19830
December 1994
- LATEN Dissemination Note # 12
Successful Environmental Institutions:
Lessons From Colombia and Curitiba, Brazil
December 1994
A ' 0. 1I :'i
Laura Tlaiye
Dan Biller
The World Bank
Latin America Technical Department t
Environment Unit IL L urr
LATEN Dissemination Note # 12
Successful Environmental Institutions:
Lessons From Colombia and Curitiba, Brazil
December 1994
Laura Tlaiye
Dan Biller
The World Bank
Latin Amenca Technical Department
Environment Unit
I
CONTENTS
INTRODUCTION ......................................... 1
ENVIRONMENTAL GOVERNMENT INSTITUTIONS IN CONCEPTUAL
TERMS ........................................... 2
Why is an EGI Needed? ................................. 2
What are the Basic Elements for a Successful EGI? ................ 2
A Cross-Sectoral Institution .......................... 3
Planning ...................................... 4
Resources ..................................... 5
What Strategies are Available to an EGI? ...................... 5
Corrective Strategy ............................... 5
Preventive Strategy ............................... 6
ENVIRONMENTAL GOVERNMENT INSTITUTIONS AT WORK:.
REGIONAL AND LOCAL RESPONSES .......................... 7
Environmental Management by Regional Development Corporations in
Colombia ...................................... 8
Environmental Management and Regional Development
Corporations ............................... 8
Corporacion Aut6noma del Valle del Cauca ................ 9
Examples of Effective Environmental Management ............ 13
Corporaci6n Aut6noma Regional Rionegro-Nare ...... 16
Curitiba-Linking Urban Planning and Resource Allocation for
Environmental Quality ............................. 17
A Brief Review of Environmental Policymaking in Parana ... .... 17
Urban Environmental Policymaking: The Case of Curitiba ... .... 19
CONCLUSION .......................................... 26
ANNEX: LATIN AMERICAN GOVERNMENT INSTITUTIONS ... ....... 29
BIBLIOGRAPHY ......................................... 33
FIGURES
1. CVC's Organization ..................................... 12
2. Municipality of Curitiba-Executive Branch Structure ................. 22
3. IPPUC's Structure ...................................... 23
iii
I
For-eword
The Dissemination Note Series of the Latin America and the
Caribbean Region's Environment Unit (LATEN) seeks to share the results of
our analytical and operational work, both completed or in progress. Through
this series, we present the preliminary findings of larger studies in an
abbreviated form, as well as describe "best practices" with regard to major
environmental issues currently confronting LAC countries.
In most cases, these notes represent "work in progress" and as such
have not been subject to either substantial internal review or editing.
Therefore the findings, interpretations, and conclusions expressed in these
notes are entirely those of the authors and should not be attributed to the
World Bank, members of its Board of Executive Directors, or the countries
they represent.
Since one of the key objectives of these notes is to stimulate debate,
we would encourage readers to contact the authors directly should they have
any comments or suggestions as to how the analyses could be improved.
William L. Partridge
Unit Chief
Environment Unit
Latin America and the Caribbean Region
The World Bank
v
I
SUCCESSFUL ENVIRONMENTAL INSTITUTIONS:
LESSONS FROM COLOMBIA AND CURITIBA, BRAZIL
Laura Tlaiye
Dan Biller'
INTRODUCTION
1. Creating effective environmental government institutions (EGIs) has been difficult
in Latin America as in other parts of the world. The characteristics of environmental
problems and the many linkages they involve give rise to a number of issues that may
make or break an infant EGI. Yet, examining the development of Latin American EGIs
may reveal important elements necessary for a successful institution. This paper
examines broad questions of environmental institution building, focusing on basic
elements that help explain an institution's success and that may be applicable to EGIs in
different countries. Moreover, it presents two case studies of regional and local
responses to environmental challenges in which these elements are present.
2. The paper is structured in four sections and one annex. The second section
presents a brief discussion of the rationale for having an environmental institution within
a governing structure: why it is needed; what are the basic elements for its success; and
what strategies it can utilize to address environmental problems. The third section
presents case studies in Latin America where institutional arrangements have been
successful in addressing environmental issues using the basic elements described in the
previous section. The case studies draw on Colombia's experience with natural resource
management and on Curitiba's (the capital of the State of Parana, Brazil) experience with
urban environmental policymaking. Finally, the last section provides conclusions,
highlighting examples of environmental policymaking where these elements are clearly
used in the experiences presented. To illustrate the diversity of EGIs in Latin America,
an annex summarizing the structure and objectives of several EGIs in the region is given
at the end of the paper.
1. Ms. Laura Tlaiye and Mr. Dan Biller work in the Latin America and the Caribbean Region of the World
Bank. She is an Environmental Specialist at the Environment and Urban Development Division, Country
Department I (LAlEU), and he is an Economist at the Environment Unit,.Technical Department
(LATEN). The authors wish to acknowledge the helpful comments of Dennis Mahar, John Dixon, Juan
David Quintero, Malcolm Rowat, Mike Lubrano, Teresa Serra, William Partridge, and the peer
reviewers Dan Gross and Sergio Margulis. Erica Buchholz's assistance in preparing the annex and the
background materials on Curitiba, and Peter Brandriss' assistance in editing are also gratefully
acknowledged. Special thanks are due to the governments of Colombia, the State of ParanA, and the
Municipality of Curitiba for their assistance in the field.
1
ENVIRONMENTAL GOVERNMENT INSTITUTIONS IN CONCEPTUAL TERMS
Why is an EGI Needed?
3. Environmental problems are characterized by market failures; that is, markets are
unable to efficiently allocate rights and obligations regarding natural resource use and
environmental conservation among different agents. This stems from the lack of
property rights associated with "environmental goods and services" and the presence of
externalities.2 These characteristics emphasize the distributional nature of environmental
issues; that is, either the parties involved in negotiating a particular environment-related
problem find an agreement to redistribute net benefits, or a regulator has to intervene to
correct an existing market failure. The regulator may also serve as advocate for absent
parties as in the case of intergenerational problems, where future generations cannot
negotiate current solutions. The regulator is in fact what we are referring to here as
an EGI.
4. An EGI therefore is primarily needed to correct market failures and regulate
externalities. The EGI does that through the allocation of property rights among
recipients and causers of an externality at a given point in time and across time. If these
rights are clearly established, enforced, and traded, markets efficiently allocate them
among agents. Yet, since this does not often occur, an EGI has an important task
regarding curtailing the causes of environmental degradation. Market failures are
particularly present in situations where a large number of agents coexist and there is
imperfect information.
What are the Basic Elements for a Successful EGI?
5. To effectively achieve the correction of market failures and regulation of
externalities, an EGI requires at a minimum certain basic elements in terms of its
placement and functions within the government structure. Its placement must enable the
EGI to address problems from a cross-sectoral perspective. Its functions must include
being part of development planning (and hence influence resource allocation) and being
entitled to resources to meet its goal.
2. Property rights refer primarily to the rights pertaining to the permissible use of resources, goods, and
services. Ownership of an asset consists primarily of the rights to use that asset, to change its form and
substance, and to transfer all rights through sale. This ownership is not necessarily unregulated, since
some restrictions are often imposed by private contract or law (see Pearce, 1984). Externalities occur
when actions by one or more agents affect positively or negatively other agents, without the latter being
able to incorporate the level of this influence into the decisionmaking process. An externality, by
definition, cannot be self-inflicted.
2
A Cross-Sectoral Institution
6. Environmental problems are cross-sectoral in nature. Since the environment does
not recognize administrative boundaries, it is difficult to place the responsibility of
addressing environmental problems in a sectoral agency. For example, a river may
support a variety of water uses to different economic agents. It may provide fish for
urban areas, an activity that traditionally is administered by agriculture or fisheries
agencies. Further, a river may provide water for irrigation, which likewise usually falls
within agriculture. Yet, a river may also supply water to towns and cities, a typical
infrastructure function; and it may serve as an outlet for industrial pollution, which is
directly related to industrial policy. If left to a single sectoral agency, property rights
for the use of this resource would likely be given to the main constituency of that
agency. This outcome may not guarantee equitable distribution of rights, regulation of
externalities, and ultimately an optimal use of the resource. A forum is needed where
these different objectives are discussed and which takes into account the goals of society
at large. Acting as such a forum should be one of the key functions of an EGI.
