A-21: FINANCIAL RESOURCES
Distr.
GENERAL
A/CONF.151/26 (Vol. III)
14 August 1992
ORIGINAL: ENGLISH
REPORT OF THE UNITED NATIONS CONFERENCE ON
ENVIRONMENT AND DEVELOPMENT
(Rio de Janeiro, 3-14 June 1992)
SECTION IV. MEANS OF IMPLEMENTATION
Chapter 33
FINANCIAL RESOURCES AND MECHANISMS
INTRODUCTION
33.1. The General Assembly, in resolution 44/228 of 22 December 1989,
inter alia, decided that the United Nations Conference on Environment and
Development should:
Identify ways and means of providing new and additional financial
resources, particularly to developing countries, for environmentally
sound development programmes and projects in accordance with national
development objectives, priorities and plans and to consider ways of
effectively monitoring the provision of such new and additional
financial resources, particularly to developing countries, so as to
enable the international community to take further appropriate action
on the basis of accurate and reliable data;
Identify ways and means of providing additional financial resources
for measures directed towards solving major environmental problems of
global concern and especially of supporting those countries, in
particular developing countries, for which the implementation of such
measures would entail a special or abnormal burden, owing, in
particular, to their lack of financial resources, expertise or
technical capacity;
Consider various funding mechanisms, including voluntary ones, and
examine the possibility of a special international fund and other
innovative approaches, with a view to ensuring, on a favourable basis,
the most effective and expeditious transfer of environmentally sound
technologies to developing countries;
Quantify the financial requirements for the successful implementation
of Conference decisions and recommendations and identify possible
sources, including innovative ones, of additional resources.
33.2. This chapter deals with the financing of the implementation of
Agenda 21, which reflects a global consensus integrating environmental
considerations into an accelerated development process. For each of the
other chapters, the secretariat of the Conference has provided indicative
estimates of the total costs of implementation for developing countries and
the requirements for grant or other concessional financing needed from the
international community. These reflect the need for a substantially
increased effort, both by countries themselves and by the international
community.
BASIS FOR ACTION
33.3. Economic growth, social development and poverty eradication are the
first and overriding priorities in developing countries and are themselves
essential to meeting national and global sustainability objectives. In the
light of the global benefits to be realized by the implementation of Agenda
21 as a whole, the provision to developing countries of effective means,
inter alia, financial resources and technology, without which it will be
difficult for them to fully implement their commitments, will serve the
common interests of developed and developing countries and of humankind in
general, including future generations.
33.4. The cost of inaction could outweigh the financial costs of
implementing Agenda 21. Inaction will narrow the choices of future
generations.
33.5. For dealing with environmental issues, special efforts will be
required. Global and local environmental issues are interrelated. The
United Nations Framework Convention on Climate Change and the Convention on
Biological Diversity address two of the most important global issues.
33.6. Economic conditions, both domestic and international, that encourage
free trade and access to markets will help make economic growth and
environmental protection mutually supportive for all countries,
particularly for developing countries and countries undergoing the process
of transition to a market economy (see chapter 2 for a fuller discussion of
these issues).
33.7. International cooperation for sustainable development should also be
strengthened in order to support and complement the efforts of developing
countries, particularly the least developed countries.
33.8. All countries should assess how to translate Agenda 21 into national
policies and programmes through a process that will integrate environment
and development considerations. National and local priorities should be
established by means that include public participation and community
involvement, promoting equal opportunity for men and women.
33.9. For an evolving partnership among all countries of the world,
including, in particular, between developed and developing countries,
sustainable development strategies and enhanced and predictable levels of
funding in support of longer term objectives are required. For that
purpose, developing countries should articulate their own priority actions
and needs for support and developed countries should commit themselves to
addressing these priorities. In this respect, consultative groups and
round tables and other nationally based mechanisms can play a facilitative
role.
33.10. The implementation of the huge sustainable development programmes
of Agenda 21 will require the provision to developing countries of
substantial new and additional financial resources. Grant or concessional
financing should be provided according to sound and equitable criteria and
indicators. The progressive implementation of Agenda 21 should be matched
by the provision of such necessary financial resources. The initial phase
will be accelerated by substantial early commitments of concessional
funding.
OBJECTIVES
33.11. The objectives are as follows:
(a) To establish measures concerning financial resources and
mechanisms for the implementation of Agenda 21;
(b) To provide new and additional financial resources that are both
adequate and predictable;
(c) To seek full use and continuing qualitative improvement of
funding mechanisms to be utilized for the implementation of Agenda 21.
ACTIVITIES
33.12. Fundamentally, the activities of this chapter are related to the
implementation of all the other chapters of Agenda 21.
MEANS OF IMPLEMENTATION
33.13. In general, the financing for the implementation of Agenda 21 will
come from a country's own public and private sectors. For developing
countries, particularly the least developed countries, ODA is a main source
of external funding, and substantial new and additional funding for
sustainable development and implementation of Agenda 21 will be required.
