconsultation on development activities and requiresparties to the convention to make provisions forpublic participation, without specifying the form ofparticipation. A person who considers that a requestfor information has been ignored or wrongfullyrefused, or that national environmental law has beencontravened, must have access to judicial review (inthe latter case, this must meet the criteria of nationallaw).

The implementation of the AarhusConvention by the Central Asian states has beensupported by ECE and UNEP activity.Implementation challenges faced by many ratifyingcountries, in particular Central Asian andCaucasian countries, have been discussed in variousforums (Box 2.3).

Access to environmental information isimproved by public information disclosure, anactivity that covers a range of structured communi-cations in various media to the public. Theseinclude state-of-the-environment and corporatesustainability reporting, pollutant release andtransfer registers,31 ecolabelling, certification andcorporate rating disclosure programmes, amongothers.

Corporate rating disclosure programmes

Cleaner production initiatives have had extremelypositive impacts on improving polluting behaviour.However, corporate rating disclosure programmes,a relatively new type of intervention, have thepotential to increase the involvement of a wide cross-section of society in determining environmentaloutcomes. Corporate rating disclosure programmeshave had dramatic and short-term impacts indiverse countries and have resulted in significantand measurable reductions in pollution levels.Corporate rating disclosure programmes, alsoreferred to as public disclosure programmes, were

Box 2.3 Aarhus Convention – challenges for economies in transition

Access to environmental information

• Lack of officials with experience in collecting, providing and properly disseminating information• Need for compatible methodologies across government offices• Lack of information exchange between government authorities and of coordinated cooperation among

agencies to ensure the flow of information• Need for attitudinal changes on the part of government officials and NGOs• Lack of public requests for information - the majority of the public does not know about and does not

believe in the possibility of receiving information publicly (wider governance issues are important)• Lack of trust in official information• Difficulty of local-level information dissemination, particularly in rural areas

Public participation

• Lack of clear requirements and procedural norms for public participation

Access to justice

• Conflict between economic and environmental interests• Low levels of legal knowledge, corruption of legal systems, lack of trust in the justice system, financial

barriers, non-enforcement of court decisions and lack of professional environmental lawyers. Theinterpretation of constitutional provisions relating to environmental rights has been found to beextremely subjective

• To be effective, the convention requires strong environmental legislation, particularly in the area ofenvironmental impact assessment

Source: Based on reports to the second meeting of the parties to the convention, held in Almaty, Kazakhstan in March 2005and to the Aarhus Convention Second Regional Workshop for the Central Asia Region, held in Dushanbe, Tajikistan

in June 2002, accessed on 23 March 2006 from <http://www.unece.org/env/pp/news.htm>.


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developed by Vietnamese and Indonesianenvironmental agencies in the 1990s as a low-costresponse to rising pollution loads. Viet Nampublished “Black” and “Green Books” listing worst-performing and best-performing companies, whilestaff of the Indonesian national pollution controlagency (BAPEDAL) are credited with conceiving acorporate rating disclosure model that has beensuccessfully replicated, with slight modifications, inChina, the Philippines, Viet Nam and India, as wellas other countries outside the region. The WorldBank’s New Ideas in Pollution Reduction (NIPR)programme has supported many of these countryinitiatives, which have made dramatic andwell-documented changes to corporate pollutingbehaviour (see box 2.4).

Typically, corporate rating disclosureprogrammes develop colour-coded systems to ratecorporate environmental performance. The resultsof a preliminary assessment are usually shared withcompanies; in some cases, the high-performingcompanies are publicly congratulated. Companiesare then given time (usually around one year) toimprove their ratings; in some cases, they are alsogiven the chance to appeal and discuss their ratings.A second assessment then takes place, followed by aceremony in which the corporate ratings are revealedto the public in the presence of the news media andhigh government officials and other stakeholders.A significant number of companies improve theirenvironmental performance during the grace period,as shown in box 2.4. One study compares thechanges in the organic water pollution (COD)discharges of companies that were assessed under theBAPEDAL Program for Pollution Control, Evaluationand Rating (PROPER) programme and ofcompanies that were not, and concludes that therewas an immediate response to the programme. Theorganic water pollution (BOD and COD) dischargeswere reduced by approximately 32 per cent.32

A comprehensive review of China’s pilotcorporate rating disclosure programme, GreenWatch, identifies the following reasons for theeffectiveness of these programmes: 33

• disclosure provides an incentive forimproved performance because of the value

placed on the corporate public image;• the ratings systems provide a management

tool that can be used by companies forself-assessment;

• the systems provide an incentive forimproving the quality of monitoring andreporting by regulatory authorities;

• they encourage public participation inenvironmental regulation – access to easilyunderstood information allows greaterpressure to be placed on polluting industry;and

• corporate resistance to environmentalmonitoring is transformed into active self-assessment and the solicitation ofinspections as a means of improving ratings.

China’s GreenWatch programme is the mostcomprehensive, large-scale public informationdisclosure programme. The ratings system is basedon polluting emissions, environmental management,records of public complaints, regulatory actions andpenalties and surveys that record other relevant firmcharacteristics. The pilot programmes in Zhenjiang,a relatively well-off city in Jiangsu province, andHohot, the relatively impoverished provincial capitalof Inner Mongolia, were tailored to fit the localconditions, information availability and monitoringcapacity. Their success, despite the differences in therelative power that the public was perceived to wieldin each location, “suggests that public disclosureshould be feasible in most of China.”34 By June 2002,some 2,500 firms were included in the expandedGreenWatch programme.35

A corporate rating disclosure pilot project inUttar Pradesh, India is notable in that it seems tohave been the only programme in which assessmentswere based on self-reported data (which wassubsequently checked).

These programmes are beneficial to both thewider public and to the companies involved. Asurvey in Viet Nam showed that publicly-disclosednegative ratings were seen by companies as anopportunity to request support from the governmentfor pollution reduction. Positive ratings were usedby more than half of the companies in variousinteractions with their clients. In one case, a


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Box 2.4 Public information disclosure

• Rising public complaints and increasing industrial pollution moved the municipal authorities of Ho Chi MinhCity, Viet Nam to launch a survey of 600 enterprises in 1993. A “Black Book” listing the 43 worst polluters waspublished in 1994. 13 firms subsequently installed waste treatment plants, 21 firms prepared EnvironmentalImpact Assessment reports and one firm moved to the outskirts of the city. Eight of the 43 firms did not takeany action. The exercise was repeated in 1997. A follow-up survey indicated that the Black Books inducedinvestment in pollution control in 98 per cent of polluting companies.

• Under the Indonesia public disclosure programme (PROPER) launched in 1995, five plants, of the 187assessed, which were rated as “very good” were publicly congratulated. Other lower-rated firms wereprivately notified of their ratings and given six months to clean up before full disclosure. One year later, thenumbers of compliant plants had expanded from one third to over half. Five of the six plants in the worstcategory graduated to higher categories. COD emissions are estimated to have been reduced by 30 percent by the programme. Relaunched in 2003, the new Indonesia PROPER reduced the number of facilitieswith the worst rating from 40 per cent of the companies assessed to 4 per cent in two years.

• The Philippines EcoWatch programme’s initial assessment in 1997 showed that 48 plants (92 per cent of thetotal number of companies assessed) were ranked in the “non-compliant” and “very poor” categories.One and a half years later, the number of companies rated as “compliant” had risen from 8 per cent to 58per cent.

• In Zhenjiang, Jiangsu Province of China, a pilot ratings scheme, starting in June 1999, was applied to 91firms. One year after public disclosure of the ratings, the numbers of firms rated as “superior performers”had doubled from 31 per cent to 62 per cent. The province then took the decision to promote province-wideimplementation of the programme. In Hohhot, Inner Mongolia, China, the scheme was applied to 107enterprises. Enterprises rated “good” or better increased from 24 per cent to 62 per cent. Enterprises in theworst category decreased from 11 per cent to 5 per cent.

• A 2001 Vietnamese programme assessed 50 food and textile plants in Hanoi. Five were rated as“compliant”, 29 were rated as “non-compliant”, and 16 as “very poor.” After public recognition of thefive compliant companies and the threat of public disclosure of all ratings four months later, the number ofcompliant companies doubled. The number of non-compliant companies was reduced to 23 and thenumber of “very poor” companies was reduced to 15.

• A voluntary pilot ratings and disclosure programme in Uttar Pradesh, India, initiated in May 2001 usedself-reported company data for 34 companies representing a mix of sizes and activities and a ratingsscheme in which companies participated in developing. After a grace period, the numbers of companiesin the worst-performing segments decreased from 17 to 11, while the number of companies which werebasically compliant increased from 12 to 16. The number in the highest-performing categories increasedfrom four to six.

• The Republic of Korea’s Monthly Violation Report was issued between 1992 and 2002 and was based onmonthly government inspections of about 10,000 air and water-polluting facilities. The report waspublished through the Korea Press Foundation’s online news database service. Based on the positiveimpacts of this programme, a large-scale public disclosure programme has been developed.

Sources: World Bank (2000). Greening Industry: New Roles for Communities, Markets and Governments (New York, OxfordUniversity Press); Confederation of Indian Industry (2004). “Media Report on the Pilot Program for Environmental

Performance Rating and Public Disclosure,” World Bank New Ideas in Pollution Control Website, accessed on 23 March2006 from <http://www.worldbank.org/nipr/greeningindustry.htm>; and Jong Ho Hong (2005). “Environmental Regulatory

Reform and Public Disclosure Program: Korean Experiences”, presentation at the ESCAP First Regional Green GrowthPolicy Dialogue: Towards Green growth in Asia and the Pacific - Eco-efficiency through Green Tax and Budget Reform,

Seoul, Republic of Korea, 9 November 2005, accessed on 23 March 2006 from<http://www.unescap.org/esd/environment/mced/tggap/documents/RPD/19_JongHoHong.pdf >.


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positive rating was used to obtain better conditionson a loan agreement.36

In Asia and the Pacific, as in other parts of theworld, governments are perceived to have resentedmoves to strengthen the link between trade, corporategovernance and environmentally unsustainableeconomic growth, and have been accused ofharbouring companies which have done extensiveenvironmental damage.37 In Greening Industry,38 theWorld Bank noted that under corporate ratingdisclosure programmes, multinational companiesseemed the most motivated to make improvements,while locally based export-oriented companiesseemed the least motivated. Corporate ratings andpublic disclosure programmes may be a politicallyacceptable way of addressing the environmentalperformance of multinationals, where this is less thansatisfactory.

Corporate environmental governance and judicialactivism

While governments are often viewed as the mainpurveyors of environmental information, corporationsare increasingly called upon to disclose theenvironmental impacts of their operations.Corporate environmental reporting is one of a suiteof overall corporate governance tools. Goodcorporate governance has been strongly linked to lowenvironmental risk; conversely, environmentally riskybehaviour is associated with flawed corporategovernance.39 Good corporate governance, asadvocated by several international initiatives such asthe UNCTAD Intergovernmental Working Groupof Experts on International Standards of Accountingand Reporting,40 stresses the accountability andtransparency of corporate operations and promotesthe positive link between profitability and goodgovernance.

Corporate environmental responsibility andaccountability thrives where governance processesand institutions relating to environment-relatedconstitutional provisions and national legislation iseffective. The enforcement of environmentaljustice seems to be improving in some countries. The“green courts” of Bangladesh are seeking to ensurethat justice in environmental matters is served, while

India’s Supreme Court and High Courts in Chennai,Kolkata, Gujarat and Mumbai have established“green benches” to adjudicate on environmentalcases. However, in some countries conflict betweenlocal communities and industrial interests aroundenvironmental issues has not been resolved despiteconstitutional and other legislative provisions.

A combination of corporate rating anddisclosure programmes with a sound legislativeframework and appropriate environmentalstandards, support for firms (in particular SMEs andthe very worst performers) to make improvements,as well as support for institutional capacity-buildingfor monitoring, is perhaps the most effectiveapproach to “greening” industry in Asian andPacific developing countries.41

2.3 Increasing demand for raw materials andenergy

There is a strong relationship between environmentalsustainability and the demand for raw materialsand energy supplied by nature. The extraction ofraw materials and their processing as inputs formanufacturing, buildings and infrastructure, as wellas to support services provision is one of the mainsources of environmental pressure.

However the extraction and processing of rawmaterials remain necessary to support human activity.Iron and steel demand reflects government investmentin steel-intensive infrastructure such as natural gasprojects. It also is an indicator of the production ofconsumer durables such as cars and householdappliances, as well as for paper, plastics and paint.Copper is used extensively in specialized equipmentproduction and electricity infrastructure development,including for electricity generation, electrifiedrailways and telephone networks.

The markets for certain commodities alsostrongly influence the markets for others. Highdemand for stainless steel precipitates price increasesin nickel, since this mineral is a key input to stainlesssteel production. Rising energy prices boost thedemand for products such as wood and naturalrubber that can substitute for petroleum-basedproducts such as plastics and synthetic rubber.


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2.3.1 Environmental, social and economicimpacts

Ensuring that the supply of renewable resources suchas wood, other forms of biomass and water cancontinue indefinitely into the future to support fast-growing economies as well as meet the future needsof other countries, requires that these resources beused at a slower rate than the rate at which they areregenerated in nature. Shrinking forests, increasingland degradation and declining fisheries (see section2.4) are evidence that the current rate of use ofrenewable resources is already higher than the rateat which they are being replenished by naturalprocesses, diminishing the flow of life-supportingecosystem goods and services.

However, diminishing natural capital is notthe only way in which environmental pressureslinked to resource use is manifested. Rising demandfor raw materials is inextricably linked to growth indemand for water and energy, as the processing ofraw materials (including fuels) requires both waterand energy. In addition, raw materials that arenot directly transformed into goods, services orinfrastructure, or consumed or recycled, are disposedof, or emitted, as pollution and waste.

Environmental sustainability requires that thevolumes and types of waste produced be kept withinthe environment’s absorptive capacity. However, aWorld Resources Institute study has concluded thathalf to three quarters of the annual raw materialinputs in five study countries are returned to theenvironment as waste material within one year.42

Solid waste is becoming a problem even in the mostremote Pacific islands. Acid rain in East Asia persists,despite the slowed emission of SO2. Wastes frommineral extraction are accumulating in Central Asiaand climate change processes are becoming moreevident as the amount of CO

2 emissions

(characterized as “humankind’s most weighty wasteproduct”)43 rise faster than can be absorbed bygrowing biomass or other natural processes.

China and Japan are the two main marketsfor processed minerals in the region. Japan is thelargest consumer of minerals overall, while Chinahas shown the greatest growth rate in mineralconsumption. India, the Republic of Korea,

Indonesia, Malaysia, Singapore, Thailand and VietNam are other significant importers of ferrous andnon-ferrous metals and industrial minerals, cement inparticular. China has become the largest aluminumand copper-consuming country in the world.

The growth in demand for raw materials issupported by the rapid increases in mineralproduction, particularly from Asia. Global iron oreproduction, constituting the majority of worldmineral flows, increased by some 30 per centbetween 1995 and 2004. In the same period, Asia’siron ore production increased by some 40 per cent.44

Australia, China and India are among the top fiveglobal producers of minerals such as bauxite,copper, gold, lead and zinc; there has also beensignificant mining activity in Indonesia, thePhilippines and Papua New Guinea.45 The countrieswhere mineral production is growing fastest includeThailand, which increased its iron ore productionalmost twentyfold. In Viet Nam and Malaysia ironore production tripled, and in Australia, productionincreased by 70 per cent between 1995 and 2002.46

Since 1995, at least 120 major mines have openedin China alone. Silver, copper, platinum, aluminium,nickel and gold constituted the fastest-growingregional mineral production streams between 1990and 2001.47 The growth in mineral production isreflected in export growth (Figure 2.9).

Changes in the exports and production offorest products are shown in figures 2.10 to 2.12.The value of global imports of forest productsincreased by almost one third in the ten years from1991 to 2001. Imports grew at twice the global ratein South-East Asia, and at more than three timesthe global rate in Central Asia and the Caucasus inthis time period. Together, China, Japan and theRepublic of Korea account for some 80 per cent ofall regional imports. China imported nearly 26million m3 of industrial roundwood in 2002, almostequalling the imports of roundwood in all othercountries of the region put together.48 China’sbooming furniture and construction industries arethe main users of timber.

Patterns of international trade in minerals andbiomass (food and timber) are changing as thedemand for raw materials grows (Figure 2.13). Asian


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-150% 0% 150% 300% 450%

Japan

DPR Korea

Bangladesh

WORLD

India

Malaysia

New Zealand

Sri Lanka

Philippines

Thailand

Australia

Rep. of Korea

China

Viet Nam

Indonesia

India

-150% 0% 150% 300% 450%

China

Philippines

Thailand

Indonesia

Republic of Korea

Sri Lanka

Malaysia

Japan

Turkey

Australia

Singapore

Papua New Guinea

New Zealand

WORLD

Figure 2.9 Change in ores and metals export, 1990-2002

Source: World Bank 2004. World Development Indicators

2004 (Washington DC, World Bank).

Figure 2.11 Change in roundwood production, 1992-2000

Myanmar

Vanuatu

Australia

New Zealand

Solomon Islands

DPR Korea

Fiji

Thailand

Pakistan

Bhutan

Rep. of Korea

Nepal

India

Samoa

Lao PDR

Bangladesh

China

Viet Nam


Papua New Guinea

Philippines

Cambodia

Mongolia

Indonesia

Sri Lanka

Japan

Malaysia

Tonga

-80% -40% 0% 40% 80% 120%

Source: FAO (2004). Selected Indicators of Food and

Agriculture Development in Asia-Pacific Region: 1993-2003

(Bangkok, FAO Regional Office for Asia and the Pacific).

Figure 2.12 Change in woodpulp production, 1992-2002




Figure 2.10 Change in forestry products exports value,1991-2001

-1750% 0% 1750% 3500% 5250% 7000%

Kazakhstan

Samoa

Nepal

Vanuatu

Thailand

Tajikistan

Rep. of Korea

India

Tonga

China

Mongolia

Lao PDR

Australia

New Zealand

DPR Korea

Solomon Islands

Indonesia

Papua New Guinea

Philippines

Malaysia

Cambodia

Japan

Uzbekistan

Myanmar

Viet Nam

Fiji

Bhutan

Bangladesh

Pakistan






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10000 ~ 20000 20000 ~ 40000 40000 ~ 80000 80000 ~ 120000120000 ~ 160000 160000 ~

Fossil FuelBiomassBase MetalUNIT : Thousand metric tons

Figure 2.13 Global trade flows – main resources, 1983 and 1998

Source: Moriguchi, Yuichi, ed. (2003). Material Flow Data Book – World Resource Flows around Japan – Second edition(Ibaraki,Center for Global Environmental Research, National Institute for Environmental Studies,

(Independent Administrative Institution)) accessed on 18 January 2006 from<http://www-cger.nies.go.jp/publication/D033/cd/html/flow_eng.htm>.

10000 ~ 20000 20000 ~ 40000 40000 ~ 80000 80000 ~ 120000120000 ~ 160000 160000 ~

Fossil FuelBiomassBase Metal

1983

1998


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countries (other than Japan) increasingly importminerals, and export biomass; some traditionalmineral exporters such as Australia importgrowing amounts of minerals. Western Asia(including Central Asian and Caucasus countries)accounts for growing proportions of global fossilfuel exports.49

Private sector investment firms haverecently targeted minerals and other commoditieswith good investment prospects in light of theexpected growth in global demand, and greaterproportions of FDI are expected to target thissector.50 Countries which produce minerals andother raw materials are therefore benefittingfrom rising commodity prices, but these economicgains can be compromised by heightenedenvironmental and social risk.

Environmental management practices and theaccountability of mining operations for disturbedsurfaces, increased soil erosion and leaching of toxicmetals and acid, and the production of largevolumes of waste material, leave much to be desiredin developing countries. The long-term containmentof mining wastes in tailing dams has proven riskyand the long-term rehabilitation of mining sitesis rarely undertaken; submarine tailing disposalis also subject to pipe failure and its safety has notbeen proven.

Rural communities and coastal communitieswhere tailings are dumped directly into watercourseshave paid a high price. The failure of the Ok Tedimine’s tailing dam and the consequent loss offreshwater fisheries in Papua New Guinea is oneexample of the disastrous impact of industrialmining practices on local communities. In anothercase, the Indonesian government obtained anout-of-court settlement over alleged mining wastepollution in North Sulawesi which was linked to skindiseases and neurological diseases. Mining activityhas also been linked to high levels of cadmium inagricultural crops such as rice. As the experience ofCentral Asia shows (see chapter 6), the impacts ofmining activity continue to manifest themselves farinto the future.

The demand for another importantcommodity, wood, is changing global and regionallandscapes. Plantation forests constitute almost10 per cent of the total regional forest area, twicethe global figure and equivalent to some five timesthe area of New Zealand. Plantation forests inthe ESCAP region make up more than 72 per centof the global planted forests; plantations infive Asian and Pacific countries (China, India,Japan, Indonesia and Thailand) rank amongthe world’s largest. While plantation forestsgrow vigourously, natural forests are in decline(Figure 2.14). The losses of natural forest indicatedin countries like Cambodia, Papua New Guinea, theRussian Federation and Viet Nam were relativelymodest in the period 1990 to 2000, but the FAO’smost recent Global Forest Resources Assessmentindicates that substantial losses occurred in thosecountries between 2000 and 2005.

-40 -20 0 20 40 60 80 100 120

Vanuatu

Viet Nam

India

Thailand

Papua New Guinea

Myanmar

Nepal

Philippines

Bhutan

Bangladesh

Pakistan

Cambodia


Indonesia

China

Solomon Islands

Malaysia

Sri Lanka

PlantationPercentage Natural

Figure 2.14 Change in natural and plantation forest,1990-2000

Source: Based on data from FAO (2004). State of the World’s

Forests 2005 (Rome, FAO) and FAO (2001). Global Forest

Resources Assessment 2000 (Rome, FAO).


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Natural forest losses in Sri Lanka and Indonesiacontinue to occur at high rates.51 As fossil fuel pricescontinue to rise, there has been increasing pressureon natural forests as people turn away from increas-ingly pricey fossil fuels, to wood.

The social impacts of natural resource extractionare also manifested in several countries. For example,the economic benefits of mining have been foundto have been offset by “poor governance, corruption,[and inadequate attention to] conflict resolution,disclosure policy, revenue management and humanrights and the environment ...”52 Similar issues arisearound both illegal mining and the illegal productionof and trade in forest products. The potential forillegal activity related to resource extraction is highbecause resources are extracted mainly in rural areasand extraction directly impacts on people with lowincomes, and by extension low levels of influence,access to information and to justice.

The FAO State of the Forests 2005 report makesthe link between deforestation, the illegal trade intimber and social conflict. The losses of naturalforest in countries such as Myanmar, Sri Lanka andNepal seem to support this conclusion. The illegaltimber trade is highly lucrative for those who engagein it, but reportedly accumulates environmental,social and direct economic costs of some US$15billion annually to the wider economy.53 Illegaltimber extraction also acts as a disincentive toinvestment in improving the sustainability of forestresource management and keeps commodity pricesartificially low.

While official Russian Federation estimatesput illegal felling at no more than 5 per cent ofoverall production, estimates as high as 20 per centhave been made.54 Estimates of illegal production ofboth hardwood and softwood in China are as highas 30 per cent. Illegal timber felling is estimated atup to 60 per cent of production in Indonesia, and 5per cent of production in Malaysia.55 Illegal timberfellings supply local markets but also find their wayacross country borders. Due to the difficulty ofverifying the origin of timber, several countries aresignificant importers of timber of illegal andsuspicious origin. As wood is processed (into

plywood or pulp, for example), the difficulty ofverifying the origin of the constituent timberincreases. Up to 35 per cent of imports of timberinto China are estimated as being of illegal originand, in Japan, 20 per cent of hardwood logs, 30per cent of hardwood timber and 40 per cent ofplywood are thought to have illegal origins. Similarly,as much as 70 per cent of Malaysian log importsmay be of illegal origin.56

The increasing demand for raw materials alsohas a very real impact on poverty reduction efforts.Sixty per cent of people in the region, or some 1.6billion people, live in rural areas and are directly orindirectly dependent on forest ecosystem services.These services range from hydrological systemregulation, which is critical to agricultural activity,to the provision of fuel and other non-wood forestproducts. Many people live in mixed cash-subsistenceeconomic systems, with the total proportion of suchpersons highest in some of the Pacific island countries.

While noting that between 1992 and 2002,the import values of 55 non-wood forest products(NWFPs), such as honey, essential oils and plantsused for pharmaceutical products,57 increased by 50per cent from US$5.5 billion to US$8.3 billion, theFAO makes the point that “local uses of NWFPsand their trade within countries have more impacton poverty alleviation and sustainable forestmanagement than international trade.” The 2005FAO Global Forest Resources Assessment shows thatthe value of wood removals is decreasing, while thevalue of non-wood forest products is bothincreasing and underestimated.58 The loss of naturalforest due to inadequate protection thereforeentrenches poverty in rural areas. At the other endof the scale, forest management regimes whichcompletely exclude communities from access tovaluable forest resources threaten livelihoods and cancreate conditions for illegal activity.

2.3.2 Rising raw material prices and resource-use efficiency

Meeting the demand for raw materials and othercommodities therefore has significant environmental,and social implications. However, none of these


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issues have focused attention on the demand for rawmaterials like the skyrocketing commodity prices (seetable 2.7 and figure 2.15) that have sparked fears ofglobal economic slowdown.

Not only have rising energy and mineralsprices increased the costs of production, but theyhave also influenced the prices of other resources.The current increases in energy prices are strongdeterminants of the prices of other commoditieswhich are important inputs to economic activity,because of the direct and indirect energy use in theirextraction, refining and production processes. Thesecommodities include minerals, nitrogenous fertilizersand agricultural commodities that can substitute forpetroleum-based products such as wood and naturalrubber, as well as ethanol and other inputs for makingbiofuels such as molasses.

Continuing highs in oil prices and an increaseddemand for commodities as a result of rapideconomic growth may influence long-term trendsin commodity prices and prove not only to be anincreasingly heavy environmental burden, but aneconomic one as well.59 Resource-use efficiency is

therefore becoming a matter of economic success.

Resource-use efficiency (an importantelement of eco-efficiency, discussed in chapter 3)reduces the consumption of raw materials andtherefore, the environmental pressures associatedwith extraction, processing and waste. Recentincreases in energy and raw material prices, as wellas the rising costs of waste disposal, highlightresource-use efficiency as a key indicator of boththe environmental and economic sustainability ofgrowth patterns. Both Japan and China have showna strong interest in improving resource-useefficiency; Japan’s motivation lies mainly in itsmounting waste problem, while China’s recent policyrealignment to focus on building a resource-efficienteconomy is based on the sheer scale of its demandfor resources and evidence that it is relatively resourcepoor (see chapter 3).

Measures to support an increasing efficiencyof resource use include waste minimization,increased recycling and dematerialization (shownin table 2.8). There is considerable overlap betweenthese measures.

Table 2.7 Commodity prices

Coal, Australia

Natural gas, Europe

Logs, Malaysia

Plywood

Sawnwood, Cameroon

Sawnwood, Malaysia

Woodpulp

Di-ammonium phosphate fertilizer

Phosphate rock

Aluminium

Copper

Iron ore

Nickel

Steel products (8) (price) index

Tin

Zinc

Annual average prices

2003 2004 2005UnitCommodity

$/metric ton

$/mmbtu

$/m3

c/sheet

$/m3

$/m3

$/metric ton

$/metric ton

$/metric ton

$/metric ton

$/metric ton

cents/dry metric ton units

$/metric ton

1990=100

cents/kg

cents/kg

27.84

3.91

187.20

431.90

551.60

551.00

525.70

179.40

38.00

1 431.00

1 779.00

31.950

9 629.00

78.80

489.50

82.80

54.70

4.28

197.30

464.80

587.00

581.30

640.80

221.20

41.00

1 716.00

2 866.00

37.90

13 823.00

121.50

851.30

104.80

50.38

6.22

202.40

508.50

562.00

656.40

637.70

245.70

42.00

1 867.00

3 597.00

65.00

14 863.00

137.80

744.00

134.10

Source: World Bank (2005). “Commodity Price Data Pink Sheet 03-04-05,” accessed on 22 December 2005 from<http://siteresources.worldbank.org/INTPROSPECTS/Resources/Pnk_1205.xls>.


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Figure 2.15 Base metals and petroleum – price changes and consumption

Source: World Bank Commodities Market Briefs web page, accessed on 14 March 2005 from<http://web.worldbank.org/external/default/

main?theSitePK=612501&contentMDK=20659291&menuPK=1691529&pagePK=64218950&piPK=64218883>.

0 1000 2000 3000 4000 5000 6000 7000

China

America

Japan

India

Russian Federation

Republic of Korea

United States of

'000 metric tons 2004 2001

Aluminium consumption

0 500 1000 1500 2000 2500 3000 3500

China

Japan

Republic of Korea

Russian Federation

'000 metric tons 2004 2001


AmericaUnited States of

Copper consumption

0 50 100 150 200 250

Japan

China

Republic of Korea


Russian Federation

India

Singapore

Thailand

'000 metric tons 2004 2001

AmericaUnited States of

Nickel consumption

0 5000 10000 15000 20000 25000

United States ofAmerica

China

Japan

Russian Federation

India

Republic of Korea


Indonesia

Thailand

Petroleum consumption

'000 metric tons 2004 2001

-00

2000

1800

1600

1400

1200

Monthly prices ($/metric ton)

Jan-01 Jan-02 Jan-03 Jan-04 Jan-05Jan-00

Aluminium

4000

3500

3000

2500

2000

1500

1000

Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05

Monthly prices ($/metric ton)C___pper___________________________

19000

16000

13000

10000

7000

4000


Monthly prices ($/metric ton)Nickel

65


Monthly prices ($/metric ton)

55

45

35

25

15

Petroleum

C___pper___________________________Copper


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Policies, legislation and programmes tosupport recycling remain the first-line response ofmost countries to the need to improve resource-efficiency and reduce pollution and waste, butseveral countries are moving towards programmesthat also promote voluntary action to minimize waste.

The recycling of certain types of material, suchas paper, steel, aluminium cans and corrugatedcardboard, is well underway. In advanced recyclingsocieties, community kerbside recycling initiativeshave given way to legislation providing for the

application of economic instruments in the contextof mandatory take-back programmes, deposit-refundprogrammes and waste disposal charges, withvarying success and levels of complexity relating tothe administration and funding of recycling systems.In Japan in 2000, some 1.6 million metric tons ofrecyclables were collected, with more than 95 percent of this amount re-manufactured; in TaiwanProvince of China, an 80 per cent recycling rate ofpolyethylene terephthalate (PET) bottles wasachieved, but recycling funds soon went into deficit

Table 2.8 Action to promote waste minimization, recycling and dematerialization

Waste minimization

Waste minimizationand recycling

Recycling

Waste minimizationand dematerialization

Waste treatment/disposal charges• Non-refundable fees on non-recyclable or difficult to recycle products – Republic of Korea

• ‘Pay-per-bag’ household waste disposal charges – Philippines, Republic of Korea

Voluntary ecolabelling• China, India, Japan, Republic of Korea, the Philippines, Singapore, Taiwan Province of

China, Thailand.

Voluntary agreements and programmes• Packaging Accord & Zero Waste campaign – New Zealand

Eco-industrial development• Eco-town projects – Japan

Cleaner production policy• Indonesia

Waste recovery/conversion• Municipal solid waste conversion to agricultural grade compost – Sri Lanka

• Municipal waste biogas capture – Bangladesh

Mandatory product take-back• Specific household appliances; consumers pay processing fees – Japan

• Non-PET containers, used tires, cars, motorcycles, lubricant oils, household appliancesand office electronics (expansion to audio devices and cellphones planned); producerspay processing fees into a fund based on sales data – Taiwan Province of China

Deposit-refund systems• Producers and importers pay deposits into a special account, and are required to collect

and treat wastes; refunds to producers and importers are paid based on recovery rates– Republic of Korea

• Producers and importers pay into a fund; consumers are refunded based on returns– Taiwan Province of China

Compulsory ecolabeling/certification• All containers covered by recycling legislation to carry an official recycling symbol

– Taiwan Province of China

Special recycling programmes:• Batteries, cars – Taiwan Province of China

• Batteries – Hong Kong, China

Disposable goods restrictions• Food service sector items – Republic of Korea

• Plastic bags less than 20 microns thick – India

• Foamed polystyrene (styrofoam) – China

• Plastic bags and bottles, plastic bags – Nepal

• Disposable packaging – Philippines

Packaging design requirements• Restrictions on layers and empty space for consumer goods packaging – Republic of Korea

• Food, alcohol and CDs – Taiwan Province of China


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because of non-payment and underpayment byfirms. In the Republic of Korea, financialincentives that were insufficient to cover recyclingcosts dampened recycling rates. In Asian andPacific developing countries, informal recyclingactivities are an income-earning activity for some ofthe poorest segments of society, but expose alreadyvulnerable populations to potentially hazardoussubstances. There has been some success withformalizing informal programmes in Bangladesh.

The rising demand for, and prices of, rawmaterials have supported the development of aninternational trade in recyclable materials (mineralsand paper in particular), reducing the need for“virgin” raw material (material extracted directlyfrom nature). Exports and imports of recyclablematerial are shown in tables 2.9 and 2.10. Chinaimports growing volumes of all types of recyclablematerial. Growth in other countries is much less ordeclining, partly as a result of the huge pull exertedby Chinese demand, but also in response totightening restrictions on trade in waste and higherlocal recycling rates.

The barriers to reducing both the demand forraw materials and raw material intensity (thecontent of raw material embodied in processedmaterials and manufactured goods) include “redtape” that hampers international trade in recycledmaterial and a low capacity to process and regulatethe trade in potentially hazardous waste. They alsoinclude governance weaknesses that facilitate illegalresource extraction and reduce incentives forenvironmentally and socially sustainable resourceextraction activity, as well as the challenge of achievingeconomies of scale in recycling. Technologicaldevelopment has also focused too long on how toextract more resources, rather than on the efficientuse of these resources in production and consumptionprocesses. The authors of Natural Capitalismadvocate for improving resource-use efficiencythrough holistic design approaches and documentcost-saving reductions in resource use by firms.60

Perhaps a more important barrier is thateconomic planning does not yet take into accountthe impacts of economic development plans onfuture consumption patterns, resource intensities and

waste production. A World Resources Institutestudy on material outflows61 noted thatAustria and Germany’s economic growth patternsresulted in the creation of about the same amountof durable goods and physical infrastructure as theamount of waste produced per person (see chapter4). This situation was compared with that of theUnited States of America, where the amount ofwaste generated per person was three times higherthan the amount of durable goods and physicalinfrastructure created. Austria and Germany’sproduction and consumption patterns could bedescribed as contributing to investments in long-termwealth, while in the United States of America a muchhigher proportion of consumption and production canbe described as being channelled into producing waste.

For developing countries with significantpoverty reduction needs and limited resource bases,the question of whether financial flows are endingup in producing waste or being used to create lastingwealth is clearly one that needs to be answered bypolicymakers.

2.3.3 Energy demand and sustainablesolutions

The consumption of energy in Asia and the Pacificincreased by more than 40 per cent between 1990and 2002, which was twice the global increase inconsumption in the same period. Much of thisincrease fed China’s economic growth spurt over thatperiod. However, there is still a substantial projectedunmet energy demand. In 2002, the average percapita energy consumption in the ESCAP region wasonly about 60 per cent of the global figure. Anestimated 270 million people in East Asia and thePacific and 500 million people in South Asia lackaccess to electricity services.62 In 2002, 11 per centof rural households were connected to an electricitysupply in Bangladesh, with 17 to 18 per centconnected in Cambodia;63 There is a great disparityin energy supply across the region: developedcountries have access to amounts of energy that areapproximately four times the overall regional percapita figure.

The expansion of energy supply andinfrastructure is a critical requirement of future


49

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50

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economic competitiveness, economic growth andpoverty reduction. The UNDP World EnergyAssessment Overview (2004 Update)64 shows that aHuman Development Index (HDI) value of 0.8(about the HDI value of Malaysia) or higher requiresa minimum energy use of about 1 tonne of oilequivalent (toe) per year per capita (or 42 gigajoulesper capita). Despite the current concernregarding the energy use of rapidly growingdeveloping economies such as China and India,energy use has not yet passed this threshold ineither country (Figure 2.16). As a result of politicaland economic instability following independencefrom the former Union of Soviet SocialistRepublics, economies in transition have all recordeda decline in energy use per capita, a situation that isimpacting on both quality of life and prospects forfuture development.

Energy intensity, or energy used economy-wide per unit of GDP, is a key indicator of patternsof energy use. This indicator, in general, is not agood indicator of efficiency of energy use, unlesseconomies with very similar sectoral and subsectoralcompositions are compared or the energyintensities of individual subsectors are calculated. Ittends to reflect economic dependence on energy-intensive activity, such as heavy industry. While acountry like Japan, with a high contribution to GDPfrom the services sector, has one of the highest percapita energy use levels in the region, it manages toobtain an average of almost US$6 of GDP fromevery kg of oil equivalent of energy, while somecountries only obtain US$1 of GDP from the sameamount of energy. Energy intensities are high inmany countries in the region (see chapter 5 andfigure 5.4) and increased in Indonesia, the IslamicRepublic of Iran, Malaysia, the Philippines, theRepublic of Korea and Thailand between 1990 and2002. Energy demand in countries with highenergy intensities, such as Central Asian countries(with the exception of Kyrgyzstan) and the RussianFederation can be expected to increase much morerapidly than in other countries as their economiesgrow.