7. A cross-sectoral approach does not eliminate the need for specific sectoral
analysis of environmental problems. Rather, it positions the environmental agenda as an
integral part of the overall development planning, in which relevant sectoral analysis of
environmental problems also has a place. The diversity of issues related to
environmental problems is usually such that it pays to place the environmental agenda in
an agency that has an overview of the economy. In such an agency, complementarities
among sectors are more readily identified, and tradeoffs are dealt with earlier in the
development process. The probability of addressing one aspect of a certain
environmental problem while worsening another aspect of the same problem is greatly
diminished, and so is the likelihood of creating a new environmental problem from an
apparent solution of another environmental problem.
8. In this context, it is also important to clarify institutional responsibilities, for
several government agencies at different levels are likely to get involved in solving most
environmental problems. In practice, this entails the reduction of opportunities for
conflict among agencies by ensuring that regulatory, enforcement, and monitoring
capabilities are not placed in agencies with conflicting objectives and incentives.
Further, the functions and hierarchical status of each agency should be clearly defined to
ensure smooth relationships among the relevant agencies.3
9. Stemming from the cross-sectoral nature of environmental issues lies the
argument that a multidisciplinary team is needed to optimally address these issues. This
requires a diverse staff that is able to respond to the various questions related to projects
and planning. Headed by competent managers, this multidisciplinary team would be able
3. For additional discussion on this topic, see Margulis (forthcoming).
3
to confront the different facets of environmental concerns, translating them into action.
By involving affected parties, the team would also be able to test the acceptance and
probable consequences of these actions prior to implementing them, and to build
consensus regarding possible tradeoffs.
Planning
10. Markets are usually unable to capture enviromnental costs and benefits without
some level of regulation. This means that in most cases it cannot be expected that
private agents would by themselves agree on solutions to environmental problems;
therefore, a well designed regulatory framework is a sine qua non condition for
environmental improvement.4 This regulatory framework should be flexible to allow for
exceptions. In addition, since budgets to address environmental problems are usually
modest in Latin American governments, combinations of market-based incentives (MBIs)
and command and control measures (CACs) should be explored.5 This would minimize
the costs of implementing a regulatory framework without jeopardizing the objective of
improving environmental conditions.
11. Apart from devising market solutions to environmental problems and designing
and implementing a regulatory framework, appropriate planning would also require a
well-functioning information system. While the extensive use of market-based incentives
may indeed decrease enforcement costs, both market-based incentives and command and
control measures are equally dependent on effective monitoring and analysis. Without
such an information base, it is unlikely that this policy will succeed in equating the
tradeoffs between environmental conservation and economic growth.
12. Beyond the context of the environmental regulatory framework, integrating an
EGI into the overall development planning process may enhance opportunities to extract
additional (environmental) benefits from public investments and programs. The Bank's
environmental assessment practice, which is built into the early planning stage of
projects, has shown that small design changes can often increase the beneficial impacts
of development projects, and avoid or minimize environmental risks.
4. There are exceptions, however, that should be duly exploited. For example, when preferences are strong
enough to change the behavior of a polluting agent (e.g., when the demand for a good produced by a
polluting agent is inversely related to the pollution), there is little need for the intervention of a regulator.
These exceptions are likely to occur when the polluting agent depends directly on the constituency
interested in promoting environmental conservation. Moreover, they may occur when the transaction
costs of reaching the social optimum are negligible, and agents do not engage in strategic behavior, as
explained by the Coase Theorem (see Coase, October 1960).
5. For a thorough review of market-based incentives in developing countries, see Eskeland and Jimenez
(July 1992). For a discussion on combining market-based incentives with command and control measures
in Latin America, see The World Bank (1992.b).
4
Resources
13. An EGI requires sufficient resources to adequately perform its functions. This is
not different from any other government institution. Yet, if an EGI is to remain an
effective regulator, it cannot be viewed either by polluters or by "pollutees" as defending
a certain group or sector of society. Once property rights are defined and established,
the EGI's function becomes part of the enforcement effort through its environmental
policy. Different than a line ministry, for example, whose function may be to promote a
certain sector of the economy, an EGI has as one of its key goals to ensure that
distributive issues regarding environmental degradation are addressed. If it engages in
defending a particular group, the EGI becomes similar to a line ministry and the
environment is treated as a sector. In that case, while some aspects of the environment
may improve, others may actually worsen.
14. This need for a certain degree of impartiality may restrict the availability of direct
external EGI funding. However, if instruments like MBIs are used, an EGI may secure
an alternate source of funding and decrease its budgetary dependency.
What Strategies are Available to an EGI?
15. An EGI has two basic strategies at its disposal: correction and prevention.
Though not exclusive, the corrective strategy seems to command environmental
policymaking in most countries. This is due in part to the structure, placement, and
mandate of existing EGIs, which preclude environmental policy from influencing the
early stages of decisionmaking. This section explores these basic strategies, and
suggests that both can be used by the conceptual EGI described in the preceding section.
Corrective Strategy
16. A corrective approach to environmental problems has been undertaken by most
countries, particularly industrialized nations. Activities such as enforcing compliance
with regulations and cleaning up have received more attention than environmental
planning. This may be partially explained by the sectoral view that has commanded
policy measures related to environmental problems. Since throughout the different
economic sectors environmental problems have traditionally been dealt with by sector
specialists, it is reasonable to expect that governments would view enviromnent as a
sector in itself. This sectoral emphasis may also help to explain the tendency to promote
CACs as opposed to MBIs. MBIs are often considered part of the macroeconomic
strategy because of their relation to fiscal and financial measures.
17. The corrective approach tends to be "ex-post" in nature. In other words, if
environmental degradation occurs and is detected, a polluter would be fined or punished
according to the law. The idea is to set a fine or punishment high enough to discourage
5
future polluters. In fact, a corrective approach in the first round implies a preventive
approach in subsequent rounds. Oil spills in the USA provide an example of corrective
approach. In these cases, it is not uncommon for polluters to pay high out-of-court
settlements to the injured parties. While the perceived size of the settlement may
discourage prospective polluters from polluting, settling them out of court mitigates this
corrective approach in at least two ways.6 First, it avoids possible higher court-imposed
penalties. Second, although there are estimates on sizes of settlements, the actual values
are usually kept secret. This way precedents would not be officially established, and
future settlements would be less correlated to previous ones.
18. To attain environmental improvement, the corrective approach has to send clear
signals to polluting agents that laws and regulations are being enforced, i.e., that
polluters face a high probability of being detected and fined. Furthermore, fines have to
be set at a level where the probable costs of being caught exceed the costs of pollution
abatement. While industrialized countries have the financial capacity to build such
enforcement credibility and can rely on their judicial systems for conflict resolution,
developing countries lack such resource and institutional bases. Despite government
modernization efforts, Latin America still confronts difficulties similar to those faced by
other developing regions.
Preventive Strategy
19. Incorporating environmental considerations and costs early in a country's macro
planning enables the establishment of development priorities that internalize environment-
related tradeoffs. A preventive strategy thus diminishes cleanup expenditures and
regulation enforcement costs at a later stage. This integrated approach also has the
advantage of allowing active participation of stakeholders. Its transparency is likely to
diminish possible challenges to regulations, since participants are aware at an early stage
of the different characteristics of the regulatory framework. In addition, since the level
of uncertainty regarding regulations greatly diminishes, cheating, free riding, and
possible markups are likely to decrease as well. At the project level, a successful
preventive strategy would attempt to address environmental concerns at the design stage,
both to mitigate impacts and to exploit opportunities for environmental improvement. At
the policy level, a similar approach would be feasible.
