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Partnership Project Partnership Project Promotion of Sustainable Development in the Context of Promotion of Sustainable Development in the Context of

Regional Economic Integration Regional Economic Integration – Strategies for Environmental Sustainability and Poverty Reduction – – Strategies for Environmental Sustainability and Poverty Reduction –

United Nations Environment Programme-Trade and Economics Branch United Nations Environment Programme-Trade and Economics Branch

(UNEP-ETB)(UNEP-ETB)McGill University McGill University

Korea Environment Institute (KEI)Korea Environment Institute (KEI) National Institute for Environmental Studies (NIES) National Institute for Environmental Studies (NIES) Institute for Global Environmental Strategies (IGES) Institute for Global Environmental Strategies (IGES)

Under the Framework of Under the Framework of United Nations Environment ProgrammeUnited Nations Environment Programme

Network of Institutions for Sustainable Development (UNEP-NISD)Network of Institutions for Sustainable Development (UNEP-NISD)

22ndnd NISD Meeting NISD MeetingGeneva, 19 September 2005Geneva, 19 September 2005

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Outline of PresentationOutline of Presentation

Rationale for the research partnership: Rationale for the research partnership: Policy ContextPolicy Context

Process of initiating the Partnership ProjectProcess of initiating the Partnership Project Project DesignProject Design

• ObjectivesObjectives• OutcomesOutcomes• ActivitiesActivities• Work PlanWork Plan

Implementation Arrangements Implementation Arrangements • Institutional ArrangementsInstitutional Arrangements• Financial ArrangementsFinancial Arrangements

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The Policy ContextThe Policy Context

Asia-Pacific region the world’s fastest growing trading Asia-Pacific region the world’s fastest growing trading regionregion

Since 1999, a new wave of FTAs and economic Since 1999, a new wave of FTAs and economic integrationintegration

Future creation of an East-Asian community by the year Future creation of an East-Asian community by the year 2020 >>> 2020 >>> East-Asia Summit to take place in December East-Asia Summit to take place in December 2005, Malaysia2005, Malaysia

China, Japan, the Republic of Korea, and the ten countries China, Japan, the Republic of Korea, and the ten countries of the Association of Southeast Asian Nations (ASEAN) of the Association of Southeast Asian Nations (ASEAN)

Need for comprehensive policy responses to the Need for comprehensive policy responses to the accumulative environment effectsaccumulative environment effects

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Policy Context Policy Context

Current web of FTAs concluded or under negotiation in Asia-Pacific region Current web of FTAs concluded or under negotiation in Asia-Pacific region (Not exhaustive)(Not exhaustive)

Singapore-Japan

China-ASEAN(framework agreement)

Korea-Japan(under negotiation)

Japan-ASEAN(framework agreement)

AFTA

East Asian Economic Community

India-ASEAN(frameworkagreement)

ASEAN +3

under negotiation

framework agreement

FTA concluded

Thailand-Japan

Malayasia-Japan

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Asian and Pacific Merchandise Exports, GDP, and Asian and Pacific Merchandise Exports, GDP, and Number of Preferential Trade Agreements, 1960-2000 Number of Preferential Trade Agreements, 1960-2000

Asian Development Bank, Asian Development Outlook 2002, Figure 3.2.

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Process of initiating the PartnersProcess of initiating the Partnershhip Projectip Project

Establishment of NISD in Jeju, Rep. of Korea, March 2004Establishment of NISD in Jeju, Rep. of Korea, March 2004

As a follow-up, four proposals facilitated by UNEP-ETB As a follow-up, four proposals facilitated by UNEP-ETB

Meeting at TNO (Netherlands Organisation for Scientific Applied Meeting at TNO (Netherlands Organisation for Scientific Applied Research) in Delft, The Netherlands, 10-11 December 2004 (IGES, Research) in Delft, The Netherlands, 10-11 December 2004 (IGES, Institute for Sustainable Futures (ISF), KEI, McGill University and Institute for Sustainable Futures (ISF), KEI, McGill University and UNEP-ETBUNEP-ETB