Energy consumption by sector

Despite increases in electricity use per capita in therange of 120 (Myanmar) to 472 per cent (Viet Nam)between 1980 and 1990, access to electricity by thegeneral population is still very limited in these andother countries.65 Electricity makes up only 9 percent of final energy consumption in the residentialsector of the ESCAP region. Combustiblerenewables (biomass) and waste are the source of 59per cent of the energy consumed by the residentialsector in the developing countries of the region,compared to 4 per cent in the developed countries.Indoor air pollution from burning biomass fuels isresponsible for the deaths of an estimated 1.6million persons globally per year; 59 per cent arewomen or girls, 56 per cent are children under five,and some 26 per cent (420,000 people per year) diein India alone.66 The lack of access to clean fuelsand energy technology means that those who do not

0 1 2 3 4 5 6 7

Brunei Darussalam

Singapore

Australia

New Zealand

Rep. of Korea

Japan

Malaysia


Cambodia

Thailand

Turkey

China

DPR Korea

Indonesia

Philippines

Viet Nam

India

Pakistan

Sri Lanka

Nepal

Myanmar

Bangladesh

tonnes of oil equivalent per capita

1990

2002

Figure 2.16 Per capita energy use

Source: World Bank, World Development Indicatorsdatabase accessed on 1 July 2005 from

<http://devdata.worldbank.org/data-query/>.


51

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die from indoor air pollution still pay a high pricein terms of lost opportunities for education andincome generation; the time and money spent toacquire fuel used in relatively inefficient cookingtechnologies; and limited opportunities for overallimprovements in quality of life. Given the traditionaldifferentiation of the role of men and women in thehome in most regional societies, the cost to womenis generally higher than to men.

Total energy use in the industrial sector in Asiaand the Pacific increased by some 18 per centbetween 1996 and 2003.67 Fossil fuels (coal, gas, oiland petroleum products) make up the majority ofindustrial energy sources (Table 2.11). Section 2.2showed that industrial production in some of themost energy-intensive sectors (including theproduction of iron and steel) is growing faster indeveloping countries than developed countries.Section 2.2 also discussed the fact that, as energyprices increase, energy-intensive production maybecome more concentrated in countries with lower

energy costs (often responding to high energysubsidies or low fuel taxes), accelerating growth inenergy demand in these countries.

As incomes increase, developing countries arealso facing growth in energy demand from thetransport sector. Energy use in this sector increasedby some 14 per cent between 1996 and 2003.68 Thetransport sector is heavily dependent on fossil fuels;it is no surprise that, after electricity generation, thetransport sector is the second fastest-growing sourceof CO

2 emissions and accounts for a growing

proportion of fossil-fuel use. Section 2.5 illustrateshow changes in consumer preferences and lifestyleshave changed energy demand in the transportationsector.

Meeting the demand for electricity – energyefficiency as a first-line response

Electricity is used by all economic sectors and itsgeneration is the fastest-growing source of CO

2

emissions globally and regionally. Electricity

Source: Based on data as published in International Energy Agency (2003). Energy Balances of Non-OECD Countries

and Energy Balances of OECD Countries (Paris, OECD/IEA).

Note:a Not including the Russian Federationb Geothermal energy accounted for 2 per cent of energy consumption in the residential sector in Pacific countries.

Table 2.11 Industrial energy consumption – share by type of energy, 2001

Total finalconsumption(million tonnesoil equivalent) HeatCoal Crude oil

Petroleumproducts Gas

Combustiblerenewablesand waste Electricity

ESCAP region 938 951

78 434

154 517

496 911

74 046

165 350

171 031

31 613

28

30

16

39

17

21

10

14

1

1

1

1

3

-

-

-

26

23

41

30

37

27

11

14

14

15

12

5

16

21

31

34

4

4

4

-

10

16

-

11

19

18

26

21

17

14

18

27

8

9

-

4

-

1

30

-

ESCAP developingcountries

ESCAP developedcountries

North-East Asiaa

South-East Asia

South and South-West Asia

Central Asia andthe Caucasus,Russian Federation

Pacificb


52

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production in Asia and the Pacific grew by 5.6 percent per annum between 1990 and 2002, withgrowth slowing slightly during the second half ofthe 1990s.69 In May 2005, it was reported thatChina’s annual increase in installed capacity reached50 million kW in 2004, accounting for some 50 percent of world capacity growth that year.70 Despitethis growth, continuing shortages inelectrical energy are reported in China, withsevere outages in 2004 reminiscent of the 1980s. Insome cases, shortages are compensated for byoff-grid diesel power generators, but they are alsoincreasingly supplemented by biogas, solarphotovoltaic (PV) and wind power.

The choice of fuels for electricity generationdepends on the application, availability and cost ofinfrastructure and the cost of the fuel, as well as onthe structure of the electricity production sector.Where electrical power generation is highlycentralized, fossil fuels continue to be the fuel ofchoice. After the energy crisis in the 1970s and therise in the price of oil price, many countriesdiversified their power sector to other fuel sources.

The growth in demand for electricity isfuelling cross-border trade in energy based onmega-projects within South-East Asia.Hydroelectricity-rich Kyrgyzstan and Tajikistan areearmarked as possible sources of cheap electricity tomeet demand in the neighbouring countries ofAfghanistan, China, India, Pakistan and the RussianFederation. Meeting the demand for energy via largeelectricity generation projects, natural gas and oiltransportation via pipeline, large hydroelectricitydams, lignite and coal power plants or wind farmshas been a source of social conflict in China, Indiaand Thailand.

There are a number of options for increasingboth the sustainability of energy supply and accessto energy in order to satisfy the demands of growingeconomies and the aspirations of their populations.Demand-side management describes a range ofmeasures to reduce energy demand, includingenergy pricing and taxation measures. Energyefficiency is in general the most immediately cost-effective, first-line response to slowing the growthin demand.

A review of key data, opportunities, policyissues and case studies in end-use energy efficiencyis provided by ESCAP.71 Based on various studies ofestimated energy savings and audits, and taking anaverage potential saving of 20 per cent from averageconsumption between 1990 and 2000, energy costsavings from energy efficiency measures alone,estimated in 2004, could range from US$5 million(Brunei Darussalam) to US$18 billion (China) peryear.72 Energy efficiency can be improved at eachstage of energy flow through an economy, andenergy efficiency measures are generally describedas being implemented at the stages of generation,distribution and end-use. Energy efficiency ingeneration and distribution is generally low, andpower theft can also contribute significantly toenergy losses. Distribution losses were as high as 30per cent in Bangladesh in 1992.

Key sectors targeted by end-use energyefficiency initiatives include the industry, transport,construction and buildings and residential sectors.Cleaner production initiatives, described in Section2.2, show the impressive savings that can result froma minimum investment in energy efficiency inindustry. Unstable policy environments or the lackof a clear long-term policy, energy subsidies and alack of access to financing all serve as disincentivesto investment by firms in cleaner energy sources orenergy efficiency measures. Small and medium-sizedenterprises (SMEs), which have lower access tofinancing, are less able to make substantial changes.End-use energy efficiency initiatives can also takethe form of energy-efficient infrastructure development.

In the context of rapid urbanization andgrowing urban populations, ensuring that energyefficiency and conservation are explicitobjectives in urban development and planning iscritical to reducing energy demand on anongoing basis, since urban infrastructure – asrepresented by buildings – fixes the energyconsumption patterns of large numbers of energyusers in all sectors. Energy efficiency in thebuilding sector has significant potential forreducing energy needs (for heating, cooling andlighting, for example) – reductions in energy use ofmore than 50 per cent, resulting from relatively cost-


53

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effective design provisions, have been reported.However, in terms of energy efficiency options, andas a result of the focus on western-style construction,building energy efficiency is perhaps the leastexploited.

A lack of coherence in the building industry,in which architects work separately from climatecontrol specialists, for example, as well as limitedincentives for building contractors to ensure lowerbuilding operation costs, are also importantcontributing factors. Construction tenderingprocesses usually focus on building costs ondelivery, without taking into account buildingoperation costs such as energy usage. Action in Asianand Pacific countries is also restricted by a scarcityof energy-saving materials for construction and by alack of awareness.73 However, the success of theShinawatra University and other entrants to theASEAN Energy Award for Energy Efficient Buildingscompetition74 that have been successful inreducing energy use through building design showthat improvements in the energy efficiency of theconstruction sector are feasible, even in regionaldeveloping countries.

Transportation infrastructure development, asdiscussed in section 2.4, will be a critical determinantof future energy consumption patterns. Encouragingthe use of energy saving mass transit requires bothinfrastructure development and policies that reducecar use and maximize urban mobility based onpublic transport. A greater focus on eco-efficient andpeople-centred mass transit and urban planningwhich builds cities for people and not for cars, alongthe lines of the famed Curitiba, Brazil, modelmaximizes long-term economic, social andenvironmental benefits. Singapore is noted for itshighly efficient mass transit infrastructure and itspolicies to limit car use to within the capacity of thenation’s roads.

New and renewable energy, distributed energygeneration and the Clean DevelopmentMechanism (CDM)

New and renewable energy (solar, geothermal, windpower, biomass and hydropower) makes up asignificant proportion of the energy used for

electricity generation in some countries of theregion, largely due to the contributions from largeand medium hydropower plants and combustiblewaste. More environmentally-friendly renewables,such as solar, geothermal and wind-power, make up,in all countries, limited proportions of totalelectricity production (see table 2.12), but efforts toexpand capacity are accelerating.

Wind energy capacity in Asian countries(mainly China, India and Japan) comprises just over10 per cent of global wind energy capacity. Indianwind energy capacity ranks among that of the topfive countries globally, and is estimated to be growingat a rate of over 30 per cent per year. Armenia haslaunched its first wind power plant, financed by theGovernment of the Islamic Republic of Iran.75 ThePhilippines launched South-East Asia’s first windfarm in Bangui in July 2005 and the Republic ofKorea has made plans to construct what will be theworld’s largest tidal energy plant, due for completionby 2009. The 260 MW Sihwa Lake Tidal PowerPlant is designed to improve the quality ofwater in the lake and will benefit from financingthrough the Clean Development Mechanism.76,77

Despite these efforts, the unmet demand forelectricity is high. It has been estimated that only 12per cent of the people currently without grid accesswill be connected by 2015.78 Distributed energy(DE) generation – energy/electricity generatedseparate from any energy/electricity grid system –not only meets energy needs quickly, but also hassignificant economic, environmental and socialbenefits (Box 2.5). After remaining fairly stable forseveral years, the share of DE generation in the worldmarket, including industrial cogeneration andcommunity-based solar PV, biogas, mini-hydropower and waste-incineration projects, increasedmarginally from 7 per cent to 7.2 per cent in 2002.Emerging developing country markets are seen ashaving greater potential than those in industrializedcountries. The World Alliance for DecentralizedEnergy finds that solar PV DE generation growthrates have remained high, in contrast withcogeneration activity, which is susceptible to risinggas prices and persistent regulatory barriers.79


54

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-

-

-

-

8

-

0

-

-

-

0

-

-

137

-

-

-

-

-

-

Source of data for the Republic of Korea is the Ministry of Commerce, Industry and Energy (2004).Yearbook of Energy Statistics (Seoul, Korea Energy Economics Institute).

Source of data for India is the Ministry of Power (2002 and 2003). Annual Report 2001-2002 and 2002-2003(Delhi, Government of India).

Source for China is Jingming Zhang, ed. (2003). Energy Development Report 2003 (Beijing, Editorial of Energy of China) and theEnergy Information Administration (2004). Website accessed in November 2004 from <http://eia.doe.gov/>.

Source for Thailand is the Electricity Generating Authority of Thailand (2004). Website accessed in December 2004 from<http://pr.egat.or.th/english/enu1a.html>.

Source for Australia, the Russian Federation and New Zealand is United Nations Statistics Division (2004). 2001Energy StatisticsYearbook (New York, United Nations) and the United States of America Energy Information Administration (2004).

Website accessed in November 2004 from <http://eia.doe.gov/>.

Source: ESCAP (2005). Electric Power in Asia and the Pacific 2001 and 2002 (ST/ESCAP/2350) United Nations publication SalesNo. E.05.II.F.6, (New York, United Nations).

Notes:a The 2002 figure for “Combustible renewables and waste” for Australia includes the installed capacity from other renewable

sources.b Capacity under “Other” for Bhutan is small hydropower (<10 MW).c The installed wind energy capacity for the Islamic Republic of Iran consists of 28.4 MW operated by the Ministry of Environment

and 120 MW operated by organizations external to the Ministry of Environment.d “Large and medium hydropower” for Pakistan includes a capacity of 184 MW and above. “Other” includes power purchased

from a small hydropower project.e Figure for “Combustible renewables and waste” for the Philippines is in million metric barrels of fuel oil equivalent.

Table 2.12 Electricity production capacity – new and renewable energy

Shared capacityof new and

renewable energy(per cent)

Hydropower,large and medium

(MW)

Geothermal,solar PV andwind power

(MW)

Combustiblerenewables and

waste(MW)

Other(MW)

2001 2002 2001 2002 2001 2002 2001 2002 2001 2002

Armenia

Australiaa

Azerbaijan

Bangladesh

Bhutanb

China

Fiji

India

Iran (Islamic Republic of)c

Japan

Mongolia

Myanmar

New Zealand

Pakistand

Philippinese

Republic of Korea

Russian Federation

Singapore

Thailand

Turkey

32

-

18

6

96

-

59

26

1

18

0

34

-

32

34

-

-

2

-

33

32

-

19

5

96

-

59

26

0

18

0

35

-

32

31

-

-

2

-

33

1 032

7 670

1 002

230

351

79 400

80

25 574

-

45 325

0

327

5 193

4 902

2 524

3 876

44 345

-

2 886

11 657

1 035

6 203

1 020

230

405

86 075

80

26 660

-

46 387

0

357

5 260

4 902

2 524

3 876

44 700

-

2 886

12 225

-

13

-

0

-

381

0

1 426

149

617

-

-

509

-

1 931

-

23

-

1

37

-

-

-

0

-

513

0

1 628

149

708

-

-

711

-

1 931

-

23

-

1

37

-

1 002

-

0

1

-

6

-

-

-

-

-

-

-

77

-

-

135

-

24

-

1 214

-

0

-

-

6

-

-

-

-

-

-

-

79

-

-

135

-

28

-

-

-

-

9

-

0

-

-

-

0

-

-

137

-

-

-

-

-

-


55

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Independent power production (IPP) has thepotential to create competitive markets for energyservices based on DE generation from waste material(e.g. agricultural waste and industrial gases) and newrenewables. The ADB points out that although theintroduction of IPP has brought private participationto East Asian electricity markets, competitive marketsfor power are not generally found. IPP companiestypically sell power to state-owned single (monopoly)buyers, which resell power to public consumers. Sucharrangements are motivated by the quick access toprivate financing that they provide to state-ownedelectricity companies, by the control over strategicinfrastructure that can be maintained and by politicalreasons. They also allow cross-subsidization betweenlarge (industrial) and small (residential) consumers,which is important for social and political reasons.80,81

Access to financing for IPP and DE generationin developing countries has been boosted by the entryinto force of the Kyoto Protocol and by rising oil,gas, and coal prices which have made such investmentsmore feasible. DE generation projects can result insubstantial reductions of CO

2 and other greenhouse

gases and present substantial opportunities forfinancing and increasing internal rates of return viathe sale of certified emission reductions (CERs)through the Clean Development Mechanism of theKyoto Protocol (see section 2.7 and box 2.12). TheDanish Ministry of Foreign Affairs has signedagreements with a Thai company for the purchaseof CERs. Methane emissions from open wastewaterponds at two starch production plants in NakornRatchasima and Chacherngsao provinces will becollected and used for producing energy within the

Box 2.5 Benefits of distributed energy generation based on renewable sources and cogeneration

• reduction of the “diseconomies of scale” of large plants, which include additional infrastructure, socialdislocation and environmental costs;

• reduced project costs, which expands financing opportunities;• greater speed of execution – faster access to energy;• lower social and environmental impacts;• lower, and more widely distributed, maintenance costs;• increased opportunity to use renewable and lower-carbon domestic fuels, including waste heat and gases

from industry;• lower vulnerability to foreign exchange fluctuations;• lower vulnerability to increases in oil and gas prices;• lower vulnerability to natural disasters – higher energy infrastructure redundancy;• improved energy security; and• lower demands for water for the cooling of large power plants.

production process; this is just one example of DEgeneration projects that take advantage of CDMfinancing.

Decaying and underdeveloped electricityinfrastructure provides ideal market conditions forDE. Three of the five most important emergingglobal DE generation markets are in large Asian andPacific countries which have infrastructure of thistype – China, India and the Russian Federation. InIndia, a new electricity law is boosting DE,particularly through cogeneration in the industrialsector. Artificially low electricity tariffs posechallenges to cogeneration developers in China.However, China is set to be an important globalcentre of DE generation activity; DE alreadyprovides some 15 per cent of its total electricitygeneration and 19 per cent of its total electricitycapacity. In Japan, 20 per cent of electricity isexpected to be DE-generated by 2030. In theRussian Federation, around 20 to 30 per cent ofelectricity generation is from cogeneration.82 InCentral Asia, mini-hydro projects have been targetedfor investment.

The use of renewable sources of energy in bothgrid applications (primarily in Japan) and off-gridapplications to increase access to electricity, inparticular via biogas and solar PV technology, isgathering momentum with the support of initiativessuch as the Solar Electric Light Fund, developmentbanks such as the World Bank and national financingarrangements (see box 2.6). Private sector companiesand financing agencies have played a key role in manyof these initiatives, and the Clean DevelopmentMechanism of the Kyoto Protocol provides a new


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opportunity for financing. For example, 60,000 highquality biogas plants are planned for installationover 21 years in Nepal by the Nepal Government’sAlternative Energy Promotion Centre, with the helpof the World Bank’s Community DevelopmentCarbon Fund, the Netherlands Development Agencyand the Kreditanstalt für Wiederaufbau of Germany.1.8 million metric tons of CO2 equivalent will begenerated in total emission reductions.83

The World Bank plans to support projectsworldwide to provide one million households withelectricity, install 1GW of renewable generatingcapacity and save more than 1GW in fossil fuel powergeneration through energy efficiency programmesin the years 2006 to 2008. Significant support isbeing extended to China through the World Bank’sRenewable Energy Scale-Up Project, which willprovide investment support and technical assistance.84

These initiatives to develop energy infrastructurebased on distributed energy generation and renewableenergy are critical because infrastructure developmentapproaches lock countries into specific consumptionpatterns – without such action consumers havelittle choice but to use the electricity providedthrough national infrastructure, the environmentalsustainability of which depends on the energy source.Energy infrastructure development planningbased on renewable energy and energy efficiencyconsiderations can therefore be considered a form

of demand-side management, and is critical toavoiding the environmental, economic and socialcosts of fossil-fuel based energy infrastructure thatare incurred well beyond the construction period andthe immediate area of infrastructure deployment, asindicated in box 2.7.

Barriers to the generation of renewable DEinclude electricity market conditions that discourageprivate sector involvement in power generation,non-cost-reflective energy pricing, inadequate policycommitment, shortages of investment finance,uncertainty in government policy, low and oftensubsidized prices of grid-based electricity, highcogeneration and equipment costs and the low pricespaid for electricity sold back to the grid by DEprojects. As well as the additional financing providedby the sale of CERs through the Clean DevelopmentMechanism, mentioned above, public-privatepartnerships offer substantial opportunities to reducepoverty and increase access to energy services. Inrecognition of this, the Government of Indonesiahas taken the decision to replicate the pro-poorpublic-private partnership (5P) micro-hydro projectpiloted by ESCAP in several other districts.85

Alternative fuels such as natural gas arebecoming well-integrated into mainstream transportfuel systems in Thailand (particularly in taxis), andare also increasingly used in certain cities of India.Myanmar is reported to have converted 4,000

Box 2.6 Solar PV applications across the region

• In Japan, subsidized costs for grid-connected PV systems under the 70,000 Roofs Program have been theprimary driver of Japan’s PV market expansion. The number of installed residential systems had reached144,000 by 2002.

• In Sri Lanka, as of March 2005, 66,000 solar home systems had been sold at a rate of about 2,000 per monthby private firms with support from microfinance institutions, commercial banks and leasing companies,with World Bank and Global Environment Facility (GEF) support. In Bangladesh, with similar financialsupport, 43,000 units were sold in under 30 months.

• The Solar Electric Light Fund (SELF) has undertaken projects to install solar PV home units in villages in theSolomon Islands in 1996, and in West Java, Indonesia in 1996 (supported by the Indonesian government).It also established a company in 1997 to install solar PV home systems in Andhra Pradesh and Karnataka,India, working with rural banking groups which provide subsidized financing for solar home systempurchasers.

• Under China’s Renewable Energy Development Project, more than 265,000 solar PV units had been sold asof March 2005, adding to the 25,000 units already in use in 2001.

• In Sri Lanka, the NGO Light Up the World and Stanford University have teamed solar PV systems withlight-emitting diode technology to dramatically downsize and reduce total system costs to as low as US$40per year.

• In the Philippines, the number of solar PV units in use jumped from 5,120 in 2001 to 7,786 in 2002. In Mongolia

in 2001, 1,100 solar PV units were in use.


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vehicles to run on compressed natural gas during2005, with buses making up more than 75 per centof this number.

Biofuels are another alternative beingpromoted as cleaner-burning, lower-carbonfuels with relatively low toxicity. Produced fromrenewable domestic sources, they can improveenergy security by reducing dependence on fossil fuelimports and promote agribusiness growth. Thesefuels include biodiesel (from palm oil, soybeans,sunflower and safflower seeds, used kitchen andanimal oils and coconut oil) and ethanol (from sugarcane, cassava, wood waste, rice-mill husks and otherbiomass sources).86 Gasohol (a blend of gasoline andethanol) is commercially available in Thailand, whilebiodiesel is available in India. Malaysia’s capacity toproduce biodiesel from palm oil is being expanded.

Fossil fuel pricing and industrial policy support

Appropriate fossil fuel pricing can play an importantrole in enhancing energy efficiency, and can makeother fuels and technologies (for example natural gas,or fuel cell technology) more economically feasible;

a positive relationship between energy efficiency andfuel prices has been noted in several publications.There is a vast range of fuel prices throughout theregion, with Turkmenistan, at one end of the scale,having one of the lowest fuel prices of 172 countriesworldwide; prices in Malaysia, Azerbaijan, China,the Philippines, the Russian Federation, Bangladesh,Tajikistan, New Zealand and Bhutan are higher;while Japan and the Republic of Korea have thehighest prices in the region, these prices being withinthe top five highest fuel prices of 172 countriesworldwide.87 However, it is clear that fuel pricingalone cannot influence total energy demand. Thereis also a need for strong state policy and support fortechnological change.

A comparison of the Republic of Korea andChina is illustrative. In the Republic of Korea, CO

2

emission growth remains coupled to economicgrowth, and it is one of the few countries in theregion in which energy intensity (energy used perunit GDP) increased between 1990 and 2002 – thisdespite its having one of the highest fuel pricesin the world, as well as high fuel taxes.88 Structuralchanges in the industrial sector, as well asincreasing consumption, may have outweighed anyimprovements in energy efficiency that may havebeen gained through higher energy prices. Bycontrast, China, with a fuel price less than half thatof the Republic of Korea and two thirds that ofIndia, has managed to significantly decouple CO

2

emissions (a major waste product of fossil fuelconsumption) from economic growth (see chapter 3).

2.4 Pressure on water supplies

When it comes to its water resources, Asia seems tolive beyond its means. Despite having the lowestwater availability per capita of all globalregions (Table 2.13), Asia uses almost twice as muchwater per capita as Latin America, which has thehighest potential water availability in the world.89

This situation is partly attributable to the highdependence of Asian countries on irrigatedagriculture. At the same time, water use andmanagement are notoriously inefficient in mostcountries of the region, with the exception of a fewcountries such as Singapore and Japan.

Box 2.7 Energy infrastructure – hidden costs

• Physical infrastructure required for exploration,extraction, processing and generation ofenergy (e.g. mining infrastructure)

• Infrastructure for energy transformation (electricpower stations, water sources and sinks forthermoelectric power stations)

• Transmission/transport of energy (e.g. powertransmission lines, transformers, oil and gaspipelines and ports for shipping and trade)

• Storage facilities (e.g. tanks for fossil fuels)

• Services and infrastructure associated withend-use (e.g. transportation, maintenance)

• Social costs related to the displacement ofcommunities and health impacts

• Environmental costs related to pollution duringexploration, extraction, processing and thegeneration of energy

• Direct economic costs related to increasedinfrastructure pollution, increased healthburdens and lower productivity


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These patterns of water use belie the reality –clean water is in fact a precious and scarce resourcein many parts of the region. Almost one in five peoplein the region still do not have access to safe drinkingwater, and almost half of the regional populationdoes not have access to sanitation facilities. Waterwithdrawals continue to rise, with the most rapidgrowth in those countries in South Asia with highpopulation growth rates and in the rapidlyindustrializing economies of South-East Asia(Figure 2.17).90

To compound the problem, some of thecountries with the lowest per capita water availabilityalso have among the worst water qualities in theregion. Many countries, particularly those with aridclimates and those with an expanding industrial base,are finding that ensuring that long-term needsare met is an increasing challenge. In Thailand,India and China (and possibly in other countries),water shortages are reportedly limiting industrialproduction in localized areas to varying extents, anddroughts have reduced agricultural productivity andlivelihoods in every subregion. Managing waterresources to meet competing demands in theagricultural, industrial, residential and increasinglythe services sector (in particular tourism) iscomplicated by a high variation in the distributionof water resources, in both temporal and spatialterms, across the region. As a reflection of theurgency of water issues, the United Nations declared2005 to 2015 the ‘Water for Life’ InternationalDecade for Action.

2.4.1 Assessing the sustainability of thewater supply

Many Asian and Pacific countries are already usingtoo much of their existing water resources to be ableto ensure that future water needs are met. Based onthe water exploitation index (Figure 2.18),91 currentwater extraction rates may be placing at least 16countries in the region in situations of water stress –in other words, intermittent or chronic waterscarcity and a diminished ability of natural ecosystemsto replenish themselves. Per capita water availability,another indicator of water stress92 (Figure 2.19) isdeclining as populations continue to grow, particularlyin India and other parts of South and South-WestAsia where population expansion continuesunabated.

The water exploitation index of the IslamicRepublic of Iran places this country in the categoryof countries facing “severe” water stress. Growingwater scarcity in this country is expected to heightentensions between water users, accelerate migrationand exacerbate water crises, as well as cause seriousenvironmental degradation.93 Indicators such as thewater exploitation index and per capita wateravailability are valuable, but can only roughlydescribe the situation on the ground in eachcountry. Despite falling into the category ofcountries facing “stress” rather than “severe stress”,China is almost chronically unable to meet all of its

3

km

pe

r ye

ar

Siberia and Far East of Russian Federation South Asia

Central Asia and Kazakhstan TranscaucasiaWestern Asia

South-East AsiaNorth China and Mongolia

1940 1950 1960 1970 1980 1990 2000 2010

Figure 2.17 Water withdrawal, Asia

Source: Shiklomanov, I.A (2004). “Assessment of waterresources in Asia and the Pacific in the 21st Century”

(unpublished report).

Source: Shiklomanov, I.A (2004). “Assessment of waterresources in Asia and the Pacific in the 21st Century”

(unpublished report).

Table 2.13 Potential water availability, 2004 (‘000 m3 peryear)

per km2 per capita

Europe

North America

Africa

Asia

South America

Australia & Oceania

277

324

134

311

672

268

4.24

17.40

5.72

3.92

38.30

83.60


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Figure 2.18 Water exploitation index, 2000

Figure 2.19 Water availability per capita, 2003-2007

0 16000 32000 48000 64000

Papua New GuineaSolomon Islands

New ZealandLao PDRBhutan

FijiCambodia

Russian FederationAustralia

MalaysiaBrunei Darussalam

MyanmarMongoliaIndonesia

GeorgiaViet Nam

NepalBangladeshKazakhstan

ThailandPhilippines

TurkmenistanKyrgyzstanAzerbaijan

ArmeniaDPR Korea

JapanTurkey

AfghanistanSri LankaTajikistan

ChinaIslamic Rep. of Iran

UzbekistanIndia

Rep. of KoreaPakistan

SingaporeMaldives

80000 96000 112000 128000 144000

m3

per capita per year

Source: Based on data from FAO AQUASTAT onlinedatabase, accessed on 9 September 2005 from

<http://www.fao.org/AG/AGL/aglw/aquastat/dbase/index.stm>.

water needs, with a 40 billion m3 shortage in anormal year, and with 400 out of 663 cities sufferingwater shortage (108 suffering serious watershortage) in 2000.94

Although indicated as a ‘no water stress’country based on the water exploitation index,relatively water-rich Indonesia is now facing increasingwater supply problems, particularly with respect tothe supply and quality of water in its major cities.95

Population growth, growing consumption,environmental damage, harmful agricultural activi-ties, poor management of water catchment areas,pollution, industrialization and groundwateroveruse are responsible for this situation. Indonesia’ssituation illustrates the impact of poor water qualityon the ability of even a water-rich country to meetits needs. Countries that are relatively less well-endowed with water are even more severely affected.

Figure 2.20 relates water quality and availabilityto identify the countries where the coincidence ofpoor water quality and low water availability is likelyto pose the greatest challenges. It indicates that manyof the countries in the region with the least availablewater per person also have some of the worst waterquality. The water resources of Azerbaijan, China,India, the Islamic Republic of Iran, Pakistan,Thailand, Turkey and Uzbekistan are among those

0 10 20 30 40 50 60 70 80 90 100 110 120

Papua New GuineaFiji

Bhutan

New ZealandCambodia

Lao PDR

MongoliaMalaysia

Russian Federation

IndonesiaMyanmar

Nepal

AustraliaGeorgia

Philippines

BangladeshViet Nam

DPR Korea

TurkeyJapan

Thailand

ChinaSri Lanka

Rep. of Korea

ArmeniaKazakhstan

India

AfghanistanKyrgyzstan


AzerbaijanTajikistan

Pakistan

TurkmenistanUzbekistan

Total water use - % of total renewable water resources

severe water stress

stressed

low stress

Source: FAO AQUASTAT online database,accessed on 9 September 2005 from<http://www.fao.org/AG/AGL/aglw/

aquastat/dbase/index.stm>.


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under the most pressure in the region. In China,some 52 urban river stretches may be so contaminatedthat they cannot be used for irrigation.96 A 2001survey of water quality in Islamabad and Rawalpindi,Pakistan, showed 94 per cent of samples unsuitablefor drinking due to bacteriological contamination,34 per cent affected by fecal contamination and 12.8per cent of samples unsuitable for drinking due tohigh nitrate levels.97 Poor water quality also increasesthe costs of water treatment and distribution.

While the per capita water availabilities in Japan and the Republic of Korea are both relativelylow, the much higher overall quality of water placesthese countries in a better position to meet theirwater needs. There have been some improvementsin water quality in the region, particularly in Japanand the Republic of Korea but water quality continuesto decline in many of its developing countries.

As indicated in State of the Environment in Asiaand the Pacific 2000, the main water pollutantsof concern in most countries in the region aremicrobial pollutants (mainly from domestic sewerage),

toxic chemicals and heavy metals (from agriculturalactivity, waste disposal and industrial productionprocesses) and phosphates and nitrates (fromagricultural production, domestic sewerage andindustrial discharge). Measures to reducepollution from point sources such as industrialprocesses have had some success, but reducingwater pollution from non-point sources such asagricultural production and domestic sewerage(particularly where water treatment infrastructure islacking), and from groundwater contaminatingsources such as sewerage systems and landfills, isincreasingly difficult to achieve. Naturally occurringcontaminants, described below, pose a particularthreat to groundwater quality.

While water quality and patterns of resourceexploitation are reducing the ability to meet waterneeds in several countries, the economicallyaccessible freshwater endowment may be decreasingas natural water infrastructure, such as river systems,freshwater lakes, floodplains, wetlands, forests andother vegetative cover in river basins and aquifers,

Australia

Bhutan

Cambodia

GeorgiaIndonesia

Japan

Lao PDR

Malaysia

Mongolia

Pakistan Rep. of KoreaArmenia

India Kyrgyzstan

Philippines

Russian Federation

Sri Lanka

Turkey

Viet Nam

0

10000

20000

30000

40000

50000

60000

70000

-2 -1.5 -1 -0.5 0 0.5 1 1.5

Water quality index

Wa

ter

ava

ilab

ility

pe

r c

ap

ita

(m

3 p

er

ca

pita

, p

er

ye

ar)

Azerbaijan

Bangladesh

China


Kazakhstan

Nepal

Tajikistan

Thailand

Turkmenistan

Uzbekistan

Figure 2.20 Water availability vs. water quality

Source: FAO AQUASTAT online database, accessed on 18 August 2005 from <http://www.fao.org/ag/agl/aglw/aquastat/main/index.stm>; Esty, Daniel C., Mark Levy, Tanja Srebotnjak and Alexander de Sherbnin (2005). Environmental Sustainability Index:

Benchmarking National Environmental Stewardship (New Haven, Yale Center for Environmental Law and Policy).

Note: Water quality index based on dissolved oxygen concentrations (1993-2002), electrical conductivity (1994-2002) andphosphorus concentrations (1994-2003). The lower the indicator value, the lower the assessment of freshwater quality based onthese parameters. The indicator does not account for other aspects of water quality. Based on data for the latest year avail-able in the time period indicated.


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come under threat from development. High lossesof watershed forest cover are increasing run off rates,reducing aquifer recharge and increasing thevariability of water flow. Table 2.14 shows the riverbasins with some of the highest percentage losses oforiginal forest cover in the region.

The increasing pressure on natural waterinfrastructure also threatens other critical ecosystemgoods and services. River systems and other inlandwater bodies are important as freshwater fisheries,sometimes providing the primary source of proteinfor rural communities. The lower Mekong RiverBasin produces two million metric tons of fish andother species annually for human consumption. Twothirds of this amount comes from natural wetlands.Wetlands provide groundwater recharge, waste-treat-ment and detoxification services, and potentiallyreduce nitrate concentrations by more than 80 percent. The Millennium Ecosystems Assessmentalso notes that “they have significant aesthetic,cultural and spiritual values and provide invaluableopportunities for recreation and tourism.”98 Thedeclining ecological integrity of freshwater systemsis signaled by the decline of freshwater biodiversity.As shown by the Living Planet index, freshwatervertebrate species have declined most rapidly, andmost consistently, compared to other species groups. 99

Climate change has already resulted inchanged precipitation patterns and will result infurther disruptions of the water cycle. Evidence ofdecreases in snow cover and the retreat of glaciersdue to global warming has been reported fromvarious parts of the Hindu Kush-Himalayan region,and have serious implications for its hydrology.100

In March 2005, the International Commission forSnow and Ice reported that Himalayan glaciers wererapidly melting. The glaciers that feed the Ganges,Indus, Brahmaputra, Mekong, Thanlwin, Yangtzeand Yellow rivers are experiencing reduced snowfallin winter, followed by increased melt caused bymonsoonal rains. These are predicted to lead tofloods and an increased frequency of glacial lakeoutbursts,101 followed by a reduction in river flows.The countries likely to be most affected are India,Bangladesh, Nepal, Bhutan and China, as well asthe countries that share the greater Mekong RiverBasin, with significant impacts expected within a fewdecades. Central Asia may be facing a similarsituation, given that most river systems in this areaare glacier- and snow-fed.

The vulnerability of countries to the multiplethreats to sustainability of low water availability,poor water quality, high water extraction rates andclimate change is heightened by dependence

Source: International Union for the Conservation of Nature, Water Resources eAtlas, Watersheds of the World, accessed on21 June 2005 from <http://www.iucn.org/themes/wani/eatlas/html/technotes.html>.

Table 2.14 Regional watersheds and rivers, 1998

Countries sharingwatershed area

River(s) Per centforest cover

Per cent lossof original

forest cover

Per centcropland

Number oflarge cities

India

Thailand

China

India

China,Viet Nam

India

China

India, Nepal, Bangladesh

China

Tajikistan, Afghanistan,

Uzbekistan, Turkmenistan,

Kyrgyzstan

Godavari

Chao Phraya

Huang He (Yellow River)

Mahanadi

Hong (Red River)

Krishna

Zhu Jiang (Pearl River)

Ganges

Yangtze

Amu Darya

6.8

35.4

1.5

8.1

43.2

2.8

9.8

4.2

6.3

0.1

76.9

77.3

78.0

79.4

80.0

80.2

80.4

84.5

84.9

98.6

-

44.7

-

59.5

-

-

66.5

-

47.6

22.4

1

3

9

1

3

2

4

11

9

9


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on water resources from outside the country.Azerbaijan, Bangladesh, Cambodia, India,Kazakhstan, Lao People’s Democratic Republic,Pakistan, Thailand, Turkmenistan, Uzbekistan andViet Nam are estimated to receive more than 30per cent of their water from outside of the country(Figure 2.21). Where there is a situation of waterstress coupled with high dependence on wateroriginating outside the country, water-security issuesare becoming more important and may prove to bea source of tension.

Meeting the needs of high concentrations ofwater-consuming populations on the coast has thepotential to reduce the sustainability of watersupply as increasingly large volumes of wastewaterare discharged uselessly into the sea and coastalaquifers become more susceptible to saltwaterintrusion. Some 40 per cent of the region’s populationlives within 100 km of the coast, and this proportionwill increase as urbanization proceeds.