20. Finally, it should be noted that the focus on a preventive strategy does not
eliminate the need for a corrective approach. Penalizing wrongdoers is still necessary,
and the need for enforcement and cleanup remains. Yet the corrective approach would
become a backup to prevention rather than the central focus of an environmental policy.
Emphasis would be given to early deterrence and detection rather than policing.
6. It should be noted that due to the relatively small number of firms in the industry, it is probable that
these firms are recurrent polluters.
6
ENVIRONMENTAL GOVERNMENT INSTITUTIONS AT WORK:
REGIONAL AND LOCAL RESPONSES
21. Almost all countries in Latin America have established some form of
environmental institution at the central government level. Earlier examples included
second-tier units within the ministry of agriculture while more recent institutions are
placed higher in the hierarchy and are charged with a broader mandate. Annex 1
presents a snapshot of environmental institutions in Latin America. A noticeable trend in
the continually evolving form of these institutions is the establishment of national
coordinating bodies. These entities are usually chaired by the central government and
are intended to bring together the interests and concerns of various institutions engaged
in environmental management, including those at regional and local levels. In many
cases, regional and local environmental management predates national experience and
offers a fertile ground to draw lessons.
22. The case studies presented in this paper illustrate institutional arrangements set
out to address environmental objectives as part of a broader development mandate. The
main goal is to show that certain institutional attributes, closely resembling the basic
elements of an EGI described earlier, contribute to successfully meeting their intended
objectives. These case studies are illustrative, designed to show the potential usefulness
of the conceptual EGI. They are far from representing a thorough hypothesis testing.
23. While environmental degradation is ultimately the result of aggregated decisions
and choices by various agents, each choice is a response to incentives and other forms of
guidance from various sources, including the market and the government. In the case
studies, the institution's performance is judged either by its ability to create (a)
measurable changes in the incentives, and thus in the decisionmaking process of relevant
parties, or (b) physical improvements in the targeted problem (e.g., stopping the rate of
environmental deterioration).
24. The first case study describes Colombia's regional development corporations
(institutions in charge of watershed management in well-defined areas), and evaluates
their performance in addressing water quality issues. This case study shows that these
institutions are effective in achieving environmental objectives in part because their work
is integrated into the overall development planning process, and also because they have
influence over the actual execution of plans.
25. The second case study describes the characteristics and incentives of city
institutions in Curitiba, Brazil. These institutions permitted the implementation of an
urban plan that favored mass transportation (against roads for private cars and other
alternatives) and managed city growth by gradually introducing land use control. The
result is a city with less congestion and air pollution than most cities of its size in Latin
America.
7
Environmental Management by Regional Development Corporations in Colombia
26. Colombia has a tradition of concern and attention to natural resource
management, and was one of the first countries in Latin America to enact laws for
environmental protection. Dating back to the formation of the Republic, this tradition
generates human and institutional capital, enriched by the past 20 years of experience in
addressing environmental challenges. This case study traces the evolution and
experience of regional institutions, whose primary mandate is overall development
coupled with environmental management.
27. The discussion is structured in three sections. The first section provides a
historical perspective of the establishment of regional development corporations in
Colombia and their relation to environmental institutions in the central government. The
second section describes the oldest regional development corporation Corporaci6n
Aut6noma del Valle del Cauca (CVC), including discussion of its mandate, planning
process, governance structure, resources, and approach to watershed protection and
water quality management. CVC's track record in these areas is considered best practice
in Colombia. Finally, the third section presents the evolution of Corporaci6n Aut6noma
Regional Rionegro-Nare, emphasizing its cross-sectoral, participatory planning approach,
which successfully influences development plans and budget allocation for environmental
goals at the local government level.
28. It should be noted that this case study does not reflect the changes introduced by
a recent law approved by the Colombian Congress in December 1993 (Law 99). The
law introduces sweeping changes in the institutional framework for environmental
management, but is still in a transitional period. This discussion is a retrospective
description of these corporations and their performance before Law 99.7
Enviromnental Mana2ement and Regional Development Corpoations
29. Beginning in the 1950s, Colombia established regional development corporations
in the spirit of fostering regional development while conserving natural resources,
particularly water resources. On closer examination, however, not all corporations had
the same mandates and attributes. In some cases, these institutions were established as a
means to control and optimize the use of water resources; others to address regional
concerns about environmental and social impacts associated with large development
projects of national interest. Specific objectives such as remedying the effects of a
7. The main changes introduced by the law affecting the regional development corporations are: a
governance structure based on elected officials and on a board of directors that includes local and NGO
representation; a reduced scope of mandate; a separation of productive/service activities from regulatory
functions (with the associated separation of revenue sources); and the corporations are now accountable
to a new environment ministry.
8
natural disaster or addressing severe soil erosion in a region were also responsible for
the creation of yet another group of corporations.
30. At first the corporations were linked to the Ministry of Agriculture, because their
mission was equated with rural development. However, as time passed the breadth of
their mission expanded significantly, ranging from electricity generation to irrigation and
infrastructure development. In addition to transfers from the central government, most
corporations were entitled to some form of earmarked revenues directly or indirectly
related to the exploitation of renewable or nonrenewable resources in their area of
jurisdiction. These ranged from a share of gross electricity revenues to property
surtaxes, water use fees, and mineral royalties. Their expanded mandate and partial
financial autonomy contributed to a decision in the 1970s to place these institutions under
the tutelage of the National Planning Department (DNP).
31. In 1976 DNP created a special unit (Unidad Especial de Politica Ambiental y
Corporaciones Aut6nomas Regionales) responsible for coordinating the corporations'
activities and formulating a national environmental policy. Additionally, at around the
same time the central government established INDERENA (Instituto Nacional de los
Recursos Naturales Renovables y del Ambiente), a normative environmental agency
within the Ministry of Agriculture. By the late 1970s, INDERENA had developed a
comprehensive environmental legal framework and delegated its application in certain
regions of the country to the regional development corporations.
32. As of May 1994 there were 18 regional development corporations in Colombia
with jurisdiction over 25 percent of the country. The remaining territory was under the
jurisdiction of INDERENA.8 Among these corporations, the Corporaci6n Aut6noma del
Valle del Cauca and the Corporaci6n Autonoma Regional del Rionegro-Nare are
recognized as responsible for the most successful environmental management experiences
in Colombia.
Corporaci6n Aut6noma del Valle del Cauca
33. The first regional development corporation in Colombia, Corporaci6n Aut6noma
del Valle del Cauca (CVC), was established in 1954 with the "mission of transforming
the Upper Cauca Valley and its surrounding region ... through better and more intensive
use of natural resources" (Anderson and Posada, 1964). CVC's primary mandate was
the planning and execution of development projects (in energy, flood control, irrigation,
rural technical assistance, roads, etc.) through integrated management of the region's
natural resources.
8. Law 99 abolishes INDERENA; its functions (with some modifications) are transferred to the new
environment ministry. Additional corporations to cover the entire territory are also created. The
information presented in the text predates the above law.
9
34. The Cauca Valley in the Pre-CVC Phase. The Cauca Valley in the 1930s and
1940s was one of the most fertile valleys of Colombia, with an area of approximately
400,000 hectares of flat land nursed by the Cauca River. Located in the west-central
region of Colombia, the valley was also rich in mineral resources and suitable for
agriculture and cattle rasing; however, its large development potential was constrained
by frequent flooding of rivers, lack of infrastructure and energy, and limited agricultural
know-how.
35. In 1936 the Cauca Valley region was plagued by an extremely hot summer,
which caused a severe drought in several parts. This prompted experts and politicians to
look for ways of tapping the region's abundant water resources. Concrete plans to
address these needs, such as dams, protection of watersheds through reforestation, and
flood control projects, began to be designed. A dialogue between those in favor of
limited local projects and those in favor of more geographically extensive and ambitious
projects started in the late 1930s and continued into the 1940s and 1950s. Gradually, as
the problems were better understood and their interdependence realized, the scope for
cross-sectoral planning based on multipurpose projects integrating and developing all the
resources of the region was acknowledged.