IGES proposed to facilitate the working group on promotion of IGES proposed to facilitate the working group on promotion of sustainable development in the context of economic integrationsustainable development in the context of economic integration

Meeting hosted by IGES in Hayama, Japan on 18 February 2005 Meeting hosted by IGES in Hayama, Japan on 18 February 2005 (IGES, KEI, McGill University, and UNEP-ETB)(IGES, KEI, McGill University, and UNEP-ETB)

MOU drafted and agreed upon by IGES, McGill University, KEI, NIES MOU drafted and agreed upon by IGES, McGill University, KEI, NIES and UNEP-ETBand UNEP-ETB

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ObjectivesObjectives

Evaluating the implications of FTAs and regional Evaluating the implications of FTAs and regional economic integration for the environmenteconomic integration for the environment

Assessing the capacity of existing environmental Assessing the capacity of existing environmental policies and institutions to deal with policies and institutions to deal with environmental effects of economic integration at environmental effects of economic integration at both national and regional levelsboth national and regional levels

Proposing relevant policies and institutions for Proposing relevant policies and institutions for mitigating potentially negative impacts while mitigating potentially negative impacts while enhancing positive onesenhancing positive ones

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Is there a set of policies and mechanisms that will Is there a set of policies and mechanisms that will promote synergies between economic integration and promote synergies between economic integration and

environmental quality in East Asia?environmental quality in East Asia?

Starting hypothesesStarting hypotheses

1.1. As economic integration proceeds, there will be a "race to the bottom" in East Asia, As economic integration proceeds, there will be a "race to the bottom" in East Asia, if no proper response measures (i.e. environmental policies) are taken.  if no proper response measures (i.e. environmental policies) are taken. 

2.2. At the same time, there will be more opportunities for countries in East Asia to At the same time, there will be more opportunities for countries in East Asia to promote resource efficiency and eco-industry, as (i) the current resources use in promote resource efficiency and eco-industry, as (i) the current resources use in the region has ample room to improve, and (ii) transfer of resource efficient the region has ample room to improve, and (ii) transfer of resource efficient technologies will be promoted. technologies will be promoted.

3.3. Neither the strong harmonization observed in the EU nor the flexible mechanisms Neither the strong harmonization observed in the EU nor the flexible mechanisms established in North America can provide a complete solution for East Asia.  established in North America can provide a complete solution for East Asia. 

4.4. Policies and mechanisms effective to promote synergies between economic Policies and mechanisms effective to promote synergies between economic integration and the environment will include nurturing eco-industries, labelling, integration and the environment will include nurturing eco-industries, labelling, certification, subsidies, taxes, and other soft measures to promote the emergent certification, subsidies, taxes, and other soft measures to promote the emergent environmental goods and services industry.environmental goods and services industry.

5.5. Policies to be identified to prevent the race-to-the-bottom, and to nurture eco-Policies to be identified to prevent the race-to-the-bottom, and to nurture eco-industry, will have only marginal impact on economic growth (thus poverty industry, will have only marginal impact on economic growth (thus poverty alleviation as well), but will contribute to long-term sustainable use of natural alleviation as well), but will contribute to long-term sustainable use of natural resources and improved environmental quality in the region. resources and improved environmental quality in the region. 

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Outcomes Outcomes

• Analysis of a few packages of plausible environmental policies in Analysis of a few packages of plausible environmental policies in terms of effectiveness, efficiency, and equityterms of effectiveness, efficiency, and equity

• Analysis of economic implications of different sets of identified Analysis of economic implications of different sets of identified policies policies

• Identification of needs for regional policies to promote Identification of needs for regional policies to promote environmentally sustainable developmentenvironmentally sustainable development

• Identification of environmental policies contributing to poverty Identification of environmental policies contributing to poverty reduction reduction

Tangible outcomesTangible outcomes• Main reportMain report• Executive summaryExecutive summary• Summary for policy makersSummary for policy makers

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ActivitiesActivities

Scenario analysisScenario analysis

Policy analysis and trend reviewPolicy analysis and trend review

Modelling based on GTAPModelling based on GTAP

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Scenario analysisScenario analysis