2.4.2 Groundwater – at special risk

Poor surface water quality and localized, periodicor seasonal surface water scarcity mean thatgroundwater is increasingly being tapped. Theexploitation of groundwater resources is leading toa rapid lowering of water tables across China, thePhilippines, India, Pakistan, the Islamic Republic ofIran and to the growing exploitation of deeperaquifers. Sinking groundwater tables have resultedin diminished grain harvests in India and China.Groundwater depletion does not only affectagricultural harvests; poor communities that dependon shallow drinking-water wells, and urban centresthat depend on groundwater, also pay the price ofoverly rapid extraction. In Jakarta, Indonesia, andDhaka, Bangladesh, a large proportion of water issupplied from aquifers,102 and Quetta, Pakistan mayrun out of water by 2018, based on the rate at whichits water table is falling.103

Deep aquifers which are usually exploited as alast resort recharge so slowly that they are, forpractical purposes, not considered renewable sourcesof water. Where the hydrology of a country isparticularly fragile, such as in the Pacific islands, oris highly dependent on slowly recharging ground-water systems, a concentrated water demand presentsa greater challenge to the sustainability of the watersupply. The overexploitation of coastal aquifers,coupled with sea-level rise, has resulted in saltwaterintrusion in some Pacific island countries and inBangkok, Thailand, and Jakarta, Indonesia, amongother cities.

While some rehabilitation of polluted surfacewater systems is possible, pollution of groundwateris, for practical purposes, cumulative and permanent.The more a groundwater source is used, the morevulnerable it is to pollution. A survey of groundwaterin the late 1990s in 22 industrial zones in India foundthat all were unfit for drinking.104 A more recentsurvey showed that about 90 per cent of groundwaterunder China’s cities was polluted by heavy metals,pesticides, petroleum products and other toxicchemicals.105

Groundwater pollution also comes fromnaturally occurring sources. Arsenic contamination

Figure 2.21 Water dependency ratio, 2000

0 25 50 75 100

Turkey

China

Russian Federation

Nepal

Rep. of Korea


Georgia

DPR Korea

Armenia

Afghanistan

Myanmar

Tajikistan

Kazakhstan

India

Lao PDR

Thailand

Viet Nam

Azerbaijan

Cambodia

Pakistan

Uzbekistan

Bangladesh

Turkmenistan

Percentage of water resources orginating from outside the territory

Source: FAO AQUASTAT online database, accessed on9 September 2005 from <http://www.fao.org/AG/AGL/aglw/

aquastat/dbase/index.stm>.


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of groundwater has been confirmed in the aquifersof Afghanistan, Bangladesh, Cambodia, China,India, the Islamic Republic of Iran, Myanmar, Nepal,Pakistan, Thailand and Viet Nam. It is believed thatBangladesh, Nepal, Myanmar, the West BengalProvince of India and Viet Nam are among the mostaffected areas in the region (Table 2.15). InCambodia, a groundwater quality survey covering100 wells showed that almost one in ten may havehad arsenic levels above WHO guideline thresholdvalues.106 The scale of the arsenic crisis in Asia,however, is just coming to light. Conservativeestimates put the total number of people drinkingarsenic-contaminated water at over 60 million in theAsia. Although the actual number of Asianarsenicosis cases is not yet known, the estimates frompublished cases suggest that as many as 200 millionpeople may be exposed to health risks associated witharsenic-tainted drinking water on a daily basis.

Long-term exposure to arsenic-contami-nated groundwater can lead to serious healthproblems, collectively called arsenicosis, whichinclude skin lesions, skin cancers, internal cancersaffecting the bladder, kidney and lungs andhypertension. It is estimated that approximately 100million people are exposed to arsenic-contaminatedgroundwater in various parts of world.

Other naturally occurring contaminantsinclude fluoride. An estimated 66 million people in

India drink groundwater with an excessive fluoridecontent, which, unless treated, leads to seriousdental and skeletal deformities and other healthproblems. In China, the water supplies of some 63million people are similarly affected.

2.4.3 Industrial water use

Industrialization puts pressure on water resources intwo ways – it consumes water in its productionprocesses (as “virtual water”), where it is either lostas steam or incorporated into a product, and thenuses water as a waste sink by disposing of pollutedwastewater directly or indirectly into water bodies.

The global demand for water to supportindustrial activity is projected to double between2000 and 2025. Much of this growth is likely tocontinue to occur in the Asian and Pacific region,given its rapidly rising status as a global industrialproduction centre and the fast growth in subsectorswith high water consumption, such as theproduction of transportation equipment, beveragesor textiles. India’s industrial water use, for example,is expected to almost quadruple by 2050.107 Watershortages at the height of drought have temporarilyslowed industrial activity in parts of Thailand andIndia. In China, water shortages have beenresponsible for an estimated annual loss of someUS$28 billion in industrial output in recent years.108

Little attention has been paid to the intensityof water use in the industrial sectors in the region.As figure 2.22 shows, the amount of water used toproduce US$1 of GDP from the industrial sectorvaries widely. India’s industrial plants are estimatedto consume 2 to 3.5 times more water per unit inproduction than similar plants in other countries.109

In addition to the efficiency of water use at the firmlevel, the productivity of the use of water is determinedby the industrial subsectoral composition. Somecountries which have adopted relatively unprofitablepatterns of water use are relatively water-stressed andalso use relatively high proportions of water forindustry (Figure 2.23).

Poor plant safety in industries which use watercourses as waste-sinks also poses the threat ofindustrial disaster (box 2.8).

Table 2.15 Conservative estimates for the Asian populationaffected by arsenic contamination of drinking water,2000-2002

Numbers affected

Bangladesh

Cambodia

China

India

Iran (Islamic Republic of)

Myanmar

Nepal

Thailand

Viet Nam

Total

35 000 000

30 000

2 200 000

6 000 000

10 000

5 000 000

500 000 – 12 000 000

1 000

11 000 000

59 741 000 – 71 241 000

Source: Based on ESCAP data collected by survey between2000 and 2002.


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2.4.4 Agricultural water use

Water is already a limiting factor for agriculturalproduction in Asia and the Pacific, with droughtconditions and lowered aquifer levels depressingagricultural productivity across every subregion.Drought conditions diminished food security andaffected more than 600 million people across theregion between 1995 and 2004. In 2005, Afghanistan

was in the sixth year of its worst drought in 30 years;in 2004, the drought had reduced cereal productionby an estimated 25 per cent and lowered GDPgrowth for fiscal year 2004 to an estimated 7.5 percent (from 15.7 and 28.6 per cent, respectively, inthe two previous years).110 In 2005, Australianfarmers seeking to make a living on the driestinhabited continent were in the grip of its worst

Figure 2.22 Water intensity of industrial production, 2000 Figure 2.23 Industrial water use, 2000

Source: Based on data from th FAO AQUASTAT online database, accessed on 9 September 2005 from <http://www.fao.org/AG/AGL/aglw/aquastat/dbase/index.stm> and World Bank (2003). World Development Indicators 2003

(Washington DC, World Bank).

0 16 32 48 64

AfghanistanMyanmar

CambodiaNepal

BangladeshIndonesia

TurkmenistanBhutan

PakistanUzbekistan

Islamic Rep. of IranSri Lanka

ThailandKyrgyzstan

ArmeniaTajikistan

IndiaLao PDR

Philippines

New ZealandAustralia

FijiTurkey

Rep. of KoreaKazakhstan

JapanGeorgia

MalaysiaViet Nam

DPR KoreaChina

AzerbaijanMongolia

Papua New GuineaRussian Federation

Percentage of total water use

Box 2.8 Focusing on industrial pollution – a disaster of human origin

Water pollution is a well-attested consequence of industrialization, but in the wake of the explosion of thepetrochemical plant of the Jilin Petrochemical Corporation, China, on 13 November 2005, greater attention islikely to be paid to the impacts of industrial disaster on water resources. As a result of this explosion, anestimated 100 metric tons of pollutants (benzene, nitrobenzene and aniline) entered the nearby SonghuaRiver. With peak concentrations of nitrobenzene reaching over 33 times the permissible level, the plume ofpolluted water reached Harbin city on 25 November 2005. The plume of pollutants made its way to the townof Khabarovsk, in the Russian Federation, necessitating the interruption of water supplies to approximately10,000 people. China and the Russian Federation joined forces to monitor pollution levels under a jointemergency response monitoring plan. The frequency of such accidents, although on a smaller scale, is high.

Sources: UNEP (2005). “The Songhua River Spill China, December 2005 – Field Mission Report” (unpublished report); Officeof the Coordinator for Humanitarian Affairs (2005). “People’s Republic of China/Russian Federation: Chemical Spill OCHA

Situation Report No. 3”, Ref. 2005/0222, accessed on 10 January 2005 at <http://www.reliefweb.int>.

0.0 0.5 1.0 1.5 2.0 2.5 3.0

Indonesia

Japan

Rep. of Korea

Fiji

Australia

Cambodia

Thailand

Malaysia

Bhutan

Bangladesh

Islamic Rep. of I ran

Nepal

Turkmenistan

Sri Lanka

Turkey

Philippines

Armenia

Pakistan

India

China

Lao PDR

Russian Federation

Uzbekistan

Kyrgyzstan

Kazakhstan

Mongolia

Tajikistan

Georgia

Viet Nam

Azerbaijan

Water withdrawals by industry (m3) per1995 US$ of GDP from industry (2000)


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drought in 20 years; high rural suicide rates werelinked to this drought, a situation which wasreplicated in India.

In more than 29 countries in the Asian andPacific region, more than 60 per cent of the waterusage is for agriculture; in 15 countries, this figurerises to more than 90 per cent. Regional agriculturalproduction increased by some 62 per cent between1989-1991 and 2002, compared with a globalincrease of only 27 per cent in the same period.Irrigated areas as a percentage of total agriculturalareas increased in the region by some 2.5 per cent in10 years, a rate 25 times faster than that in the restof the world, with major growth occurring in South-East and South Asia.111

Inefficient surface irrigation systems areemployed in more than 90 per cent of Asianirrigated areas. Poor maintenance and the misuse ofsurface irrigation systems have been linked to landdegradation, increased soil erosion rates andsalinization, all of which degrade water quality.Water-use efficiency in Indian surface-waterirrigation systems is estimated to be in the range of35 to 40 per cent.112 Although agricultural wateruse returns much of the water to the water cycle,either through evaporation or run-off, high intensitiesof pesticide and fertilizer use contaminate run-off.In China, inadequate attention to maintenance ismanifested in the 60 per cent of systems operatingbelow capacity and the 30 per cent of canals in aprecarious state;113 the situation is similar in CentralAsia. Improperly maintained surface irrigationsystems also create the conditions for outbreaks ofJapanese Encephalitis and other mosquito-relateddiseases. In India, the human death toll fromJapanese Encephalitis exceeded 1,000 in 2005,mainly in the state of Uttar Pradesh. In southernNepal, the human death toll from this diseaseapproached 300 in a three-month period.114

Less than one per cent of Asian and Pacificirrigated areas benefit from micro/drip irrigationsystems, in which drip lines bring water directly tothe plant root zone. In addition to reducing wateruse by some 95 per cent, these systems facilitateefficient fertilization and avoid the nitrification ofwater sources associated with excessive surface

application of mineral fertilizers.115 The willingnessof farmers to invest in more efficient irrigationsystems can be limited by plot size, water subsidiesand insecure land tenure. However, new, moreaffordable irrigation technologies make these systemsan increasingly feasible option in some cases.

As discussed in section 2.5, the growingdemand for water in this sector is also attributableto changing consumer preferences, the export focusof production and increased buying power. Producingone kilogram of beef requires some 15 m3 of waterper kilogram, while producing one kilogram of poultryrequires less than half that amount (Table 2.16). Theproduction of crops with a high water content forexport (for example, citrus fruit) results in losses ofvirtual water, as in the industrial sector. Thailand,identified by its water exploitation index as awater-stressed country, is also ranked as the fourthlargest net exporter of virtual water, having exportedsome 233.3 billion m3 of water along with its world-famous fruits and other agricultural produce in thefive years between 1995 and 1999. Two other fairlywater-scarce countries, India and Australia, are notfar behind. Sri Lanka leads Japan, the Netherlands,the Republic of Korea, China and India as the top netvirtual water importer in the world (see box 2.11).116

While biofuels are being touted as a solutionto rising energy prices, air pollution and CO

2

emissions from the transport sector in particular,their environmental impact and, in particular, their

Cattle

Sheep and goats

Fresh beef

Fresh lamb

Fresh poultry

Cereals

Citrus fruits

Palm oil

Pulses, roots and tubers

Table 2.16 Water requirement of main food products

UnitWater

required,m3 per unit

Head

Head

kg

kg

kg

kg

kg

kg

kg

4 000

500

15

10

6

1.5

1

2

1

Source: FAO (1997). Water Resources of the Near East

Region: A Review (Rome, FAO).


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impact on water demand should be taken fully intoaccount when assessing both the positive and thenegative impacts of their use.

Despite the critical role played by theagricultural sector in ensuring food security and as abasis for rural livelihoods, the agricultural sector isnot given priority in times of water shortage; socio-political biases regarding the allocation of water canwork against a long-term planning perspective.During ongoing droughts, while irrigation water isdenied to farmers who suffer severe economichardship and loss of productivity, these droughtsrarely affect the lifestyles of city-dwellers, whousually continue with former patterns of water useexcept in the most dire of scarcity situations.

2.4.5 Unmet domestic water needs

Millennium Development Goal 7, Target 10 seeksto halve the proportion of people without sustainableaccess to safe drinking water and improved sanitationby 2015. For the purposes of monitoring, progressagainst the goal of “improved sanitation” refers tothe installation of facilities that hygienically separatehuman excreta from human, animal and insectcontact. Facilities such as sewers or septic tanks, poor-flush latrines and simple pit or ventilated improvedpit latrines are assumed to be adequate, provided thatthey are not public. “Improved” or “safe” water refersto piped water, or to water from public taps, boreholesor pumps, protected wells, protected springs or to rain-water and, for statistical purposes, does not includevendor-provided water, bottled water, or water fromtanker trucks or unprotected wells and springs.117

In Asia and the Pacific, an estimated 665million people (almost one in five people) werewithout access to improved water and some 1.9billion (almost one in two people) were withoutaccess to improved sanitation in 2002 (Table 2.17).118

In absolute terms, the investment needed for Asiato meet Millennium Development Goal 7, Target10 outstrips that required for Africa, Latin Americaand the Caribbean combined.119

Between 1990 and 2002 the number of peoplewithout access to sanitation increased in somecountries, such as Indonesia, the Islamic Republicof Iran, Nepal, Papua New Guinea, Turkey and

Uzbekistan. During the same period, infrastructuredevelopment to provide safe drinking water did notkeep pace with population increases in Bangladesh,Papua New Guinea, the Philippines, Uzbekistan andViet Nam.120

The ADB estimates that the investmentrequired to halve the proportion of people withoutsustainable access to improved water and sanitationwould be US$8 billion annually until 2015, andaround twice as much to provide access to all theunserved people of the region.121 A lack of finance isa chronic problem for the water and sanitationsector, and it is most difficult to attract finance fromthe private sector for sanitation infrastructure.

Besides placing a strain on national treasuries,meeting water and sanitation needs based on currentwater use and management models would drainwater reserves throughout the region. A person withaccess to a piped water supply and undergroundsewerage system uses about three times the amountof water as someone in a rural area with onlylimited access to a piped supply and no undergroundsewerage. Housing improvements and the increaseduse of washing machines and water heaters in Chinaincreased per capita daily household waterconsumption from less than 100 litres in 1980 to244 litres in 2000.122 Domestic water demand isalso expected to triple in India by 2050.

Progress towards meeting this demand will behampered by high levels of distribution losses. InIndia, some 50 per cent of total water flow is lost.123

In Armenia, 60 per cent of pipelines are more than20 years old. There are other hurdles to be over-come. In those countries with the highest numbersof people without access to improved sanitation andwater, such as Indonesia, Bangladesh, Pakistan andViet Nam water services provision is characterizedby high levels of unaccounted-for water and lowlocal government capacity to shoulder the burdenof water and sanitation services provision. Tariffstructures that do not reflect the true cost ofproviding water, a lack of metering, outdated andmalfunctioning or non-functional meters and/orunauthorized connections to a water supply also playtheir part by limiting incentives for private and publicsector investment in infrastructure upgrades.


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Even where relatively efficient wateradministration exists, the poor – particularlymigrant workers, female-headed households andthose in slum areas – find it difficult or impossibleto meet the preconditions for obtaining a waterconnection from the water utility. In somecountries for which the data indicates good accessto improved drinking water, many people receivelimited hours of service and water of questionablequality. Some South Asian country utilities provideintermittent supplies to their service areas, whilesome South-East Asian country utilities providelimited service coverage.124

Those who do not have access to improveddrinking water are particularly exposed to risks fromcontaminants, but even those with piped water

sources are at risk. Health impacts can range fromgastrointestinal disease and infectious diseases suchas cholera, chronic illnesses and organ damage tocancers associated with toxic contaminants. Some300 million people living in China’s countrysidedrink unsafe water.125 Waterborne disease fatalitiesand the number of persons affected show how poorwater quality, a lack of access to improved water andwater scarcity place as strain on health care systems(Box 2.9).

2.4.6 Meeting future water demand

Assuring equitable and adequate access to water tomeet human needs, support economic activity andto ensure the continued provision of water-relatedecosystem goods and services will depend on the

Table 2.17 Access to improved sanitation and improved drinking water (2002)

Without access to improved sanitation Without access to improved drinking water

Urban%

Rural%

Total Urban%

Rural%

Total

No. (‘000) % No. (‘000) %

North-East Asia, total (1)

China

North-East Asia (1)excluding China

Central Asia and theCaucasus

Pacific islands (2)

South and South-WestAsia, total

India

South and South-West Asia,excluding India

South-East Asia, total (3)

Indonesia

South-East Asia (3)excluding Indonesia

Asia-Pacific (4)

67

71

29

51

53

75

82

58

51

62

45

68

23

31

9

20

19

32

42

14

21

29

13

25

759 081

711 321

47 760

27 302

3 603

940 680

740 608

200 072

199 851

100 281

198 243

1 930 517

47

55

14

37

45

61

70

42

39

48

33

51

30

32

10

30

58

20

18

24

30

31

29

25

6

8

1

4

20

6

4

8

9

11

8

6

301 174

290 593

10 581

13 630

3 945

233 395

146 649

86 746

113 654

46 898

66 756

664 634

19

23

3

19

49

15

14

18

22

22

22

171

Source: Updated from World Health Organization and United Nations Children’s Fund (2000). Global Water Supply and

Sanitation Assessment, 2000 Report (Geneva and New York, Water Supply and Sanitation Collaborative Council).

Notes:(1) Excluding Hong Kong, China and Macao, China(2) Excluding Australia, American Samoa, Nauru, New Caledonia and New Zealand(3) Excluding Brunei Darussalam. Data for Malaysia not available for urban and total access to sanitation(4) Excluding above-mentioned countries


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region’s ability to bring or maintain water withdrawalwithin the limits of sustainability, prevent waterpollution, maintain the integrity of the water cycleand develop equitable and efficient water allocationpolicies.

Developing equitable and efficient water-allocation and sharing policies

The current practice of water allocation, in whichwater is unceremoniously expropriated from one useto another in times of scarcity, results in socialconflict and fewer incentives to create long-termpolicies for water efficiency or management. Incountries affected by drought, or countries where

water extraction is unsustainably high in relation toexisting resources, long-term and equitable waterallocation policies are needed. Such policies shouldspan the environmental, economic and socialsectors and address long-term water stress orscarcity, as well as seasonal water scarcity such asdrought. Not least, such policies should provideincentives for increased water efficiency andinvestment in the provision of water resourcesmanagement and ensure the continued functioningof ecosystems to protect the integrity of the watercycle and to support biodiversity and rurallivelihoods.

Box 2.9 Reports of disease linked to water scarcity and poor water quality, selected countries, 2004-2005

• In Eastern China, during September and October 2004, over 180 cholera cases were reported;

• Cholera claimed upwards of 1500 lives in the Islamic Republic of Iran during mid-2005;

• Almost 2 in 10 people in Uzbekistan suffer from diarrhoea every month;

• In the Philippines, diarrhoea outbreaks in October-December 2005 caused by dirty water in deep wellsin Samar and Catanduanes killed at least six and affected at least 370 people. In San Andres and Viracwater contaminated by Escherichia Coli resulted in the deaths of 14 people in September 2005;

• In one city in Bangladesh, over 18,000 people were treated for diarrhoea between January and March2004. The wave of illness was attributed to the scarcity of safe drinking water and the intake of stale orrotten food;

• In India, most of the 1,500 patients admitted to hospital in Kolkatta in a 12-day period during April 2004were found to be suffering from cholera following consumption of contaminated piped water. InKarnaataka state during December 2005, 70 people in one village fell ill from gastro-enteritis, claimedby villagers to be a result of groundwater contamination by effluents from a nearby distillery. InOctober 2005 in Madras, more than 100 people fell ill from waterborne diseases linked to unsanitaryconditions and contaminated water;

• In Malaysia, the deaths of four children of an indigenous tribe in April 2004 were linked to watercontamination. Salmonella infection was implicated in the death of at least one of the children, whileother waterborne diseases were suspected in the cases of the others; and

• In Nepal in the village of Rautahat, over 100 people were affected by an outbreak of diarrhoea, blamedon contaminated food and water as well as on rising temperatures.

Vulnerability to waterborne disease increases after a natural disaster. In the Philippines and Bangladesh, deathsfrom waterborne diseases are often a consequence of the frequent floods. In the Philippines between Augustand September 2005, diarrhoea killed 30 people and affected 450 others, while cholera affected over 180people and killed five. In Bangladesh between July and August 2004, more than 176,000 people were affectedby diarrhoea in the post-flood period.

Source: Center of Excellence in Disaster Management and Humanitarian Assistance, Pacific Disaster ManagementInformation Network, Asia-Pacific Disease Outbreak Surveillance reports, various dates, 2004-2005,

accessed on 10 October 2005 from <http://pdmin.coe-dmha.org/apdr/>.


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Meinzen-Dick and Appasamy126 propose thatnegotiated transfers can avoid the problemsof the expropriation of water. They provide aninnovative example of negotiated transfer, in whichcities pay for investments in rural irrigation waterconservation (such as through the upgrade ofirrigation infrastructure), and then use the “saved”water to meet their needs – a national schemefor reduced water use analogous to the CleanDevelopment Mechanism for greenhouse gasemissions, and that may be scaled up to apply tocross-border water transfers. Box 2.10 highlights apractical approach to transboundary water sharing.

Supply-side approaches

Supply-side approaches – watershed management,water storage (including dams) and diversionsbetween basins – are currently considered importantwater resources management approaches by manycountries, and have benefits relating to hydroelectricpower generation, flood control and water diversionwhich can contribute to offsetting their oftennegative social and environmental impacts. InNovember 2002, the Government of Chinaapproved the largest-ever water infrastructure projectwith the objective of transferring water from theYangtze River to the Yellow River Basin.This is a historically significant engineering feat, withthe potential to help meet China’s energy and waterdemand and to control the fatal seasonal floods.However, the resulting social impacts havealready been covered by the media and theenvironmental impacts are beginning to emerge.

Around 20,000 large dams have been constructedin China. Japan has already dammed all but 10 percent of its rivers.127 In Australia, a new dam is nolonger considered part of the supply-side suite ofoptions, as it has been noted that new dams eithercommandeer resources from an existing use (forexample agricultural, or other forms of rurallivelihood support) or from freshwater ecosystem-and water-cycle support.128 Mini- and micro-hydroelectricity plants are increasingly the focus ofsupply-side approaches in Central Asia.

Newer supply-side approaches being exploredinclude artificial groundwater recharge and theaction taken by water utilities to reduce the costs oftreating polluted water, prevent groundwatercontamination and encourage rainwater harvesting.The use of agrochemicals is being reduced in Chinaand Indonesia, partly through new research intointegrated pest management. The example set byGermany, where the water utility pays farmers toswitch to organic operations and so reduce nitratepollution to freshwater bodies, and at the same timereduce the additional costs of treating nitrate-polluted water, could be an effective incentive forreducing the pressure on water resources in theregion.129

Water efficiency and demand-side management

Greater water efficiency can go a long way towardsmeeting the rapidly growing water demand in a cost-effective manner, but the benefits do not stop there.The often unrecognized benefits include long-termgains in national eco-efficiency, which is reflected in

Box 2.10 Cross-border investment in water infrastructure: water-sharing on the Chu-Talas Rivers as a model formore effective negotiations on water resources management.

The sharing of water resources, and upstream-downstream country relations in particular, has long been fraughtwith tension and insecurity. Kyrgyzstan and Kazakhstan have found a solution which institutionalizes cross-border investment in maintaining water infrastructure, rather than undertaking difficult negotiations arounddirect payments for water. Under a 2000 agreement, Kazakhstan has agreed to pay part of the operation andmaintenance expenses for a number of Kyrgyz dams and reservoirs which supply water to Kazakhstan, takinga huge step forward towards addressing a contentious issue in a way that benefits both parties.

With the support of ECE and ESCAP, and the financing of the Governments of Sweden, the United Kingdomand Estonia under the auspices of the Organization for Security and Cooperation in Europe, the proposedChu-Talas Rivers Commission will oversee the agreement. This model could be extended further to cross-borderinvestments in domestic water efficiency measures or irrigation infrastructure upgrades in upstream countries.If it were applied to the sharing of resources in other transboundary river basins, significant progress and greateroverall capacity to meet water needs could be achieved.


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simultaneous reductions in energy consumption (forwater treatment and distribution) and in wastewatertreatment costs, and increases in the economicbenefit gained from each unit of water used. Therehave been a number of successful water efficiencyinitiatives, including Sydney, Australia’s “Every DropCounts” business programme. The programmeresulted in a saving of 7,000 m3 of water per day bythe end of 2003, a return on investments by companiestotalling some A$3.5 million (US$2.6 million).Between 1999 and 2003, Sydney’s investments indemand-side management totalling US$30 millionalso enabled the city to stabilize its 2003 waterdemand at 1983 levels, despite a population increaseof almost one million people, and yielded 60,000m3 per day in savings. In Thailand’s south ChaoPhraya area, charges levied for pumping led toan 80 to 90 per cent increase in efficiency.130

Under ESCAP’s Kitakyushu Initiative for a CleanEnvironment, a model project of water-use efficiencyin an urban area of Tehran has been documentedand tested. The results to date are encouraging. Theproject is estimated to have resulted in a saving ofabout 15 per cent on Nassim residents’ monthlyhousehold water bills and if applied across Tehranas a whole, could save about 135 million m3 ofwater per year or US$6.5 million. This is asignificant result for a city which already experienceswater shortages even during mild droughts.

Infrastructure design for a sustainable water supply

Very few countries have developed comprehensiveapproaches to water-resource efficiency, althoughChina’s April 2005 Water Conservation TechnologyPolicy outlines several areas for technologicaldevelopment in support of greater water efficiencyacross all sectors.131 However, in order to achieveimprovements in patterns of water use and supplycontinuity, greater sustainability must be built intoeconomic systems, infrastructure development andnatural resources management. Greater attention tothe three key areas of action described below will beneeded.

The first key area is a greater focus on theimplications of economic activity for water use, interms of both quantity and quality. Every day,

decisions in sectors such as agriculture, forestry andenergy impact on the management of water to agreater extent than decisions taken within the watersector itself. Countries with limited water resourcesshould, through their economic development plans,explicitly seek less water-resource-intensive economicactivity.

Water-use considerations should also be builtinto economic development planning. Chineseofficials, describing efforts to reduce pollutionlevels in two important lakes over a period spanningalmost 10 years, have concluded that “the treatmentof the lake basin should be combined with win-winsolutions of economic growth and environmentalimprovement … industrial restructuring and cleanerproduction should be promoted and a newindustrialization path taken… eco-agriculture shouldbe promoted to follow an ecological and market-oriented path that turns the wastes into resources…with these measures the [sic] water pollutionprevention will be successful.”132

The second approach is that of investment innatural water infrastructure. River systems, freshwaterlakes, floodplains, wetlands, aquifers and forests andother vegetative cover in river basins constitute thenatural water infrastructure critical to maintainingthe integrity of the water cycle. Integrated River BasinManagement is an approach that invests in main-taining the functions of the river basin and is beingadopted by countries such as Thailand.

The Living Murray River Basin project inAustralia sought to mitigate the impacts of theoverextraction and diversion that had reduced theflow at the mouth of the river to some 27 per centof the natural flow, and of deteriorating waterquality related to the fertilization of agricultural fieldsand increased salinity. To prevent further impactson aquatic plant and animal communities, the lossof agricultural productivity, recreation and tourism,impacts on drinking water quality, risks to humanhealth and the compromising of the cultural valuesof indigenous people, the River MurrayImprovement Programme was introduced and theLiving Murray project initiated to investigate waysto restore river flows. The 2003 River Murray Actestablishes 15 ‘Objectives for a Healthy River


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Murray’ and gives the Australian Government clearpowers over the use of the river, allowing it toimprove the management of planning, irrigationpractices, pollution and rehabilitation programmes.Under the programme, major infrastructure and landmanagement improvements will be made to reducethe flows of polluted drainage water to the riversystem from irrigated pastures to 20 per cent of thebaseline. Revegetation and livestock managementstrategies are targeted at reducing sediment loads.The project also seeks to involve communities andlocal government in reducing pressures on the riversystem.133

Such investments seek to maintain theecosystem services which are not valued in themarket but which can often exceed market values.One example given in the Millennium EcosystemAssessment report shows that the social benefitsassociated with original mangrove cover in Thailand(timber, charcoal, non-timber forest products,offshore fisheries and storm protection) fell to zerofollowing its conversion to shrimp farming. Thisresulted in the loss of a total economic value ofbetween US$1,000 and US$36,000 per hectare ofmangrove, with the economic value of the shrimpfarming estimated at about US$200 per hectare.134

The third key area is that of infrastructuredevelopment geared towards water efficiency,rainwater capture and water re-use. As in the energysector, patterns of infrastructure development andmanagement will determine future water consump-tion patterns. In the agricultural sector, the IslamicRepublic of Iran’s plans for developing pressurizedirrigation systems are expected to save 1.044 billionm3 of water per year (almost half of the amountcurrently used) and potentially double the amountavailable for drinking and other uses.135 It ispredicted that green building initiatives in Singaporewill reduce water use in buildings certified underthe “Green Mark” programme by up to 30 per cent,as has been achieved by similar initiatives in theUnited States.136

Urban development planning that explicitlytakes into account the possibility of water capturecan go a long way towards facilitating waterrecycling. The integration of wastewater treatment

plants into urban plans so that they are close to thesources of water to be recycled, as well as to thewater to be used, may also increase the economicfeasibility of water recycling.

Options for future infrastructure developmentdepend very much on the current level ofinfrastructure development and the resourcesavailable. Urban stormwater run-off and treatedwastewater is being used for landscaping purposesin Australia, where private companies are purchasingtreated water at the plant exit for distribution to thehorticultural and agricultural industries, and thereare experiments underway involving the storage oftreated wastewater. In the dry city of Adelaide, there-use of 16,000 m3 of water per day fulfils some 19per cent of water demand.137

Singapore is now producing ultra-pure waterfrom raw domestic sewerage, at a rate of over 32,000m3 per day, at a facility which is now a touristattraction. The solution is seen as cheaper and moreeffective than desalination and is facilitated bySingapore’s fully sewered wastewater and sanitationsystems. There are also plans to site a reservoir inthe middle of the city state. Bio-remediation,phytotechnology (the use of micro-organisms andplants to remove toxins and improve water quality)and artificial groundwater recharge (in whichnatural recharge is augmented by wastewater,including storm/flood water, grey water and treatedwastewater, through recharge basins or directly intothe aquifer)138 are other promising measures whichcan be facilitated by urban development planning.

For developing countries in particular,expanding access to water services in a situation ofresource scarcity and limited investment requiresspecific attention. The potential of public-privatepartnerships for expanding access to water serviceshas been demonstrated in Sri Lanka and in thePacific. While making water services accessible tothe general public, small piped-water networkssignificantly reduce unaccounted-for water. In SriLanka, under an ESCAP project, private companies,with the support of state agencies, are now providingpiped water to poor families in return for a modestfee. This model of water services provision overcomesboth the lack of resources of publicly-owned agencies


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and the institutional barriers faced by poor orotherwise marginalized water users. Rather thanviewing small water network operators as unwantedcompetition, the water utility has instead (andperhaps unexpectedly) seen the project as a welcomeintervention. Currently, Colombo has 1,200 poorerurban communities sharing water from public taps.If consumption as well as wastage of water can bereduced, utility officials feel that they can increasetheir revenue and reduce their debt considerably byselling the water saved to other consumers, includingindustrial consumers, who are willing to pay a highertariff. This project will require appropriate policysupport in order to be replicated. As noted by theADB’s case study of small piped-water networks,“small water network operators are severely hamperedby their informal status.” This affects their ability tooperate in a commercially viable fashion and toinvest in better, more efficient, technology. Inaddition, the high bulk rates characteristic of modeltariff schedules work against small networkbusinesses. A comparison of two small piped-waternetworks operating in illegal and legal environmentsshows a vast difference in the levels of serviceoffered to subscribers, the technology deployed andthe tariff paid.139

Sanitation infrastructure can be designed tofacilitate the treatment and conversion of sewerageto increase resource recovery. The continuing avail-ability of economically feasible phosphate reservesis in doubt, and domestic human waste thereforerepresents a massive waste of phosphorus, as well asof nitrogen and potassium. Much of the treatedsludge produced by the more than 1,180 night soiltreatment facilities in Japan which serve about 30per cent of the population is used in agriculture;treatment facilities could be extended to producemethane.140

In less developed countries, appropriatesanitation infrastructure development may focus onmeeting immediate sanitation needs, reducingfuture water demand and protecting water supplies.In the Pacific islands, the choice of sanitationinfrastructure is especially critical to protectingfreshwater systems and coastal ecosystems. Fragilegroundwater systems are easily and irreversibly

contaminated by pit latrine systems or pipedsewerage systems. Ecological sanitation systemsdeployed in Tuvalu are proven to simultaneouslyaddress the goals of expanding access to sanitationservices, of reducing the amount of water neededper person and of closing the nutrient cycle byrecycling the valuable phosphorus and nitrogencontent of human waste for agricultural use andtherefore increasing agricultural production.141 Inthe northern Viet Nam, dehydrating toilets thatdivert urine and dehydrate faeces have been usedsince 1954; the waste produced is used to boostagricultural productivity. However, technical issuesrelating to pathogen control still persist (dependingon the climate and model) and proper managementis needed.

In India, the sanitation solutions pioneeredby Sulabh International help to meet sanitation needswhile reducing pressure on water resources andwater contamination. Twin pit household latrinesrequiring only two litres (half to one seventh of thewater needed by conventional models) are producedat a minimal cost of US$10. A total of 5,500 publictoilet complexes have been built by the company,including complexes that produce biogas (methane)for cooking, electricity and heating during winter,with no manual handling of human excreta.Effluents from the system can be turned into acolourless, odorless and pathogen-free liquid manure.The Sulabh approach includes children’s education,the involvement of women and house-to-housecontact.142

Developing the use of ecological sanitationsystems will require policy support for “alternative”sanitation infrastructure. In Bangladesh, one of thecountries with the largest number of peoplewithout access to safe drinking water or sanitationin the region, every household within 100 feet(30.5 m) of a sewer line is required to connect to theline, and is taxed whether or not a connection ismade.143 By specifying a particular sanitationsolution, such policies may inhibit the deploymentof more affordable sanitation solutions.


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2.5 Increasing pressure on ecosystems:intensive agriculture

2.5.1 Agricultural production in the region: adecade of relentless growth and expansion

Agriculture remains a cornerstone economic sector formany developing countries. Accounting for around 9per cent of the GDP throughout developingcountries in the world,144 the sector not only improveseconomies by providing the revenue necessary forstimulating investments in other sectors, but alsodirectly contributes to raising the incomes of farmersin rural areas and to enhancing food security.

Agriculture in Asian and Pacific countries hassignificantly contributed to the remarkable growthof the region, registering one of the most impressivesectoral performances in the past decade. The Asiaand the Pacific region has been at the forefront ofglobal agricultural production growth, with increasedoutputs of more than four per cent per annumduring the period 1981-1999,145 with the exceptionof 1998 (see figure 2.24).

During the years 1990 to 2002, the region’sagricultural production output increased by some62 per cent, compared to a global average increaseof just 27 per cent.146 The agricultural productionindex of countries in the region for the year 2002 isshown in figure 2.25; Viet Nam, China, the LaoPeople’s Democratic Republic and Myanmarhave shown impressive growth. The growingindustrialization of the sector, achieved through anintensification of agricultural activities following thesuccess of the Green Revolution launched in the early1970s, have been central to the sector’s success.

A number of countries in Asia and the Pacificproduce a significant share of the global productionof some important agricultural commodities (seetable 2.18), with China and India producing all ofthe important commodities.

The region’s importance as a producer ofthese commodities grows as developing countriesincreasingly participate in the international market,allowing them greater access to larger markets andopening up opportunities for the specialization ofproduction.147 Despite the general trend of increasing

0

1

2

3

4

5

1997 1998 1999 2000 2001 2002

World

An

nu

al p

erc

en

tag

e c

ha

ng

e

0.5

1.5

2.5

3.5

4.5Asia and the Pacific

Figure 2.24 Total agricultural production change,percentage per year (global vs. Asia-Pacific)

Source: FAO (2004). State of Food and Agriculture 2003-2004

(Rome, FAO)

Figure 2.25 Agricultural production change, 1989-1991to 2002

-100 -50 0 50 100

Marshall Islands

Tajikistan

Kazakhstan

Vanuatu

DPR Korea

Japan

Mongolia

Bhutan

Fiji

Tonga

Uzbekistan

Samoa

Nauru

Australia

Sri Lanka

Papua New Guinea

Indonesia

Thailand

WORLD

New Zealand

India

Malaysia

Rep. of Korea

Kiribati

Bangladesh

Nepal

Philippines

Cambodia

Pakistan

Maldives

Solomon Islands


Myanmar

Lao PDR

China

Viet Nam

Percentage


Agricultural Development in Asia and the Pacific 1993-2003



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agricultural production, the region is still a netimporter of agricultural products (Figure 2.26).Among the subregions, North-East Asia remains thelead importer of agricultural products, with Chinaand Japan accounting for almost 80 per cent of totalsubregional imports and 60 per cent of total regionalimports of agricultural products.