36. CVC's Mandate. With the advice of David E. Lilienthal (former head of the
Tennessee Valley Authority),9 the central government and the departments sharing the
Upper Cauca founded CVC in 1954. The corporation was created as a pilot to test the
potential usefulness of this type of cross-sectoral planning and development agency.
37. CVC's original mandate ranged from electricity generation to flood prevention
and water quality management. In 1987, Decree 77 reduced the scope of its mandate by
transferring construction and operation of roads, telecommunications, and sewerage
infrastructure projects to local jurisdictions (municipios) and public utilities. CVC
retained the three main mandates and attributes that formed the spirit of its bylaws:
* an autonomous and decentralized entity able to directly influence the region's social
and economic development;
* improve the electrical infrastructure by engaging in hydroelectric projects;
* manage and administer the Cauca River and the watershed's natural resources
utilizing an integrative and cross-sectoral approach.
38. Governance Structure. Until 1993, CVC's Director was appointed by the
country's president. The Director reported to the corporation's board of directors,
which comprised eight members: six from the public sector (including representatives of
the federal, state and local governments), and two representatives of the private sector.
9. The Tennessee Valley Authority was created in 1933 to manage multi-purpose development and regional
growth in the Tennessee River Basin and still functions as one of the few federal-state river basin
management entities in the United States.
10
As a government agency, CVC reported directly to the planning ministry for approval of
its budget and for external financing support of investment projects.
39. Internal Management. During its initial stages, CVC had a rudimentary
organizational framework, comprised of study groups. These study groups developed an
integrated plan and a number of specific projects. Since its inception, CVC was
characterized by a business-like, cost-conscious and results-oriented management style.
Its recruitment was based on technical competence, and its compensation and reward
systems resulted in a very low turnover rate compared to other public organizations. In
addition, its personnel were unaffected by changes in the political system.
40. As shown in Figure 1, CVC has four layers of management with five technical
divisions reporting to the General Manager. The Natural Resource Management
Division and the Technical Division work jointly to ensure that environmental
considerations are part of every major decision regarding investments and operating
practices. An example of the integration of environmental analysis in CVC's
development planning process is the involvement of the Natural Resources Unit in the
analysis of the energy expansion plan. Environmental constraints and complementarities
are identified early on, at the time when alternatives for future provision of electricity in
the region are identified.
41. CVC's Resources. CVC is an entity created by law with legal personality and
administrative autonomy, and endowed with its own sources of revenue supplemented by
resources transferred from the central government. CVC is subject to audit by the
Contralona General de la Republica with respect to fiscal matters. The National
Council of Economic Policy and Planning is responsible for approving the corporation's
plans and programs, and any request for obtaining domestic or international loans.
42. On average, about 85 percent of CVC's operating revenues come from electricity
sales. The remaining sources, in approximate order of importance, are a property
surtax, fees for services rendered, concession fees (water and forests), valuation fees (in
account of infrastructure works), and pollution fees (tasas retnibutivas). In addition,
transfers from the central government, international loans, and technical cooperation
supplement the corporation's investment budget.
43. Regarding its attributes, CVC has the prerogative of improving xights-of-way and
carrying out property expropriation under certain conditions. CVC also receives
appropriations, grants and transfers from the national government (e.g., shares of power
companies). In addition, the CVC has authority over the allocation of water use rights
(both surface and groundwater) in the Upper Cauca.
44. The institution has approximately 2,400 employees, of which 565 work in the
Natural Resources Division and 338 in the Technical Division.
11
FIGURE 1. CVC'S ORGANIZATION
MANAGEMENT
SECRETARIAT SUPPORT RESOURCES PLANNING
ENVIRONMENTAL
ADVICE MANAGEMENT _ -
ADvlCE ~~~GR OUP
CENTRAL ~~~~~~Agriculture DrAgricultural Regional Urban Ecoomcsal d
OPERATIONS Technical Assistance Water Planning Development Social
Salvajine AnohlcY Reon
Plant Plant Ra n
Examples of Effective Environmental Management
Example 1-Preventing Watershed Degradation: User Associations
45. Faced with a daunting mission, CVC's planning approach was simple and flexible.
It first made an inventory of available resources and most urgent needs, so as to arrive at
decisions on priority programs and to meet these needs on an integrated, cross-sectoral
basis. Principal obstacles preventing agricultural development were: periodic flooding of
the rivers; lack of irrigation facilities; lack of agricultural know-how; low agricultural
income and productivity; inadequate nutrition and capacity of farming population; scarcity
of electricity for industry; and inadequate transport infrastructure.
46. The next stage was preparation of studies to determine projects and their priority
ranking subject to the available and potential financial resources. Limited resources made
CVC start with only four programs: land reclamation (drainage and irrigation) in two pilot
zones; energy supply for the region; improvement of living conditions of the farming
population through technology dissemination; and improvement of community relations.
47. If a certain project encountered funding difficulties or opposition from
landowners, the central government or politicians, another project would be carried out
during the period needed to clear obstacles. In this way, CVC managed to earn the
public's support, since it was clear that there was a benefit attached to its presence.
48. CVC pioneered watershed management in Colombia by initiating natural resource
management programs for selected Upper Cauca tributaries in 1969. Its initial focus was
to maintain the biophysical conditions of these areas as reflected in its technical diagnoses
and management plans. However, its approach evolved over time to address in a more
integral manner the biophysical, economic and social problems of these watersheds,
providing the infrastructure and operational means necessary to administer them.
49. In the early 1980s, CVC launched its Programa de Ordenaci6n y Desarrollo
Integrado de Cuencas Hidrogrdficas, covering nonagricultural territory of about 800,000
hectares. Microwatershed development plans have been prepared incorporating the
following elements: (a) development of a microwatershed development plan in close
consultation with resident communities; (b) community-managed watershed use schemes
supported with social programs to improve living conditions (e.g., farmers' family
training, better production techniques, etc.); and (c) control and surveillance of natural
resource use. The planning exercise has lead to detailed subregional maps which are
used for identifying ecologically sustainable use patterns. In some local jurisdictions
these plans have been adopted for land use zoning purposes.
50. An interesting scheme being used by CVC to encourage the adoption of these
sustainable land use patterns are Watershed User Associations. Fourteen such
associations bring together water users located in the lowlands (mostly farmers and cattle
13
ranchers) and communities living in the highlands (mostly subsistence farmers including
indigenous reserves). The production pattern of the latter group tends to reduce forest
cover and decrease soil stability, thus contributing to the deterioration of water resources
used for agriculture. CVC has acted as a catalyst between these two groups, establishing
a scheme whereby subsistence farmers are compensated for protecting forest cover in the
watershed. Such compensation required pooling of resources from all downstream users
in the watershed. CVC fostered such cooperation among users, and helped establish a
fund made of contributions proportional to water usage. The fund is used to finance the
compensation package and a forest and soil management program for the area.
Example 2-Water Quality Management at CVC
51. The Cauca watershed has contributed significantly to economic development of
the region under CVC's jurisdiction (which excludes the city of Cali). Surface and
groundwater sources have been supporting human consumption, agricultural, industrial,
and ecological uses. However, with the increase of economic activities, CVC
determined that water quality could become a limiting factor in certain stretches of the
Upper Cauca. CVC thus developed an approach to water quality management that can
be conceptualized in three stages: (a) study the problem to determine its causes and
effects; (b) establish medium- and long-term goals to address the problem; and (c)
develop a program to implement an integrated solution.
52. The first stage began in the early 1960s, when CVC identified an interrnediate
stretch of the river (from Vijes to Mediacanoa) that suffered from low water flows
during the summer and progressively lower concentrations of dissolved oxygen. Water
quality for human consumption was deteriorating rapidly, and large investments in
pretreatment or groundwater extraction were foreseen if pollution trends continued.