Weak

Strong

StrongWeak

ScenarioC Scenario

D

ScenarioB

Scenario A

Likely Scenario for the Region

Likely Scenario (Country-Based or Sector-Based)

ENVIRONMENTAL CONTROL

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Policy analysis and Modelling Policy analysis and Modelling

Policy review and trend analysis

Set of policies for:

- Mitigation of adverse environmental effects

- Enhancement of positive effects

Evaluation of Environmental Impacts

(positive and negative)

Evaluation of Economic Impacts

(positive and negative)

National and regional

consultations

Policy AnalysisModel Analysis

Scenario development at national and regional levels

(story lines, policies and indicators)

Model development and data collection

Comprehensive analysis of different policy scenarios-Regional policy harmonization-Economic efficiency-Poverty reduction

Analysis of a few packages of environmental policy

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Work PlanWork Plan

Year 1 (Apr. 2005 – Mar. 2006)Year 1 (Apr. 2005 – Mar. 2006) Inception workshop, 26-28 October 2005. Inception workshop, 26-28 October 2005. Work on analytical framework and methodologies. Work on analytical framework and methodologies. Drawing of scenarios.Drawing of scenarios. Initiation of activities under the policy and modelling groups.Initiation of activities under the policy and modelling groups. 1st progress review workshop, March 2006. 1st progress review workshop, March 2006.

Year 2 (Apr. 2006 – Mar. 2007)Year 2 (Apr. 2006 – Mar. 2007) Continuation of activities under the policy and modelling groups.Continuation of activities under the policy and modelling groups. Formulation of policy proposals. Formulation of policy proposals. Thematic workshops.Thematic workshops. National and regional policy dialogues. National and regional policy dialogues. 2nd progress review workshop, March 2007.2nd progress review workshop, March 2007.

Year 3 (Apr. 2007 – Mar. 2008)Year 3 (Apr. 2007 – Mar. 2008) Synthesis of activities under the policy and modelling groups.Synthesis of activities under the policy and modelling groups. Refinement of policy proposals and feed-back to modelling exercise.Refinement of policy proposals and feed-back to modelling exercise. Thematic workshops.Thematic workshops. National and regional policy dialogues.National and regional policy dialogues. Concluding workshop, March 2008.Concluding workshop, March 2008.

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Institutional ArrangementsInstitutional Arrangements

Core Group:Core Group: UNEP-ETB, IGES, McGill University, KEI, NIES UNEP-ETB, IGES, McGill University, KEI, NIES

Partner Institutes:Partner Institutes: Policy Research Center for Environment & Economy, State Policy Research Center for Environment & Economy, State

Environment Protection Administration of ChinaEnvironment Protection Administration of China Indonesian Institute of SciencesIndonesian Institute of Sciences Thailand Environment Institute Thailand Environment Institute Institute of Environmental Science and Technology, University of Institute of Environmental Science and Technology, University of

HanoiHanoi

Resource Persons and Institutions:Resource Persons and Institutions: Keio University, Seikei University, ASEAN Secretariat and othersKeio University, Seikei University, ASEAN Secretariat and others

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Financial ArrangementsFinancial Arrangements

Core Group:Core Group: Provide for the cost of activities under their responsibilitiesProvide for the cost of activities under their responsibilities Provide financial support to partner institutes in developing Provide financial support to partner institutes in developing

countriescountries

Partner Institutes:Partner Institutes: Provide in-kind and intellectual contributionProvide in-kind and intellectual contribution Receive financial support from the core group for directs costs of Receive financial support from the core group for directs costs of

researchresearch

Resource Persons and Institutions:Resource Persons and Institutions: Provide intellectual contributionsProvide intellectual contributions Receive financial support from the core group as may be Receive financial support from the core group as may be

requiredrequired

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Thank you for your attention!Thank you for your attention!

Hideyuki Mori,Hideyuki Mori,

Project Leader, Long-term Perspective and Project Leader, Long-term Perspective and Policy Integration Project, IGESPolicy Integration Project, IGES

For further information, please contact: For further information, please contact:

h-mori@iges.or.jph-mori@iges.or.jp