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AGENDA 21, CHAPTER 33


FINANCIAL RESOURCES AND MECHANISMS






NOTE:     This is a final advanced version of a chapter of Agenda 21 as adopted by the
          Plenary in Rio de Janeiro on June 14, 1992.  This document will be further
          edited, translated into the official languages, and published by the United
          Nations for the General Assembly this autumn.




                                                        ........./2


                               INTRODUCTION

33.1.  The General Assembly, in resolution 44/228 of 22 
December 1989, inter alia, decided that the 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 to 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 describe 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 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 roundtables 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.  To establish measures concerning financial resources 
and mechanisms for implementation of Agenda 21.

33.12.  Provision of new and additional financial resources 
should be both adequate and predictable.

33.13.  Full use and continuing qualitative improvement of 
funding mechanisms to be utilized for the implementation of 
Agenda 21 should be sought.



                                ACTIVITIES

33.14.  Fundamentally, the activities of this chapter are 
related to the implementation of all the other chapters of 
Agenda 21.


                          MEANS OF IMPLEMENTATION

33.15.  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 a prompt and effective 
implementation of Agenda 21.  Some countries agree or 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 which 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.

33.16.  Funding for Agenda 21 and other outcomes of the 
Conference should be provided in a way which maximizes the 
availability of new and additional resources and which uses all 
available funding sources and mechanisms.   These include, 
among others:

     (a)  The multilateral development banks and funds:

     (i)  International Development Association (IDA).  Among 
          various issues and options that IDA Deputies will 
          examine in the forthcoming 10th Replenishment, 
          special consideration should be given to the 
          statement made by the President of the International 
          Bank for Reconstruction and Development at the 
          Conference in plenary meeting 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, as well as 
               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 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.

33.17.  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.
 
33.18.  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 presently committed to 
military purposes.

33.19.  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.

33.20.  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.

33.21.  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 in the 
Fall of 1992 at its forty-seventh session.

33.22.  Developing countries should also begin to draw up 
national plans for sustainable development to give effect to 
the decisions of the Conference.

33.23.  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.  It will be important 
to review on a regular basis the adequacy of funding and 
mechanisms, including efforts to reach agreed objectives of 
this chapter, including targets where applicable.


.
