The provisional agenda for the meeting of the ad hoc working group was contained in document E/CN.17/ISWG.II/1994/1. The Secretariat prepared a report on Financial resources and mechanisms for sustainable development: an overview of current issues and developments, as contained in document E/CN.17/ISWG.II/1994/2. The report is divided into three parts. In the first part, the report examines international finance for sustainable development and focuses in particular on world economic growth, international trade and terms of trade, recent trends in ODA, foreign direct investment and debt relief. In the second part, the report examines the national policy environment and its impact on financing for sustainable development, especially the increased use of economic instruments in environmental policies such as taxes, encouragement of private sector financing and the clarification of property rights. Part three looks at innovative mechanisms such as debt for nature swaps, other swaps, tradeable permits and venture capital funds for greenhouse gas emissions.
Five background papers were also prepared on the sectoral issues under review by the CSD at its 1994 session. Background Paper No. 1, Financing of Health for Sustainable Development, starts with an overview of various issues related to the assessment of needs for the financing of health and discusses a number of technical approaches. The paper then analyzes costing health, which is supported by a needs-population matrix. Finally, the paper discusses the desirability of a new approach to the financing of health in the context of sustainable development policies. Background Paper No. 2, Financing of Human Settlements for Sustainable Development, focuses on the three key areas of shelter, infrastructure and recurrent costs. Within these areas, emphasis is placed on assessing the needs for financial resources, the adequacy of existing funding flows, and financial policies and mechanisms. Background Paper No. 3, Financing of Toxic Chemicals for Sustainable Development, reviews this issue using the framework provided by Chapter 19 of Agenda 21. The analysis of estimates for the various programme areas focuses on assessing the current financial flows and their adequacy and discusses funding polices and mechanisms. Background Paper No. 4, Financing of Hazardous Wastes for Sustainable Development, analyzes financial resources and mechanisms for hazardous wastes and addresses programme areas A to D of Chapter 20 of Agenda 21. It focuses on the assessment of funding needs, analyzes current flows and their adequacy and evaluates funding policies and related policies. Background Paper No. 5, Financing of Freshwater for Sustainable, prepared by the World Bank contains a detailed discussion of the provision of water supply and sanitation services the need to address the rapid degradation of the aquatic environment, in particular in urban areas of low-income developing countries. The paper also discusses the cost of providing services and how services are financed. In this context, the paper addresses issues such as levels of public financing, relationship between costs and pricing and the question of subsidies. Finally, the paper analyzes the conventional views of freshwater financing and elaborates on new views of sector financing.
UNCTAD produced four documents. The first paper, "The Strategy of 'Joint Implementation' in the Framework Convention on Climate Change" documents joint implementation regimes, the payoffs under such regimes, including potential cost savings and transaction costs. "Administrative Structures and Procedures for Implementing a Tradeable Entitlement Approach to Controlling Global Warming" describes the necessary components of a facilitating institutional structure, monitoring requirements, international precedents, and roles for different actors. A third paper, "Study on Model Rules and Regulations for a Global CO2 Emissions Credit Market," describes cost/benefit analysis of organized markets, implications for market development of tradeable CO2 emission credits, developing markets, oversight and governance and illustrative transactions. The fourth document, "An Analytical Approach to Evaluating the National Net Costs of a Global System of Tradeable Carbon Emission Entitlement," describes national cost-benefit analyses of an international carbon abatement policy, identity of buyers and sellers, monitoring procedures and net costs. UNCTAD also provided a document on the effect of the internalization of external costs on sustainable development (TD/B/40(2)/6 of 7 February 1994). The document describes basic principles, such as the Polluter Pays Principle and the Resource Pricing Principle.
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