53. The second stage took place in 1968, when CVC set a medium-term goal of
achieving an annual average dissolved oxygen concentration of 0.5 mg/lt by 1995 at the
critical point of the above-mentioned stretch (at a town called Juanchito-downstream
from Cali) and a long-term goal (20 years later) of maintaining or improving that level
of water quality. Interim targets of 5 years each were also established. These targets
were established utilizing simulations of the river's behavior with increasing pollutant
loads, considering its natural capacity to assimilate such pollution. These goals were
passed as a regional regulation in November 1976 (Acuerdo 014). This instrument
stipulated the desired concentration of dissolved oxygen for different sections of the
stretch, and mandated pollutant removal from public and private sources.
54. The third and last stage corresponds to the implementation of the proposed
solutions. Based on the legal requirements mentioned earlier, CVC could have
established a set of effluent standards for industrial and municipal wastewater and
focused its attention on enforcement and monitoring. Instead, the institution took a
proactive role and worked closely with industry to develop an industrial pollution control
14
program consisting of specific pollution control measures for each industry sector present
in each section of the stretch.
55. Another component of this implementation stage is CVC's ability to directly
increase pollutant dilution by allocating water discharges from the hydroelectric dam of
Salvajina, just upstream from the city of Cali. In addition to providing water resources
for electricity generation and infrastructure for flood prevention, the dam is operated by
CVC to release water at rates that guarantee a minimum flow rate of 130 m3/sec (daily
average) at the town of Juanchito, thus increasing the dilution of waste loads. Before
Salvajina, flow rates dropped to 47 m3/sec during the dry season and the river was
virtually anaerobic (CVC 1993).
56. CVC's water quality program predates national regulations by almost 10 years,
and its implementation approach is vastly different from that implied in the national
code. Decree 1594 approved in 1984 establishes national standards concerning water
quality and provides norms for wastewater discharge, including sewage and industrial
wastewater, taking into account the quality of receiving waters. In addition to dissolved
oxygen, the decree enumerates the priority substances of concern from a health
standpoint (e.g., lead, mercury, PCBs, pesticides).
57. The decree requires water users to register with local authorities and to submit
plans for coming into compliance with its water discharge provisions within 4.5 years.
In contrast, CVC negotiated different timetables for compliance (4 years for preliminary
treatment, 4 years for primary, and 5 years for secondary),'o and its operating style is
based more on negotiation and consensus building than on enforcement and control. In
addition, due to the high costs involved in meeting the national standards in terms of
acidity, turbidity, and reduction of priority substances, the program has focused on solids
and odor removal with an overall goal of increasing dissolved oxygen concentrations in
the ambient waters of the Cauca River.
58. In 1981 the pollution control program was published, and by 1985 over 100
industries had invested the necessary funds for primary treatment. Secondary treatment
was installed in 1990, and by 1993 the concentration of dissolved oxygen at the critical
point had increased from zero to 0.3 mg/lt. This improvement is directly attributable to
significant reductions in industrial organic pollutant discharges; however, largely due to
lack of control over organic loads from municipal sewage, the 1995 goal (0.5 mg/lt) has
not yet been achieved.
59. A key to the success of the industrial pollution program is that CVC was
perceived by the private sector as credibly committed to promoting and enforcing the
program. The corporation's resources-the quality and professionalism of its human
10. New industry is required to start up with secondary treatment.
15
resources, and the type of instruments used by CVC, such as technical advise and
pollution fees"-worked to provide sufficient incentives for enterprises to adopt
pollution control measures.
60. As stated earlier, the main pending hurdle to meeting the program's goals has
been the somewhat slower compliance of Cali (which is outside the jurisdiction of CVC
and is the largest source of pollution). Even though CVC reached agreement with the
local sewerage company (EMCALI) on a program of pollution reduction for both
industrial and municipal discharges, EMCALI has only recently launched a series of
initiatives (water treatment plant, small-scale anaerobic systems, and preliminary
treatment of industrial discharges). With these investments in place, water quality is
expected to meet the desired targets.
61. CVC served as an initial model for other regional institutions created in the 1950s
(notably the Corporaci6n Aut6noma de Desarrollo de Cundinamarca-CAR). Since
then, however, a number of institutions emerged with different and sometimes narrower
objectives and attributions. The next section describes one of these newer entities.
Corporaci6n Aut6noma Regional Rionegro-Nare
62. Background. The jurisdiction of the Corporacion Autonoma Regional Rionegro-
Nare (CORNARE) is located within the northwestern department of Antioquia and
encompasses 26 municipios, neighboring but not including the city of Medellin. The
region includes a system of watersheds (notably the Magdalena, Medellin, Negro, Nus,
and Nare rivers) with four major hydroelectric developments supplying approximately 30
percent of the nation's electricity. These and other large infrastructure projects created
local socioeconomic dislocations leading to CORNARE's creation in 1983 as a means of
harmonizing local concerns and projects of national significance.
63. Resources and Mandate. Based on the local desire to capture part of the income
extracted from the region's natural resources, CORNARE is entitled to 4 percent of
gross electricity revenues. These revenues are allocated in equal shares to natural
resource management and rural electrification. CORNARE's overall mandate is to
promote and guide regional development through sustainable use of its natural resources.
64. Planning Process. The corporation began operating in 1985. It engaged in a
three-year regional planning exercise, which served as the basis for regional natural
resource management policies and programs. To lay the foundation of its planning
process, CORNARE conducted studies to establish the biophysical, socioeconomic, and
11. The use of pollution fees to financially support the administration of the pollution control program is
also noteworthy, since CVC is probably the first institution in Latin America to use such an instrument.
Although effective in raising some revenues for the institution since 1979, these fees are not the main
incentive driving industry compliance with the pollution control program.
16
cultural characteristics of the region and its constraints for future growth. The
sociocultural emphasis of the studies helped assess the degree and nature of the
community's sense of ownership for the region's natural resources and to identify
determinants of power relationships. This knowledge assisted the corporation in its
future dealings with the local governments.
65. The completion of the study phase lead to a synthesis of the region's development
objectives, including its natural resources management priorities, articulated at the level
of eight subregions. The main result of the planning process was a Protocol for Regional
Development outlining the region's vision of the main development programs and
policies to be implemented by CORNARE and by local governments.
66. In practice, this planning process shapes the way in which CORNARE currently
works. CORNARE's planning approach is highly participatory and reaches local
governments and communities. In fact, a unique feature of this corporation with respect
to all other corporations up to mid-1994 is the composition of its board of directors,
which includes representatives from local governments.
67. From Planning to Implementation. The final and most important stage of
planning is to make provisions for implementation. In addition to CORNARE's
allocation of its own resources, the adoption of the Protocol's projects and policies in
municipal budgets is evidence of the success of the planning exercise. Resources
budgeted by local jurisdictions for environmental programs are supplemented by
CORNARE, enabling it to participate during implementation. For example, a project
may entail purchase and reforestation of a plot in the highlands of a microwatershed.
CORNARE may purchase the land while the municipio establishes boundaries and
reforests the plot. An environmental technician is hired jointly by CORNARE and the
municipio (50-50 share) to act as liaison and coordinator of the project. CORNARE also
provides technical assistance to the municipio in the form of improved local
administration systems and project preparation capacity building.
Curitiba-Linking Urban Planning and Resource Allocation
for Environmental Oualitv
A Brief Review of Environmental Policvmaking in Paranri
68. Parana, a southern state in Brazil, is in the forefront of environmental and natural
resource management in the country. Its economy, which steadily outperforms the
national economy, is based primarily on agriculture and natural resource exploitation.12
12. Over 30 percent of the state's GDP comes from agriculture, cattle raising, renewable and exhaustible
resources exploitation and related industries (State of Parana, 1993).
17
Realizing that these activities are essential to guarantee a steady source of income for the
state, planners attach significant importance to closely monitoring the use of these riches.
