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East: Study Links Market Reform To Better Environment

  • Breffni O'Rourke

A new study from the Organization of Economic Cooperation and Development (OECD) finds that transition countries making the most progress towards market economies are also those managing best to improve their environment. Correspondent Breffni O'Rourke explores the interrelation between these two phenomena and reports that there is high praise on environmental issues for the Baltic states and Kazakhstan, but less for Ukraine and Russia.

Prague, 21 October 1999 (RFE/RL) -- A study just issued in Paris has uncovered an interesting link between economic reform in the transition countries and environmental protection. The study says that those countries which have gone farthest in the reform process are also the ones that have been able to cut pollution the most.

The conclusion is that economic and environmental reforms are mutually supportive and reinforcing. The coordinator of the OECD study, Brendan Gillespie, explains the findings:

"Those countries that have been most advanced in economic reform have also been the most successful in terms of protecting the environment. This is I think due to several factors, one is that economic reforms have promoted structural changes away from the old smokestack industries to more services and other sectors; I think also it's generated the resources required to invest in cleanup, and finally the set of reforms have created incentives to be more efficient in the use of resources."

The study says cites in particular the advanced reform countries of Central and Eastern Europe, such as Poland, Hungary, and the Czech Republic. Those countries have managed to cut air emissions of life-threatening pollutants -- such as sulfur dioxide, nitrogen oxides and particulate matter -- even as they have returned to economic growth. Water pollution has also been reduced. In other words, those countries have managed to "decouple" economic growth from pollution.

Gillespie say the converse is true for those countries that have been slower in economic and democratic reforms: they have not done so well in terms of environmental cleanup.

"The countries of the former Soviet Union, for example, if one looks there, one finds there have been falls in environmental pollution -- but this is all essentially linked to the collapse in industrial output, on account of the sharp contraction in those economies. The problem there is that they have not taken the steps to introduce strong environmental policies and indeed other forms of economic policies which would help to decouple environmental pollution from economic output."

Gillespie mentions Russia, Ukraine, Romania, and Bulgaria in this context. He has strong praise, however, for the three Baltic republics, Estonia, Latvia, and Lithuania. He says the Baltics are examples of reform-minded countries that have been able to attract foreign assistance to develop cleaner, more efficient technologies:

"These are small countries. I think they have benefited from the close cooperation within the Baltic region itself, and certainly on a per-capita basis they have received more in the form of technical and financial assistance (from abroad) for environmental improvement than any of the other countries in the broader region." Turning to Central Asia, Gillespie notes that those republics have extremely serious water pollution problems. This is further complicated by the generally weak institutional framework in these newly independent states. That being said, there are still some encouraging examples:

"If one looks at Kazakhstan, for example, there they have been very effective in terms of creating a small group which is working in the Environment Ministry, and they have also enjoyed some very high-level political support. And this in turn has enabled them to attract some external assistance, which they have used very effectively to identify priorities and design appropriate policy responses." Pollution is becoming an increasingly pressing international issue, one where individual countries have commitments to meet. Much of the international community, including a number of transition states, entered into the Kyoto agreement to cut the output of greenhouse gases to some 8 percent below 1990 levels. That convention was worked out in Kyoto, Japan in 1997.

Some of the transition-country signatories will only be able to meet that goal because of the involuntary decline they have suffered in industrial output. If their industrial output rises, they could be in breach of their commitments to the Kyoto accord.