The agricultural sector has provided employmentand alleviated poverty in rural areas. Around 56 percent of the population still reside in rural areas andrepresent the backbone of the region’s agriculturallabour force.148 Recently gathered data indicatesthat engagement in agricultural trade by developingcountries generally reduces the incidence ofhunger.149 The case of Viet Nam is cited as a clearexample of this. Between 1991 and 2001, thecountry’s economy grew by seven per cent perannum, while the proportion of the populationwhich was undernourished reduced dramaticallyfrom 27 per cent to 19 per cent. During the same

Table 2.18 Production of selected agricultural commodities - 15 largest Asia-Pacific producers, 2001-2003

% share and rank in global production of selected commodities

3

Cereal Oil crops Meat SugarTropical

beverages FibresCitrus fruits Bananas Milk

S1

(%)R2 S

(%)R S

(%)R S

(%)R R S

(%)R S

(%)R S

(%)R S

(%)R

Australia

Bangladesh

China

India

Indonesia

Iran (Islamic Rep. of)

Malaysia

New Zealand

Russian Fed.

Pakistan

Philippines

Thailand

Turkey

Uzbekistan

Viet Nam

Source: FAO (2004). State of the Agricultural Commodity Market (FAO, Rome).

Notes:S1 Reflects percentage share of the total global production of the commodityR2 Rank in total global production

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Figure 2.26 Agricultural imports and exports: Asia-Pacificand global

Source: Based on FAOSTAT data 2005, accessedon 12 November 2005 from <http://faostat.fao.org>.

0

20

40

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1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004

Asia-Pacific imports

Asia-Pacific exports

Bill

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period, agricultural output grew by six per cent perannum, with exports growing even faster, generatinga large agricultural surplus.150

The region has demonstrated a capacity formeeting the growing demand for food. Despite theexpansion of its population over the past 50 years,the region’s improvements in terms of providingfood security have been one of its most impressiveachievements. The Green Revolution raised theaverage per capita dietary energy supply from about2,000 kcal per person per day in 1965-1966 to over2,600 kcal per person per day in 1999-2000.151 It isprojected that the per capita dietary energy supplyof developing countries in the region will increaseto 2,902 kcal per person per day by 2015 and 3,056kcal per person per day by 2030.152

However, the fact remains that the number ofundernourished people in the region still stands atmore than 500 million, 60 per cent of the globaltotal.153 Recent assessments which compared theperiods of 1990-1992, 1995-1997 and 1999-2001indicate that the pace of hunger reduction hasslowed, with a number of developing countriesbacksliding. These assessments show that China,Viet Nam, Thailand and Sri Lanka steadily decreasedthe size of their undernourished populationsthroughout these periods; India, Pakistan andIndonesia significantly reduced the number ofundernourished people from 1990-1997 butregistered increases for the period 1999-2001;Bangladesh and Cambodia had large undernourishedsegments of their populations in the periods 1990-1992 and 1995-1997 but markedly reduced numbersin 1999-2001; and Afghanistan, the Philippines,Tajikistan and Uzbekistan had increasing numbersof undernourished people over the entire period.154

Integration into the global market is likely tocontinue in the region, highlighting the crucial roleof agriculture and agricultural trade in increasingeconomic growth and ensuring food security.However, this growth pattern has also brought anumber of critical issues to the fore, which couldundermine the achievements so far. Two issues standout: the environmental sustainability of intensifiedagricultural activities and the further marginalizationof subsistence farmers, who are not receiving the

benefits from the region’s participation in the globalmarket and the growth of the sector.

2.5.2 Drivers of agricultural intensification

Current agricultural production patterns in Asiaand the Pacific are defined by three critical factors:population increases and shifts which arecorrespondingly expanding and diversifying thedemand for food,155,156 the opportunities presentedby the globalization of markets, and thetechnological improvement of agriculturalproduction processes.

The benefits of increased participation ofdeveloping countries in the global marketplace areillustrated by the case of Viet Nam in section 2.5.1.Apart from significantly reducing the incidence ofhunger and poverty, globalization processes allowdeveloping countries to gain access to technologiesthat can improve their production of particularcommodities. Ancillary benefits of participationinclude improved infrastructure (including transport,particularly relating to ports or railways; energy; andcommunication systems) and the increased availabilityof non-farm goods and services. It should be noted,however, that while openness to global trade bringsimmense benefits to developing countries, it isequally important to recognize the major trade-offsthat take place. Small-scale farmers are often thehardest hit by changes in production structures thataccompany industrialized agriculture. Withoutpolicy intervention, the implications of themarginalization of small farmers for environmentalsustainability can be profound, as this segment ofthe population may be forced through exploitativepractices or farming on unsuitable land, to exertfurther pressure on natural resources. Where thisoccurs, a vicious circle of environmental degradationand poverty is perpetuated.

The decision by developing countries tointensify agricultural activities in order to tradeproducts globally must recognize that, withoutbuilt-in environmental safeguards in both theproduction and trading processes, threats toenvironmental sustainability may be magnified.


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Increasing and diversifying demand foragricultural products

A nutritional transition is taking place, one mani-festation of changing lifestyles and consumptionpatterns discussed in the previous section. Contem-porary Asian diets are turning away from staples,such as rice and grain, towards a growing demandfor animal-sourced food, such as meat and dairyproducts, and for vegetables, fruits, fats and oils.157

The FAO projects that for the period 2000-2010,the demand for cereals in Asian cities alone willincrease by more than 11 million metric tons,almost half of the total increase in demand for rawfoodstuffs; that there will also be a combinedincrease of almost eight million metric tons in thedemand for fruits and vegetables; and that theremaining food demand will be for roots and tubers(2.2 million metric tons) followed by meat (1.9million metric tons). Altogether, this represents atotal increase in demand of more than 23 millionmetric tons of food.158

These increases take into account regionaldifferences in food preferences, which include: a highdemand for eggs in all Asian cities; a variation bysubregion in consumption of other animal products,with South Asia leading the way in demand for dairyproducts; a higher demand for meat and fish andother seafoods in East and South-East Asia; and lowerfresh fruit and vegetable consumption in South Asiathan in East and South-East Asia.159 These changingfood consumption patterns are also shaping agricul-tural product demand. The need to expand the foodsupply in order to meet the food requirements ofeach individual will exert further pressures on theagricultural production sector.

Agricultural food production is not solelydevoted to meeting direct human consumptionneeds. Changing diets and the demand for meat,fish and dairy products have a multiplier effect onthe indirect consumption of grains used as feed forthe livestock industry. Although cereals remainthe dominant source of calories for the humanpopulation, it is estimated that as much as 36per cent of cereals produced are used for animalfeed. Other food products, such as beer, requirehuge amounts of grain to produce. Agricultural

commodities such as jute, fibers and rubber haveindustrial uses, and the demand for those productsthat can substitute for petroleum-based products isincreasing.

2.5.3 Critical pressure points of agriculturalintensification

In the face of mounting pressure to meet the needsof growing populations and at the same time generaterevenue by way of increasing agricultural productionoutputs for export, most developing countries haveadopted a strategy of agricultural intensification.Farmers have shifted to producing high-value dairyand other livestock products, employing farmingpractices such as multiple cropping and plantinghigh-yielding crop varieties. This agriculturalsuccess, however, also has significant negativeenvironmental trade-offs which affect the integrityof natural ecosystems and their future potential. Thecritical pressure points of agricultural intensificationas experienced in the region are outlined below.

Fertilizer and agrochemical use intensity

The Green Revolution relied heavily on theinputs of high-yielding varieties of crops, expandedirrigation coverage and increased use of mineralfertilizers to boost production. The regional produc-tion and use of mineral fertilizers as a proportion ofglobal production is increasing and is dominated byNorth-East Asia and South Asia, particularly Chinaand India, which have produced 64 per cent of thetotal regional fertilizer output (Figure 2.27).160 Interms of fertilizer consumption patterns, fertilizer-use intensity in the region remains high in somecountries but is being reduced in several countries,as shown in figure 2.28. Countries such as India,Lao People’s Democratic Republic, Myanmar, thePhilippines, Sri Lanka, Thailand and Viet Namintensified their use of mineral fertilizers by as muchas 90 per cent over the period 1992 to 2002.

Misuse and excessive use of mineral fertilizersis responsible for land degradation, soil nutrientimbalances, eutrophication and algal blooms infreshwater systems and coastal waters. The misusepesticides and herbicides not only impacts on insectdiversity and contaminates water supplies but


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Figure 2.28 Mineral fertilizer consumption intensity inselected countries

Source: FAOSTAT data, accessed on 15 November 2005 from<http://faostat.fao.org> and FAO (2003).

Selected Indicators for Food and Agricultural Development

in Asia and the Pacific 1992-2002, (Bangkok, FAO RegionalOffice for Asia and the Pacific).

0

50

100

150

200

250

300

350

400

Jap

an

Chin

aV

iet N

am

Ma

lays

ia

U

zbe

kist

an

Sri L

anka

Pa

kist

an

DPR K

ore

aIn

dia

Ind

one

sia

Tha

iland

Philip

pin

es

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ralia Fi

jiSa

mo

aN

ep

al

T

ajik

ista

nM

yanm

ar

Lao

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RM

ong

olia

K

aza

khst

an

Ca

mb

od

iaBhuta

nM

ald

ive

s

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Pe

rce

nta

ge

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era

l fe

rtili

zer

pe

r h

a o

f a

gric

ultu

ral l

an

d

-20

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pua

Ne

w G

uin

ea

Isla

mic

Re

p. o

f Ira

n

Ba

ng

lad

esh

Ne

w Z

ea

land

Re

p. o

f Ko

rea

Fertilizer use intensity (2002) Change in fertilizer use intensity (1992-2002)

threatens the health of farmers. Organochlorineshave not only killed the targeted insect pests but alsotheir natural predators.161

Pressure from expanding irrigation

One in three hectares of agricultural land in theregion is irrigated, as compared with one in ten forthe rest of the world, and irrigated areas are expandingfast.162 Water-stressed countries such as India, SriLanka, Kazakhstan and Thailand are among theleaders in region in this respect (Figure 2.29).163 Theenvironmental impacts of overirrigation are water-logging, the depletion of groundwater and surfacewaters and the creation of routes for the chemicalcontamination of waterways and water bodies. Theenvironmental havoc wrought on the ecosystems ofthe Aral Sea is a clear example of the the devastationthat can occur where over-irrigation due tounderinvestment, poor maintenance, inappropriatepolicies and land management practices exist. Theconstruction of large dams to meet the escalatingdemands for water is a controversial issue.Providing for the needs of the agricultural sector isone of the primary justifications for building largedams. More than half of the world’s dams have beenbuilt exclusively for irrigation; they support 12 to16 per cent of global food production and waterapproximately 40 per cent of the more than 270million hectares of irrigated agricultural landworldwide.164 The impacts of these structures includereduced river flow, social conflict regarding the rightsof access to water and river resources, the uprooting of

Figure 2.27 Mineral fertilizer production in Asia-Pacificsubregions vs. global production

0

5

10

15

20

25

30

35

40

45

50

1961

1963

1965

1967

1969

1971

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

North-East Asia

South-East Asia

Pacific

Mill

ion

m

etr

ic t

on

s

Central Asia andthe Caucasus


Source: Based from FAOSTAT data, accessed on30 March 2006 from <http://faostat.fao.org>.

Figure 2.29 Change in irrigated area as a percentageof agricultural land, 1992-2002

-12 -6 0 6 12 18

Viet Nam

Nepal

Tajikistan

DPR Korea

Bhutan

Rep. of Korea

China

Philippines

Indonesia

Fiji

Malaysia

REST OF WORLD

Cambodia

New Zealand

Pakistan

Japan

Lao PDR

Australia

Mongolia

WORLD

Uzbekistan

ASIA-PACIFIC

Thailand

Kazakhstan

Sri Lanka

India


Bangladesh

Percentage

Source: FAO (2004). Selected Indicators for Food and

Agricultural Development in Asia and the Pacific 1993-2003,(Bangkok, FAO Regional Office for Asia and the Pacific)


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existing settlements, the disruption of the culture andsources of livelihood of local communities, and thedepletion/degradation of environmental resources.165

More efficient water use and storage measuressuch as rainwater harvesting and rehabilitation oftraditional irrigation systems therefore has manybenefits beyond the water saved.

Competition for water will intensify with thedemand for increasing food production and everyresource needs to be optimized. In rice-farming-richcountries, rice-fish farming can be applied as apractical response to the need to maximizeagricultural production using limited resources.166

Trade in virtual water can help to meet foodproduction needs in the most water-intensive ofcrops (Box 2.11).

Intensifying energy use

Another pressure exerted by agriculturalintensification causing increasing concern, is itscontribution to overall energy demand.Agro-industrial farming requires a massive infusionof fossil fuels in the forms of the fertilizers used (ureais a derivative of natural gas), pesticides (derived fromoil) and the hydrocarbon fuel used to run themachines used for cultivation and irrigation.167

Agricultural energy consumption can be brokendown as follows:168

• 31 per cent for the manufacture of inorganicfertilizers

• 19 per cent for operating farm machines• 16 per cent for transport• 13 per cent for irrigation

• 8 per cent for raising livestock• 5 per cent for drying and post-harvest processes• 5 per cent for pesticide production.

Modern food production systems are bothenergy-intensive and inefficient; it can take morethan 10 kcal of exosomatic energy169 to deliver 1 kcalof energy in the form of food delivered to aconsumer.170 One aspect of intensive agriculturein Asia and the Pacific is the shift in the realenergy cost from agricultural production to thepost-harvest segment of the food production system.This is reinforced by increasing urbanization in manydeveloping countries, which requires the movementof agriculture produce to urban centers. It isestimated that between three and five kcal are spentin processing, distribution, packaging and homepreparation for each one kcal that is used in producingfood at the farm level.171

Food travels further than ever before, withfruits and vegetables in developed countries oftentravelling 2,500-4,000 kilometers from farm tostore.172 Trucking accounts for the majority offood transport, though it is nearly 10 times moreenergy-intensive than moving goods by rail or barge.Refrigerated jumbo jets, which are 60 times moreenergy-intensive than sea transport and constitutea small but growing sector of food transport,help to supply the globe with fresh produce.The implications of energy use in agriculturalintensification are not usually factored into thedecision to promote intensification as a strategyfor accelerating economic growth. The emergingchallenge, therefore, is that of how to decouple

Box 2.11 Virtual water trade

Water is required for the production of nearly all goods. The water used in the production process of anagricultural or industrial product is called “virtual water.” For example, a kilogram of grain grown under rain-fedand favorable climatic conditions would require about 1,000 to 2,000 kg (1-2 m3) of water. If the same weight ofgrain is produced in an arid area or under other unfavorable conditions, the amount of water neededincreases to 3,000 to 5,000 kg of water. If one country exports a water-intensive product to another country, italso exports water. For water-scarce countries, it may be attractive to achieve water security by importingwater-intensive products instead of producing them. Conversely, water-rich countries could profit from theirabundance of water resources by trading water-intensive products to water-scarce countries. As a real watertrade is economically and geographically not feasible, the exchange of virtual water can realistically meetsuch needs. Such an arrangement could be an instrument for improving global water-use efficiency andachieving water security in water-poor regions.

Source: Hoekstra, A. Y and P.Q. Hung (2003). Virtual Water Trade: A quantification of water flows between nations in

relation to international crop trade, Value of Water Research Report Series No. 11(Delft, IHE).


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food production systems from the oil industry,which many experts believe is the key to ensuringfood security and maintaining environmentalsustainability in the long term.

2.5.4 The impacts of agricultural intensification:land and soil degradation, air qualityand climate change

Inappropriate land-use practices have long been theprimary cause of the systematic degradation of theregion’s agroecosystems Both the intensification andthe expansion of agricultural activities for cropproduction and pasture have caused severeenvironmental stress, including the conversion offorest areas for agricultural purposes, the reductionof the genetic pool of major crops, soil erosion, soilnutrient depletion, the salinization and sodificationof soils and waterlogging.

A basic practice of increasing agriculturaloutput is to bring more land into production.However, many countries already face severeconstraints in further expanding land used foragricultural production. Only parts of the Pacific andCentral Asia have reserves of land with cropproduction potential; countries in other areas willnot be able to expand agricultural land withoutencroaching on other critical ecosystems. Despitesuch constraints, many countries in the region havecontinued to increase their arable and permanentcroplands, pushing the balance of ecosystems to thelimit (see figure 2.30).

Constraints in arable land are compoundedby soil and slope constraints. Much of the region’sland offers less than optimal conditions for furtheragricultural expansion and intensification. Steepslopes (more than 8 per cent slope incline) and poorsoil condition characterize many of theseagricultural lands. In addition, the fertility of manyof these areas has significantly declined after years ofoveruse and misuse of fertilizers and intensiveirrigation. These conditions are particularly criticalfor small-scale and marginalized farmers, many ofwhom are poor, and who are dependent on thenatural fertility of the soil. With little fertilelowland to cultivate, many poor farmers movetowards the uplands, shifting pressure onto the

forest ecosystems. Conversion of forested land toagricultural use are biodiversity loss and, on a morelong-term basis, the influence on climate change.

Agriculture, forestry and watershed manage-ment are intimately linked. Land use changes in theuplands, particularly the removal of vegetative cover,inevitably impact on the productive potential oflowlands. The region offers many examples of howdenudation and poor land-use practices in water-shed areas have led to reduced storage capacity inreservoirs, lowered irrigation potential and havemagnified the damaging impacts of flooding,especially on agricultural crops. The high sedimentloading of the Himalayan river systems due tointensive upland agriculture and livestock activities,for example, has been causing serious damage to thelowlands of Pakistan, India, and Bangladesh. Inthe Philippines, the massive denudation of thePantabangan watershed has caused severe erosionand siltation, shortening the lifespan of the dam thatis supposed to support irrigation of the food basket

Figure 2.30 Change in arable and permanent croplandas a percentage of total land area, 1992-2002

Source: FAOSTAT online database, accessed on 15November 2005 from <http://faostat.fao.org>.

KazakhstanThailand

Rep. of KoreaJapan

ArmeniaNew Zealand

MongoliaUzbekistan

AfghanistanKiribati

SingaporeTonga

VanuatuCambodia

Solomon IslandsAustraliaSri Lanka

Papua N. GuineaIndia

KyrgyzstanTajikistanMalaysiaLao PDR

BhutanBangladesh

MyanmarTurkmenistan

TurkeyFiji

PakistanDPR KoreaIndonesia

ChinaSamoa

AzerbaijanPhilippines

NepalViet Nam

PalauMaldives

F.S. of MicronesiaMarshall Islands

Percentage of total land area

Brunei Darussalam

Russian FederationIslamic Rep. of Iran

-15% 0% 15% 30% 45% 60%


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area of Luzon. The same has been observed in theYellow River of China.

Land and soil degradation

Land and soil degradation have become issues ofglobal importance in the last 10 years. The impactof these phenomenons on the productivity ofagricultural lands means that they affect the lives ofmore than a billion people globally. Land degradationis a complex process which can take different formsand have different levels of intensity, influencedmainly by topography, soil characteristics, climaticconditions, vegetative cover and human activities (see

table 2.19). Resource assessments indicate that vastareas of croplands, grasslands, woodlands andforests in Asia and the Pacific are critically affectedby various forms of land degradation. The fullimpact of land degradation is more severe in drylandecosystems, where it can cause desertification. Forexample, in South and South-East Asia, around 74per cent of agricultural lands are severely affectedby wind and water erosion as well as by chemicaland physical deterioration.173 Central Asia is mostseriously affected by desertification and erosion.In Kazakhstan alone, around 66 per cent ofthe total land area is desertified (see chapter 6).174

Table 2.19 Areas affected by land degradation, Asia

Type of land degradation Country or area Critical areas and predominant cause of land degradation

Water erosion

Wind erosion

Salinization

Waterlogging

Afghanistan

Central Asia

China

India

Pakistan

South-East Asia

Central Asia

China

India

Mongolia

Afghanistan

Central Asia

India

Pakistan

Central Asia

India

Pakistan

Region north-east of Kabul: removal of vegetative cover andmountainous areas.

South-east Kazakhstan: overexploitation of vegetative cover.

Loess plateau, central and north-central China and someparts of north-west China: deforestation and overexploitationof vegetative cover.

Northern India (Punjab), Indus and Ganges: overexploitationof vegetative cover.

Balochistan: deforestation, overgrazing and overexploitationof vegetative cover.

All South-East Asian countries during the monsoon: deforestation,removal of vegetative cover, especially in areas withcritically steep slopes.

South-east Kazakhstan: overexploitation of vegetative cover.

North-east China, north-west China, inner Mongolia:overgrazing of rangelands and overexploitation ofvegetative cover.

North-west India (Rajasthan and Gujarat states): agriculturalactivities.

Central-eastern steppe, Selenge-Onon and Govi andGovi-Altai regions: overgrazing of rangelands and removalof vegetative cover.

South-east areas of Kabul, particularly the areas of Helmand,Kabul and Arghandab rivers: agricultural activities andsocial conflicts.

Turkmenistan, Uzbekistan and Kazakhstan: agriculturalactivities and removal of vegetation.

Portions of the north-west (Punjab, Haryana, Gujarat) andTamil Nadu: agricultural activities.

Punjab and Indus areas: agricultural activities.

Turkmenistan, Uzbekistan and Kazakhstan: agriculturalactivities and removal of vegetation.

Portions of Northwest (Punjab, Haryana, Gujarat) and TamilNadu: agricultural activities.

Punjab and Indus areas: agricultural activities.


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The pressures to increase production, eitherfor subsistence farming or for commercial purposes,and other unfavourable socio-economic developmentpolicies are the primary drivers for unsuitableagricultural management regimes such as theovergrazing of livestock, nutrient overloading andover-irrigation. Ecologically-fragile areas such asdrylands and forest ecosystems with steep slopes areparticularly vulnerable. Fragility of their soils makesPacific Island countries extremely susceptible to theimpacts of shifting agriculture, overpopulation andinappropriate land and other resource use. Australia’sefforts to reduce land degradation continue to bechallenged by agricultural pressures, its dry climate,water scarcity and drought conditions.

Air quality and climate change

The emissions of ammonia from livestock manurecan be a major source of air pollution in agriculturalareas. Very little research has been done in Asia andthe Pacific on the possible implications of airborneammonia. Often considered a nuisance pollutantbecause of its odour, airborne ammonia can acidifysoils and eutrophy water bodies. The OECD projectsthat the total nitogen loading in the environment(air, soil and water) originating from livestock, willgrow by 30 per cent between 1995 and 2020.175

Agricultural activities contribute to globalclimate change in both positive and negative ways.On one hand, the soils of the agroecosystem are goodcarbon sinks, properties which can be enhancedthrough proper farm tilling and soil conservationmanagement. On the other, the agricultural industryis a major source of greenhouse gases. A studyconducted in China,176 Japan177 and the Philippines178

has shown that the raising of livestock, particularlyof ruminant animals such as cattle, and the cultivationof rice are significant sources of methane, while themain source of nitrous oxide emissions is the use ofnitrogen fertilizers.

Given these challenges, governmentspromoting sustainable agriculture in the region willneed to focus on the following: policies that furtherimprove agricultural productivity while easing thepressure on ecosystems; policies to address globalenvironmental concerns that are cost-effective and

do not have cost implications for small-scalefarmers; and practical strategies for educatingfarmers on the benefits of sustainable farmingpractices.

2.5.5 Mitigating the impacts of agriculturalintensification

There is increasing recognition among policymakersin the region of the implications of agriculturalintensification for the environment. Agriculturalpolices are being reviewed with a view toincorporating sound environmental principles inagricultural development frameworks. While thesepolicy reassessments are being pursued, agriculturistsand industry practitioners are already movingtowards profitable, and more sustainable, strategiesfor agricultural production.

Organic farming: an industry with a growingmarket niche

As concern about the environmental impacts ofmineral fertilizers increases, organic farming isattracting attention (see table 2.20). Organic farminghas found a niche in high-income markets andorganic products are commanding premium prices.The Worldwatch Institute confirms that the shift toorganic farming may be a poor farmer’s best hopefor maximising production and increasing economicindependence as well as reducing hunger and boostinglong-term production.179

Developments in biotechnology: the new generationof the agricultural revolution

The application of biotechnology represents the newgeneration agricultural revolution, following in thepath of the Green Revolution.180 This technologyhas a wide spectrum of applications, from improvingthe genetic makeup of livestock, crops, forestry andfisheries, to developing protective mechanisms thatcan fight and resist agricultural pests and viruses.The FAO argues that the application of biotech-nology should be viewed in the context, not ofsubstituting current research work such as that onplant breeding, integrated pest management,livestock breeding, feeding and disease management,but as complementary work towards an integrated


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Table 2.20 Organic farming in the Asia-Pacific region

Country Organic farms,number

Organic farms,per cent of all farms

Hectares Percentage of totalagricultural area

Australia

Azerbaijan

Bhutan

China

Fiji

India

Indonesia

Japan

Kazakhstan

Lao People’s Democratic Republic

Nepal

New Zealand

Pakistan

Philippines

Republic of Korea

Russian Federation

Sri Lanka

Thailand

Turkey

Viet Nam

1 380

285

-

2 910

10

5 147

45 000

-

1

-

26

800

405

500

1 237

-

3 301

1 154

18 385

1 022

1.40

0.75

-

-

-

-

-

-

-

-

-

1.14

0.08

-

-

-

-

0.02

-

-

10 000 000

2 540

-

301 295

200

37 050

40 000

5 083

36 882

150

45

46 000

2 009

2 000

902

5 276

15 215

3 993

57 001

6 475

2.20

0.20

-

0.06

0.04

0.03

0.09

0.09

-

0.01

..

0.33

0.08

0.02

0.05

..

0.65

0.02

0.14

0.08

Sources: FAO (2004). Selected Indicators for Food and Agricultural Development in Asia and the Pacific 1993-2003


and comprehensive agricultural research anddevelopment programme.181

The widespread application of biotechnologyis impeded by strong public opinion on the safetyand environmental impacts of its use. Much of thedebate revolves around the use of transgenic crops,more widely known as genetically modifiedorganisms (GMOs).182 There are, however, lesscontroversial areas of biotechnology which areproving valuable to agricultural production and thatcan potentially provide immense benefits to the poor.The study of genomics is radically boostingknowledge of how genes, cells and organismsbehave in an ecosystem. The development of newtools for diagnosing and treating diseases hosted byplants and animals, improvements in animalnutrition, and the reduction of the impacts ofanimals on the environment, as well as the production

of vaccines against animal diseases are some of themost promising areas of biotechnology application.There are now 67.7 million hectares planted withGMOs in 18 countries, representing an increase of2.8 million ha from 1996.183 In Asia and the Pacific,at least five countries have begun to plant GMOs(see table 2.21).

Widening support for Integrated Pest Management

The indiscriminate use of chemicals to control pestsand unwanted plants has also created seriousenvironmental impacts. Pest resistance andresurgence were major threats to the GreenRevolution and affected many farmers in the region.The early response to the problem was to developmore potent chemicals, but their application has alsoaffected other organisms which in cases, were deemedbeneficial to the crops that are being protected.


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Subsequent research was directed towards theapplication of biological controls, particularly formajor rice pests. The ensuing efforts of governmentshave been directed towards aggressive promotion ofintegrated pest management (IPM). Initial effortsresulted in mixed success, as the promotion strategywas based on the conventional promotion packagesof the Green Revolution, a centrally designedinformation and education campaign. It was notuntil communities and farmers were involved in theinformation and education process, that theprogramme gained wider acceptance and greater ratesof success.184 Farmer empowerment is now centralto the promotion of IPM programmes, withfarmers trained to master the fundamentalecological principles necessary to make IPM work,allowing them to apply their knowledge to developnew and locally adapted techniques.185 Thisapproach, known as the IPM Farmer Field Schools,was pilot-tested in Indonesia and later expanded toother countries. The widespread promotion ofIPM taught significant lessons about sustainableagriculture, emphasizing that combining theelements of technological development, adulteducation, local organization, alliance forming,confidence building and sharing information arecritical to both agricultural growth and ensuringenvironmental sustainability.

Increasing awareness of the judicious use offertilizers

Awareness of the negative effects on the environmentof overusing or misusing chemical fertilizers hasmeant that a growing number of countries are

recognizing the benefits of judicious use of fertilizers.In the Republic of Korea, for instance, there has beenan increasing use of bulk-blended fertilizers (BBfertilizers) that allow for more balanced applicationof the essential minerals, rather than compoundchemical fertilizers that are more prone to misuse.186

The use of organic fertilizer is growing in China,India, the Philippines and Thailand.

The challenges of meeting the ever-expandingdemand for food in the region, whilst ensuring thatthe agricultural production systems do not exertexcessive pressure on the environment’s sustainability,remain overwhelming. The responses of governmentsto these challenges, described above, are steps in theright direction and should continue to be supportedby governments and promoted by the private sectorand the donor community. However, even theseefforts will not be sufficient to address the core issueof maintaining environmental sustainability. Theimperative to decouple agricultural intensificationfrom unsustainable patterns of growth, such asintensifying energy and water use, remain a priorityfor Asia and the Pacific.

2.5.6 Capture fisheries and aquacultureproduction

The FAO reports that global capture fisheries(marine and inland) and aquaculture has been highsince 1991.187 The fisheries sector contributes morethan 15 per cent of total animal protein to globalfood security. Between 1998 and 2002, worldcapture fisheries production (excluding aquaticplants) fluctuated, largely because of El Niño.Globally, China remains the leader in capturefisheries production (including aquatic plants)followed by Peru, the USA, Japan and Indonesia.188

At a subregional level, North-East Asia leadscapture fisheries production, as China and Japanaccount for the bulk of total regional production.

Since 1984, global aquaculture has increasedby more than 300 per cent, growing at an average of10 per cent a year in the 1990s and making it thefastest-growing food production activity.189 Thegrowth of the aquaculture industry is comparable tothat created by the Green Revolution programmein agriculture during the 1970s. World aquaculture

Table 2.21 Commercialization of transgenic crops

Countries in theregion usingtransgenic cropsin 2003

Type oftransgenic

crop

Trait oftransgenic

crops

Australia, China,India, Indonesia,and thePhilippines

Canola, cotton,green pepper,maize, papaya,soybeans,squash andtomato.

Source: FAO (2004). State of Food and Agriculture 2003-2004:

Agricultural Biotechnology Meeting the needs of the poor?

(Rome, FAO).

Herbicidetolerance, insectresistance andherbicidetolerance


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production is dominated by Asian countries whichaccount for almost 90 per cent of all farmed fish,shrimp, and shellfish.190 China leads the productionof aquaculture products, contributing some 70 percent of global production in 2002 (see table 2.22).Aquaculture products cater to both domestic andexport markets: high-valued species such as shrimpand salmon are frequently grown for export, whilelower-valued species such as carp and tilapia are, forthe most part, consumed locally.

The spectacular growth of aquaculture overthe last decade underscores the increasingimportance of the industry in meeting the growingglobal demand for fish. Its contribution to meetingthe increasing demand for a cheap protein sourcefor a growing population cannot be overemphasized.Whereas one third of the conventional fish catch isused in making fish meal and fish oil191 for animalfeed, virtually all farmed fish are used as human food.Nearly one third of the fish consumed by humans isa product of aquaculture and this proportion isexpected to increase further as the fish catch fromthe ocean and lakes declines due to overfishing andthe wanton destruction of marine habitats.

In 2002, 11.6 million metric tons of seaweed(wet weight) valued at US$6.2 billion was produced,the bulk of which (89 per cent) originated fromculture-based practices. The 2002 global aquaculture

Table 2.22 Share of major Asia-Pacific countries inglobal aquaculture production, 2002

Share of global production

%Quantity

(thousand metric tons)

China

India

Indonesia

Japan

Bangladesh

Thailand

Viet Nam

Rest of the world

Total

70

6

2

2

2

2

1

15

100

27 767

2 192

914

828

787

645

519

6 147

39 799

Source: FAO (2004). The State of the World Fisheries and

Aquaculture 2004 (Rome, FAO).

production of aquatic plants represents an increaseof about 14 per cent from the 2000 level of 10.2million metric tons.192 Chinese production ofaquatic plants reached 8.8 million metric tons in2002, representing 76 per cent of the total volumeand about 71 per cent of the total value of globalaquaculture production of aquatic plants.193

The increasing demand for fish and othermarine products is intensifying pressure on marineecosystems. While the region has vast areas availablefor fisheries, it has also been noted that the industrymay have already reached the maximum sustainableharvest limits. Theoretically, fish are renewableresources that can be harvested sustainably providedthat appropriate fishing methods are applied.Unfortunately, current harvesting practices do notobserve the natural fish recovery cycles. The mostdramatic declines in fish stock globally are in South-East Asia. In some areas a decline of 40 per cent infive years has been observed.194 In essence, much ofthe current practice of capture fisheries follows a“resource mining” approach: the exploitation ofspecies begins with those of the highest value or oflowest harvest cost; as species become exhausted,species of lower value or higher harvest cost areprogressively exploited.195

Other factors that contribute to the pressureon fishery resources are pollution from both offshoreand land-based sources, habitat destruction,destructive fishing techniques such as bottomtrawling, the use of fine-mesh nets and dynamitefishing, and global warming. Aquaculture providesa viable alternative and alleviates the demand forwild-caught fish, but without the appropriatemeasures to prevent environmental degradation, thepractice can also have local negative environmentalimpacts.

Coastal and marine ecosystems: pressures onecosystem quality affecting the fishery industry

The Asian and Pacific region has the longest regionalcoastline in the world. Population increases, risingfood demand and conversion of ecosystems fordevelopment are exerting tremendous pressure onthese areas and threatening the integrity ofecosystems. Almost 40 per cent of the population of


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the region lives within 100 kilometres of the coastalareas. Of the 12 mega-cities in the region, eightimpinge on the coastal zones. Coastal zones in theregion remain highly vulnerable to various economicdevelopment activities.

Mangroves are unique ecosystem features oftropical and subtropical coastlines and fulfill criticalfunctions in both conservation and providinglivelihoods for communities. These ecosystems arerich in biodiversity and provide a wealth of goodsand services at both local and national levels. Theyare, however, continuously under threat of beingconverted to other uses, such as tourism, or foraquaculture to produce highly valued shrimps forexport and firewood, as in Indonesia.

The region accounts for about 50 per cent ofthe total mangrove area in the world,196 with South-East Asia accounting for about 78 per cent of themangroves in Asia and the Pacific (see figure 2.31).The area of mangrove lost in the region from 1990to 2000 represents approximately 60 per cent of theglobal loss, with South-East Asia accounting for themajority of the total coverage lost.197 The Philippinesand Viet Nam have the most extensive areas ofmangroves that have been converted to other landuse, mostly for aquaculture (Figure 2.32).

The conversion of mangrove ecosystems foraquaculture has the most serious effects, since thisactivity not only induces loss of vegetation but alsoleads to the deterioration of water quality andthe loss of biodiversity, and contributes to thedecline of fish stocks.198 In recent years there has beena decrease in the conversion of mangrove ecosystems,attributed largely to the decision of many govern-ments in the region to ban mangrove conversionor require the conduct of environmental impactassessments .199

The value of coral reefs for the marineecosystem is analogous to that of forests forterrestrial ecosystems. They play a valuable role inproviding services such as habitats and nurseries forthousands of species of fish and marine life forms,and protect exposed coasts from the pounding ofoceans and seas. However, like mangroves, coral reefsare under assault from a multitude of sources.

Reef damage in Asia and the Pacific has increasedover the past 20 years, and there is reason to believethat there is a serious global decline in theseresources.200 Coral reefs are at risk of degradationfrom coastal development, destructive fishingpractices, sedimentation from land-based activitiesand marine pollution. Coastal development gives rise

Figure 2.31 Mangrove forest cover by subregion

1980 1990 2000

6,263

1,826

1,482

66

1,339

45

1,681

5,260

4,460

1,5041,305

24

South-EastAsia

Pacific

South and South-WestAsia

North-EastAsia

7,000

6,000

5,000

4,000

3,000

2,000

1,000

0

Tho

usa

nd

h

a

Source: FAO (2003). State of the World’s Forests 2003

(Rome, FAO).

Figure 2.32 Change in mangrove forest cover, 1990-2000

Percentage

-51% -34% -17% 0% 17%

Bangladesh

India

Kiribati


Brunei Darussalem

Thailand

Malaysia

Australia

New Zealand

Myanmar

Solomon Islands

Philippines

Papua New Guinea

Sri Lanka

Fiji

Cambodia

Pakistan

Timor-Leste

Indonesia

Tuvalu

Samoa

Vanuatu

Viet Nam

China

Source: FAO (2003). State of the World’s Forests 2003

(Rome, FAO).


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to several harmful effects such as mining, landdevelopment – particularly coastal reclamation andport or harbour dredging – pervasive sewagereleased near shore and discharges from industrialplants. Actual coral reef conditions are difficult toassess, but estimates based on the proximity andintensity of known risk factors such as ports, urbancenters, coastal population density and prevailingland use patterns indicate the potential extent ofdamage to the coral reefs.201 Fishing by both localartisanal fisheries and commercial fishing operatorsaffects about one third of all reefs.

Approximately 60 per cent of the region’s coralreefs are estimated to be at risk.202 The reefs of South-East Asia are the most species-diverse in the worldand are also the most threatened, with more than80 per cent at risk, including 55 per cent at high orvery high risk (see table 2.23). The Pacific reefs,which have more reef area than any other subregion,face comparatively fewer risks as they are distant fromintensive human activity.

