ENVIRONMENTAL MANAGEMENT

The use of integrated economic/social/political-environment indicators is not only a trend in international state-of-the-environment studies, but is a prerequisite for understanding the drivers of environmental change and being able to respond to it in an appropriate manner.

The rationale behind this type of study is that management and policy decisions on biophysical change cannot be made without considering the economic, social and political context. This approach is particularly relevant for developing countries where it is increasingly important to both develop and save the biophysical environment. The challenge, however, is to achieve both these goals simultaneously. In order to do this, socio-economic development needs to be "decoupled" from environmental impacts and management and policy responses need to be targeted to specific areas where the achievement of these dual goals creates conflict and trade-offs. This study attempted to lay the groundwork for the methodology through which integrated indicators can be developed, and actually presents a set of integrated indicators based on this philosophy.

The indicators presented here are a combination of integrated indicators and environmental management indicators. The rationale for developing indicators of environmental management is outlined below in the description of the issue of environmental management. The two main elements of the methodology used to identify integrated indicators are also presented below, through addressing policy and market failures and through a sectoral analysis.

METHODOLOGY

Policy and market failures

In order to identify the key drivers for environmental change an analysis of policy and market failures and a sectoral analysis was completed. Policy failure can be defined as the situation where government itself is the source of failure in the economy. This could be through corruption or patronage, however even well-meaning policies can lead to a worsening environment or reduction in well-being rather than an improvement in the overall well-being of society (van Kooten & Bulte, 2000). Market failure can be defined as the inability of the market to allocate resources efficiently due to the presence of imperfect competition, imperfect information, public goods, inappropriate government intervention and externalities (positive or negative) (Khan, 1998).

Low market failures mean that, although markets do not operate well, the external environment could (when compared to other biophysical areas) allow for functioning markets in the future. High market failures indicate both a lack of markets and the lack of an external environment in which these could be implemented in the near future.

Low policy failures indicate that there are consistent policies in place and that there are ways to implement and enforce such policies. High policy failures indicate that there are neither consistent policies in place, nor capacity to implement and enforce these. Although this classification is crude, it gives a relative feel for the nature of market and policy failures across the biophysical focus areas in South Africa.

Sectoral analysis

The sectoral analysis was required to focus on the key issues that drive biophysical change. Therefore, a full sectoral analysis was not carried out, as this would be more than required for the purpose of this project. Instead, four questions were identified that would help identify the areas where the drivers of biophysical change are most likely to occur. These questions are:

• Which sector has the largest impact on the biophysical focus area?
• In which sector is the intensity of the impact the highest?
• For which socio-economic activities are the damage costs the highest?
• For which socio-economic activities are the response costs the lowest?

For the first question, information was readily but crudely available, and for the second question, international estimates were used where available. However, both the third and fourth questions were, given the lack of South African data, impossible to answer at this stage. This means that, based on this information, one can only crudely focus on those areas where the drivers of biophysical change are the most pertinent.

DESCRIPTION OF ISSUES

This study includes issues relating to the other biophysical studies: Atmosphere & Climate; Biodiversity & Natural Heritage; Inland Water; Marine, Coastal & Estuarine environments; Waste Management; Human Well-being and Land Use. An additional issue of Environmental Management was addressed in this study.

Environmental Management

During the project, and as a result of stakeholder consultation, it became clear that no separate specialist study was commissioned for measuring government and business commitment to environmental management. The core project team and many stakeholders felt that this topic warranted the development of a separate section called 'Environmental Management', to be included in this report. Various indicators have subsequently been developed, focusing on topics such as multilateral environmental agreements, budgetary allocations to environmental management, and environmental assessments.