69. This preoccupation is reflected in a number of actions and efforts undertaken by
the state and some local jurisdictions. The government of Parana has a number of
initiatives ranging from protecting the remains of the Atlantic rainforest to combating
erosion on areas overexploited by agriculture. It often seeks collaboration with
nongovernmental organizations (NGOs) and local communities, and participates in a
variety of projects to improve environmental conditions. Its efforts, however, are
generally directed to natural resource management, while urban environmental
management often falls under local jurisdictions.
70. Yet, at least one example can be found where the role of the state government
directly impacts decisionmaking by the different local administrations on environmental
issues. In a new initiative-Projeto Agua Limpa'3-the state government seeks to
address externalities related to water supply by influencing the allocation of tax
revenues. In the past, local districts located in headwater areas had no incentive to
conserve and protect the resource. In fact, if preservation was required by law, they
viewed the existence of this resource as a nuisance that stopped development. Due to
their geographical location, among other things, these local jurisdictions were often
unable to reap the benefits of economic growth, thus forfeiting the tax revenues that
would come with it. A vicious cycle developed. Local governments could not stimulate
the establishment of companies in their jurisdiction for lack of economic incentives and
their perceived water protection functions, which resulted in a depressed economy unable
to generate tax revenues to improve economic conditions.'4 While richer districts were
enjoying the benefits of clean water, no compensation was provided to poorer
"protective" districts-a regressive way of distributing benefits.
71. Understanding that this situation was unsustainable, the state government decided
to redistribute the revenues of the ICMS in a slightly different fashion. As required by
law, the government continues its revenue distribution based on economic dynamism, but
now it includes a provision to compensate the local districts that protect headwaters.
Since it has a certain degree of flexibility in this revenue allocation, the state adopted a
redistribution formula that takes into account water availability and quality. In addition,
13. See Governo do Parana (February 1994) and Do Carmo (November 1993).
14. A main source of govermnent revenue in Brazil is the "Imposto de Circulacao de Mercadorias e
Serviros' (ICMS), a value-added tax on goods and services. These funds are shared between the state
and local district according to a formula that takes into account the value of outflow and inflow of
goods and the value of services rendered within the municipality. In addition, each state is also given
complete discretion in the allocation of part of these funds. Many states often allocate this discretionary
part on the basis of population. Yet, given that the nondiscretionary part of the formula is based on
economic activity, poorer districts are likely to produce less goods and services thereby generating less
fiscal revenue (see Shah, 1991).
18
it provides technical support to interested districts, and serves as a catalyst for private
sector investment in the conservation of these natural areas. These initiatives are part of
the Agua Limpa project, and have the advantage of compensating districts for water
protection while guaranteeing a reliable source of the resource to larger urban areas.
Urban Environmental Policvmaking: The Case of Curitiba
72. Examples of natural resource management are discussed in detail in the previous
case study. We now focus on the urban environment, and present an analysis of
Curitiba's environmental management. Curitiba deems itself "Brazil's ecological
capital," and is recognized as one of the most agreeable, clean, and energy efficient
cities in the country. This reputation is largely the result of a public policy orientation
towards increasing quality of life by improving the quality of the urban environment.
This case study reviews Curitiba's success within the context of the composition and
relationship between city institutions, particularly those responsible for planning and
resource allocation.
73. Curitiba, a city of 1.6 million inhabitants, is the capital of Parani. Like other
urban centers in the past four decades, Curitiba suffered the effects of rural migration
from within ParanA and from other states in Brazil, albeit on a smaller scale. Concern
for maintaining and improving quality of life prevented the significant deterioration of
the urban environment that is often caused by rapid growth.
74. Curitiba's approach to improving quality of life is all-encompassing, and involves
providing good urban services such as housing, transportation, employment, education,
and leisure opportunities. With respect to services that directly affect environmental
quality, Curitiba has obtained remarkable results in public transportation, solid waste
collection, flood prevention, headwaters protection, and parks and recreational areas.
75. Located in a relatively affluent region of Brazil, Curitiba had the country's
highest ratio of automobiles per capita in 1971L City planners foresaw that congestion
and air pollution would worsen, unless they reversed existing transportation policy that
favored the use of private automobiles. They developed an innovative mass
transportation system based on buses with exclusive express lanes and special passenger
stations. Currently, the system is used daily by about 75 percent of all commuters.
76. Regarding waste collection, the city's education system and mass communication
programs encourage its citizens (primarily children) to recover and separate reusable
trash before it is collected by private contractors. The reduced volume of waste extends
the useful life of the city's landfill, creates environmental awareness, and generates some
revenues from the sale of used bottles, cans, etc.
77. Curitiba is the birthplace of the Iguacu River, which flows into the Parani River
at the border between Brazil, Paraguay, and Argentina. The Iguacu's northern section is
the site of numerous springs that are currently vital for Curitiba's water supply. Many
19
smaller tributaries of the Iguacu also cut through Curitiba. When the city was small, the
rise of these rivers during the rainy season was uneventful because a wide floodplain
existed to capture the floods. Starting in the 1950s, the city's horizontal expansion
encroached on this floodplain and caused severe flooding problems.
78. Engineering solutions to this problem were unsuccessful because channelling the
rivers simply transferred the floods to other areas. City authorities realized that it was
necessary to recover the floodplain. A concerted effort to expropriate areas along their
courses and build small dams led to the creation of large parks and lakes that today are
Curitiba's main recreational sites. Concurrently, new land use regulations regarding the
division of land into plots for housing development prohibits the construction of streets
and buildings in strips subject to flooding.
79. Another park (the Passauna Park) was also created to protect a river and its
system of springs that supply one-third of Curitiba's water. The area was declared an
"environmental protection area" under legislation that grants tax incentives for
preservation of forest cover. Further, the law allows only up to 30 percent of the area
to be used for construction, and the choice of sites and the building parameters are
subject to district approval. Similarly, new housing developments elsewhere (i.e., in
non-drainage areas) must dedicate 35 percent of the land area to the public domain for
environmental purposes.
80. The overall result is a city with one of the highest ratios of green areas per capita
(50 square meters per inhabitant) among western cities, providing its citizens ample
recreational and cultural sites, more than 140 km of bicycle paths, neighborhood parks,
and in-city forest reserves.
Lcal Institutions: The Evolution of Environmental Planning.
81. In the 1940s, Curitiba was poised to become a large metropolis. Parana's coffee-
generated wealth provided the economic foundation for faster growth. In anticipation of
cheap fuels and a boom in Brazil's automobile market, the first urban master plan,
developed in 1942, prepared the city for extensive automobile use.
82. Curitiba's position as the state's capital and center of services, and its
geographical location (on the main road to the state's principal port of Paranagua) fueled
its growth from 140,000 inhabitants in 1940 to 180,000 in 1950, and then doubled its
population to 360,000 by the 1960s. The 1942 master plan called for the construction of
large overpasses and roads to accommodate the increased volume of vehicles associated
with this growth. At that time, a new generation of city leaders and state officials began
to question the traditional model of development. They were concerned about the extent
of investments required and the longer-term effects on urban quality of life.
83. In 1964, the administration of Curitiba commissioned a consortium of Brazilian
consulting fnrms to produce a new master plan which later became the Curitiba Master
20
Plan. This plan included the ideas tor segregated bus lanes, pedestrian streets, gradual
development of land use legislation, several waste management programs and integrated
surface transport networks. The Curitiba Research and Planning Institute (IPPUC) was
then created in 1965 to pursue implementation of the plan.
84. In the meantime, the mechanization of agriculture and the uprooting of coffee in
northwestern Parand accelerated migration to Curitiba. In addition, the 1960s witnessed
the industrialization of Curitiba as a result of the government's effort to decentralize
heavy industry from Sao Paulo. By the 1970s the urban growth rate of Curitiba and its
metropolitan region was almost 7 percent-the highest in the country.