Developed countries reaffirm their commitments to reach the accepted United
Nations target of 0.7 per cent of GNP for ODA and, to the extent that they
have not yet achieved that target, agree to augment their aid programmes in
order to reach that target as soon as possible and to ensure prompt and
effective implementation of Agenda 21. Some countries have agreed to reach
the target by the year 2000. It was decided that the Commission on
Sustainable Development would regularly review and monitor progress towards
this target. This review process should systematically combine the
monitoring of the implementation of Agenda 21 with a review of the
financial resources available. Those countries that have already reached
the target are to be commended and encouraged to continue to contribute to
the common effort to make available the substantial additional resources
that have to be mobilized. Other developed countries, in line with their
support for reform efforts in developing countries, agree to make their
best efforts to increase their level of ODA. In this context, the
importance of equitable burden-sharing among developed countries is
recognized. Other countries, including those undergoing the process of
transition to a market economy, may voluntarily augment the contributions
of the developed countries.
33.14. Funding for Agenda 21 and other outcomes of the Conference should
be provided in a way that maximizes the availability of new and additional
resources and uses all available funding sources and mechanisms. These
include, among others:
(a) The multilateral development banks and funds:
(i) The International Development Association (IDA). Among the
various issues and options that IDA deputies will examine in
connection with the forthcoming tenth replenishment of IDA, the
statement made by the President of the World Bank at the United
Nations Conference on Environment and Development should be
given special consideration in order to help the poorest
countries meet their sustainable development objectives as
contained in Agenda 21;
(ii) Regional and subregional development banks. The regional and
subregional development banks and funds should play an increased
and more effective role in providing resources on concessional
or other favourable terms needed to implement Agenda 21;
(iii) The Global Environment Facility, managed jointly by the World
Bank, UNDP and UNEP, whose additional grant and concessional
funding is designed to achieve global environmental benefits,
should cover the agreed incremental costs of relevant activities
under Agenda 21, in particular for developing countries.
Therefore, it should be restructured so as to, inter alia:
Encourage universal participation;
Have sufficient flexibility to expand its scope and
coverage to relevant programme areas of Agenda 21, with
global environmental benefits, as agreed;
Ensure a governance that is transparent and democratic in
nature, including in terms of decision-making and
operations, by guaranteeing a balanced and equitable
representation of the interests of developing countries
and giving due weight to the funding efforts of donor
countries;
Ensure new and additional financial resources on grant and
concessional terms, in particular to developing countries;
Ensure predictability in the flow of funds by contributions
from developed countries, taking into account the
importance of equitable burden-sharing;
Ensure access to and disbursement of the funds under
mutually agreed criteria without introducing new forms of
conditionality;
(b) The relevant specialized agencies, other United Nations bodies
and other international organizations, which have designated roles to play
in supporting national Governments in implementing Agenda 21;
(c) Multilateral institutions for capacity-building and technical
cooperation. Necessary financial resources should be provided to UNDP to
use its network of field offices and its broad mandate and experience in
the field of technical cooperation for facilitating capacity-building at
the country level, making full use of the expertise of the specialized
agencies and other United Nations bodies within their respective areas of
competence, in particular UNEP and including the multilateral and regional
development banks;
(d) Bilateral assistance programmes. These programmes will need to
be strengthened in order to promote sustainable development;
(e) Debt relief. It is important to achieve durable solutions to
the debt problems of low- and middle-income developing countries in order
to provide them with the needed means for sustainable development.
Measures to address the continuing debt problems of low- and middle-income
countries should be kept under review. All creditors in the Paris Club
should promptly implement the agreement of December 1991 to provide debt
relief for the poorest heavily indebted countries pursuing structural
adjustment; debt relief measures should be kept under review so as to
address the continuing difficulties of those countries;
(f) Private funding. Voluntary contributions through
non-governmental channels, which have been running at about 10 per cent of
ODA, might be increased.
33.15. Investment. Mobilization of higher levels of foreign direct
investment and technology transfers should be encouraged through national
policies that promote investment and through joint ventures and other
modalities.
33.16. Innovative financing. New ways of generating new public and
private financial resources should be explored, in particular:
(a) Various forms of debt relief, apart from official or Paris Club
debt, including greater use of debt swaps;
(b) The use of economic and fiscal incentives and mechanisms;
(c) The feasibility of tradeable permits;
(d) New schemes for fund-raising and voluntary contributions through
private channels, including non-governmental organizations;
(e) The reallocation of resources at present committed to military
purposes.
33.17. A supportive international and domestic economic climate conducive
to sustained economic growth and development is important, particularly for
developing countries, in order to achieve sustainability.
33.18. The secretariat of the Conference has estimated the average annual
costs (1993-2000) of implementing in developing countries the activities in
Agenda 21 to be over $600 billion, including about $125 billion on grant or
concessional terms from the international community. These are indicative
and order-of-magnitude estimates only, and have not been reviewed by
Governments. Actual costs will depend upon, inter alia, the specific
strategies and programmes Governments decide upon for implementation.
33.19. Developed countries and others in a position to do so should make
initial financial commitments to give effect to the decisions of the
Conference. They should report on such plans and commitments to the United
Nations General Assembly at its forty-seventh session, in 1992.
33.20. Developing countries should also begin to draw up national plans
for sustainable development to give effect to the decisions of the
Conference.
33.21. Review and monitoring of the financing of Agenda 21 is essential.
Questions related to the effective follow-up of the Conference are
discussed in chapter 38 (International institutional arrangements). It
will be important to review on a regular basis the adequacy of funding and
mechanisms, including efforts to reach agreed objectives of the present
chapter, including targets where applicable.
END OF CHAPTER 33
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