Coral bleaching has increased the vulnerabilityof coral reefs and is attributed to climate change.The major El Niño and La Niña events of 1997-1998 destroyed approximately 16 per cent of the

world’s coral reefs. The impact of these eventsstretched from the Arabian/Persian Gulf to theAtlantic Ocean. The most severely bleached were thereefs of the Indian Ocean, South-East and East Asiaand some of the reefs in the Pacific. Recovery in theseareas has been slow to moderate, and in some partspoor, rendering the reefs effectively dead. In areaswhere there is less or no human disturbance,recovery has been considerable. However, there isgrowing concern in the scientific community that arecurrence of the phenomenon could arrestrecovery or render some reefs unviable.203

Initiatives for sustainable fishing: not yet sufficient

Many Asian and Pacific countries have made effortsto stem the overexploitation of fisheryresources. With international support and fundingassistance, coupled with industry-based initiatives,a significant level of improvement has been achieved.Interventions have primarily focused on improvinggovernance through the development of appropriatepolicy and planning frameworks that reflect themultiplicity of factors and actors in the fisherysector. Among the prominent initiatives areESCAP’s efforts to promote integrated coastal zone

Table 2.23 Reefs at risk in Asia

Reef area,‘000 ha

Reef area, % of total

Threat index, % of reefs

Low Medium High Very high

Indonesia

Philippines

Spratlys and Paracel Islands

Malaysia

India (Andamanand Nicobar Islands)

Japan

Thailand

Myanmar

Viet Nam

China

Brunei Darussalam

Singapore

Cambodia

Asia

5 087.5

2 581.9

575.2

400.6

399.5

260.2

178.7

168.6

112.2

93.2

18.7

5.4

4.2

9 885.9

51.1

25.9

5.8

4.0

4.0

2.6

1.8

1.7

1.1

0.9

0.2

<0.1

<0.1

-

14

2

0

13

45

22

23

44

4

8

79

0

0

12

39

27

100

44

53

38

24

36

22

14

16

0

0

39

46

63

0

38

2

37

51

20

49

76

5

100

90

45

1

7

0

4

0

3

1

0

25

3

0

0

10

3

Source: World Resources Institute (2002). Reefs at Risk in Southeast Asia (Washington DC, World Resources Institute).


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management in many developing countries, whichwere pursued in the early 1990s.

Since then, other agencies have built on theseexperiences to expand the coverage of similarprogrammes. In the Philippines, USAID hassupported the implementation of the CoastalResources Management Program (CRMP), whichbuilt the capacities of local governments to protectand develop their respective coastal resources. TheADB has extended loan programmes for thefisheries sector and coastal resources managementto Cambodia, Indonesia, the Philippines, Sri Lanka,Thailand and Viet Nam, with components of policyand enforcement capability improvement as well asa massive information and education campaign forcommunities about protecting these resources. UNEPhas two regional seas programmes (East Asian Seasand South Asian Seas) involving a number ofcountries, with certain programmes supported bythe Global Environment Facility (GEF).

Private sector involvement in the sustainablemanagement of fishery resources is also increasing.FAO’s recent establishment of guidelines for theeco-labeling of fish and fishery products frommarine capture fisheries is expected to promote thesustainable management of fishery resources.204 FAOhas also been actively promoting the FAO Code ofConduct for Responsible Fisheries, which, althoughvoluntary in nature, stipulates the principles andstandards applicable to the conservation, managementand development of all fisheries. It also covers thecapture, processing and trade of fish and fisheryproducts, fishing operations, aquaculture, fisheriesresearch and the integration of fisheries into coastalarea management.205

These initiatives have had positive impacts onthe management of fisheries and coastal resourcesin the region. However, despite their achievements,the challenges of the sector remain formidable. Partof the difficulty stems from the complexity of theissues involved in the management of fishery andcoastal resources in the region. A comprehensivefishery and coastal resources managementapproach continues to be important for the region.The influence of such a policy, however, may belimited unless a major paradigm shift is embraced

which recognizes that fisheries and coastal resources,like other natural endowments, are not infinite.

2.6 Urbanization and globalization ofconsumption patterns

2.6.1 Rapid urbanization: a defining growthpattern in Asia and the Pacific

The Asian and Pacific region has one of the mostremarkable urbanization rates in the world. In 1975,two of the five cities with populations greater than10 million (defined as “megacities”) were in theregion. By 2005, there were 20 mega-cities worldwide,of which 12 were in the region.206 The totalnumber of urban residents is growing at a rate ofapproximately 2.7 per cent per annum.

While South-East Asia has some of the fastestgrowing cities, South Asia, and particularly thecities of Dhaka, Karachi, Kolkata and Mumbai, areat the epicentre of this growth (see figure 2.33). andby 2015, 20 cities in South Asia are expected tohave populations greater than 5 million. Urbanpopulation growth in the Pacific is likely to be slower,rising from 73 per cent of the total populationin 2003 to 74 per cent by 2030. The urbanpopulations of those countries with economies intransition are expected to approach 78 per cent oftheir projected total populations by 2020.

In the 1950s, the region’s urban populationcomprised only 20 per cent of its total population.207

The urban population is expected to surpass thatof the rural population by 2025 (Figure 2.34).The phenomenal growth of cities highlights theircritical role in development. Cities offer myriadopportunities through the creation of markets andthe provision of employment opportunities. Theyalso facilitate social transformation by serving as amelting pot for ideas and cultures, bringing in newknowledge, perspectives and human capital.

However, fulfilling this potential requires thatthe needs of human populations be met in anequitable and environmentally sustainable way. Thedramatic growth of urban populations signals atremendous increase in demand for physical spaceand infrastructure, including housing.


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This implies future pressure on water andenergy supplies, freshwater and coastal ecosystemsand on air quality. It also implies land conversionand a mounting waste problem.

Poverty, inadequate housing, underdevelopedwater supply and sanitation infrastructure, air and

water pollution are among the key challenges alreadyconfronting Asian and Pacific cities. Evolvinghousehold consumption patterns are the core of theseissues and the intensification of pressure onenvironmental sustainability across the region.

2.6.2 Globalization of consumption patterns

Urban consumption patterns are pivotal in definingwhether cities follow a sustainable or unsustainablegrowth path. A major characteristic of urbanhouseholds is their increasing consumerism andchanging lifestyles, which progressively multiplies thequantity, quality and variety of products andservices that are offered and demanded.208 Thedemand for new types of goods, including packagedfoods, household products, electronic appliances,vehicles and other modes of personal motorizedtransport to meet basic needs as well as to satisfy thedesire for luxury, is increasing.209

Consumption patterns do not only refer tofood and consumer items, but are expressed invarious aspects of the consumer’s lifestyle – modesof transportation and accommodation, for example.The capacity of developing countries to managethe environmental threats posed by shifts inconsumption behaviour and changing lifestyles raisesserious concerns.

Changing food consumption patterns of urbanhouseholds

Increasing per capita incomes accompanied bychanging lifestyles are dramatically modifying Asianand Pacific diets. Contemporary regional foodconsumption patterns reflect a significant reductionin per capita consumption of rice; an increased percapita consumption of wheat and wheat-basedproducts; an increasing diversity; a markedpreference for high-protein and energy-dense foods;the rising popularity of convenience stores; and agrowing influx of imported food products.210

As discussed in the previous section, thesechanges in food preferences represent a decline inthe environmental sustainability of consumptionpatterns in several respects. On the supply side,impacts can be traced to the manner in which raw

Figure 2.33 Projected urban population changes inmajor cities, 2005-2015

Source: United Nations (2004). World Urbanization Prospects:

The 2003 Revision (New York, Population Division).

-1.5 0.0 1.5 3.0 4.5 6.0

Seoul

Shanghai

Osaka-Kobe

Beijing

Moscow

Tianjin

Tokyo

Tehran

Istanbul

Metro Manila

Kolkatta

Jakarta

Mumbai

Karachi

Dhaka

Delhi

Millions

0

500

1,000

1,500

2,000

2,500

3,000

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 2030

Urban population

Rural population

Po

pu

latio

n,

mill

ion

s o

f p

eo

ple

Figure 2.34 Urban and rural population

Source: United Nations (2004). World Urbanization Prospects:

The 2003 Revision (New York, United Nations).


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foods are stored, processed, packaged, distributedand delivered for final consumption. For instance,vegetables sold at market may have been producedusing agrochemicals and water, increasing thelikelihood of water pollution near farm areas.Making fruits and vegetables available all year roundinvolves greater energy use, both in production andin transport to markets. One study that quantifiedthe distance travelled by food, as well as totalconsumption levels, reveals that Japan’s total “foodmileage” for 2001 was 900 billion tonne-kilometres– 8.6 times that of France, 3 times that of the USAand 2.8 times that of the Republic of Korea – withimpacts for CO2 emissions related to transport.211

The raising of livestock and poultry for commercialpurposes is a primary source of water pollution. Themanufacture of food and beverages also accounts fora significant portion of the total organic waterpollution loading of industries in the region.212

Demand-side impacts arise directly from theactions of urban consumers, i.e. food packaging, storage, preparation and cooking. The largest sourceof these impacts is the waste generated by urbanhouseholds. Packaging waste is the most problematicissue, as plastics, convenient but difficult to recycle,are a popular packaging material.213 Food waste hashuge recycling potential, but in theabsence of specific systems for its collection, it isusually mixed with other household waste that goesto landfills or open dumpsites; this waste cancontaminate groundwater and surface water sources.Fast foods may eliminate the need to consumeenergy for cooking, but these savings may beoutweighed by the energy used for preserving foodsthrough refrigeration.214 The transition in nutritionpatterns is also affecting the health and well-beingof the urban population. There has been a rise inthe prevalence of “modern diseases” such as obesity,cardiovascular disease, hypertension, stress, anddiabetes related to the preference for energy-dense diets.

The emergence of highly pathogenic andinfectious diseases such as SARS and Avian flu hascaused serious health concerns, and is associated withfood transport and handling in urban areas.215 Thespread of these diseases has been facilitated by the

under-investment in maintaining sanitary conditionsand public markets, the continuing popularity of‘wet’, or live animal markets, and the increaseddemand for exotic wild-caught meats, whichprovides new pathways for disease transmissionbetween wild animals and humans. Not only are wetmarkets potential sources of pathogens, but they arealso significant contributors to local pollutionthrough water and solid waste.

Slums and poverty: unmet infrastructuredevelopment needs

While the lifestyles and consumption patterns ofrising Asian and Pacific “consuming classes” andthose of the region’s slum dwellers lie at theopposite ends of the spectrum, both groupsrepresent sources of massive environmental pressure.Slums, as defined by UN-HABITAT,216 are acontinuing concern in this rapidly urbanizing region.Thirty-seven per cent of the region’s 1.4 billionurban residents were estimated as living in slums in2001, with South and South-West Asia having morethan 57 per cent of its urban population living inthese areas (see table 2.24). Urban slums areprojected to grow as urban populations increase. Thisrepresents a tremendous unmet current and futuredemand for water, sanitation services, energy,housing and transportation infrastructure.

While the combination of an influx of ruralpopulation into urban areas and inadequateinfrastructure to accommodate it facilitate thedevelopment of slums, the lack of “legitimacy” ofslum occupants either because of the often temporarynature of their stay or employment, and/or status asimmigrants or refugees is a major barrier to providingthe necessary infrastructure to improve their qualityof life.

Slums have always been viewed negativelyas they suffer disproportionately from pollution,health hazards, crime, drug use and other productsof social malaise. However, slums play a significantrole in supporting the urban development process.From an economic and social standpoint, slums serveas a transit point for rural migrants and can serveas a ‘melting pot’ of ideas and cultures which cangive rise to new artistic expressions and economic


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opportunities. Recognizing the rights of thoseliving in slums to basic services and developmentopportunities should be a matter of urgent nationalconcern, but also acknowledged as a substantialsource of future environmental pressure.

Changing urban household energy consumptionpatterns

In both highly industrialized countries (regionalOECD countries China, India and the RussianFederation) as a group and in other regional countriesas a group, residential energy consumption accountsfor at least one third of energy consumed, and istherefore a major determinant of overall the overallregional energy demand.217, 218

Two key trends associated with lifestyle changeand rising incomes are defining energy consumptionof urban households: an increasing proclivity foracquiring durable consumer goods, such as electronicappliances, that testify to rising income and status,and the growing preference for larger, western-stylehouses that require more energy to heat or cool. Thegrowing individual ownership of electricity-consumingconsumer goods, such as fridge-freezers (see table2.25), electric cookers, microwave ovens, airconditioners and clothes driers, is increasing thedemand for energy in urban areas. In China, forinstance, the ownership of air conditioners rosedramatically from almost no ownership (0.34 per100 urban households) in 1990 to ownership byslightly more than half of the urban population(51.10 per 100 urban households) in 2002.220

Electrity used per urban household increased by 200

per cent from 77.4 kWh in 1990 to 237 kWh in2002.221Although electricity consumption makes uponly some 9 per cent of final energy consumptionof the residential sector in the ESCAP regionoverall, this figure rises to 48 per cent for Australia,Japan and New Zealand.222

With higher disposable incomes, the preferencefor bigger dwellings with western-style designs hasincreased. Many of these designs, however, do nottake into account their location’s environment andignore the traditional designs which are more adaptedto local conditions. As a result, most of these newhomes require substantial amounts of energy forcooling or heating the rooms and for water heating.The lax enforcement of building codes, if any, theabsence of programmes that promote the value of

Table 2.24 Population of slum areas by subregion, 2001

Total population,millions

Urbanpopulation,

millionsUrban, % of

total population

Slumpopulation,

millions

Slum population, % of urban

North-East Asia

Central Asia and the Caucasus

South-East Asia


Pacific

Total for Asia-Pacific region

1 629

74

529

1 517

30

3 780

731

34

202

473

23

1 464

45

45

38

31

75

39

206

9

57

272

0.82

545

28

29

28

57

4

37

Source: UN-HABITAT (2003). Slums of the World: The face of urban poverty in the new millennium? (Nairobi, UN-Habitat).

Table 2.25 Sales of fridge-freezers219

1995 2000

China

Hong Kong, China

India

Indonesia

Malaysia

Philippines

Singapore

Republic of Korea

Thailand

Viet Nam

0.7

0.3

0.2

-

2.1

0.7

1.7

25.3

0.8

0.1

11.5

18.9

0.5

2.3

6.8

4.5

27.9

35.4

17.9

2.3

Source: Euromonitor International Inc. (1999 and 2002).

Consumer Asia 1997 and 2002 (London, Euromonitor Plc).

number per 1,000 inhabitants


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home insulation and subsidized electricityconsumption only increase inefficiency of energy usein urban areas.

One way of potentially reducing energyconsumption by urban households is the selectionof more energy-efficient products. Advances intechnology are improving the energy efficiency ofappliances. Ecolabelling initiatives by the privatesector and governments mean that consumers nowalso have better access to reliable information onenergy use and can therefore make more informedchoices. Consumer education and changingconsumption behaviour are critical to achieving thedesired downward shift in the energy consumptionof urban households while maintaining quality oflife. Despite the evidence that electricity consumptionis increasing, access to energy remains a major issueeven in urban centres. Large segments of thepopulation still do not have access to electric power.

Urbanization also means expanding demandfor water for domestic consumption. An urbanitewith access to piped water and undergroundsewerage systems uses about three times the amountof water as a person in a rural area, with consequentimpacts on wastewater production (Table 2.26).223

Although income plays a major role in influencingper capita domestic water use, climate, lifestyles,attitudes to water and pricing are also key factorsdictating patterns of domestic water use (Figure2.35).

An “invisible” factor which limits access topiped water in urban areas is that of aginginfrastructure. Pricing inefficiencies mean that inmost parts of Asia, water tariffs are too low toinfluence demand, and diminish investment inimprovements that would reduce transmission lossesand reduce the risk of water contamination. Whereillegal and informal trade in water fills the gap inthe market left by underdeveloped infrastructure, thepoor subsidize the rich, paying as much as 25 percent more per unit of water purchased than thoseconnected to a water supply.224

The global bottled water industry has becomea multibillion dollar industry, making it one of themost dynamic sectors of the food and beverage

industry. Growing at an average of 12 per cent perannum, the industry produces an annual volume of89 billion litres of water, valued at an estimatedUS$22 billion.225 For some, drinking bottled wateris a lifestyle choice, but for others, bottled water is amore expensive, but the only, alternative toinaccessible or contaminated tap water fordrinking.226 Although Asian and Pacific consumersaccount for only an estimated 13 per cent of globalbottled water consumption, it is the mostpromising market, with an annual growth of 15 percent.227 However, this change in consumptionpattern is not without some serious environmentalimpacts. Globally, more than 1.5 million metric tonsof plastics, mainly polyethylene terephthalate (PET),are used to bottle water. While PET bottles require

0 50 100 150 200 250 300 350

Malaysia

Islamic Rep.of Iran

DPR Korea

Turkey

Russian Federation

Japan

Rep. of Korea

Australia

Armenia

m3 per capita per year* Countries with greater than 90 % of population with access to improved drinking water

Figure 2.35 Domestic water use per capita in selectedcountries*

Source: Based on data from the FAO AQUASTAT onlinedatabase, accessed on 15 November 2005 from

<http://faostat.fao.org>.

Table 2.26 Average pollution loads of wastewatergenerated by one person in Japan, 1996

Average,g/person/

day

% of urine and

faeces

% of soiled (grey)

water

Biological oxygendemand

Chemical oxygendemand

Suspended solids

Nitrogen

Phosphorous

58

26

44

12.5

1.5

32

36

47

75

75

68

64

53

25

25

Source: Ministry of Construction, Government of Japan(1996). “Guidelines for investigation of a Basin-wide Sewage

Works.”


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less energy to produce and recycle than glass oraluminum, most used bottles are not recycled butare disposed of in dumpsites and landfills, whichare steadily increasing in size.228 In cities where solidwaste management is already a critical issue, thedisposal of used PET bottles only exacerbates theproblem.

Expanding transportation demands and theaccelerated motorization of cities

The rapid growth of Asian cities implies a moremobile population. The growth in passenger cartransport and air travel is the result of urbanization,rising incomes and patterns of infrastructuredevelopment (see figure 2.36). Rising incomes,especially among the middle class, have been behindthe increases in car use (see table 2.27). Australia,Brunei Darussalam and Japan have the highestmotorization rates in the region, with approximatelyone private car for every two people. Bangladesh,China, Myanmar and Nepal on the other hand, havefewer than five private cars per thousand people.229

An increase in vehicles coupled with low roadnetwork growth and limited space for expansion insome countries have resulted in high road networkdensities, and attendant traffic, energy consumptionincreases and air pollution problems.230 Thailand,Malaysia and the Republic of Korea have experienced


Pacific 2003 (New York, United Nations) and Department ofEnvironment and Heritage, Australia.

Figure 2.37 Vehicles per road-kilometre, selected Asia-Pacific countries and areas


Pacific 2003 (New York, United Nations).

0 20 40 60 80 100 120 140 160

Japan

Rep. of Korea

Indonesia

Malaysia

Singapore

Thailand

India

Pakistan

Australia

New Zealand 2000

1995

1992

Motor vehicles per road kilometre

180

11 935

230

202

541

14 739

5 412

1 321

70 902

4 927

4 828

264

2 344

1 717

2 438

12 022

23 479

551

572

5 962

6 150

Table 2.27 Motor vehicles in use in selected countriesand areas (‘000)

1995 2000 2002

Australia

Bangladesh

Brunei Darussalam

Hong Kong, China

India

Indonesia

Iran (Islamic Republic of)

Japan

Malaysia

Maldives

Myanmar

New Zealand

Pakistan

Philippines

Republic of Korea

Russian Federation

Singapore

Sri Lanka

Thailand

Turkey

10 651

163

158

490

9 464

4 132

1 409

65 356

3 085

2 325

209

2 077

1 150

2 846

8 436

17 273

504

413

4 649

4 165

12 800

250

202

548

17 385

5 983

-

54 541

5 834

5 099

290

-

1 811

-

13 907

-

-

-

6 806

6 428

Figure 2.36 Passenger travel, Asia-Pacific (index,

1993=100)


Pacific 2003 (New York, United Nations).

60

80

100

120

140

160

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

Railway traffic (Passenger-kilometres)

Road traffic (Passenger cars)

Air traffic (Passenger-kilometres)


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among the fastest rates of growth in networkdensity, with growth of more than 38 per centbetween 1992 and 2000231(see figure 2.37). CO

2

emissions from the transport sector are rapidlyincreasing, not only due to the sheer volume ofvehicles in circulation, but also because of theincreasing preference of urban consumers for biggerand more powerful cars, the CO2 emissions of whichare approximately twice those of subcompact andcompact types of vehicles (see figure 2.38).

One alternative to individual motorization isthe improvement of road or rail-based mass transportsystems. For freight, a comparison of modal energyintensities (the amount of energy required todisplace one metric ton by one km) shows that truckscan use 16 times more energy than that used intransporting the same weight of material by rail.232

Data from the Republic of Korea show that theenergy intensity of road transport increased from1.88 tonnes of oil equivalent/thousand passengers(three times that of rail transport) to 2.26 toe/thousand passengers, or four times that of railtransport between 1995 and 2000.233

Railway route development in the regionincreased only marginally by 1.5 per cent from 1994to 1999, with less than 25 per cent of the entiretrack length electrified.234 Japan, China and CentralAsia have achieved the highest level of railwayelectrification, with 60 per cent of networks

electrified in Japan and China and 47 per cent ofnetworks electrified in Central Asia. South-East Asiahas the lowest proportion (only 1.4 per cent) of itsroutes electrified.235

However, there has been increasing interest inimproving mass transport systems. Ongoing railwayimprovement projects are taking place in Bangkok,Kuala Lumpur, Manila, Busan, Seoul and a numberof major cities in China. In addition improvementsin public bus transport systems in Bangkok, KualaLumpur, Shanghai and Shenzen have complementedrailway system upgrades. Bus rapid transit systemsare either operational, planned, under constructionor under consideration in 36 cities in 10 countrieswithin Asia.236

2.6.3 Environmental pressures exertedby urbanization and globalizingconsumption patterns

Air pollution

The dramatic increase in the number of vehicles inurban areas has made transport-related fuelcombustion a major source of pollution in urbanareas. The environmental health impacts ofambient air pollution are well known and manyepidemiological studies have been carried out tosupport various government initiatives to curb airpollution.237

Annual ambient concentrations of the mostcommonly monitored criteria air pollutants areshown in figure 2.39. Improvements in the qualityof fuel for transportation, particularly the reductionof sulphur content, have markedly lowered SO

2

concentrations in several cities. Similarly, thephasing out of lead as a fuel additive and theintroduction of unleaded fuels have significantlyreduced concentrations of atmospheric lead, whichis known to have a negative impact on children’shealth. Suspended particulate matter (SPM) andPM10 are the pollutants of main concern, withaverage annual ambient concentrations generally stillsubstantially higher than WHO guideline values.Concentrations of SPM and PM10 increased in mostcities from 1995 to 2003. Average annual ambient

0

50

100

150

200

250

300

350

400

Pic

kup

s

g

CO

2 p

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km

Sports Util

ity

Vehi

cle

s(S

UV

s)Min

iva

ns

Larg

e

Med

ium

Com

pact

Subco

mpact

Figure 2.38 Average CO2 emission rates by type of

vehicle

Source: Austin, D., N. Rosinski, A. Sauer and C. Le Duc (2003).Changing Drivers: the impacts of climate change on

competitiveness value creation in the automotive industry

(Washington DC, World Resources Institute and SustainableAsset Management).


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Figure 2.39 Average annual concentrations of selected air pollutants, selected major cities

0 50 100 150 200

Dhaka

Singapore

Colombo

Ho Chi Minh City

Bangkok

Hong Kong

Seoul

Jakarta

Busan

Tokyo

Taipei

micrograms/m3 1995 2000 2003

WHO air quality guideline(2005), 8-hr. maximum -100 µg/m3

0 10 20 30 40 50 60 70 80

Dhaka

Surabaya

Taipei

Mumbai

New Delhi

Tokyo

Seoul

Hong Kong

Bangkok

Kolkata

Singapore

Busan

Ho Chi Minh City

Shanghai

Colombo

Beijing

micrograms/m3 1995 2000 2003

WHO air quality guideline (1999)- 50 µg/m3

0 100 200 300 400 500 600

Busan

Hong Kong

Bangkok

Seoul

Shanghai

Manila

Jakarta

Kolkata

Mumbai

Hanoi

New Delhi

micrograms/m3 1995 2000 2003

0 50 100 150 200 250

Surabaya

Manila

Kathmandu

Dhaka

Singapore

Tokyo

Taipei

Hong Kong

Jakarta

Bangkok

Busan

Seoul

Colombo

Ho Chi Minh City

Shanghai

Mumbai

Kolkata

Hanoi

New Delhi

Beijing

micrograms/m3 1995 2000 2003

WHO air quality guideline (2005) -

*Particulate matter less than 10 microns in diameter

µg/m3

0 10 20 30 40 50 60 70

Dhaka

Hanoi

Singapore

Colombo

Jakarta

Bangkok

Busan

Taipei

Hong Kong

Tokyo

Shanghai

Seoul

Surabaya

micrograms/m3 1995 2000 2003

WHO air quality guideline (2005) - 40 µg/m3

Source: Clean Air Initiative Asia Secretariat, March 2005;WHO (2005). WHO Air Quality guidelines global update 2005:Report on a Working Group meeting, Bonn, Germany, 18-20

October 2005.

Ozone (O3)

Suspended particulate matter (SPM)

Sulphur dioxide(SO2)

PM10*

Nitrogen dioxide (NO2)


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NO2 concentrations exceed the WHO guideline

standards. Efforts to reduce SO2 concentrations needto be intensified as this compound, along with NO

2,

contributes to the formation of acid rain. Emissionsof acidifying pollutants are high in South-East Chinaand North-East India, Thailand, and the Republicof Korea, with some acid rain events having causedreductions in agricultural yields and impacts on otherecosystems.238

Solid waste (and e-waste) issues

The management of domestic solid waste is amongthe most pressing environmental issues for theurban areas of developing countries. A World Bankstudy showed that those low-income countries witha low proportion of urban population also have thelowest waste generation rates, ranging from 0.4 to0.9 kilogram per capita per day. As average incomesrise towards the middle-income bracket, wastegeneration rates rise to between 0.5 to 1.1 kilogramper capita per day, while populations in thehigh-income category generate between 1.1 and 5.07kilograms of waste per capita per day. 239

Rapid urbanization rates and increasingincomes point to a future waste explosion. Manylocal governments with jurisdiction over citiesalready face serious challenges in the managementof the solid waste generated by their constituencies.Local governments spend between 20 and 30 percent of their budgets on solid waste management,with around 70 per cent of this expenditure on wastecollection alone.240 It is predicted that solid wastemanagement will become even more costly anddifficult in the future as disposal options based onlandfills diminish. A 2003 survey by UN-HABITATon waste disposal methods in major cities indicatedthat while a substantial proportion of regional wasteis disposed of in sanitary landfills, 14 out of 20countries practiced open dumping of waste and sevenof these also burned waste in the open.241 Manylocal governments are fully conscious of the need tocut down the costs of waste disposal and are lookingfor more viable options.

Solid waste management challenges are notonly attributable to the sheer volume of consumption;changing patterns of consumption patterns mean

new streams of waste. PET water and beverage bottlesand food packaging have been targeted by speciallegislation in recent years. Also recently the wastefrom electrical and electronic equipment (e-waste)and its associated environmental and health-relatedimpacts has received attention in the media. E-wasteis growing faster than other waste streams; theEuropean Union has seen its e-waste grow three timesfaster than other municipal waste.242 This rapidgrowth has been attributed to developments intechnology, notably rapid changes in high-performance software, which lead to productsbeing replaced after a relatively short period,243 andto market expansion.

E-waste contains toxic and hazardoussubstances. Cathode ray tubes found in colourtelevision sets and colour computer monitorscontain significant amounts of lead. Printed circuitboards found in computers and other electronicdevices may contain lead and chromium. Some oldercomputers contain mercury switches, and manytypes of electronic devices use batteries whichcontain nickel cadmium, nickel metal hydride,lithium or sealed lead acid.244 The presence of suchsubstances complicates the recycling and disposal ofe-waste from a technical, environmental andeconomic point of view.

In Japan, new and comprehensiveenvironmental legislation has been introduced whichencourages the prevention, reuse, recycling andrecovery of e-waste. Countries such as China anddeveloping countries in South-East Asia, includingThailand, have formulated legislation to restrictimports of e-waste as well as to regulate imports ofsecond-hand information technology.

The implications for trade are also significant.UNCTAD estimates the value of world imports ofelectrical and electronic equipment in 2002 atUS$349 billion, of which US$224 billion (65 percent) originated from developing countries.245 Thevalue of total imports to developed countriesamounted to US$246 billion, of which US$165billion (over two thirds) originated in developingcountries, almost 80 per cent of which were in South-East Asia.246 Imports from China, worth US$59billion, represented over one third of total exports


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from developing to developed countries.247

Information and communication technologyaccounted for 58 per cent of the value of totalimports of electrical and electronic equipment todeveloped countries from developing countries.Legislation in varying stages of development andfinalization (see chapter 7, box 7.1) will requireproducers of electronic components to replace heavymetals, such as mercury, lead and cadmium withnon-toxic, and/or easily recycled, alternatives.Governments and companies in producingcountries need to promote proactive policies withregard to information gathering and management(including enhancing understanding of newrequirements), product engineering and design inorder to compete successfully in internationalmarkets and address problems related to thegrowing volumes of e-waste at home.

Encroachment of expanding urban areas onagricultural lands and other lands

The need for physical expansion to accommodatethe rapid growth of urban centers is resulting inconversion of agricultural lands, forests and otherareas which have valuable ecological functions.Market imperfections and failures and the lack ofsecurity of land tenure for much of the agriculturalland in the region have facilitated the conversionof these areas for urban land use. The conversionprocess has engendered conflict betweenstakeholders.248 Flooding, pollution, groundwatercontamination and habitat loss are just some of theserious long-term environmental consequences ofthese changes in landuse.

In the Philippines, for example, theconversion of prime agricultural lands in the Lagunaand Cavite provinces into gated residential areas andindustrial estates has not only increased energy-useintensity but has also significantly altered the area’slandscape. Water pollution of the creeks andtributaries which used to feed agricultural areas ismounting due to domestic sewage originating in thebuilt-up residential areas.249 One important impactof urban encroachment is the displacement offarmers, resulting in the loss of livelihoods andfuelling the growth of slum areas.

2.6.4 Pursuing urban environmentalsustainability: responses and initiatives

The fundamental issue most governments face is thatof whether urban environmental sustainability andsocial equity can be achieved without constrainingthe role of cities as hubs of economic growth. Thefollowing discussions highlight a number of policyinitiatives and strategic innovations undertaken bothin and outside the region that provide examples ofgood practice in improving the environmentalsustainability of urban development.

Reforms in urban environmental policy: defininghow urban sustainability can be achieved

The most pressing environmental issues facingdeveloping cities in the region today are the resultof ambiguous, or non-existent urban developmentpolicies that fail to take into account theirenvironmental implications. Critical public policydecisions in the transport, industrial, agricultural andtrade sectors shape the environmental sustainabilityof cities, but are made without the necessarycoordination among stakeholder institutions.Multilateral agencies have supported theformulation of urban environmental policies thatincorporate sustainable development principles, andwhich emphasize cross-sectoral coordination, widercivil society participation in decision-making processesand greater transparency and accountability.

Cities such as Beijing, Shanghai, Bangkok,Kuala Lumpur and Metro Manila are developing andimplementing comprehensive urban policyframeworks that reflect these critical elements. Thesuccess of these interventions is mixed, with somemeasures, such as privatizing environmental services,the application of the “user pay” principle and theuse of environmental impact assessments asplanning and regulatory tools, showing encouragingprogress; other strategies require reassessment, asprogress has not been ideal.

The cities of Singapore and Kitakyushuprovide model examples of the implementation ofholistic and environmentally sustainable approachesto urban development. The primary driver for thesecities to choose these approaches may have differed(Singapore was obliged by its limited natural


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resources, while Kitakyushu was compelled by civilsociety action, upheld by judicial courts), but theyboth showcase the viability of achievingenvironmental sustainability if the appropriateurban policy framework is in place. Otherinitiatives which stress the vital importance ofurban environment planning are those of developmentplanning for Kuala Lumpur, Malaysia, and thegreening of urban areas in Thailand.

Patterns of urban growth reflect the failuresof urban development planning, as manifested inthe social inequities and deteriorating environmentalconditions of many cities in developing countries.Urban development planning has always been theweakest functional link of the many criticalfunctions governments are mandated to undertake.As a consequence of poor planning systems and weakinstitutional capacities, many urban centres areunable to cope with the rapid expansion of demandfor the services they are expected to provide.

One area where progress has been made is theadoption of local action plans that attempt tointegrate social, economic and environmentalobjectives. More than 6,400 local governments in113 countries have indicated that their respectivelocal governments have adopted, or are in theprocess of adopting, Local Agenda 21.250 Around 674local communities/governments from 17 Asian andPacific countries (Australia, Bangladesh, China,India, Indonesia, Japan, the Republic of Korea,Malaysia, Mongolia, Nepal, New Zealand, Pakistan,the Philippines, Singapore, Sri Lanka, Thailand andViet Nam) have reported that they are preparing andimplementing their own Local Agenda 21.251

Progress is also noted in the preparation of city localenvironmental management plans; 32 cities in the49 countries of the region have indicated theexistence of local environmental management planssupported by the various sectors and endorsed bytheir legislative assemblies.252

The process of preparing a Local Agenda 21or a local environmental management plan is self-motivated and internally financed. This indicationof local government commitment merits thesupport of both national governments andinternational organizations.

Building sustainability into urban planning

The principles of sustainable urban design supportthe development of urban centres that minimizenegative environmental impacts such as airpollution, and resource use such as energy andwater, while maximizing quality of life. Thewinning team of a “special jury” prize in theInternational Sustainable Urban Systems Designcompetition developed a model of the city of Panjim,capital of the state of Goa, India, that focuses onensuring efficient resource use, as well as the well-being of its people, communities and ecosystems.Based on detailed mapping, the team forecastlong-term trends for the project area and came upwith a design based on a low-tech/high-techmixture of transportation systems, buildingmaterials and design that would condense the citywithout resorting to high-rise resource-intensivedevelopment.

The project design team concluded thatan investment of US$60 million per yeartogether with the time investment of citizens frommany sectors could accomplish the transition of asmall or medium-sized city in 30 years. The projectprinciples are being applied in the state of Goa.253

Sustainable urban design principles are being appliedto the development of eco-cities such as that beingdeveloped near Shanghai, China, on the island ofDongtan and to the transformation of Bangalore.UNEP and UN-HABITAT, in collaboration withthe local authorities and the private sector, have beensupporting the development of the “SustainableShenyang” and “Sustainable Wuhan” initiatives.

Sustainable urban mobility and transport:moving people with minimal impact on theenvironment

With pressure growing to enhance the quality of lifein urban areas, efforts are being made to improveurban mobility. Urban development planning thatfully integrates a vision for cities along the lines ofthe famed city of Curitiba, Brazil is gaining attentionas a means of increasing the environmentalsustainability of urban transportation systems,increasing the use of public transportation andlowering fuel use and pollution. The Sustainable


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Urban Mobility in Asia programme is supported byvarious agencies including the World Bank, theADB, UNEP and UNDP and seeks to reducegreenhouse gas emissions from the transport sectorwhile improving urban mobility. Programmeinitiatives include practical interventions such as thepromotion of non-motorized transport, includingthe construction of bicycle routes within urbanareas, as well as investing in infrastructure to enhancetraffic management.

Education, information disclosure and marketinstruments: influencing consumer choice

One of the more positive developments in this area,and one that has the potential to significantly shapethe characteristics of household consumptionhabits in urban areas, is increased education and thegrowing public environmental awareness. At thehigher income levels, urban households aresensitive to the quality of their environment and aretherefore quick to act on issues which threaten theintegrity of their surroundings. In Singapore, forinstance, urban households have supportedreductions in product packaging in order to reducewaste. Access to information and communicationtechnology and to the Internet has empowered theproactive consumer.

As outlined in section 2.3, governments arenow showing that they can influence consumerbehaviour through the application of informationdisclosure instruments (such as ecolabellingschemes), economic instruments (such as rebates forrecycling and charges for waste disposal), private-public partnerships (involving producer associations)and regulatory instruments such as zoning laws,emissions standards and charges.

Positive developments in the car manufacturingindustry are also influencing the future environmentalimpacts of an expanding vehicle population. Carmanufacturing giants in the region are investingheavily in improving the designs of future generationsof vehicles. Given the increasing environmentalawareness of many consumers, and anticipating thatcountries will be imposing stricter emissions andenergy efficiency standards, car manufacturers have

been accelerating research and developmentprogrammes aimed at maintaining a competitiveedge in the market. For example, Honda and Toyotahave introduced fuel-cell technology, hybrid cars andhydrogen-fueled vehicles; Nissan and Mazda arepromoting their low-emission vehicles; and Isuzu ispioneering work on more efficient and cleanerdiesel engines.254

2.7 Climate change: a real threat to the region

Human activity is the primary driver for theincreased concentrations of greenhouse gases(GHGs) which have already brought aboutsignificant change to the earth’s climate. Emissionsof GHGs (carbon dioxide, methane, nitrous oxidesand others)255 have increased dramatically over thelast century, largely due to fossil fuel combustionand land-use changes.256

Records of the global mean temperature showthat it has risen faster in this past century than atany other period over the past ten thousand years.257

Nine of the ten hottest years since 1860 occurredbetween 1990 and 2005. The melting of polar capsand mountain glaciers, sea-level rises and increasesin the frequency and intensity of storms and weatherdisturbances are just a few of the other indicatorsthat confirm that climate change is indeed takingplace. This and other mounting evidence confirmsthe reality of climate change. This global threat maywell provide the impetus to reexamine presentpatterns of development.