85. Mr. Jonas Rabinovitch-IPPUC's past chief of staff, and later Curitiba's director
of international relations-points to two very distinctive phases of the planning process:
(a) the preimplementation phase (1965-1970) characterized by the traditional master plan
methodology and less emphasis on implementation, and (b) the implementation phase
(1971-present) characterized by the political will and the commitment of the public
administration to "get things done." Rabinovitch believes that it was this slow moving,
well thought out "interaction between theory and practice" that has produced Curitiba's
success in development. This interaction was made possible by the composition and
internal workings of city institutions."5
86. Figure 2 shows the inception of IPPUC within the city government organization.
In contrast with other forms of city organizations where the planning agency is placed at
the level of executing agencies (i.e., "secretarias," which in the case of Curitiba are
placed at a fourth level of hierarchy from the mayor's office), IPPUC is placed directly
under the mayor's office.
87. IPPUC's main functions are to conduct research on urban planning, collect and
maintain city statistics, research urban law, and develop instruments for implementation
and monitoring of the Curitiba Master Plan. IPPUC develops the broad guidelines and
policies, which are then transformed into action by the secretarias. Yet, IPPUC is not
detached from the translation of its guidelines into specific actions and project initiatives.
As shown in Figure 3, the institute has implementation and supervision units, which
monitor the development and execution of projects. Most importantly, IPPUC has the
authority to review the allocation of resources to implement these projects. Finally,
IPPUC has an ex-post evaluation responsibility.
88. An illustration of the role of IPPUC in incorporating natural resource objectives
into planning and implementation was the adoption of land use policies in conjunction
with the mass transportation and road plan. These land use policies facilitated the
preservation of green areas necessary for flood prevention and springs protection
mentioned in the previous section.
15. Rabinovitch (1994).
21
Figure 2. Municipality of Curitiba-Executive Branch Structure
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OPSWANAiI
89. The transportation system is built around five roads that radiate more than 10
kilometers from the city's center like the spokes of a wheel. These main roads have
exclusive lanes for buses, are connected to each other by 185 kilometers of suburban
interdistrict lines, and are augmented by 300 kilometers of "feeder" routes (Rabinovitch
1993). As the main roads and the feeder routes became primary axes of development in
the city, IPPUC developed instruments for preserving green areas along these routes.
These instruments were implemented by the secretarias, and took the form of tax
incentives and expropriation laws in the case of ecologically fragile areas. These areas
were then transferred to Curitiba's Environment Secretariat, which is responsible for
their reconditioning and maintenance.
90. Another example of the contribution of an integrative planning approach in
solving city problems was the development of single programs that address multiple
objectives. Faced with the difficulty of collecting waste in marginal neighborhoods with
limited access, city planners devised a program to improve the trash collection service
while providing a source of income to these poor communities.
91. The city pays local residents to gather waste in plastic bags. Initially they were
paid in bus tokens, but are now paid with bags of food. Curitiba is located in an area
surrounded by agricultural activities and these bags of food constitute surplus production
that is sold to City Hall at below market prices. The plastic garbage bags are distributed
to the population by neighborhood associations, which are paid a fee by the city
government equivalent to 10 percent of the value of a bus token per bag. The price per
kilogram that the city is paying for garbage collection by residents is equivalent to that
paid to a private company, yet the residents reap greater gains.
92. Another program that addresses socioeconomic and waste management objectives
is the "Trash that isn't Trash" program. With a strong publicity campaign, planners
convince residents to separate their trash into organic and inorganic waste. The
recyclable waste is collected by a private contractor once a week, and taken to a
processing center owned by the city. The facility employs homeless people and
recovering alcoholics to sort the trash into different types of materials. The trash-
purchase scheme and the "Trash that isn't Trash" program are linked; the proceeds from
sale of the recycled materials go to finance the purchase of food given in exchange for
trash.
The Role of Leadership and Continuity
93. Much of Curitiba's environmental management success is attributed to Mayor
Jaime Lerner, who provided the political backing for many of the innovative programs
mentioned above. However, the role of IPPUC has been very important in providing
continuity.
24
94. Lerner, an architect, began his work with Curitiba city planning as president of
IPPUC in 1968-69. He continued to support IPPUC after being elected to his first term
as mayor in 1971. In addition, he made the explicit political decision to initiate the first
stages of implementation of the Curitiba Master Plan. This period established IPPUC's
role of strategic coordination and guidance within the city's administration, and
developed an approach to urban management based on the constant interplay between
planning and implementation activities.
95. Though Lerner's three terms as mayor were nonconsecutive, work by
administrations with different priorities did not reverse the policies and directives of the
master plan. IPPUC was largely responsible for maintaining this continuity despite the
fact that its president serves as an appointee of the mayor in office. IPPUC's
objectivity, technical excellence, and public image of service contribute to the
institution's enduring influence. The success of its planning function is also due to its
ability to affect resource allocation.
CONCLUSION
96. Several elements influence the formulation of a successful environmental policy
and consequently an effective Environmental Government Institution. It is virtually
impossible to isolate them, for local conditions and particularities such as management
styles and staff morale may play a major role in the success of any organization. The
purpose of this paper, however, is to identify some basic elements that may assist
policymakers in designing and shaping the objectives of an EGI. In addition, it seeks to
present cases in which these elements are clearly displayed. Instead of providing a final
answer to the question of how to build a successful EGI, the paper intends to stimulate
debate on the topic. Nonetheless, it is clear that further research in this topic is needed.
The complexities and dynamics related to the construction and functioning of an EGI
make this an evolving process. The need for further study is particularly evident when
attempting to introduce the findings of this work into a country-specific context.
97. This paper presents a conceptual framework which identifies three key elements
that should dominate environmental policymaking in developing countries. First,
policymakers should recognize that environmental problems are cross-sectoral in nature.
Translating this recognition into action means, that at a minimum, an EGI has to be
capable of influencing the different sectors of the economy, be staffed with a multi-
disciplinary team, and take part in overall development planning.
98. This leads to the second element. Environmental planning plays a major role in
any cost-efficient and successful environmental policy. It centers on prevention rather
than correction and cleaning up. It takes into account complementarities and tradeoffs at
an early stage. It builds a regulatory framework that is flexible, and benefits from cost-
saving approaches such as market-based incentives and stakeholder participation. It
25
facilitates active public participation in the overall development planning, and fosters
understanding of objectives and regulations. Finally, the third element is the EGI's
capacity to earn resources to fulfill its mandate and to influence resource allocation.
This is crucial in the linkage between planning and implementation.
99. The three basic elements are present in the institutions studied in this paper. For
example, regarding natural resource management in Colombia, the use of the Salvajina
dam offers a clear illustration of cross-sectoral complementarities. This multipurpose
project generates electricity, prevents floods, and assists in the dilution of waste loads.
On the urban side, Curitiba's Passauna Park fulfills functions such as flood prevention,
watershed protection, and provision of amenities. As the case studies indicate, part of
the success of the three institutions analyzed here can be explained by the fact that all of
them are able to take advantage of the cross-sectoral nature of environmental issues.
100. This success does not occur overnight. In fact, as illustrated by the analysis, all
three institutions engage in detailed studies and planning prior to designing solutions.
CVC and CORNARE, for example, involve communities early on in the planning stage
(e.g., on CVC's Programa de Ordenaci6n y Desarrollo Integrado de Cuencas
Hidrogrdficas and on the composition of CORNARE's Board of Directors). Curitiba
guarantees a certain degree of continuity through IPPUC, and involves the community at
least in the implementation stage. All three case studies indicate that the responsible
institutions have a medium-term vision of economic growth subject to environmental
constraints. Rather than short-run trouble shooting, they seem to be interested in
slowing environmental degradation over time.
101. Finally, as the case studies indicate, a common characteristic among the different
institutions is that all of them manage to gain sufficient resources to perform their
functions, and that they effectively influence resource allocation. In the Colombian case,
financial resources mainly come from a direct benefit to the household-the sale of
electricity, various service charges, and different taxes and fees. In the case of Curitiba,
it is harder to isolate a particular EGI, since the environmental agenda is intertwined at
all levels of government. Nonetheless, revenue sources include taxes, service charges,
and the sale of recyclable materials, among others.
