The environment, climate change and the management of natural resources have been taking centre stage with policy-makers and governments in Southeast Asia. It is now recognized that environmental degradation cannot continue unabated over the long term. It is already affecting countries, their economies and communities. Economic and social well-being will depend on how well environmental resources are managed.
Concern for the environment was well documented in the Third ASEAN State of the Environment Report 2006: Towards an Environmentally Sustainable Community (SOE 2006). (1) In this report, ASEAN leaders stressed that the resources used to fuel economic growth have to be utilized in a sustainable manner, in order to ensure that prosperity in the region will be durable. ASEAN leaders have also acknowledged that sustainable development, with a dynamic and mutually supportive balance between economic growth, social equity and environmental integrity are to be the guiding principle to establish the ASEAN Community.
One way to achieve this balance would be by reconciling economic-environmental trade-offs within the social setting in public policy making. Due consideration must be paid to protecting the environment and its natural resources by ensuring that resources are used in a way that benefits society as a whole, not just private interests. To do this, we need an accurate assessment of the value of environmental goods and services to society.
ASEAN faces enormous challenges. Besides ongoing efforts at economic integration and political cooperation, and the high poverty incidence in Cambodia, Lao PDR, Myanmar, the Philippines and Vietnam, (2) there is a need to redress environmental problems like air and noise pollution, sewage disposal and management, traffic congestion, land degradation and deforestation, the depletion of natural resources and biodiversity, damage to marine and coastal ecosystems, depletion of the ozone layer and excessive emissions of greenhouse gases.
Managing environmental resources is not easy. Markets normally do a good job of dealing with scarcity--as things become scarcer, their prices increase, people consume less of them and producers invest more in producing them. However, this does not happen when environmental goods become scarce, because few of them are bought or sold in markets. Many are also subject to misguided government policies that encourage environmental destruction by, for example, subsidizing energy consumption, over-fishing and deforestation.
Environmental economics can help us to recognize the economic cost and causes of environmental depletion and so help us to react quickly--by strengthening property rights (either private or community-based), applying corrective taxes and so on. Economics can also help us design environmental laws that incorporate workable economic incentives and that, therefore, have a good chance of affecting behaviour.
Conversely, environmental economics can reveal the full environmental costs of human activity. By assessing such costs and incorporating them into the prices of goods, we can use market forces to bring about environmental protection: If we all had to pay the full environmental cost of our activities, we would soon learn to conserve resources and to consume in less damaging ways.
The papers in this special issue deal in varying degrees the need to "price" environmental resources. They also address some of the issues identified in the SOE 2006. Specifically, they use economic analysis to examine issues surrounding climate change, environmental degradation and the depletion of natural resources. The authors have been given a free hand to approach these issues from a quantitative or qualitative perspective, and on any aspect of the environment, provided they focus on ASEAN as a region or on ASEAN member countries.
These papers report the findings of a series of research projects financed by the Economy and Environment Program for Southeast Asia (EEPSEA). …