2.7.1 Climate change impacts in Asia and thePacific

Scientists predict that, should GHG emissionscontinue unabated, the accumulation of greenhousegases will cause further disruptions to weatherpatterns, entailing more severe weather events,increased ecosystem stresses, shifting precipitationpatterns, increased ranges of infectious diseases,coastal flooding and other impacts that are only nowbeing understood. These changes will haveuncertain, but potentially devastating, consequencesfor communities around the globe, affecting bothindustrialized and developing countries.


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Based on the Intergovernmental Panel onClimate Change (IPCC) model scenario of thepressures of climate change, table 2.28 summarizesprojected impacts. The impacts in small island statesare given special attention in view of their lowadaptive capacity, high sensitivity to external shocksand high vulnerability to natural disasters. Forexample, Tuvalu and the Carterets islands off thecoast of Papua New Guinea have already beenimpacted by sea-level rise and prepared evacuationplans. The projected impacts of climate change onselected countries are outlined in Annex IV of thisreport and highlighted by figure 2.40. UNEP’s GEOYearbook 2006 indicates that both China andCentral Asia can be expected to experience net gainsin potential rainfed cereal land, while South andSouth-East Asia would experiences net losses.

Governments may fully recognize theramifications of climate change issues, but face toughchallenges in choosing the appropriate actions totake. The IPCC acknowledges that decision-making on issues related to climate change is aprocess subject to uncertainty,258 and that it mustconsider the nature of the risks; the economic andenvironmental consequences of the action and thesocial appreciation of the risks involved, as well asthe political acceptability of the alternatives andavailability of mitigating technology.259 Appropriatecourses of action are therefore country-specific andvary from generation to generation.260

2.7.2 Greenhouse gas emission trends

The relentless drive for economic growth and risingincomes constitute the primary factors contributingto the increased accumulation of atmosphericGHGs. Developed and industrialized nationsproduce the bulk of the emissions which contributeto global warming. Emissions of greenhouse gasesfrom Asian and Pacific developing countries, withthe exception of China and India, are considered tobe of relatively minor significance. However, certainactivities such as changing land-use, deforestationor the over-application of fertilizers, have contributedto the distortion of the global natural carbon andnitrogen cycles which in turn disrupt the climaticbalance.

CO2 emission trends

Industrialized and developed countries, home to 20per cent of the world’s population, have beenresponsible for about 63 per cent of cumulative netcarbon emissions from fossil fuel combustion andland-use changes since the 1900s.261 The UnitedStates of America remains the world’s largest emitter,with carbon emissions from its electric power sectoralone exceeding the combined annual emissions ofsix developing nations.262

The World Resources Institute ranks countriesin order of their cumulative emissions of carbondioxide from 1900, and shows that five of the top20 are from Asia and the Pacific, including Chinaand India. The latter two countries, home to 40 percent of the world’s population, have contributed 7per cent and 2 per cent respectively to atmosphericcarbon content since 1900.263 They are responsiblefor much of the growth in regional CO2 emissions,which increased by almost 30 per cent between 1990and 2000. Asian (excluding China) CO2 emissionsgrew by 78 per cent in the period 1990-2002 (seetable 2.29). The combined emissions from Chinaand India are projected to grow by more than 4 percent annually between 2010 and 2025.264

Several smaller countries have some of thefastest rates of growth in CO2 emissions,corresponding with their fast-growing energyconsumption. Countries which have experiencedthe fastest rates of increase in CO

2 emissions (see

figure 2.41) are those with rapidly expandingeconomies, notably Viet Nam and Sri Lanka. Chinaand India continue to exhibit the largest growths, inabsolute terms, in CO

2 emissions. The extent to

which CO2 emissions from fuel combustion arelinked to the value of economic production(measured by GDP) varies from country tocountry, as shown in figure 2.42 and chapter 3,figure 3.3. Due to improvements in fuel mix, sectoraland subsectoral structures and energy efficiencies,several countries, including China and India, havemanaged to reduce the amount of CO

2 produced

from fuel combustion for every unit of GDP earned(CO

2 intensity).


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Table 2.28 Climate change pressures: Asia–Pacific region

Projected impacts Key impact areas

Agriculture andfood security

Ecosystems andbiodiversity

Water resources

Deltas andcoastal zones

Human health

Extreme weatherevents

• Food insecurity will be a key concern for many countries inthe region. Crop production and aquaculture will be threatenedby thermal and water stresses, sea-level rises, increased floodingand destruction due to an increasing frequency and intensityof tropical cyclones.

• Marine productivity will also be affected by plankton shifts.

• Climatic change will exacerbate threats to biodiversityresources, particularly if the pressure is induced by intensiveland-use change and population pressure.

• Many species in the region are likely to become extinct as aresult of climate change and habitat fragmentation.

• Global warming will increase the vulnerability of the permafrostecosystems of boreal Asia.

• As temperatures rise, particularly during summer, the frequencyof forest fires may increase in boreal Asia and tropical Asia.

• Freshwater availability is expected to be highly vulnerable toclimate change. Surface runoff will be pronounced duringwinter, leading to increased winter flooding. However,during summer a significant reduction in the stream flows willbe observed in boreal Asia.

• Countries which use more than 20 per cent of their waterresources will experience more water stress. Irrigation andagriculture will be severely affected. In water-stressed areas,water will become more scarce.

• Growing competition from urban areas for water use and qualitywill magnify the pressure on an already scarce resource.

• Countries in large deltas or low-lying coastal areas will be athigh risk of being inundated by sea-level rises.

• Warmer and humid conditions will increase the incidence ofheat-related and infectious diseases in the tropical andtemperate zones of the region. In temperate countries, therecould be a reduction in winter deaths, but also a rise in theincidence of heat stroke, especially in cities, during summer.

• A rise in the incidence of respiratory and cardio-vasculardiseases among populations in arid and semi-arid areas ispredicted.

• In temperate and tropical areas, vector-borne diseases willincrease as high temperatures can be conducive to breedingmosquitoes and other disease-carrying insects.

• Developing countries in the temperate and tropical zones arealready vulnerable to extreme climatic events such as tropicalstorms, cyclones, droughts and floods. Climate change willincrease this vulnerability.

• Increased precipitation intensity during the monsoon seasonwill increase flooding in flood-prone areas.

• In drier and arid areas, more intense dry spells or prolongeddrought will occur.

Most of the region’s “food basket”and coastal areas, where thereare vast areas of aquaculture(China, Bangladesh, India, thePhilippines, Thailand and VietNam).

Desert ecosystems (arid, semi-arid and dry sub-humid zones)may experience prolongedspells of drought which mayaffect local ecosystems.

A 1-meter sea-level rise willinundate and destroy the Sundar-bans (the largest mangroveecosystems in Bangladesh)

Mongolia and China (especiallythe Himalayas region)

Mongolia, China, Indonesia,Thailand and the Philippines

Russian Federation and China

Arid, semi-arid and dry sub-humid areas (China, India,Pakistan and Mongolia)

Most of the coastal zones in theregion. Countries at risk areBangladesh, India, Indonesia,the Philippines and Viet Nam.

Different climatic zones will posedifferent health threats.

Bangladesh, China, India,Philippines, Thailand, Viet Nam,Lao People’s DemocraticRepublic, Cambodia, Japan,the Republic of Korea and HongKong, China.

Source: IPCC Technical Summary (2001). Climate Change 2001: Impacts, Adaptation and Vulnerability, Report of the Working

Group II of the Intergovernmental Panel on Climate Change (Geneva, IPCC).


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Sectoral CO2 emission trends

Energy use accounts for the largest share of globalgreenhouse gas emissions. Emissions from fossil fuelcombustion generally come from two sources:emissions related to energy production and thosefrom energy end-use sectors, such as industry,transport and the residential and commercialsectors. Sectoral per capita emissions for 2002 areshown in Figure 2.43.

Public electricity and heat production remainthe main sources of greenhouse gas emissions,contributing about 35 per cent of global CO

2

emissions in 2002. Coal is a major fuel for theproduction of electricity and heat in the region.While Asia and the Pacific accounted for some 40per cent of global energy use in 2001, the regionused 52 per cent of global energy use produced fromcoal. The result of this dependence on coal,

Source: International Energy Agency (2004). CO2 emissions from fuel combustion 1971-2002 (Paris, OECD/IEA).

Table 2.29 Global CO2 emissions from fuel combustion: selected OECD-designated regions

GtCO2 per

capita (2002)(% change1990-2002)

CO2 emissions from fuel combustion, million metric tons (2002)

% change1990-2002Coal Oil Gas Other Total

OECD Pacific

Former USSR

Asia (excludingChina)

China(incl. HongKong, China)

OECD Europe

Middle East

OECD NorthAmerica

10.24 (25.6%)

7.78 (-32.8%

1.14 (44.3%)

2.57 (27.9%)

7.53 (-0.5%)

6.33 (39.7%)

15.62 (0.8%)

761.5

660.8

1 031.6

2 620.7

1 241.0

34.1

2 217.2

993.4

469.2

916.1

617.6

1 782.3

651.2

2 814.2

266.8

1 086.9

309.7

69.2

921.6

407.5

1 500.8

13.6

15.3

-

-

24.6

-

17.2

2 035.3

2 232.2

2 257.4

3 307.4

3 969.4

1 092.8

6 549.3

33.6

-33.3

78.1

44.5

0.6

85.2

17.7

Figure 2.41 CO2 emissions from fuel combustion

0 500 1000 1500 2000 2500 3000 3500

Nepal

Brunei Darussalam

Myanmar

Sri Lanka

Bangladesh

New Zealand

Singapore

Viet Nam

DPR Korea

Philippines

Pakistan

Malaysia

Thailand

Turkey

Indonesia

Australia


Rep. of Korea

India

Japan

China

Million metric tons of CO2

(2002)

-100 0 100 200 300

DPR Korea

WORLD

Japan

Australia

Singapore

China

Turkey

New Zealand

Brunei DarussalamPakistan

India

Myanmar

Philippines

Rep. of Korea

Indonesia

Thailand

Bangladesh

Malaysia

Nepal

Sri Lanka

Viet Nam


Percentage change, 1990-2002

Source: International Energy Agency (2004). CO2 emissions from fuel combustion 1971-2002 (Paris, OECD/IEA).


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0 0.5 1 1.5 2 2.5

Myanmar

Nepal

Bangladesh

Sri Lanka

Philippines

Viet Nam

Japan

Pakistan

India

New Zealand

Turkey

Thailand

Singapore

Indonesia

WORLD

Malaysia

China

Rep. of Korea

Australia


Brunei Darussalam

Russian Federation

DPR Korea

.

.

.

kg CO2 per 1995 ppp US$ GDP, 2002

Figure 2.42 CO2 emissions from fuel combustion per unit of GDP

-60 -40 -20 0 20 40 60 80 100

China

Singapore

Myanmar

WORLD

Australia

DPR Korea

India

Rep. of Korea

Russian Federation

Japan

Turkey

New Zealand

Pakistan


Malaysia

Brunei Darussalam

Indonesia

Philippines

Bangladesh

Thailand

Viet Nam

Sri Lanka

Nepal

Percentage change, 1990-2002

Figure 2.43 Sectoral distribution of CO2 emissions from fuel combustion, 2002

Source: International Energy Agency (2004). CO2 Emissions from Fuel Combustion 1971-2002 (Paris, OECD/IEA).

Source: International Energy Agency (2004). CO2 Emissions from Fuel Combustion 1971-2002 (Paris, OECD/IEA).

0% 20% 40% 60% 80% 100%

Nepal Myanmar

GeorgiaBangladesh

TajikistanSri Lanka

Viet NamPakistan

PhilippinesArmenia

KyrgyzstanIndonesia

IndiaDPR Korea

TurkeyThailand

Islamic Rep. of IranChina

New ZealandUzbekistan

MalaysiaAzerbaijan

TurkmenistanRep. of Korea

JapanRussian Federation

SingaporeKazakhstan

Brunei DarussalamAustralia

Public electricity

Unallocated

Other energyIndustries

Manufacturing

Transport

Others


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particularly for the production of electricity, is thatAsian developing countries, including China butexcluding countries of the former Union of SovietSocialist Republics, emit about 1.5 times more CO2

from public electricity and heat production per kWhproduced (from all fuels) than the world average (seefigure 2.44).

Overall, despite the commitments to sustainabledevelopment made in 2002, the world has increasedthe amount of CO

2 emitted per kWh of electricity

overall, negating the substantial progress made byOECD Europe to slow the momentum of climatechange.

The transportation sector is the next largestsource of emissions and is also the fastest-growingemitter of CO

2, increasing emissions by some 33

per cent between 1990 and 2002.

Other sources of greenhouse gases

Land-use and forestry, including the establishmentof plantations, reforestation and afforestation, thecommercial harvesting of timber resources and fuel-wood gathering, all influence climate changeprocesses. The conversion of forest lands foragricultural use and the abandonment of theseareas as practiced in swidden agriculture not onlycontribute to the environmental degradation of theseareas but also affect their carbon storage capacity.Forests store 40 per cent of all the carbon inthe terrestrial biosphere, more than any other

ecosystem.265 The storage of carbon in theecosystem varies depending on the type of forest.266

The growth and regrowth of forests in temperatecountries can provide sinks to absorb CO2 emissionsfrom fuel combustion. Conversely, the deforestationof tropical forests and their conversion to other landuses releases an estimated 2 billion metric tons ofCO2 into the atmosphere annually, equivalent to 25per cent of the emissions from fuel combustion.267

Agriculture is a source of GHGs, particularlymethane and nitrous oxides. Just as appropriateforest management must be exercised in forestareas, appropriate agricultural practices must also beadopted to minimize the sector’s contribution ofGHGs emissions (see section 2.5).

2.7.3 Meeting the challenges of climatechange: mitigation, the CleanDevelopment Mechanism (CDM) andadaptation

The United Nations Framework Convention on ClimateChange (UNFCCC) entered into force in 1994,and represents a global strategic response to climatechange issues.268 With the ultimate objective that the“stabilization of greenhouse gas concentrations in theatmosphere….should be achieved within a timeframe sufficient to allow ecosystems to adaptnaturally to climate change, to ensure that foodproduction is not threatened and to enable economicdevelopment to proceed in a sustainable manner,”269

the two key strategies of mitigation and adaptationare pursued.

Mitigation options for curbing GHG emissions

Mitigation measures are a broad set of policy andtechnological interventions aimed at reducing theemissions of GHGs in the most cost-effective andefficient manner. These measures can only besuccessful where countries desire to develop in thecontext of equity, common but differentiatedresponsibilities, cost-effectiveness, sustainabledevelopment and support for an open internationaleconomic system.270 Given that climate changeinvolves complex interlinkages between climatic,environmental, economic, social, political,institutional and technological factors, there is “no

Figure 2.44 CO2 emissions from public electricity and

heat production per kWh

400

500

600

700

800

900

1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002

me

tric

to

ns

pe

r kW

h

WorldOECD PacificOther non-OECD AsiaChina

Source: International Energy Agency (2004). CO2

Emissions from Fuel Combustion 1971-2002 (Paris, OECD/IEA)


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single path to a low emission future.”271 The IPCCtherefore advocates for multiple approaches tomitigating the impacts of climate change, bearingin mind that these approaches should becomplementary.272, 273

The misperception that action on climatechange lies in the global arena, rather than at thenational level is reinforced by the lack of compulsorytargets for emissions reductions in the framework ofthe UNFCCC and the Kyoto Protocol. Bridging thegap between short-term economic gain and long-term benefits of action to mitigate climate changeprocesses is critical to addressing the very realresource limitations faced by developing countries.However, the current fuel market situation may helpto change this view. As oil and coal prices increase,investments in GHG mitigation that also lead toenergy savings become more feasible, and may evenpresent new business opportunities for developingcountries.

The choices made by governments as to whichset of mitigation measures will be implemented areshaped largely by prevailing political, economic,cultural and social settings and global influences.Notwithstanding the likely differences, there arecertain common features which lie at the heart ofeffective mitigation measures:

• Energy efficiency, conservation andreforestation are critical first steps ofmitigation measures, which can be takenfurther if innovative supply-side technologiesare developed;

• Investment in developing infrastructurethat increases access to energy,transportation, water, as well as housing andother urban development needs in the mosteco-efficient way possible, is a vitalmeasure to reduce future greenhouse gasemissions. Its importance in those sectorsin which GHG emissions are significant,such as the energy and transport sectors,cannot be understated;

• Integrating global climate policies anddomestic air pollution abatement policiescan contribute to significantly reducingemissions in developing countries over the

next two or three decades; and• Policies relating to agriculture, land use and

energy systems need to be integrated andlinked with climate change mitigationpolicies.

The Clean Development Mechanism: tapping itspotential

The Kyoto Protocol is a follow-up agreement tothe UNFCCC intended to prompt governments(particularly the industrialized, or Annex I,countries) to reduce or limit CO

2 emissions to 1990

levels by 2012. The Protocol introduced threeinnovative and flexible cooperative mechanismsaimed at ensuring global cost-effectiveness incurbing GHG emissions: Emissions Trading,274 JointImplementation275 and the Clean DevelopmentMechanism (CDM).

Of the three mechanisms, the CDM hasattracted the widest interest, due to its potential forprofit and its involvement of developing countries.The CDM has two goals: to promote sustainabledevelopment in developing countries and to allowAnnex I countries to earn emissions credits (morewidely known as certified emission reductions(CERs)) from their investments in emission-reducing projects in developing countries. To earncredits under the CDM, the project proponent mustprove that the GHG emission reductions are real,measurable and additional to what would haveoccurred in the absence of the project.276

The implementation of the CDM in theregion has progressed. In December 2005, a total of27 projects were registered with the CDM ExecutiveBoard277 and were projected to reduce emissions by18.9 million metric tons of CO

2 equivalent

annually (see table 2.30), which represents 71 percent of the total global reductions that will be earnedfrom all 49 projects globally. India and the Republicof Korea278 are notable for the amount of CO

2

equivalent reductions that will be achieved throughthe CDM. India’s 14 projects will account for morethan 27 per cent of the total emission reductions,while the Republic of Korea’s two projects willaccount for almost 40 per cent of total regionalemissions that are avoided. What makes the


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Republic of Korea’s contribution particularlysignificant is that these projects will support thereduction of emissions of hydrofluorocarbons(HFCs) which are between 150 and 23,900 timesmore potent than CO

2 in terms of their global warming

potential.279 The types of CDM project vary; in Asiaand the Pacific projects will achieve GHG emissionreductions or avoid GHG emissions throughenergy efficiency, renewable energy, gas capture andsequestration, small and medium-sized hydroelectricplants and waste incineration. The greatest shares ofCERs are generated by gas capture and fuel switch-ing, and most of the future CERs generated by theseprojects will accrue to Japan, the Certified EmissionReduction Unit Procurement Tender280 and thePrototype Carbon Fund (PCF).281

The potential of the CDM in the region ishigh, and more developing countries are becomingaware of its benefits; many have been recipients of

capacity development support from both multilateraland bilateral development agencies. Table 2.30 showsthat some 90 CDM projects in the region are invarious stages of preparation. This number is expectedto expand further following the establishment ofDesignated National Authorities (DNAs) in morenon-Annex 1 countries, which will oversee theimplementation and approval of projects,following the guidelines established at the 7th

Conference of Parties.282 In the region, a total of 24countries have already identified their DNAs, andtherefore can register projects under the CDM.283

While there is increasing interest inimplementing CDM projects, a number ofinstitutional, financial and procedural barriers stillneed to be addressed to enhance the mechanism’sviability (see table 2.31), in addition to the hurdlesposed by stakeholder misperceptions (see box 2.12).

Table 2.30 The Clean Development Mechanism in Asia and the Pacific (December 2005)

Armenia

Bangladesh

Bhutan

China

Fiji

India

Indonesia

Nepal

Malaysia

Papua New Guinea

Philippines

Republic of Korea

Sri Lanka

Thailand

Uzbekistan

Viet Nam

Asia-Pacific total

Global Total

CountryNumber of CDM

projectsregistered1

Estimatedemission reductions,registered projects

(TCO2/yr)

Number of CDMprojects in various

stages of preparationand implementation2

1

-

1

3

1

14

-

2

-

-

-

2

3

-

-

-

27

135 000

-

524

338 016

24 928

7 191 180

-

93 883

-

-

-

10 550 000

104 130

-

-

-

18 961 137

(70.72% of global total)

26 810 980

-

9

-

9

-

23

11

-

9

1

14

-

-

9

2

3

90

Sources:1. UNFCCC website, accessed on 14 March 2006 from <http://www/unfccc.int> and

2. CDM Watch website, accessed on 14 March 2006 from <http://www.cdmwatch.org/ssnp-list.php>.


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The perception of risk is one important limitingfactor to the current CDM.284 There are three maintypes of risks, both perceived and real:

(a) The CER price risk: this relates to theuncertain market price of the CER, which is drivenby aggregate supply and demand for the amountof emission reduction units - this also makes itdifficult to forecast future prices;

(b) The CER quantity risks: the CERsgenerated cannot be determined ex ante; they arelargely determined by the difference between actualemissions and baseline emissions. Actual projectemissions may change unexpectedly due tocircumstances such as plant shutdowns or theinterrupted operation of power plants. In such casesthe operator is unable to meet its emissionsreduction targets; and

(c) Host country risks: usually defined by thehost country’s political, financial, economic andsocial stability.

Unilateral CDM: a viable prospect withconsiderable potential, particularly for developingcountries

The current CDM is a bilateral instrument, involvingan entity or entities from an industrialized countryinvesting in a GHG-reduction project in a developingcountry. Multilateral funds are mobilized andcombined with private sector investments to reducethe perception of risk and stimulate the market.However, the slow response of targeted companiesin industrialized countries has shifted preferences topurchasing the CERs rather than investing fully inthe projects. This has led to the emergence of analternative approach, which is a variant on theoriginal CDM – the unilateral CDM.285

The unilateral CDM is purported to be moreflexible than the original CDM scheme, as theapproach allows the host country or developingcountry to plan and finance projects. The attractivenessof the approach is that the host country has the

Table 2.31 Critical limitations to, and opportunities for, expanding the implementation of the Clean DevelopmentMechanism

Areas of concern Limitations Opportunities

Institutional

Technical

Financial

Legal

• A complex and cumbersome project approvalprocess

• A slow approval process in host countries, attributedto weak institutional capacities

• Marginal contribution to sustainable development(very few energy-efficiency and forest-conservation projects)

• Transfer of technology is not actually taking place• A perceived geographical bias of the host parties• Uncertainty regarding the continuation of the

CDM beyond 2012

• Technical difficulties in the development ofmethodology

• Complexity of baselines and additionality

• High transaction costs for project development• Uncertainty of the price and volume of CERs• Difficulties in mobilizing financial support for projects• Difficulties in securing willingness of the private

sector in developed countries to invest in hostdeveloping countries

• Complexity and lack of transparency of theregulations in host countries, particularly regardingtaxation and the adjudication of disputes

• Legal status of CERs• Distribution of CERs from projects funded under

by ODA

• Streamlining of the project process by reformingthe CDM and the Executive Board

• Strengthening of institutional and humancapacity where it is inadequate

• Preferential measures to promote CDMprojects with local sustainable developmentbenefits, including energy efficiency andforestry projects.

• Adoption of sector-based approaches toCDM and policy-based CDM to addresstechnology and distribution issues

• Standardization of methodologies• Relaxation of baseline and additionality

conditions

• Reducing transaction costs through improvementsin the project development process.

• Mobilizing additional support to finance CDMprojects during the project developmentstages

• Reforming institutions to promote the account-ability and transparency of decision-makingprocesses

• Interventions to recognize the CERs as a legalmarket instrument, particularly in developingcountries

Source: Adapted from Institute of Global Environmental Studies (2005). Asian Perspectives on Climate Regime Beyond 2012:

Concerns, Interest and Priorities (Tokyo, Institute of Global Environmental Studies).


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Box 2.12 Infrastructure financing opportunities via the Clean Development Mechanism

The opportunities presented by the CDM for use as a component in the financing of large-scale infrastructureprojects are enormous. Large-scale projects which generate a significant amount of CERS and introducepoverty-reduction opportunities can be set up by conglomerates with the ability to realize projects in a timelymanner. The CDM mechanism provides an ideal link between private and public interests. However, infrastructuredevelopment, such as the construction of new industrial plants for electric power generation, chemicals, oiland gas, cement, agribusiness and pulp and paper plantations, tends to be perceived as unrelated toenvironmental protection initiatives such as the CDM. Too often, the perception is that private sector gains arein conflict with environmental objectives. Despite this, a brief look at the Asia-Pacific region highlights thepotential for immediate projects and CDM opportunities.

• Large-scale renewable energy: In archipelagic South-East Asia, such as in the thousands of islands ofIndonesia, biomass is abundant but too often burned in the open air and the potential energywasted. Meanwhile, almost all of the electricity in these islands comes from diesel generators. Mobilizing theopportunity presented by this situation is hampered by foreign exchange risks and a lack of local financing.The CDM could provide a critical boost to enhancing internal rates of return and could help to bridgeadditional financing sources with development risks. If this is done in conjunction with captiveindustrial plants nearby, the associated risks can be significantly mitigated.

• Agri-business (agricultural plantations): In addition to the opportunities to replace diesel provided by biomassenergy, many traditional plantations have huge pools of decaying biological effluent. The CDM offers thepossibility of structuring a methane capture facility which can bring in new revenue while generating CERsand introducing better overall environmental management.

• Industrial processes upgrades: Heavy industries continually assess the value of upgrading their processes andtechnologies. These industries need to consider possible CER generation as a first step in upgrading theircurrent process. Companies in sectors which generate heavy chemicals as final and intermediate productsand in sectors where industrial processes use heavy chemicals, can also explore generating CERs throughefficiency improvements in their efficiencies.

Threats to the blossoming of CDM potential:

“On the Ground” mismatch: A history of confrontation and conflict between community and environmentalgroups and industry has created a divide that reduces the potential for cooperation to develop win-winsolutions to environmental problems. Too often, environmental protection and commerce are viewed asopposing interests. Engagement in achieving mutually beneficial objectives is rarely seen, and the CDM canfall in the same trap. There is also a mismatch between the types of projects being developed by designatednational authorities (DNA) in developing Asia and their attractiveness as commercial ventures. The projects arepurely from the perspective of corporate finance, often “unbankable” due to their size, financial returns whichare not commensurate with the risks, and a lack of professional and technical capacities to implement theprojects successfully.

Misconceptions: In order for a vibrant CER market to develop, large block generators of CERs, as found inheavy industry and infrastructure projects (which generate millions of metric tons of CERs), are needed.However, conglomerates often view environmental concerns and the CDM as financial burdens akin to taxes.In order for the CDM to be “scaleable” across Asia, conglomerates must be mobilized to generate CERs fortheir own self-interest.

Too often, regional forums on the CDM are dominated by the public sector. There is too much “public push”and too little “market pull”. Private-sector skepticism about the CDM can be overcome by emphasizing thepurely financial element of the CDM. The CDM as a financing element can add a percentage point or two tothe internal rate of return and introduces new sources of international financing. The simple message that the“CDM = money” works.

Corporate finance firms which deal with heavy industries and construction for infrastructure development areimportant intermediaries in reconciling environmental, social and public interests with commercial interests inthe context of maximizing CDM opportunities. At present, the limited number of corporate finance firmspromoting the CDM represents an open market with limited competition. Paradoxically, the lack of competitionworks against pioneering corporate finance firms as awareness of CDM as a source of financing iscommensurately low, hampering the growth of the CER market. Greater emphasis on the role played bymarket intermediaries in effectively creating greater CDM “market pull” is critical to developing CDM marketsand promoting greener infrastructure and industrial development.

Contributed by William I.Y. Byun, Managing Director, Byun & Co., Singapore.


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human, institutional and infrastructural capacity tomobilize the capital necessary for the initiative,thereby assuming all the associated risks of theproject.286

Linked with an appropriate CERdiscounting scheme,287 the unilateral CDM has thepotential to contribute significantly to the netglobal reduction of GHGs without the impositionof any reduction targets on developing countries.288

For example, a developing country implementing aproject has generated two million worth of CERsand has sold 1 million CERs on the carbon marketto developed countries. The remaining 1 millionCERs retained by the developing country thusrepresents a net global GHG emission reduction.

One concern raised about the scheme relatesto access to technology and the transfer of capacities,which may constrain the host country since it willassume all the costs and risks associated with theproject. Proponents of the unilateral CDM maintain,however, that such concerns would be adequatelyaddressed under a CER discounting scheme. SinceCERs are economic instruments and are consideredpurchasing agreements, developing countries may beable to use them as collateral, giving the countriesaccess to financial resources that will enable them toacquire new technologies and hire technical expertswho can assist with developing actions andinterventions to reduce climate change.

The unilateral CDM means that developingcountries can become active participants in globalemissions reductions, rather than merely beingpassive hosts to projects identified by developed andindustrialized countries under the original CDM. Ifthe “Cuyamapa Hydroelectric Project” in Honduras289

is an indication of the scheme’s acceptability andappeal, and depending on the market response,unilateral CDMs can become a significant optionfor those developing countries in the region that havethe capability to support this type of project.290

Incorporating adaptation measures intodevelopment planning

Adaptation measures are actions which reflect theability of societies to adjust to climate change in

order to mitigate potential damage and takeadvantage of opportunities or cope with theconsequences of climate change.

Human adaptive capacities vary depending onthe climate and the magnitude, scale and frequencyof climate-related risks and can be maximisedthrough market forces or by direct governmentintervention (see table 2.32). In general, marketresponse is slow and its effectiveness may be furtherhampered by factors such as the maturity ofinstitutions, the protection provided by legalframeworks and various sources of market failure.291

The public sector is expected to lead in bothreactive and anticipatory responses to addressingclimate-change vulnerability and risks.

It is vital to emphasize the value ofanticipatory adaptive measures, given theirpotential to significantly reduce vulnerability to, andrisks posed by, climate change. Central to thisexercise is the recognition of planning as animportant component of the adaptive strategywhich should be spearheaded by the public sector atall levels, from the community to the national level.

Unfortunately, the absence of sustainabledevelopment plans and the continued sectoralorientation of development planning highlight theinadequacies of government efforts to addressclimate change in the context of coastal zonedevelopment plans, urban development plans andland-use planning. This situation is yet more acutein developing countries, as primary developmentobjectives are directed towards economic expansion.In this context, developing countries should beencouraged and assisted by developed countries toformulate development plans that incorporateclimate-change concerns.


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2.8 Natural disasters in the region: a constantthreat

The Asian and Pacific region is among the mostdisaster-prone regions in the world and is subject tohydrometeorological (floods, cyclones and droughts),geological (earthquakes, landslides and volcanoes)and others disasters, such as epidemics, insectinfestations, hot and cold waves and forest fires (seetable 2.33).

UNEP estimates that 80 per cent of allnatural disasters worldwide occur within Asia andthe Pacific.292 Estimates of lives lost alone alreadyaccount for about 90 per cent of total global deathsfrom natural disasters since 1900. Between 1995 and2004, South Asia, South-East Asia and North-EastAsia have seen the largest number of lives lost fromnatural disasters (see figure 2.45).293

In terms of disaster damage, the regionaccounted for more than 50 per cent of the totalglobal amount of damage in the period 1900 to 2004

(see figure 2.46). For the year 2004, 245 of the 641natural hazards events recorded globally occurred inAsia and the Pacific, accounting for US$73 billionof the total economic losses valued at US$145billion, or 50 per cent of the total loss.294

2.8.1 Natural disaster distributions and types

In Asia, droughts, floods and windstorms constitutethe disasters that may not be the most deadly, butthat affect the largest numbers of people. In thePacific, windstorms, volcanoes and floods impact onthe lives of more people than other disasters.

Riverine flooding continues to be a commonoccurrence, causing substantial annual damage, andthe impact of flash floods is increasingly important.Urban flooding has become a major potentialhazard in terms of its economic and social impactsas a result of the rapid urbanization process anduncoordinated infrastructure development. Withregard to coastal flooding, storm surges have causedsubstantial loss of life and property damage in large

Table 2.32 Typology of adaptation to climate change and examples of adaptive measures

Anticipatory Reactive

Na

tura

lsy

ste

ms • Changes in the length of growing season

• Changes in ecosystem composition• Altering wildlife migration patterns• Adaptation of species to extreme variations

of the environment

• Changes in insurance premiums• Changes in farm practices, including crop

changes and resource substitution• In commercial endeavors such as the

management of forestry concessions or theprocessing of forest products, changes inmanagement regimes or silvicultural practices

• Compensation payments and subsidies forthose affected by disasters or eventsattributed to climate change

• Enforcement of building codes and zoninglaws

• Establishment of immediate disaster-reliefprogrammes

Hu

ma

n s

yst

em

s

Priv

ate

(m

ark

et-

ba

sed

resp

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ses)

• Expanding insurance cover to include risksassociated with climate change such asflooding and the impacts of cyclones andstorms

• Construction of houses on stilts in flood-proneareas

• Early warning systems• Promulgation of new building codes, design

standards and zoning standards• Reform of institutions that rebuild public

health infrastructures• Research into improving the adaptive

capacities of human systems• Investment in protective activities such as

mangrove reforestation, building coastalbarriers and building flood control systems

• Provision of incentives for the relocation ofsettlements that will be affected by extremeclimate changes

Pu

blic

Adapted from IPCC (2001). Technical Summary, Climate Change 2001: Impacts, Adaptation and Vulnerability, A Report of

Working Group II of the Intergovernmental Panel on Climate Change (Geneva, IPCC).


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Table 2.33 Relative intensity of natural hazards faced by selected countries in the Asia-Pacific region

Cyclones Floods Droughts Landslides Tsunamis Earthquakes Volcanoes Fire

Australia

Bangladesh

China

Cook Islands

Fiji

India

Indonesia

Iran (IslamicRepublic of)

Japan

Kiribati

Lao People’s DemocraticRepublic

Malaysia

Marshall Islands

Micronesia (FederatedStates of)

Myanmar

Nepal

Niue

Pakistan

Palau

Papua New Guinea

Philippines

Solomon Islands

Samoa

Sri Lanka

Thailand

Tokelau

Tonga

Tuvalu

Vanuatu

Viet Nam

S

S

M

M

S

M

L

-

S

L

-

M

M

M

M

M

M

M

M

L

S

S

M

M

M

M

S

L

S

M

S

S

S

L

S

S

M

M

S

S*

M

M

S*

S*

M

L*

L*

M*

M*

S

S

S

S

S

S*

S*

M

S*

S

S

-

S

S

S

M

S

M

S

L

S

L

S

S

S

M

M

M

M

M

M

L

L

L

S

S

S

M

M

L

L

-

L

L

L

S

L

L

-

M

L

-

L

L

L

M

L

L

L

L

S

S

S

S

L

L

L

L

L

S

S

-

L

L

M

S

-

L

-

S

S

-

M

M

S

-

-

-

M

M

S

S

S

S

-

-

S

S

S

S

S

L

L

S

L

M

M

S

S

S

L

-

-

L

L

S

M

L

S

L

S

S

S

M

-

L

L

S

L

S

L

-

-

-

-

-

-

M

-

S

-

-

-

-

-

-

-

-

-

-

S

M

S

L

-

-

-

S

-

S

-

S

L

M

-

-

M

M

-

L

-

-

L

-

-

S

M

M

L

-

L

M

L

L

L

L

-

-

-

L

L

Source: ESCAP (2006). Enhancing regional cooperation in infrastructure development including that related to disaster

management, United Nations publication Sales No. E.06.II.F.13 (New York, United Nations).

S - severeM - mediumL - low* - coastal flooding


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and heavily populated delta areas such as those ofBangladesh and Viet Nam, while tsunamis generatedby submarine earthquakes and other geologicaldisturbances took their toll in 2004 in 2006 in Southand South-East Asia.

About 15 per cent of the world’s cyclonesoriginate in the Bay of Bengal, causing severeflooding on the east coasts of India and Bangladesh.Windstorms frequently impact Pacific islandcommunities.

The region is also very vulnerable to droughts,with 31 droughts recorded over the last 10 years.Prolonged droughts in South Asia (mainly inAfghanistan, Pakistan and India) since 1998 havecompromised food security and caused widespreadfamine and food shortages.295 The high temporal andspatial variations in the distribution of waterresources across the region are responsible for Asia’svulnerability to water-related disasters. Between2000 and 2004, over half a billion people (one ineight of the region’s population) across Asia and thePacific were affected by drought. An almost equalnumber were affected by flooding in the same timeperiod.296

Between 1900 and 2005, earthquakes haveresulted in a total loss of nearly 530,000 lives andnearly US$200 billion in the Asian and Pacificregion.297 Two thirds of all large earthquakes takeplace in the “ring of fire” around the Pacific, and the

Figure 2.46 Global distribution of disaster damagevalue, 1990-2004

Source: Based on Université Catholique de Louvain, Brussels,Belgium EM-DAT data (2005). The OFDA/CRED International

Disaster Database, accessed on 15 March 2006 from<http://www.em-dat.net>.

