A-21: FINANCIAL RESOURCES





                                             Distr.
                                             GENERAL

                                             A/CONF.151/26 (Vol. III)
                                             14 August 1992

                                             ORIGINAL:  ENGLISH




               REPORT OF THE UNITED NATIONS CONFERENCE ON 
                       ENVIRONMENT AND DEVELOPMENT

                    (Rio de Janeiro, 3-14 June 1992)




                  SECTION IV.  MEANS OF IMPLEMENTATION


                               Chapter 33

                   FINANCIAL RESOURCES AND MECHANISMS


                              INTRODUCTION

33.1.  The General Assembly, in resolution 44/228 of 22 December 1989,
inter alia, decided that the United Nations 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
     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 reflect 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 the
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 round tables 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.  The objectives are as follows:

     (a)   To establish measures concerning financial resources and
mechanisms for the implementation of Agenda 21;

     (b)   To provide new and additional financial resources that are both
adequate and predictable;

     (c)   To seek full use and continuing qualitative improvement of funding
mechanisms to be utilized for the implementation of Agenda 21.


                               ACTIVITIES

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


                         MEANS OF IMPLEMENTATION

33.13.  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 prompt and
effective implementation of Agenda 21.  Some countries 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 that 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.

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

     (a)   The multilateral development banks and funds:

     (i)   The International Development Association (IDA).  Among the
           various issues and options that IDA deputies will examine in
           connection with the forthcoming tenth replenishment of IDA, the
           statement made by the President of the World Bank at the United
           Nations Conference on Environment and Development should be given
           special consideration 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 and
                 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 programmes 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.

33.15.  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.

33.16.  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 at present committed to military
purposes.

33.17.  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.

33.18.  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.

33.19.  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 at its forty-seventh session, in 1992.

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

33.21.  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 (International institutional arrangements).  It will be
important to review on a regular basis the adequacy of funding and mechanisms,
including efforts to reach agreed objectives of the present chapter, including
targets where applicable.


END OF CHAPTER 33
