The Chair then suggested that participants use the report of the Secretary-General, E/CN.17/ISWG.II/1994/2, Financial resources and mechanisms for sustainable development: overview of current issues and developments, as a basis. Dr. Mostafa Tolba of Egypt said that the mandate of the Working Group was to look at the availability and adequacy of financial flows. ODA must be examined. Grants play an important role if properly used. Debt for nature swaps have limited application. He requested further information on paragraph 35 of the Secretary-General's report, which stated that in 1992 private flows and grants by non-governmental organizations increased by $4.8 billion to $16.6 billion. Juergen Holst of the Secretariat said that this figure came from an OECD report. Norway said that in future versions of such a background document it would be helpful not to limit information simply to performance by industrialized countries. There should also be information on the developing world. Morocco highlighted the growing importance of private investment due to developing country reforms, making investment in them more attractive. Poland disagreed with Egypt, saying that it has had good experience with debt for nature swaps.
China said that developed countries still should try to achieve the agreed target of 0.7% of GNP for ODA. The UK said that full implementation of the Trinidad Terms were important for certain African countries and required political will. The Commission of the European Union said that trade liberalization by all countries should be pursued. Hungary emphasized the need to ensure a supportive international economic climate with regard to phasing in sustainable development on a global scale. Hungary, speaking from experience of transition from a centrally-planned to a market economy noted that it is of utmost importance to make progress in encouraging free trade and access to markets, and the importance of making trade and environment policies favorable to sustainable development. Cuba said that developing countries cannot achieve sustainable development unless external flows are made available by developed countries. Canada said that the Working Group should focus on what can be recommended for immediate action and what needs more extensive coordination. Brazil stated that we should take some elements from the Secretariat's overview and put them to the test. He also said that GATT was not just a one-way road, that the CSD should give elements of input to GATT. Colombia said that the problem is not that there is no money, but where is it so that it can be used more appropriately. Secondly, ODA and domestic resources together are essential.
The US said that paragraph 34 on foreign direct investment is useful as this is a growth area. In paragraph 11 on trade, he said that the North American Free Trade Agreement (NAFTA) side agreements on the environment could set a model for trade agreements of the future. The representative of World Citizens' Assembly said that it is useful to maintain a holistic perspective on the links between the Secretary-General's paper and the sectors. Financial mechanisms should be strong in consciousness-raising. The representative from Third World Network said that NGOs are concerned about structural adjustment being attached to new loans, which in the past has been socially and environmentally damaging.
At the start of Monday afternoon's session, the Chair said that environmental problems are more insidious than obvious. Domestic problems have international ramifications. In principle, countries should be moving to full-cost pricing. The Chair then asked experts to comment on Part Two of the Secretary-General's report. The Czech Republic said that it has had good results with environmental charges on air and water pollution. As stated in paragraph 60, the volume of subsidies worldwide is large; however, new and additional resources are small. There are still heavy subsidies for energy and they are politically difficult to remove. China said that it is important to differentiate domestic from international taxes and that the CSD should consider the rationality and feasibility of taxes and study public support. Tradeable permits for CO2 does not have a scientific basis, but studies should still go on. The Netherlands urged consideration of sustainable consumption and production patterns.
Egypt and Algeria were shocked over the reports of expenditures of US$1 trillion for subsidies and US$1 trillion for armaments. They asked if these amounts could be diverted in part to sustainable development in the next 10 years. He disagreed with paragraph 53 of the Secretary-General's report on tradeable permits, saying that no country has the right to pollute. He also stated that the concrete examples of actions in paragraphs 44, 50, 54, and 55 should be highlighted in one-page summaries. Uganda said that in its national experience, needs are urgent and cannot wait for long-term arrangements. The Trinidad Terms must be fully implemented. Denmark stressed the importance of creating sustainable consumption and production patterns. He agreed with Part Two of the Secretary-General's report on enhancing the role of environmental taxes and agreed with paragraph 45, shifting from a tax on labor to green taxes. The UK, supported by Poland, said that he had a strong preference for economic instruments on the basis of the overview. Regulations are important, setting a stable framework over the short-term to attract investment. He endorsed the need to look at cost-benefit analysis and to eliminate excessive military expenditures. Poland said that tradeable permits were an excellent idea. Tunisia agreed on the importance of economic instruments, but believed that they must complement command and control regulation. Norway said that intensive dialogue with the private sector is needed. The US supported increased use of economic instruments, but did not like shifting the tax base. Colombia, supported by Bolivia, stressed regional and subregional finance mechanisms. France stated that international cooperation must be based on two important instruments: debt reduction and well-thought-out structural adjustment. Brazil supported the Cousteau Society's proposal to create a fund derived from reductions in military expenditures, saying that sustainable development is everything other than military spending. [Return to start of article]