Note: Including tsunami-related deaths

Africa

2%

Europe

16%

Americas

31%

Asia-Pacific

51%

Figure 2.45 Lives lost due to natural disasters, 1995-2004

0 200 400 600 800 1000 1200 1400 1600

North-East Asia

Russian Federation

Mongolia

Republic of Korea

DPR Korea

Japan

China

No. of people (hundreds)2000-2004 1995-1999

0 200 400 600 800 1000 1200 1400 1600 1800

South-East Asia

Timor Leste

Viet NamThailand

Singapore

Philippines

Myanmar

Malaysia

Lao PDR

Indonesia

Cambodia


0 5 10 15 20 25 30


Pacific

Vanuatu

SamoaPapua

New GuineaNiue

New ZealandFed. Sts. ofMicronesia

Fiji

Cook Islands

Australia

0 1 2 3 4 5

Central Asia and the Caucasus

Uzbekistan

Turkmenistan

Tajikistan

Kyrgyzstan

Kazakhstan

Georgia

Azerbaijan

Armenia


0 50 100 150 200 250 300 350 400 450 500

South and South West Asia

Sri Lanka

Pakistan

Nepal

Maldives


India

Bhutan

Bangladesh

Afghanistan



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Himalayan region is also one of the world’s mostseismically active regions. While all subregions inAsia and the Pacific experience seismic activity,the areas of highest activity are in South Asia(Afghanistan, India, Islamic Republic of Iran, Nepaland Pakistan), China, Indonesia, Japan, Papua NewGuinea and the Philippines.298

In terms of the estimated economic value ofthe damage caused by natural disasters in the periodfrom 1995 to 2004, North-East Asia (particularlyChina and Japan) sustained damage of a highereconomic value than any of the other subregions.

In 2000, a survey quantified the annualeconomic losses caused by cyclone-related disasters,showing that these losses varied from US$5.5million in Hong Kong, China to as high asUS$1,960 million in Japan every year. Attemptswere also made in several countries to rank theseverity of cyclone-related hazards according to themagnitude of impacts – see, for example, Malaysiaand the Philippines (Table 2.34).

The impacts of river floods, as well as offlooding in urban areas, resulting from cyclones wereconsiderable in many countries. Flash floods werealso found to be frequent in many countries, whiledata on coastal floods, particularly storm surges, weregenerally not readily available. The survey, supportedby the data held by the OFDA/CRED InternationalDisaster Database, indicated that the loss of humanlives and the economic damage from cyclone-relateddisasters (wind storms and floods) accounted formore than half of the total losses from naturaldisasters (54 per cent of deaths and 57 per cent of

economic damage).299 This pattern, however, haschanged significantly in recent years, with theannual average number of deaths from naturaldisasters in the past 15 years reduced to about 42,000from a high of about 100,000 50 years ago. On theother hand, annual economic damage has increasedto US$29 billion in the last 15 years compared toUS$10.6 billion per annum 50 years ago.300

2.8.2 Vulnerability to natural disasters

An expanding population with limited habitablespace, coupled with unsustainable patterns ofdevelopment, is among the primary reasons for thehigh human, social and economic losses in theregion caused by natural disasters. Both the ruraland urban poor are particularly vulnerable, as theyare often forced to settle in low-lying flood-proneareas, on unstable hillsides or in other disaster-pronemarginal areas. For example, in Bangladesh over amillion people live on islands formed by silt depositsand along the vulnerable flood plains and coastalareas. Over 85 per cent of the population of Chinalives on alluvial plains or along river basins,concentrated in one third of the total area of thecountry. In Viet Nam, where the distribution of thepopulation is similar, the dykes along rivers whichusually provide protection are sometimes breachedby flood waters, causing extensive inundation.

Environmental degradation, caused by theunsustainable patterns of development taking placein many countries of the region, is exacerbating theeffects of natural hazards. The damage causedby natural hazards is higher in countries whereenvironmental degradation is severe. Deforestation,soil erosion, overgrazing, over-cultivation, flawedagricultural practices and the degradation of naturalbuffers all amplify the effects of natural hazards (Box2.13). Land degradation and desertification pose aserious threat to the region in the wake of growingpopulations and enhanced food demand.

Equally critical are the unseen effects ofhuman interventions that subtly but significantlycontribute to the vulnerability of societies todisaster. The influence of climate change on weather-related natural disasters is acknowledged andsupported by credible scientific evidence such as that

Source: Survey conducted by ESCAP Secretariat for theTyphoon Committee Area in 2000. ESCAP (2006). Enhancing

regional cooperation in infrastructure development

including that related to disaster management,United Nations publication Sales No. E.06.II.F.13 (New York,

United Nations).

Table 2.34 Comparative economic losses fromselected natural disasters

Economic loss, million US$

Floods Strongwinds

Landslides Stormsurges

Malaysia

Philippines

50

1 829

2

1 691

3

1 290

1

-


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produced by the World Meteorological Organiza-tion in 2002.301 Since 1980, scientists have beenwarning of the increasing intensity, severity andfrequency and wider spatial distribution of extremeweather events.

Despite these events, development policies stilldo not generally consider their impact on disaster-related risks. The increasing number of mega-citiesin the region is giving rise to an emerging area ofconcern – the vulnerability of underground spaces.302

With land increasingly scarce in many of themega-cities in the region, creating new spaceunderground is becoming an attractive option.However, the expansion of undergroundinfrastructure such as rail systems, shopping areas,and underpasses in most mega-cities has taken place

with little consideration of the associated risks fromextreme hazards such as flooding, fire andearthquakes. The enforcement of zoning and strictbuilding laws and the incorporation of naturaldisaster risk management into planning are ofteninadequate, making these infrastructures vulnerableto disasters. For instance, in Tokyo the frequency ofunderground flooding is high, particularly duringthe rain and typhoon months, with 17 reportedincidents occurring between 1999 and 2001 andinvolving some fatalities despite extensiveprecautions.303 The likelihood that these events alsooccur in other megacities is high, but they aregenerally either not reported at all or under-reported.The implications for many developing countries,which have a low capacity to handle such events, areworrying.

Box 2.13 Protection by natural coastal barriers in the December 2004 tsunami

The deadliest tsunami in history occurred in South-East Asia on 26 December 2004. Following an earthquake ofmagnitude 9.0 on the Richter scale off the coast of Sumatra, a massive tsunami struck low-lying coastal areasthroughout the Indian Ocean, killing at least 176,000 people; nearly 50,000 people to date are still listed asmissing. While tsunamis are rare events, their destructive power is enormous. In heavily hit areas, they canreduce buildings to rubble, wiping out entire communities with little warning. Tsunami survivors must often copewith the trauma of losing family members, friends, homes and livelihoods. At the same time, they must deal withsevere environmental degradation, which makes a return to normal life difficult.

The most pressing environmental concerns following the Indian Ocean Tsunami were the proper disposal oflarge quantities of debris, the contamination of groundwater, soil salinization, coastal erosion and thedisruption of environment-related activities such as farming, fishing and eco-tourism. In the Maldives, the debriscontained hazardous materials such as asbestos, and groundwater supplies were contaminated with nitratesand fecal coliform. Many other tsunami-affected communities face similar environmental hazards.

26 December 2004 marked the second time in just over 120 years that a devastating tsunami has struck South-East Asia. Because of the highly destructive nature and relative frequency of tsunamis in the Indian Ocean, it isimperative for governments in the subregion to prepare for the next catastrophe. In recognition of thisimperative, governments have already begun planning the installation of a tsunami early warning system,which, however, only represents one step in the safeguarding of coastal communities. Evidence that coastalforests, mangroves, sand dunes and coral reefs can mitigate the force of the giant waves is mounting. Notsurprisingly, human settlements that are located behind natural barriers tend to suffer far less damage thanthose with no natural barriers. In Sri Lanka, vegetated sand dunes are credited with protecting large areas ofthe Lunama-Kalametiya Sanctuary and the Godawaya area, while mangroves bore the brunt of the tsunami’sforce in Medilla, the Kalametiya Lagoon and Kahandamodara.

Over the past 20 years, the coastal ecosystems of South-East Asia have been replaced by hotels, aquacultureponds and residential areas. The conservation and restoration of these natural barriers will not only provideprotection against tsunamis, but also restore a wide range of ecosystem services such as erosion control,biodiversity protection, fisheries rehabilitation and tourist attractions. The economies of South-East Asia dependupon these services which can play an important role in plans for adaptation to sea-level rise and theincreased frequency of extreme weather events associated with climate change.

Sources: Université Catholique de Louvain, Brussels, Belgium EM-DAT data (2005). OFDA/CRED International Disaster, Database,Disaster Type Proportions by United Nations Subregions 1994-2003, accessed online on 12 March 2006 from <www.em-dat.net>;

IUCN (2005). A Report on the Terrestrial Assessment of Tsunami Impacts on the Coastal Environment in Rekawa,

Ussangoda, Kalametiya (ROK) Area of Southern Sri Lanka (Colombo, IUCN);UNEP (2005). Maldives Post Tsunami

Environmental Assessment (Bangkok, UNEP).


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2.8.3 Linking disaster risk management withgrowth and development: the emergingimperatives for coping with naturaldisasters

Different natural disasters affect people and theenvironment in various ways. It is critically importantto recognize these differences, as well as the linkbetween economic growth and natural disasters. Loweconomic losses do not necessarily reflect smallimpacts on development. For developing countries,particularly the least developed, even a relatively smalleconomic loss may be critically important to thecapacity to recover from disaster.

For example, it is estimated that the proportionof economic losses in developing countries fromflooding alone can be as high as 13 per cent of GDP,compared with just 2 per cent of the GDP ofdeveloped countries.304 Earthquakes often cause themost expensive damage, although these losses areconcentrated geographically. On the other hand,floods may register relatively low economic lossesbut their total human impact may be higher. Droughtscover bigger areas, and affect large numbers of peopleand have generally lower economic impact.

The increasing severity of natural disasters andthe escalating costs of damages are compellingjustifications for governments to review theircurrent outlooks on disaster risk management.Support for a more holistic approach to disastermanagement has been increasing in the past fewdecades, manifested by the growing number ofcountries which are taking steps to improve theirdisaster preparedness capabilities. A number oflaudable efforts can be cited, particularly inimproving policies aimed at minimizing the risks ofdisasters through planning and the promotion ofzoning laws, especially in urban areas. UN-HABITATconducted a survey in 2002 of disaster preparednessin 48 cities in the 49 countries of the region. Thirty-four cities indicated that a building code wasenforced, 32 cities undertook hazard mapping and24 cities had established natural disaster insuranceschemes for public and private buildings.305

The value of information and communica-tion is one aspect of disaster preparedness that has

not been given due attention. The Red Crosspromotes the view that information is a vital formof aid in itself, and that disaster-affected people needit as much as the basic relief necessities (i.e. water,food, medicine or shelter) that are provided.306

Lessons learned from past disasters underscorethe fact that sharing information with the mostvulnerable groups can significantly reduce casualtiesand save lives, livelihoods and resources. TheInternational Federation of Red Cross and RedCrescent Societies (IFRC) considers that informa-tion may be the only form of disaster preparednessthat most vulnerable groups can afford.307 Earlywarning systems, supported by a robust forecastingsystem, are the most practical way of ensuring thataccurate information can be shared in a timelyway with vulnerable communities, making thedifference between life and death. It is estimatedthat establishing early warning systems has a cost-benefit ratio of 10 or 15 to 1.308 Japan has demon-strated the benefit of a very well-established disasterpreparedness system, and similar observations havebeen noted, however localized, in the Philippines,India, and Bangladesh. On the other hand, the Asiantsunami experience has shown that even where thebest information possible is generated (such as wasavailable to scientists in the Pacific), the lack ofeffective early warning systems to process anddisseminate the information immediately can leadto disasters of horrific proportions.

While there is growing recognition of thebenefits of disaster and risk management, there isalso a need to reorient current disaster managementperspectives. The mindset must shift from thereactive and the charitable to one of anticipation andpre-emptiveness. As experience shows, countries areusually generous with post-disaster relief efforts, butless so when it comes to pre-disaster preparedness,spending US$100 on relief for every US$1 spent onpreparedness.309 Recent research has focused on theroot causes of the continued increase in economicand human losses caused by natural disasters, whichhave occurred despite the economic growth anddevelopment that have taken place in the region.This increase has largely been attributed to thecurrent orientation of disaster management, which


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focuses exclusively on reducing the impact ofdisasters on development rather than on a trulyintegrated risk management approach which, inaddition to disaster management, promotesdevelopment that helps to reduce and not to increasedisaster risks.310 It is predicted that the benefits ofsuch a reorientation of perspectives will be immenselyvaluable, especially for Asia and the Pacific, sincethis approach reduces the level of disaster risks tosocieties and, if pursued alongside sustainabledevelopment strategies, can help significantly toreduce expenditure on emergency and reconstructionefforts and to reduce human losses when a disasterstrikes.


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End notes1 UNIDO (2005). International Yearbook of IndustrialStatistics 2005 (Vienna, UNIDO).

2 UNIDO defines pollution-intensive industries ascomprising the following subsectors of manufacturing:paper and paper products, industrial chemicals, petroleumrefineries, non-metallic mineral products, iron and steel,and non-ferrous metals. Website accessed on 23 March2006 from <http://www.unido.org/userfiles/PembletP/figc.jpeg>.

3 One study that covers 15 countries and areas includingChina, Taiwan Province of China, India, Indonesia andthe Russian Federation, and reported by the World Bank(Greening Industry: New Roles for Communities, Marketsand Governments (New York, Oxford University Press,2000)), has found that a growing proportion of totalpollution was attributable to Asian developing countriesduring the 1970s and 1980s. See Brandon, Carter andRamesh Ramankutty (1993). Toward an EnvironmentalStrategy for Asia, World Bank Discussion Papers No. 224.Chapter 4 pp. 65-73 (Washington DC, World Bank)accessed on 18 November 2005 from <http://www.worldbank.org/nipr/work_paper/224-4>. Theauthors reported that there were multiple increases inpollution intensities in Thailand and the Philippines,accompanied by a two-thirds decrease in pollutionintensity in Japan from the late 1970s to the late 1980s.A study focusing on trade between the USA, Japan,Australia and the ASEAN countries (Angitto Abimayu“Impact of Free Trade on Industrial Pollution: DoPollution Havens exist?” ASEAN Economic Bulletin,v 13, no. 1 (1996)), found that there has been a fasterexpansion of “dirty” industry in ASEAN countries thanin their developed trade partners.

4 Brandon, Carter and Ramesh Ramankutty (1993),op. cit. This study applied the World Bank’s IndustrialPollution Projection System (IPPS) model developed inthe early 1990s and sought to assist regulators in devel-oping countries to estimate pollution loads attributableto industrial activity. A series of sector estimates of pollu-tion intensity (defined as pollution per unit of output orpollution per employee in the sector) was derived frommerging production and emissions data from 2,000,000factories in the United States of America during the late1980s. The pollution intensities were then applied inother countries to estimate the pollution loads of differentindustries. See World Bank New Ideas in PollutionRegulation programme website, “Estimating PollutionLoad: The Industrial Pollution Projection System (IPPS),”accessed on 23 March 2006 from <http://worldbank.org/nipr/ipps/ippsweb.htm>.

5 Brandon, Carter and Ramesh Ramankutty (1993),op. cit. Estimates of toxicity intensity are based on thelinear acute toxicity index, which combined United States

of America coefficients of pollution intensity (pollutionproduced per unit of product) and weighted eachcoefficient by acute toxicity for over 30 industries in thelate 1980s. The result was an index for each industrythat showed the relative toxicity of pollutants producedper US$1000 of product from each industry. This indexmay not be wholly applicable to other countries or othertime periods. However, it is assumed that the relativetoxicity of industrial subsectors is not likely to changesignificantly with time.

6 Asia-Pacific Centre for Transfer of Technology (2004).“VATIS Update – Waste management” Vol. 5, No. 63,July-August 2004.

7 Dasgupta, S., R. Lucas and D. Wheeler (1998). “SmallPlants, Pollution and Poverty: Evidence from Mexico andBrazil,” World Bank Development Research GroupWorking Paper 2029, November 1998 (Washington DC,World Bank).

8 European energy-intensive industry representativesassert that implementing the Kyoto Protocol will placean unfair burden on them and will lead to possiblereductions of production and “generate changes in tradeflows as imports into the EU from countries with nocarbon constraints would naturally increase, especiallyfor products with little elasticity in demand.” Europeanenergy intensive industries (2004). “Energy intensiveindustries call upon EU decision-makers to pay moreattention to the impact of emissions trading upon theircompetitiveness” Joint statement, January 2004, accessedon 23 March 2003 from <http://www.cembureau.be/Cem_warehouse/1-ENERGY%20INTENSIVE%20INDUSTRIES-JANUARY%202004.PDF>.

9 Natural Resources Canada (2000). Energy in Canada2000, Chapter 4, accessed on 23 March 2006 from<http://www2.nrcan.gc.ca/es/ener2000/online/html/toc_e.cfm>.

10 Based on World Bank data in ESCAP (2004).“UNESCAP and the Monterrey Consensus,” Informationpamphlet, January 2004 (Bangkok,United NationsInformation Service).

11 Based on UNCTAD data in ESCAP (2001).Implications of Globalization on Industrial DiversificationProcess and Improved Competitiveness of Manufacturingin ESCAP countries, United Nations publication, SalesNo. E.02.II.F.52 (United Nations, New York).

12 This discussion relates to the debate about “pollutionhavens”. Many studies conducted in the 1990s concludedthat pollution abatement constituted too small aproportion of total costs to influence location decisions– i.e. that the pollution haven effect was unlikely. Amore recent study identifies the possible reasons for whichpollution haven effects have not previously been observed.


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It further concludes that the effects of pollution costs onnet imports are not only “statistically significant, theyare economically significant”. For each product groupstudied, net imports increased when pollution abatementcosts increased; i.e. it was found to be more cost-effectiveto import a particular product when pollution abatementcosts increased. The increase in net imports was alsofound to represent “a considerable fraction of the increasein total trade volumes over the period.” See Levinson,Arik and M. Scott Taylor (2004). “Unmasking thePollution Haven Effect” National Bureau of EconomicResearch Working Paper Series, Working Paper 10629.Another study shows that whether or not investment isinfluenced by environmental stringency can depend onthe source of investment. Investigating almost 2900manufacturing joint ventures in China, Dean and othersshowed that “low environmental levies are a significantattraction only for joint ventures in highly-pollutingindustries with partners from Hong Kong [China], Macao[China] and Taiwan [Province of China]. In contrast,joint ventures with partners from OECD sources are notattracted by low environmental levies, regardless of thepollution intensity of the industry.” See Dean, Judith,Mary Lovely and Hua Wang (2005). “Are foreigninvestors attracted to weak environmental regulations?Evaluating the evidence from China,” World Bank PolicyResearch Working Paper 3505, February 2005 (Wash-ington DC, World Bank), accessed on 23 March 2006from <http://ideas.repec.org/p/wbk/wbrwps/3505.html>.

13 “Open” developing countries are shown to be ahead,even of OECD countries, in the adoption of electric arcsteel, continuous casting steel and thermo-mechanicalpulping technologies and processes. See Wheeler, D., M.Huq and P. Martin (1993). “Process Change, EconomicPolicy and Industrial Pollution: Cross Country evidencefrom the Wood Pulp and Steel Industries,” presented atthe Annual Meeting, American Economic Association,Anaheim, California, January 1993.

14 UNCTAD (2005). World Investment Report 2005(Geneva, United Nations).

15 Ho Hong, Jong (2005). “Environmental RegulatoryReform and Public Disclosure Program: KoreanExperiences”, presentation at the ESCAP First RegionalGreen Growth Policy Dialogue: Towards Green growthin Asia and the Pacific - Eco-efficiency through GreenTax and Budget Reform, Seoul, Republic of Korea, 9November 2005, accessed on 23 March 2006 from<http://www.unescap.org/esd/environment/mced/tggap/documents/RPD/19_JongHoHong.pdf>.

16 FDI Magazine (2005). “Canada sets good treatyexample”, News article, 3 October 2005, accessed on 23March 2006 from <http://www.fdimagazine.com/news/fullstory.php/aid/1404/Canada>.

17 See UNCTAD’s search engine of bilateral investmenttreaties, accessed on 23 March 2006 from <http://www.unctadxi.org/templates/DocSearch____779.aspx>.

18 OECD (2004). Implementing Sustainable Development.Key Results 2001-2004 (Paris, OECD).

19 ADB (2005). Asian Environment Outlook 2005:Making Profits, Protecting Our Planet – Corporate Respon-sibility for Environmental Performance in Asia and thePacific (Manila, ADB), accessed on 23 March 2006 from<http://www.adb.org/Documents/Books/AEO/2005/default.asp>.

20 Helmut Kaiser Consultancy (2005). “EnvironmentalTechnologies and Markets Worldwide 2010-2015,”summary, accessed on 23 March 2006 from <http://www.hkc22.com/environmentaltechnology.html>.

21 See UNEP (2004). “National and Regional Status ofSustainable Consumption and Production in Asia andthe Pacific” Available at <http://www.uneptie.org/pc/cp/library/catalogue/regional_reports.htm>.

22 See UNEP (2004), ibid.

23 Chiu, Anthony (2004). “Sustainable Eco-IndustrialDevelopment Strategy,” presentation at the ESCAPKitakyushu Initiative Seminar on Urban Air QualityManagement, Bangkok, Thailand, 20-21 February, 2003,accessed on 23 March 2006 from <http://www.iges.or.jp/kitakyushu/Meetings/Thematic%20Seminar/UAQM/Presentations/AChiu.pdf>.

24 See <http://www.env.go.jp/earth/3r/en/info/05_06.pdf>, accessed on 23 March 2006.

25 For more information on ecolabelling, see the websiteof the Global Ecolabelling Network, accessed on 23March 2006 from <http://www.gen.gr.jp/>.

26 See the report of NGO Japan for Sustainability on areport issued by the Ministry of Environment, Japan,accessed on 23 March 2006 from <http://www.japanfs.org/db/database.cgi?cmd=dp&num =576&dp=data_e.html>.

27 Sung-Woo, Seok (2004). “The Laws and experiencesof Green Purchasing in [the Republic of ] Korea,”presentation at the International Conference onSustainable Development in Asia and the Pacific:Common issues for effective implementation, Bangkok,Thailand, 18 July 2004.

28 ISO 14000 is an internationally recognized environ-mental management system which, through a generic setof specifications, establishes standards for all aspects ofenvironmental management that can be applied across awide range of organizations. See the website of theInternational Standards Organization, accessed on 12April 2006 from <http://www.iso.org/iso/en/iso9000-14000/understand/inbrief.html>.


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29 Presentation by Susmita Dasgupta at a conferenceon public information disclosure programmes organizedby the World Bank in June 2001, in Nanjing, China,accessed on 23 March 2006 from <http://www.worldbank.org/nipr/greeningindustry/Susmita_Nanjing_June21.ppt>.

30 Institute for Global Environmental Strategies (2005).“Information Access as a Vehicle for SustainableDevelopment in Asia” Policy Brief #2, October 2005.

31 Known as PRTRs, these information systemstypically document pollutant emissions in substantialdetail and make them available to the public withoutinterpretation for the lay person.

32 Garcia Lopez, Jorge, Thomas Sterner and ShakebAfsah (2004). “Public Disclosure of Industrial Pollution:The PROPER Approach for Indonesia?” Resources forthe Future Discussion Paper 04-34, October 2004,accessed on 23 March 2006 from <http://www.rff.org/rff/Documents/RFF-DP-04-34.pdf>.

33 Wang, Hua, Jun Bi, David Wheeler, Jinnan Wang,Dong Cao, Genfa Lu and Yuan Wang (2002). “Environ-mental Performance Rating and Disclosure: China’sGreenWatch Program” World Bank Policy ResearchWorking Paper No. 2889 (Washington DC, World Bank),accessed on 23 March 2006 from <http://www.worldbank.org/nipr/work_paper/hua/EnvironmentalPerformanceRatingandDisclosure.htm>. This report also discussesprogramme design and implementation issues.

34 Wang, Hua et al (2002), ibid.

35 Wang, Hua et al (2002), ibid.

36 Presentation by the Viet Nam National EnvironmentAgency at the June 2001 World Bank meeting onpublic information disclosure, accessed on 23 March2006 from <http://www.worldbank.org/nipr/greeningindustry.htm>.

37 Tay, Simon S. C., and Iris Tan (2005). “SustainableDevelopment and Foreign Direct Investment: Theemerging paradigm in Asia” in Zarsky, Lyuba, ed. (2005).International Investment for Sustainable Development –Balancing Rights and Rewards (London, Sterling VA,Earthscan Publications Ltd.).

38 World Bank (2000). Greening Industry: New Roles forCommunities, Markets and Governments (New York,Oxford University Press).

39 Buffet, Sandy (2005). “Corporate Governance andGlobal Disclosure: Let the Sun Shine,” in Zarsky, Lyuba,ed. (2005). International Investment for SustainableDevelopment – Balancing Rights and Rewards (London,Sterling VA, Earthscan Publications Ltd.).

40 Others include the OECD Principles of CorporateGovernance, OECD guidelines on MultinationalEnterprises, the UNEP FI initiatives, the United NationsGlobal Compact, the Global Reporting Initiative and theEquator principles.

41 A UNEP survey of stakeholder ratings of sustainableproduction tools and initiatives in the Asian and Pacificregion indicates that public reporting is ranked along withenvironmental accounting as one of the least-recommended measures for strengthening sustainableproduction at the national level. This may be a reflectionof generally negative perceptions in the industryregarding public disclosure. Legislation, regulation,policies and training and financial incentives ranked asthe most important. See UNEP (2004), op. cit.

42 World Resources Institute (2000).The Weight ofNations: Material outflows from industrial economies(Washington DC, World Resources Institute).

43 World Resources Institute (2000), ibid.

44 Excluding the Islamic Republic of Iran, the RussianFederation and CIS countries. Based on data fromInternational Iron and Steel Institute (2005). SteelStatistical Yearbook 2005 (Brussels, International Iron andSteel Institute).

45 See Kuo, Chin S., Travis Q. Lyday, Pui-Kwan Tse,David Wilburn, and John C. Wu (2001). “The MineralIndustries of Asia and the Pacific” in U.S. GeologicalService (2001). U.S. Geological Survey Minerals Yearbook2001, (Reston, U.S. Geological Service), accessed on 11November 2004 from <http://minerals.usgs.gov/minerals/pubs/country/2001/asia01r.pdf>.

46 International Iron and Steel Institute (2005), op. cit.

47 Based on data in Kuo, Chin S. and others (2001), op. cit.

48 Based on data presented in FAO (2005). State of theWorld’s Forests 2005 (Rome, FAO).

49 See Moriguchi, Yuichi, ed. (2003). Material Flow DataBook – World Resource Flows around Japan. Secondedition. (Ibaraki, Center for Global EnvironmentalResearch, National Institute for Environmental Studies,Environment Agency of Japan), accessed on 18 January2006 from <http://www-cger.nies.go.jp/publication/D022/972359-1.pdf>.

50 UNCTAD (2005). World Investment Report 2005:Transnational Corporations and the Internationalizationof R&D (New York and Geneva, United Nations).

51 Ecolabelling schemes such as that of the ForestStewardship Council and, within the region, that inIndonesia, seek to improve the sustainability of forestmanagement. However, in 2002, the total area of forests


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certified by the Forest Stewardship Council in the regiononly constituted some 4 per cent of the global total.Despite being established to improve the managementof tropical timber forests, such certification schemes seemto have had limited impact in tropical areas.

52 See World Bank (2004). Extractive Industries Review.Asia and Pacific Regional Workshop Executive Summary:Testimonials and Consultation Report, accessed on 20December 2004 from <http://bankwatch.ecn.cz/eir/reports/vol4_asia_execsummary.pdf>.

53 World Bank (2001). Controlling the International Tradein Illegally Logged Timber and Wood Products – a RevisedStrategy for the World Bank Group (Washington DC,World Bank).

54 United Nations ECE and FAO (2005). Forest ProductsAnnual Market Review 2004-2005 (ECE/TIM/BULL/2005/3), (Geneva, United Nations).

55 Wood Resources International LLC and Seneca CreekAssociates (2004). Illegal logging and global woodmarkets: The competitive impact on the U.S. wood productsindustry, 2004. (Washington DC, American Forest &Paper Association).

56 Wood Resources International LLC and Seneca CreekAssociates (2004), ibid.

57 “Non-Wood Forest Products” refers to animal andplant products other than wood derived from forests orforest tree species. FAO defines Non-Wood Forest Productsas goods of biological origin other than wood that arederived from forests, other wooded land and treesoutside forests. See the FAO Non-Wood Forest Productwebpages, accessed on 20 April 2006 from <http://www.fao.org/forestry/foris/webview/forestry2/index.jsp?siteId=2301&sitetreeId=6366&langId=1&geoId=0>.

58 FAO (2006). Summary of findings of the GlobalForest Resources Assessment 2005, accessed on 11January 2006 from <http://www.fao.org/forestry/site/32253/en>.

59 While commodity prices have increased rapidly inrecent years, long-term declines in real commodity pricesfrom 1980 to 2002 have been observed. The World Bank’sprice indices for agricultural commodities, crude oil andmetals show declines of 47 per cent, 43 per cent and 35per cent respectively. With the exception of nickel, realprices of minerals are expected to decline in the longerterm as production costs continue to fall and newtechnologies and managerial practices improve. SeeAnnex 2 “Global Commodity Price Prospects”, in WorldBank (2005). Global Economic Prospects 2005 (WashingtonDC, World Bank).

60 Hawken, Paul, Amory Lovins, and L. Hunter Lovins(1999). Natural Capitalism: Creating the next industrialrevolution (New York, Back Bay Books/ Little, Brownand Company).

61 World Resources Institute (2000). The Weight ofNations: Material outflows from industrial economies(Washington DC, World Resources Institute).

62 Saghir, Jamal (2005). The global investment challenge- Financing the growth of renewable energy in developingcountries, in Renewable Energy World, July/August 2005,pp 196-211, (London, James & James; Earthscan).

63 Ministry of Industry, Mines and Energy, Cambodia,International Energy Agency data.

64 UNDP, United Nations Division of Economic andSocial Affairs, World Energy Council (2004). WorldEnergy Assessment Overview 2004 Update (New York,UNDP).

65 These increases can be compared with the globalincrease in electricity consumption of 50 per cent in thesame period (1980-1990). See World Bank (2003). WorldDevelopment Indicators 2003 (Washington DC, WorldBank).

66 WHO (2005). “Indoor air pollution and health”,Media Centre Website fact sheet, June 2005, accessed on11 November 2005 from <http://www.who.int/mediacentre/factsheets/fs292/en> and Saghir, Jamal(2005), op. cit.

67 Based on data from International Energy Agency(1999a). Energy balances of non-OECD countries 1996-1999 (Paris, OECD/IEA); IEA (1999b). Energy balancesof OECD countries 1996-1999 (Paris, OECD/IEA); IEA(2004a). Energy balances of non-OECD countries 2003-2004 (Paris, OECD/IEA). IEA (2004b). Energy balancesof OECD countries 2003-2004 (Paris, OECD/IEA).

68 Based on IEA (1999a and 1999b) and (2004a and2004b), ibid.

69 ESCAP (2005). Electric Power in Asia and the Pacific,2001 and 2002 (ST/ESCAP/2350), United Nationspublication, Sales No. E.05.II.F.6, (United Nations NewYork).

70 Asia Times (2005). “China’s electric power sectorreaches growth limit,” 5 May 2005, accessed on 2 January2006 from <http://www.atimes.com/atimes/China/GE05Ad07.html>.

71 ESCAP (2004). End-use energy efficiency andpromotion of a sustainable future, Energy Resources andDevelopment Series no. 39, United Nations publication,Sales No. 04.IIF.II (New York, United Nations).


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72 Of the 20 per cent savings, it is assumed that halfresults from zero-investment measures, six per cent fromlow-cost investments and four per cent from high-investment measures. See ESCAP (2004), op. cit.

73 ESCAP (2004), op. cit.

74 See the ASEAN Energy Centre website, <http://www.aseanenergy.org/aeawards/index.php>, accessed on12 May 2006.

75 World Wind Energy Association (2005). “WorldwideWind Energy Capacity at 47.616 MW – 8.321 MWadded in 2004. Spain, Germany and India are leadingmarkets – Australia-Pacific shows highest growth rate”,Press release, 7 March 2005, accessed on 22 December2006 from <http://www.wwindea.org/pdf/press/PR_Fig2004_070305.htm>.

76 James & James/Earthscan (2005). “World’s largesttidal energy plant for [the Republic of ] Korea”, RenewableEnergy World July-August 2005 news summary webpage,accessed on 20 April 2006 from <http://www.earthscan.co.uk/news/article/mps/uan/426/v/3/sp/>.

77 See the website of the UN Framework Conventionon Climate Change, CDM project activities webpage“Project 0349 : Sihwa Tidal Power Plant CDM Project”,accessed on 20 April 2005 from < http://cdm.unfccc.int/Projects/DNV-CUK1143710269.08/view.html>.

78 Saghir, Jamal (2005), op. cit.

79 World Alliance for Decentralized Energy (2005).World Survey of Decentralized Energy 2005, (Edinburgh,World Alliance for Decentralized Energy), accessed on4 January 2006 from <http://www.localpower.org/documents_pub/report_worldsurvey05.pdf>.

80 ADB, Japan Bank for International Cooperation andWorld Bank (2005). Connecting East Asia: A New Frame-work for Infrastructure (Washington DC, World Bank).

81 A comprehensive review of IPP issues is given by Toba,Natsuka (2005). Welfare Impacts of Electricity GenerationSector Reform in the Philippines, ADB-ERD WorkingPaper No. 44, June 2005 (Manila, ADB).

82 World Alliance for Decentralized Energy (2005), op. cit.



85 Under the ESCAP 5P (Pro-Poor Public-PrivatePartnership) project, the Cinta Mekar microhydro powerplant was financed by a private company and thecommunity organized into a cooperative. The power plantgenerates about 54,000 kWh a month and earns profitsof about US$3,300 which are shared equally among thecommunity. For more information see the ESCAP

website, accessed on 18 April 2006 from <http://www.unescap.org/esd/energy/cap_building/ppp/>.

86 Steve Halls and Thassannnee Wanderly-Wanick(2005). “Biofuels: the energy source of the future”,presentation made at the Eminent Scientists Symposiumof the Ministerial Conference on Environment andDevelopment in Asia and the Pacific, 2005, Seoul,Republic of Korea, 24-25 March 2005.

87 Metschies Consult and German Technical CooperationGTZ, for the German Federal Ministry for EconomicCooperation (2005). International Fuel Prices 2005(Eschborn, GTZ, German Federal Ministry for EconomicCooperation and Development), accessed on 2 February2005 from <http://www.international-Fuel-Prices.com,www.gtz.de/fuelprices>.

88 Metschies Consult and German Technical CooperationGTZ, for the German Federal Ministry for EconomicCooperation (2005), ibid.

89 Based on Shiklomanov, I.A. (2004). “Assessment ofwater resources in Asia and the Pacific in the 21st

Century” (unpublished report) and World ResourcesInstitute data, as featured in UNEP (2004). “Water andDevelopment: Industry’s contribution”. Industry andEnvironment, Volume 27, No. 1, January-March 2004(Paris, UNEP Division of Technology, Industry andEconomics).

90 Shiklomanov, I.A. (2004), ibid.

91 The water exploitation index (WEI) is the meanannual total demand for freshwater divided by the long-term average freshwater resources. If between 10 and 20per cent of annual renewable freshwater resources arewithdrawn each year, a country’s water supply is said tobe under low stress. WEI values between 20 and 40 percent indicate situations of water stress, while WEI valuesgreater than or equal to 40 per cent indicate severe stress.See European Environment Agency (2003). “IndicatorFact Sheet (WQ01c) Water exploitation index”, Version01.10.03, available online at <http://themes.eea.eu.int/indicators/all_indicators_box>.

92 Water availability per capita is also known as theFalkenmark Index. If this value is greater than 1,700 m3

per capita per year, only occasional or local waterproblems are expected. Less than 1,700 m3 per capitaper year but over 1,000 m3 per capita per year signalsperiodic or regular water stress. Less than 1,000 m3 percapita per year is said to be an indicator of chronic waterscarcity.

93 Department of Environment, Soil and WaterPollution and Waste Management Bureau, IslamicRepublic of Iran (2004). “Water use Efficiency Planningin Iran”, presentation at the ESCAP Ad-Hoc ExpertGroup Meeting on Water Use Efficiency Planning,Bangkok, Thailand, 26-28 October 2004.


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94 Water Resources and Hydropower Planning andDesign General Institute, China (2004). “On China’sAction, Problem and Countermeasure in EfficientWater Use”, presentation at the ESCAP Ad-Hoc ExpertGroup Meeting on Water Use Efficiency Planning,Bangkok, Thailand, 26-28 October 2004.

95 Ministry of Environment, Indonesia (2004). “WaterUse Efficiency Planning in Indonesia”, presentation atthe ESCAP Ad-Hoc Expert Group Meeting on WaterUse Efficiency Planning, Bangkok, Thailand, 26-28October 2004.

96 Warford, Jeremy (2004). “Infrastructure Policy andStrategy in the East Asia and Pacific Region: Environ-mental and Social Aspects”, cited in Asian DevelopmentBank, Japan Bank for International Cooperation and theWorld Bank (2005). Connecting East Asia: A New Frame-work for Infrastructure (Washington DC, World Bank).

97 Pakistan Water Gateway, accessed on 1 October 2005from <http://www.waterinfo.net.pk/doc1.htm>.

98 See Millennium Ecosystem Assessment (2005).Ecosystems and Human Well-Being:Wetlands and WaterSynthesis (Washington DC, World Resources Institute).

99 Millennium Ecosystem Assessment (2005), ibid.

100 Chalise, S, S. Kansakar, G. Rees, K. Croker and M.Zaidman (2003). “Management of water resources andlow flow estimation for the Himalayan basins of Nepal”,Journal of Hydrology. Volume 282, Issues 1-4, 10 November2003 (London, Elsevier).

101 Glacial lakes are formed when debris-covered glaciersretreat, leaving behind closed water bodies dammed bydebris that are vulnerable to basin erosion and seismictremors. In 2002, UNEP and the International Centrefor Integrated Mountain Development found that thebuilding pressure of water from increased glacial meltcould cause 24 glacial lakes in Bhutan to burst theirnaturally created dams, endangering the communities intheir paths.

102 Worldwatch Institute (2001). “The hidden freshwatercrisis”, in the San Diego Earth Times, January 2001issue, accessed on 10 January 2006 from <http://www.sdearthtimes.com/et0101/et0101s6.html>.

103 Brown, Lester (2003).“World Creating Food BubbleEconomy Based on Unsustainable Use of Water”, EarthPolicy Institute Eco-Economy update, no. 2, 13 March2003, accessed on 19 October 2005 from <http://www.earth-policy.org/Updates/Update22.htm>.

104 Worldwatch Institute (2001), op. cit.

105 Agence France Presse News Service, Beijing, “BubblingEconomy Means Water Woes in China”, Yahoo News

website, Friday 30 December 12:56 AM ET, accessedon 17 January 2005 from <http://news.yahoo.com/s/afp/20051230/wl_asia_afp/chinaenvironmentwater_051230055600>.

106 Department of Water Resources, Managementand Conservation, Ministry of Water Resources andMeteorology, Cambodia (2004). Country paper submittedto the ESCAP Ad-Hoc Expert Group Meeting on WaterUse Efficiency Planning, Bangkok, Thailand, 26-28October 2004.

107 Central Ground Water Board, Ministry of WaterResources, India (2004). Country paper submitted to theESCAP Ad-Hoc Expert Group Meeting on Water UseEfficiency Planning, Bangkok, Thailand, 26-28October 2004.

108 Data for 2004. See the Water Resources and Hydro-power Planning and Design General Institute, China(2004), op. cit.

109 Central Ground Water Board, Ministry of WaterResources, India (2004), op. cit.

110 ADB (2005). Asian Development Outlook 2005:Promoting competition for long-term development (HongKong, China, ADB).

111 FAO (2004a). Selected Indicators of Food and AgricultureDevelopment in Asia-Pacific Region: 1993-2003 (Bangkok,FAO Regional Office for Asia and the Pacific).

112 See Central Ground Water Board, Ministry of WaterResources, India (2004), op. cit.

113 See Water Resources and Hydropower Planning andDesign General Institute, China (2004), op. cit.

114 Center of Excellence in Disaster Management andHumanitarian Assistance, Pacific Disaster ManagementInformation Network, Asia-Pacific Disease OutbreakSurveillance reports, various dates, 2004-2005, accessedon 10 October 2005 from <http://pdmin.coe-dmha.org/apdr/>.

115 Other benefits of these systems include increased plantyields, reduced tillage operations and tillage energy use(by some 50 per cent), a quick post-harvest turnaroundof fields that can permit two crops to be harvested insome years, reduced fertilizer and systemic pesticide useand pollution (where irrigation systems are used todeliver agrochemicals directly to the root zone) andreduced salinization and land degradation.

116 See Hoekstra, A. Y., and P.Q. Hung (2002).VirtualWater Trade: A quantification of virtual water flowsbetween nations in relation to international crop trade, IHEDelft Value of Water Research Report Series, No. 11,September 2002 (Delft, IHE Delft).


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117 United Nations Development Group (2003). Indicatorsfor Monitoring the Millennium Development Goals(New York, United Nations Development Group).

118 World Health Organization and United NationsChildren’s Fund (2000). Global Water Supply and SanitationAssessment, 2000 Report (Geneva and New York, WaterSupply and Sanitation Collaborative Council). Updateddata available at <http://www.childinfo.org>. Down-loaded from the United Nations Millennium IndicatorDatabase on 20 April 2005 from <http://millenniumindicators.un.org/unsd/mi/mi_goals.asp>.

119 United Nations (2003). Water for People, Waterfor Life - the United Nations World Water DevelopmentReport (United Nations World Water AssessmentProgramme, UNESCO Publishing, Berghahn Books).

120 Based on data from the Millennium Indicatordatabase and United Nations Population Division.

121 ADB (2005). Asia Water Watch 2015 (Manila, ADB).

122 In 2000, China’s per capita water consumption inrural households was estimated at 89 litres per day. Urbanper capita water use was estimated at almost three timesthis amount at 244 litres per day. See Guan, Dabo andKlaus Hbacek, Leeds Institute of Environment, Schoolof the Environment, University of Leeds (2004).“Lifestyle Changes and its influences on energy and waterconsumption in China”, in Proceedings for the Interna-tional Workshop on Driving Forces for and Barriers toSustainable Consumption, Leeds, 2004. Earlier estimatesfor India put urban per capita water use (with pipedwater and underground sewerage) at three times therural per capita figure of 40 litres per day (assumingavailability of other water sources for bathing andwashing clothes in rural areas). See Meinzen-Dick, Ruthand P.P. Appasamy (2002). “Urbanization andInter-sectoral Competition for Water” in Finding theSource: The Linkages between Population and Water (Wash-ington DC, Woodrow Wilson International Centrefor Scholars), accessed on 12 December 2005 from<http://wwics.si.edu/topics/pubs/popwawa1.pdf>.

123 Central Ground Water Board, Ministry of WaterResources, Government of India (2004), op. cit.

124 Conan, Hervé (2004). “Small Piped Water Networks– Helping Local Entrepreneurs to Invest.” eds. CharlesT. Andrews and Almud Weitz (2004). Water for AllSeries, No. 13 (Manila, ADB).

125 Kurtenbach, Elaine, Associated Press (2005). “300Million Chinese Drink Unsafe Water”, Yahoo Newswebsite, Thursday December 29, 9:38 AM ET, accessedon 10 January 2006 from <http://news.yahoo.com/s/ap/20051229/ap_on_re_as/china_water_pollution>.

126 Meinzen-Dick, Ruth. and P.P. Appasamy (2002), op.cit. The authors point out that tradeable water rights, amarket solution that has been proposed in developedcountries, will require adequate physical infrastructurefor transfers, effective information systems and effectivemechanisms for dealing with the consequences for thirdparties, conditions not often found in developingcountries. Given the low economic value of water usedfor agriculture, tradeable water rights can result indiminished food production, as farmers sell water forindustrial purposes and eventually exhaust their ownsupplies.

127 UNEP (2004). “Freshwater and Industry: facts andfigures”, UNEP Industry and Environment, Volume 27,No. 1, January-March 2004 (Paris, UNEP).

128 Taylor, Les and Peter Fleming (2004). “Urban WaterConservation Activities and Trends in Australia”,presentation at the ESCAP Ad-Hoc Expert GroupMeeting on Water Use Efficiency Planning, Bangkok,Thailand, 26-28 October 2004.

129 Worldwatch Institute (2001), op. cit.

130 Provincial Waterworks Authority, Government ofThailand “Water-Use Efficiency Planning in ProvincialWaterworks Authority, Thailand”, “Water Use EfficiencyPlanning in Indonesia”, presentation at the ESCAPAd-Hoc Expert Group Meeting on Water Use EfficiencyPlanning, Bangkok, Thailand, 26-28 October 2004.

131 See the website of the National Development ReformCommission, China (English version), available at <http://en.ndrc.gov.cn/policyrelease/t20050621_8427.htm>.

132 Paper submitted by the State Environmental ProtectionAgency of China, “Water Pollution Prevention andControl: Successful Cases in China”, Eighth specialsession of the UNEP Governing Council/GlobalMinisterial Environment Forum, 29–31 March 2004,Jeju, Republic of Korea.

133 Website of the Department for Environment andHeritage, Government of Australia, “Inland Waters –River Murray”, accessed on 17 January 2006 from <http://www.environment.sa.gov.au/reporting/inland/index.html>.

134 Millennium Ecosystem Assessment (2005), op. cit.

135 Department of Environment, Soil and Water Pollutionand Waste Management Bureau, Islamic Republic of Iran(2004), op. cit.

136 Singapore Government SEI Professional SharingSeries presentation, “Green Mark for Buildings”, accessedon 22 July 2005 from <http://www.nea.gov.sg/cms/sei/PSS13slides.pdf>.


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137 Taylor, Les and Peter Fleming (2004), op. cit.

138 Ho, Goen (2004). “Bioremediation, phytotechnologyand artificial groundwater recharge: potential applicationsand technology transfer issues for developing countries”,in Industry and Environment, Volume 27, No. 1, January-March 2004 (Paris, UNEP).

139 Conan, Hervé (2004), op. cit.

140 Matsui, Saburo (2004). “Towards a new form ofurban sanitation and water infrastructure”, Industry andEnvironment, Volume 27, No. 1, January-March 2004(Paris, UNEP).

141 UNEP Sourcebook of Alternative Technologies forFreshwater Augmentation in Small Island DevelopingStates (undated). Accessed on 22 March 2006 from< h t t p : / / w w w. u n e p. o r. j p / i e t c / Pu b l i c a t i o n s /TechPublications/TechPub-8d/sanitation.asp>.

142 Pathak, Bindeshwar (2003). “Toilets for All”, HabitatDebate, Vol. 9, No. 3, September 2003 (Nairobi, UNHuman Settlements Programme).

143 Water Resources Planning Organization, Ministry ofWater Resources, Bangladesh (2004). “Water-UseEfficiency Planning: Bangladesh Context”, presented atthe ESCAP Ad-Hoc Expert Group Meeting on WaterUse Efficiency Planning, Bangkok, Thailand, 26-28October 2004.

144 FAO (2003a). State of the Food Insecurity in the World2003 (Rome, FAO).

145 FAO (2004b). State of Food and Agriculture 2003-2004(Rome, FAO).

146 ESCAP (2004). Statistical Yearbook for Asia and thePacific, 2003, United Nations publication, Sales No.E.04.II.F.1 (New York, United Nations).

147 FAO (2003a), op. cit.

148 See FAO (2004c). Follow-up to the World FoodSummit and World Food Summit: Five years later: RegionalDimensions. Paper presented to the the Twenty-SeventhFAO Regional Conference for Asia and the Pacific(APCR/04/4), Beijing, China, 17-21 May 2004.

149 FAO (2003a), op. cit.

150 FAO (2003a), op. cit.

151 FAO (2004c), ibid.

152 FAO (2004c), ibid.

153 FAO (2004b), op. cit.

154 FAO (2004b), op. cit.

155 Also an important factor is the shifting age structurefollowing the ageing of the “baby boomer” generation.Generally the baby boomer generation have high incomesand can afford to maintain relatively comfortablelifestyles. Their dietary preference is for a lower calorificintake and an increased demand for fish, fruits andvegetables. It is predicted that a growing aging populationwill significantly shape the future pattern of foodconsumption in the region.

156 Coyle, William, Brad Gilmour, and WalterArmbruster (2003). “Where will Demographics Take theAsia-Pacific Food System” Economic Research Service,(Washington DC, US Department of Agriculture).

157 FAO (2003b). World Agriculture: towards 2015/2030,J. Bruinsma ed. (London, Earthscan Publications Ltd.).

158 FAO (2001). Feeding Asian Cities: Proceedings of theRegional Seminar (Rome, FAO).

159 Inoue, Sotaro and Boonjit Titapiwatanakun (2000).“Dietary pattern change in Asian countries. Research on foodconsumption structure and marketing system (sic) undereconomic fluctuations in Japan and other Asian countries”(Tokyo, National Research Institute of AgriculturalEconomics).

160 Based on data from FAO FAOSTAT online database,accessed on 15 March 2006 from <http://faostat.fao.org>.

161 ADB (2000).The Growth and Sustainability ofAgriculture in Asia (Manila, ADB).

162 FAO (2003c). Selected Indicators of Food and AgricultureDevelopment in Asia-Pacific Region 1992-2002, RegionalOffice for Asia and the Pacific publication 2003/10,(Bangkok, FAO Regional Office for Asia and the Pacific).FAO’s definition of Asia and the Pacific does not includeArmenia, Azerbaijan, Brunei Darussalam, Georgia, theRussian Federation, Singapore and Turkey.

163 FAO (2003c), ibid.

164 World Commission of Dams (2000). Dams andDevelopment: A new framework for decision making(London, Earthscan Publications Ltd.), accessed on 15March 2006 from <http://www.dams.org>.

165 World Commission on Dams (2000), ibid.

166 FAO (2003a), op. cit.

167 Giampeitro, Mario and David Pimentel (1994). TheTightening Conflict: Population, Energy Use and theEcology of Agriculture, Available online and accessed on15 March 2006 from <http://dieoff.org>.

168 Pfeiffer, Dale Allen (2004). Eating Fossil Fuels(Sherman Oaks, Wilderness Publications), highlights,accessed on 15 March 2006 from <http://www.fromthewilderness.com/free/ww3/100303_eating_oil.html>.


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169 Exosomatic energy is the transformation of energyoutside the human body, as differentiated fromendosomatic (or metabolic) energy, which is thetransformation of food energy into power within thebody.

170 Giampeitro, Mario and David Pimentel (1994), op. cit.

171 Giampeitro, Mario and David Pimentel (1994), op. cit.

172 Murray, Daniel (2005). Oil and Food: A new securitychallenge, (Asia Times Online Hong Kong, China, 2005),accessed on 15 March 2006 from <http://www.atimes.com>.

173 Woods, Stanley, Kate Sebastian, and Sara J. Scherr(2000). Pilot Analysis of Global Ecosystem: Agroecosystems(Washington DC, World Resources Institute). Availableonline and accessed on 15 March 2006 from <http://www.ifpri.org/pubs/books/page.htm>.

174 UN Millennium Project (2005). Environment andHuman Well-being: A Practical Strategy: Report of the TaskForce on Environmental Sustainability (London, EarthscanPublications Ltd.).

175 OECD (2001). OECD Environmental Outlook (Paris,OECD).

176 Hongmin Dong, Qing He,Yue Li and Xiuping Tao(2000). “Livestock Production and CH

4 Emission from

Enteric Fermentation of Domestic Livestock in China”,paper presented at the Workshop on GHG Inventoryfor the Asia and the Pacific (Japan, Institute for GlobalEnvironmental Strategies).

177 Terada, Fuminori (2000). Methane Emission Inventoryfrom Enteric Fermentation of Ruminant Livestock in Japanand Asia, Paper presented at the Workshop on GHGInventory for the Asia and the Pacific, (Japan, Institutefor Global Environmental Strategies).

178 Rhonda Lantin and Jose Villarin (2000). “PhilippineGreenhouse Gas Inventory Agriculture and Waste Sectors”,Paper presented at the Workshop on GHG Inventoryfor the Asia and the Pacific, (Japan, Institute for GlobalEnvironmental Strategies).

179 Halweil, Brian (2006). “Can organic farming feed usall?”, World Watch Magazine: May/June 2006 (Wash-ington DC, World Watch Institute).

180 See <http://www.greenfacts.org/gmo/figures/table-1-An-agricultural-technology-timeline.htm>, accessed on2 April 2006.

181 FAO (2004b), op. cit.

182 The FAO and the Cartagena Protocol on Biosafetyemploy narrower definitions of modern biotechnology.(see FAO <http://www.fao.org/biotech/index.asp?lang=en>, accessed on 15 March 2006 and the Convention

on Biological Diversity <http://www.biodiv.org/biosafety/default.asp>, accessed on 15 March 2006). In thecontext of this report “GMO”, “transgenic organisms” and“genetically engineered organisms” are used synonymouslybut it should be noted that they are not technicallyidentical.

183 FAO (2004b), op. cit.

184 The Field Alliance, “Community Integrated PestManagement website,” accessed on 15 March 2006 from<http://www.communityipm.org>.

185 The Field Alliance, ibid.

186 Young-Kyun Kim, “Recent Agricultural and FertilizerDevelopment in the Republic of Korea”, paper presentedat the 2003 International Fertilizer Industry AssociationRegional Conference for Asia and the Pacific, ChejuIsland, Republic of Korea.

187 FAO (2002). State of the World Fisheries and Aquaculture2002, (Rome, FAO) and FISHSTAT data 2005, accessedon 15 March 2006 from <http://www.fao.org/fi/default.asp>.

188 FAO (2004d). The State of the World Fisheries andAquaculture 2004 (Rome, FAO).

189 Based on FISHSTAT data 2005 available online andaccessed on 15 March 2006 from <http://www.fao.org/fi/statist/FISOFT/FISHPLUS.asp.>.

190 FAO (2004d), op. cit.

191 FAO (2004d), op. cit.

192 FAO (2004d), op. cit.

193 FAO (2004d), op. cit.

194 FAO (2004e). Status and Potential of Fisheries andAquaculture in Asia and the Pacific (Bangkok, FAORegional Office for Asia and the Pacific).

195 OECD (2001), op. cit.

196 FAO (2003d). State of the World’s Forest 2003 (Rome,FAO).

197 ESCAP estimate based on data from FAO (2003d),ibid.

198 Millennium Ecosystem Assessment (2005), op.cit.

199 Millennium Ecosystem Assessment (2005), op.cit.

200 Jameson, Stephen C., John W. Mcmanus, and MarkD. Spalding (1995). “State of the Reefs: Regional andGlobal Perspectives”, Background Paper, ExecutiveSecretariat, International Coral Reef Initiative and theU.S. National Oceanic and Atmospheric Administration.


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201 Bryant, Dirk, Laura Burke, John McManus and MarkSpalding (1998). Reefs at risk: A Map Based Indicator ofThreats to the World’s Coral Reefs, (Washington DC, WorldResources Institute).

202 ESCAP estimate based on data from Spalding, M.D.,C. Ravilious and E.P. Green (2001). World Atlas of CoralReefs (Berkeley, University of California Press).

203 Australian Institute of Marine Science (2002). Statusof Coral Reefs of the World 2002, Clive Wilkinson ed.(Australia, Australian Institute of Marine Science).

204 FAO (2005). “Ecolabelling schemes to supportsustainable fisheries get a boost: FAO’s Committee onFisheries adopts guidelines for ‘ecolabelling’ of fishcaught at sea”, Asia Pacific Fishery Commission NewsFeature, accessed on 15 March 2006 from the FAO News-room website at <http://www.fao.org/newsroom/en/news/2005/100302/index.html>.

205 FAO (1995). “Code of Conduct for ResponsibleFisheries,” accessed on 15 March 2006 at <http://www.fao.org/documents/show_cdr.asp?url_file=/DOCREP/005/v9878e/v9878e00.htm>.

206 The 12 cities are: Tokyo and Osaka (Japan); Shanghaiand Beijing (China); Mumbai, Calcutta, and Delhi(India); Dhaka (Bangladesh); Karachi (Pakistan); Jakarta(Indonesia); Metro Manila (the Philippines); andMoscow (the Russian Federation). United NationsDepartment of Economic and Social Affairs PopulationDivision (2004). World Urbanization Prospects: The 2003Revision (New York, United Nations).

207 United Nations Department of Economic and SocialAffairs Population Division (2004), ibid.

208 OECD (2001a). OECD Environmental Outlook 2001(Paris, OECD).

209 Euromonitor International Inc. (1999 and 2002).Consumer Asia 1997 and 2002 (London, EuromonitorPlc).

210 Pingali, Prabhu (2004). Westernization of Asian dietsand the transformation of food systems: Implications forresearch and policy ESA Working Paper no. 04-17 (Rome,FAO).

211 See the report on the work of the Japanese NGODaichi-o-Mamoru, accessed on 14 March 2006 from<http://www.japanfs.org/en/newsletter/200508.html>,and its food mileage campaign, accessed on 14 March2006 from <http://www.food-mileage.com/> (Japanese-only site).

212 World Bank (2005). World Development Indicators,2005 (Washington DC, World Bank).

213 OECD (2001b). Household Food Consumption (Paris,OECD).

214 OECD (2001a), op. cit.

215 Webster, Robert (2004). “Wet Markets- a continuingsource of severe acute respiratory syndrome andinfluenza?”, The Lancet, Volume 363, Issue 9404,2004, accessed on 13 March 2006 from <http://www.thelancet.com>.

216 Slums are characterized by UN-HABITAT as areassuffering from: backlogs in the delivery of basic servicesas demand outstrips institutional capacity and financialresources; inadequate access to shelter and insecuretenure; severe overcrowding, homelessness and environ-mental health problems; increased vulnerability toenvironmental health problems, environmental shocksand natural disasters; intra-city inequality; residentialsegregation and lack of participation in decision-makingprocesses. See UN-HABITAT (2003a). Slums of theWorld: The Face of Urban Poverty in the New Millennium(Nairobi, UN-HABITAT).

217 Based on OECD/IEA Statistics (2004). EnergyBalances of Non-OECD Countries 2001-2002 and EnergyBalances of OECD Countries 2001-2002 (Paris, OECD/IEA).

218 The other countries and areas include Armenia,Azerbaijan, Bangladesh, Bhutan, Brunei Darussalam,Cambodia, Georgia, Hong Kong, China, Indonesia, theIslamic Republic of Iran, Kazakhstan, Kyrgyzstan, LaoPeople’s Democratic Republic, Mongolia, Myanmar,Nepal, New Zealand, Pakistan, the Philippines,Singapore, Tajikistan, Timor-Leste, Thailand, Turkey,Turkmenistan, Uzbekistan, and Viet Nam.

219 Although the values may reflect national salesvolumes, the figures reflect consumption patterns of thedurable goods in urban or in highly urbanized areas ofthe countries.

220 National Bureau of Statistics of China (2003). ChinaStatistical Yearbook 2003 (Beijing, China Statistics Press).

221 National Bureau of Statistics of China (2003), ibid.

222 Based on data for 2001 in International EnergyAgency (2003). Energy Balances of Non-OECDCountries (Paris, OECD/IEA) and Energy Balances ofOECD Countries (Paris, OECD/IEA).

223 In 1995 in India, the average water use in rural areaswas 40 litres per capita per day while in urban areas,households connected with piped water systems used 70litres per capita per day and households with both pipedwater and underground sewerage systems used 125 litresper capita per day. Meinzen-Dick, Ruth and Paul P.Appasamy (2002). “Urbanization and IntersectoralCompetition for Water” in Finding the Source: TheLinkages between Population and Water (Washington DC,Woodrow Wilson International Centre for Scholars),accessed on 13 March 2006 from <http://wwics.si.edu/topics/pubs/popwawa3.pdf>.


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224 McIntosh, Arthur C. (2003). Asian Water Supplies:Reaching the Urban Poor (Manila, ADB and InternationalWater Association), accessed on 13 March 2006 from<http://www.adb.org/Documents/Books/Asian_Water_Supplies/default.asp>.

225 See UNESCO (2003). Facts and figures: Bottledwater: International Year of Freshwater 2003, accessed on13 March 2006 from < http://www.wateryear2003.org/>.

226 United Nations agencies do not see bottled water as asustainable alternative to tap water. Bottled water doesnot therefore feature among the primary parameters forgauging improved access to water under MillenniumDevelopment Goal 7.

227 UNESCO (2003), op. cit.

228 UNESCO (2003), op. cit.

229 Based on data from ESCAP (2003). StatisticalYearbook for Asia and the Pacific 2002 (New York, UnitedNations).

230 Mohanty, C.R.C., Ken Shimizu, Mitsuri Iida, MakikoIchida (2004). Strategic Planning for Promoting Environ-mentally Sustainable Transport in Asia with both Long-termvision and Short-term Action Session 1 Paper presentedat the Manila Policy Dialogue on Environment andTransport in the Asian Region, January 2004, Manila,Philippines.

231 Based on data from ESCAP (2003), op. cit.

232 ESCAP (2004). End-use Energy Efficiency and Promotionof a Sustainable Energy Future, Energy ResourcesDevelopment Series No. 39, United Nations publication,Sales No. E.04.II.F.11 (New York, United Nations).

233 ESCAP (2004), ibid.

234 Mohanty, C.R.C. and others (2004), op. cit.

235 Mohanty, C.R.C. and others (2004), op. cit.

236 ESCAP (2005). Review of Developments in Transportin Asia and the Pacific 2005, ST/ESCAP/2392 (New York,United Nations).

237 The Health Effects Institute identified 138 papers andpeer-reviewed literature published between 1980 and2003 presenting the health impacts of ambient airpollution in Asia. The bulk of the studies were conductedin East Asia and a number were conducted in South Asiaand South-East Asia. Health Effects Institute (2004).Health Effects of Outdoor Air Pollution in Developingcountries of Asia: a Literature Review (Boston, HealthEffects Institute).

238 World Resources Institute (1998). Acid Rain: downpourin Asia (Washington DC, World Resources Institute),

accessed on 13 March 2006 from <http://earthtrends.wri.org/features/view_feature. php?theme=3&fid=27>.

239 World Bank (1999). What a Waste: Solid WasteManagement in Asia (Washington DC, World Bank).

240 UN-HABITAT (2001). State of the World’s Cities 2001(London, Earthscan Publications Ltd.).

241 UN-HABITAT (2003b). The Challenge of Slums:Global Report on Human Settlements 2003 (London,Earthscan Publications Ltd.).

242 EU volumes of electronic waste total more than eightmillion metric tons a year.

243 This is much less the case in developing countries. InThailand, for example, the average period for whichelectrical and electronic equipment are used beforereplacement is very long (e.g. 18 years for television setsand 7 years for computers). Pollution Control Depart-ment, Ministry of Natural Resources and Environment,Thailand. “Mitigation Measures Examples fromThailand,” presentation at the Regional Expert GroupMeeting on E-Waste in the Asia Pacific, UNEP/RegionalResource Centre for Asia and the Pacific, Pathumthani,Thailand, 22-23 June 2004.

244 Colorado Department of Public Health and theEnvironment (2003). Compliance Bulletin HazardousWaste Management of Electronics Waste reviewed/revised(Denver, Colorado Department of Public Health and theEnvironment).

245 Vossenaar, Rene, Lorenzo Santucci and NudjarinRamingul (2006). “Environmental requirements andmarket access for developing countries: The case ofelectrical and electronic equipment” in UNCTAD Tradeand Environment Review 2006, United Nationspublication, Sales No. E.05.IID27 (New York andGeneva, UNCTAD).

246 Voseenaar, Rene and others (2006), ibid.

247 Voseenaar, Rene and others (2006), ibid.

248 Hardoy, Jorge Enrique, Diana Mitlin, and DavidSatterthwaite (2001). Environmental problems in anurbanizing world: Finding solutions for cities in Africa,Asia and Latin America (London, Earthscan Publications,Ltd.).

249 Hardoy, Jorge Enrique, et.al. (2006), ibid.

250 Local Agenda 21 is the initiative for local authoritiesin support of Agenda 21. See United Nations Departmentof Economic and Social Affairs webpage on Agenda 21(Chapter 28), accessed on 13 March 2006 from <http://www.un.org/esa/sustdev/documents/agenda21/english/agenda21chapter28.htm>.


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251 United Nations Division for Economic and SocialAffairs (2002). Second Local Agenda 21 Survey, BackgroundPaper no. 15 for the WSSD Preparatory Session.

252 UN-HABITAT (2003a), op. cit.

253 AtKisson, Allan (2005). “Introducing “RUrbanism”:The Goa 2100 project” reprinted from Karlson Hargrovesand Michael H. Smith, eds. (2005). The NaturalAdvantage of Nations, Business Opportunities,Innovation and Governance In the 21st Century (London,Earthscan Publications Ltd.), accessed on 13 March 2006from <http://www.worldchanging.com/archives/002477.html>.

254 The United Nations, in citing as examples thesespecific brand names, does not in any way endorse theproducts or the companies mentioned.

255 The Kyoto Protocol includes in the categoryof ‘other’ GHG gases hydrofluorocarbons (HFCs),perfluorocarbons (PFCs) and sulphur hexafluoride (SF

6).

These gases are man-made chemicals and do not occurnaturally. HFCs are manufactured as replacements forthe CFCs which have been phased out; PFCs are mainlyused in various applications in the semiconductor industry;and SF

6 is generally used in the electronics industry.

These gases are emitted in small quantities but havedisproportionate effects because of their atmosphericlifetimes. Of the three chemicals, SF

6 is the most potent

as measured in terms of global warming potential.Information from Energy Information Agency, availableat <http://eia.doe.gov>, accessed on 14 March 2006.

256 The combustion of fossil fuels, particularly by theenergy sector, is the largest source of global anthropogenicgreenhouse gas emissions and, based on the 2002 totalprimary energy supply (TPES) accounts, represents 83per cent and 76 per cent of emissions in OECD andnon-OECD countries respectively. Another source isagriculture, which accounts for about 8 per cent.International Energy Agency (2004). CO2 Emissions fromFuel Combustion 1971-2002 (Paris, OECD/IEA).

257 OECD (2001). op. cit.

258 Intergovernmental Panel on Climate Change (IPCC)(2001a). Climate Change 2001: Synthesis Report: AnAssessment of the Intergovernmental Panel on ClimateChange (Cambridge, Cambridge University Press).

259 IPCC (2001a), ibid.

260 IPCC (2001a), ibid.

261 Baumert, Kevin and Nancy Kete (2002). “ClimateChange in a Disparate World,” in Christian Layke andWendy Vanasselt eds. (2002). The United States, DevelopingCountries and Climate Protection: Leadership or Stalemate(Washington DC, World Resources Institute).

262 United States of America Environmental ProtectionAgency (2001). Inventory of US Greenhouse Emissions andSinks: 1990 – 2000 (Washington DC, US EnvironmentalProtection Agency).

263 Baumert, Kevin and Nancy Kete (2002), op. cit.

264 See The Environmental Action Network for the21st Century, accessed on 16 March 2006 at <http://www.net .org/warming/docs/technology_and_emissions.pdf>.

265 FAO (2001). Forest Resource Assessment 2000 (Rome,FAO).

266 FAO (2001), ibid.

267 FAO (2005). “Climate change conference urgesstrategies to curb massive deforestation” Press release,December 2005, accessed on 20 February 2006 from<http://www.un.org/apps/news/story.asp? NewsID=16875&Cr=climate&Cr1=change>.

268 The UNFCCC Secretariat provides organizationalsupport and technical expertise to the negotiations andinstitutions and facilitate the flow of authoritativeinformation on the implementation of the UN Frame-work Convention on Climate Change and the KyotoProtocol. As part of their functions the Secretariat serveas the repository of all national reports of the Parties anddecisions of the Conference of Parties. For an update onthe status of country commitments to the Conventionplease visit the UNFCCC website at <http://unfccc.int/documentation/items/2643.php>.

269 Article 2, UN Framework Convention on ClimateChange, accessed on 14 March 2006 at <http://unfccc.int/resource/docs/convkp/conveng.pdf>.

270 Article 3, UN Framework Convention on ClimateChange, accessed on 14 March 2006 at <http://unfccc.int/resource/docs/convkp/conveng.pdf>.

271 IPCC (2001b). Climate Change 2001: Mitigation, AReport of Working Group III of the Intergovernmental Panelon Climate Change. Technical Summary (Cambridge,Cambridge University Press).

272 IPCC (2001b), ibid.

273 For more information on the mitigation measuresplease see the IPCC (2001b), op. cit.

274 Under the emissions trading scheme, industrializedcountries will be allowed to meet their commitments bybuying and selling excess emissions credits amongthemselves. By creating a financial value for emissionscredits, market forces will provide a cash incentive forgovernments and industry to switch to cleaner fuels andindustrial processes, achieving emissions targets and


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moving towards sustainable development. KyotoProtocol, Article 17, accessed on 14 March 2006 from<http://unfccc.int/resource/docs/convkp/kpeng.pdf>.

275 The joint implementation programme, on the otherhand, will permit industrialized countries to cooperativelyimplement projects that will reduce GHGs. An investorfrom one country would receive emissions credits equalto the amount of emissions reduced or avoided as aresult of the project. The recipient country wouldreceive new technology and know-how. Article 6 of theKyoto Protocol, accessed on 14 March 2006 from <http://unfccc.int/resource/docs/convkp/kpeng.html>.

276 Article 12 of the Kyoto Protocol, accessed on 14 March2006 at <http://unfccc.int/resource/docs/convkp/kpeng.pdf>.

277 The CDM Executive Board supervises the implemen-tation of the CDM under the authority and guidance ofthe Conference of Parties (COP)/ Meeting of Parties(MOP), and is accountable to the COP/MOP. For moredetails of the functions of the CDM EB see <http://cdm.unfccc.int/EB>, accessed on 14 March 2006.

278 While Republic of Korea is an OECD member it isNon-Annex I Party of the UNFCCC and therefore canbe a recipient of CDM financing.

279 ESCAP (2006). “Review of Implementation Statusof the Outcomes of the World summit on SustainableDevelopment – An Asia-Pacific Perspective,” draft Paperfor the Regional Implementation Meeting for Asia andthe Pacific for the fourteenth session of the Commissionon Sustainable Development (ESD/RIMAP/2006/INF.1)(Bangkok, ESCAP).

280 The Certified Emission Reduction Unit ProcurementTender is a tender process funded by the Dutch Govern-ment in order to acquire CERs. The tender mechanismwas closed in January 2002, however, after the Dutchgovernment found the tender mechanism too inflexibleand costly and was severely criticized by a number ofNGOs.

281 The Prototype Carbon Fund (PCF) is a World Bank-initiated consortium of power-generating and oilcompanies and the governments of the Netherlands,Norway, Finland, Canada, Sweden and Japan. Theconsortium is involved in acquiring CERs.

282 The guidelines were approved at the 7th Conferenceof Parties (Marrakech Accords of 2001) under Decision17/CP.7 Modalities and procedures for a clean developmentmechanism, as defined in Article 12 of the Kyoto Protocol.

283 As if December 2005, the countries in the ESCAPregion that had established designated national authoritieswere: Armenia, Azerbaijan, Bangladesh, Bhutan,Cambodia, China, Fiji, Georgia, India, Indonesia, Japan,

Lao People’s Democratic Republic, Malaysia, Maldives,Mongolia, Nepal, New Zealand, Pakistan, Papua NewGuinea, the Philippines, the Republic of Korea, Sri Lanka,Thailand, and Viet Nam. Information accessed on 14March 2006 from <http://unfccc.int/2860.php>.

284 Jahn, Michael, Axel Michaelowa, StefanRaubenheimer, and Holger Liptow (2004). “Measuringthe Potential of Unilateral CDM” Discussion Paper(Hamburg, Hamburg Institute of InternationalEconomics).

285 The decision by the CDM Executive Board to acceptthe registration of projects without Annex 1 participantswas made during its 18th Meeting in February 2005.See Report of the 18th Meeting of the Executive Boardof the CDM, accessed on 16 March 2006 from <http://cdm.unfccc.int/EB/Meetings/018/eb18rep.pdf>.

286 Chung, Rae Kwon (2005). “Unilateral CDM:Market Instrument,” presentation at the Workshop onFinancing Modalities of the Clean DevelopmentMechanism, Jakarta, Indonesia, 27-28 June 2005,accessed on 20 March 2006 from <http://www.iges.or.jp/en/cdm/pdf/activity02/1_1_1.pdf>.

287 The CER discounting scheme is another idea that isbeing explored in the region.

288 Chung, Rae Kwon (2005), op cit.

289 The first unilateral CDM project endorsed andapproved in April 2005 by the CDM Executive Board.

290 Jahn, Michael and others (2004), op. cit.

291 IPCC (2001c). Technical Summary Climate Change :Impacts, Adaptation and Vulnerability, A Report ofWorking Group II of the Intergovernmental Panel onClimate Change (London, IPCC).

292 UNEP (2004). “North East Asian Dust and SandStorms Growing in Scale and Intensity,” press releaseENV/DEV/760 UNEP/216, 31 March 2004.

293 Based on data from Université Catholique de Louvain,Brussels, Belgium EM-DAT (2005). The OFDA/CREDInternational Disaster Database, accessed on 30 June 2005at <www.em-dat.net>.

294 Munich Re Group (2005). Topics Geo Annual review:Natural catastrophes 2004 (Berlin, Munich Re).

295 Kishore, K. (2001). Disasters in Asia and Pacific anOverview, (Bangkok, Asian Disaster PreparednessCenter).

296 Based on data from Université Catholique de Louvain,Brussels, Belgium EM-DAT (2005), op. cit.

297 Based on data from Université Catholique de Louvain,Brussels, Belgium EM-DAT(2005), op. cit.


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298 Kishore, K. (2001), op. cit.

299 Based on data from Université Catholique de Louvain,Brussels, Belgium EM-DAT (2005), op. cit.

300 ESCAP (2006). Enhancing regional cooperation ininfrastructure development including that related to disastermanagement, United Nations publication, Sales No.E.06.II.F.13 (Bangkok, United Nations).

301 UNISDR (2004). Living with Risks: A global reviewof disaster reduction initiatives (Geneva, UNISDR).

302 United Nations University (2005). “The hiddenvulnerability of Mega-cities to natural disasters – Under-ground spaces” media release MR/E01/05, 12 January2005, accessed on 15 March 2006 at <http://www.unu.edu/hq/rector_office/press2005/pre01-05.html>.

303 United Nations University (2005), ibid.

304 United Nations University (2004). “Two BillionPeople Vulnerable to Floods by 2050; Number Expectedto Double or More in Two Generations Due to ClimateChange, Deforestation, Rising Seas, Population Growth,”media release, 13 June 2004, accessed on 15 March 2006at <http://www.unu.edu/hq/rector_office/press2004/press2004.html>.

305 UN-HABITAT (2003b), op. cit.

306 International Federation of Red Cross and RedCrescent Societies (IFRC) (2005). World Disasters Report2005: Focus on information on disasters, (Geneva, IFRC),accessed on 15 March 2006 at <http://www.ifrc.org/PUBLICAT/wdr2005/index.asp>.

307 IFRC (2005), ibid.

308 United Nations University (2004), op. cit.

309 United Nations University (2004), op. cit.

310 For more detailed discussion on the elements for areoriented disaster risk management see UNDP (2004).A Global Report: Reducing Disaster Risk, a Challenge forDevelopment (New York, UNDP).

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