102. Regarding resource allocation, CORNARE and CVC influence the environrnental
programs of local governments, for they cofmance such activities. In the case of
Curitiba, environmental planning is reflected in project implementation due to IPPUC's
ability to influence resource allocation to the executing units.
103. Concern with the environment has traditionally been dominated by the developed
countries. These countries are now starting to realize that a hastily designed environ-
mental policy based on corrective strategies may not be cost effective. Recent estimates
26
provide staggering figures for the costs of different aspects of environmental policies.6
This paper proposes an alternative route taken by some institutions in Latin America that
may help policymakers address environmental issues in a more cost-effective manner.
16. For example, Cropper et. al. (1992) estimates US$35 million per applicator cancer case avoided due
to U.S. pesticide regulation. Citing other studies, Bartlett (1994) gives values for different aspects
connected to environmental regulations. For instance, he indicates that without the loss of productivity
associated with environmental regulations between 1972 and 1991, real output in the U.S. would have
been more than US$700 billion higher.
27
<
ANNEX
LATIN AMERICAN GOVERNMENT INSTITUTIONS
ARGENTINA:
A decree in November 1991 created the National Secretary of Natural Resources
(SRNAH), a cabinet level position reporting to the president. It also placed three
secretaries below (SRNAH): Subsecretary of Natural Resources, Subsecretary of Human
Resources, and Subsecretary of National and International Relations. Coordination of
different levels of government takes place through the Federal Council for the
Environment (COFEMA). SRNAH has control over The National Presidential
Commission on the Environment, National Park Administration, Direction and Natural
Resources, Cattle and Fishing Industries, and the National Institute of Science and
Hydrological Technology. The major functions of SRNAH have been park
administration and water management.
BOLIVIA:
In December 1990, the National Environmental Fund (FONAMA) was
established under the Office of the President to coordinate and administer national and
external financial assistance for the environment. In January 1991, the Government
established a National Environmental Secretariat (SENAMA) under the Office of the
President. SENAMA is attached directly to the presidency, and its secretary is a
member of the National Economic Council. The secretariat is responsible for
formulating, monitoring, and coordinating implementation of environmental policies, but
it has no implementation role. The implementing agencies are the sectoral ministries,
subnational departments, regional development corporations, and other entities such as
NGOs and municipalities. In 1992 an environmental law was passed that focuses on the
need for environmental impact assessments of investments and for creating the National
System of Protected Areas.
1. The information provided in this annex was assembled during the summer of 1994 based on available
Bank reports. Some of the country summaries may be outdated as these institutions are evolving at a
rapid pace.
29
BRAZIL:
In February 1989, Brazil created a single national environmental agency, the
Brazilian Institute for Environment and Renewable Natural Resources (IBAMA). This
agency was placed under the Ministry of the Interior, and divides its responsibilities
among five directorates. It also acts as the secretariat of the National and Environmental
Council (CONAMA). The main functions of IBAMA and its agencies are to assist the
president in shaping environmental policy, regulate and evaluate this policy, create state
agencies to execute programs, and control activities that could degrade environmental
quality. One of the major environmental programs that the government has focused on
is the National System of Conservation Units to protect biological resources.
CHILE:
A 1991 decree created Chile's National Environmental Commission (CONAMA)
an environmental agency attached to the Ministry of National Resources. CONAMA
consists of: (a) the Committee of Ministers (chaired by the Minister of Natural
Resources); (b) the Operational Committee, composed of all ministers with
environmental competencies; (c) the Technical and Administrative Secretariat headed by
an executive director appointed by the president of Chile; and (d) the regional and
provincial environmental commissions chaired by local government authorities and
comprised of the directors of the Ministerial Regional Secretariat and representatives of
community and social organizations. The two most pressing natural resource issues that
CONAMA has been addressing are forest conservation and pollution affecting fisheries.
COSTA RICA:
The Ministry of Natural Resources, Energy, and Mines (MIRENEM) was
designed in 1986, but was not formally approved by the Congress until 1990. There is
no general environmental law, but the legislative assembly has a draft environmental
code before it now.
ECUADOR:
Ecuador has a comprehensive environmental law regulating environmental
pollution, but norms regarding other natural resources are sectoral. At the national
level, the Interinstitutional Committee for the Protection of the Environment (CAAM) is
responsible for environmental policy formulation and coordination, while other agencies
have control over operational aspects of environmental protection. The Office of the
Environment within the Ministry of Energy and Mines has the authority to monitor the
environmental impacts of oil exploration, power generation and mining. The Natural
30
Resources Subsecretariat of the Agriculture Ministry deals with forestry issues and
management of conservation units.
EL SALVADOR:
In June 1991 CONAMA, an interministerial coordinating committee that
formulates environmental policy, was formed with the Secretaria de Medio Ambiente
(SEMA) as its Executive Secretariat. CONAMA was headed by the minister of
agriculture and reported directly to the president. SEMA began to tackle the problems
of solid waste disposal, air and water pollution, and deforestation, but it does not
participate in the national planning and development process. A new proposal to place
SEMA within the Ministry of Planning and to restructure the role and composition of
CONAMA is pending approval.
GUATEMALA:
The Law of Protection and Improvement of the Environment, enacted in
November 1991, creates the National Commission for Protection and Improvement of
the environment under the control of an executive agency. The commission is directly
dependent on the president, and consists of a coordinator appointed by the president, and
a technical advisory council which consists of representatives from several ministries and
NGOs. The commission's function is to help coordinate all national government actions
for the protection and improvement of the environment. One of the commission's main
tasks is to coordinate and give advice in all activities of the National Council of Urban
and Rural Development.
MEXICO:
In May 1992, the Secretaria de Desarrollo Social (SEDESOL) was created with
federal environmental protection as one of its main responsibilities. SEDESOL reports
to the president, and is broken into two subagencies: the National Instituteof Ecology
(INE) and the Federal Guard for the Protection of the Environment (PROFEPA). INE is
in charge of formulating policy and setting national standards and norms, while
PROFEPA is in charge of enforcing the mostly control-and-command legislation. In
general, SEDESOL is responsible for setting fuel quality and vehicle emissions standards
and the operation of air quality monitoring systems. Responsibility for national parks,
reducing water pQllution, and preservation of maritime species are controlled by separate
individual ministries.
31
VENEZUELA:
Policy implementation and management of the environment are addressed in the
1976 Organic Law on Central Administration, which created the Ministry of
Environment and Renewable Natural Resources (MARNR). MARNR, with headquarters
in Caracas and delegations in each state, is responsible for the enforcement of
environmental standards and the preparation of most environrnental and land-use plans at
the national and regional levels. MARNR is also responsible for management of much
of the publicly owned natural resources, including inland waters, forests and protected
areas. Under a 1991 decree MARNR became responsible for environmental screening of
virtually all new development projects. There are three autonomous services that are in
charge of protecting wildlife, national parks, and the undeveloped Amazon region.
32
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35
LATEN DISSEMINATION NOTES
No. Title Date Author
1 Sustainability, Yield Loss and Imediatismo: April 1993 Robert Schneider
Choice of Technique at the Frontier Gunars Platais
David Rosenblatt
Maryla Webb
2 The Potential for Trade with the Amazon in April 1993 Robert Schneider
Greenhouse Gas Reduction
3 Land Abandonment, Property Rights, and Agricultural April 1993 Robert Schneider
Sustainability in the Amazon
4 The Urban Environmental Challenge in Latin America August 1993 John Dixon
5 An Analysis of Flooding in the Parana/Paraguay September 1993 Robert J. Anderson, Jr.
River Basin Nelson da Franca Ribeiro
dos Santos
Henry F. Diaz
6 Ecology and Microeconomics as "Joint Products": October 1993 John A. Dixon
The Bonaire Marine Park in the Caribbean Louise Fallon Scura
Tom van't Hof
7 Forest Management and Competing Land Uses: October 1993 Nalin M. Kishor
An Economic Analysis for Costa Rica Luis F. Constantino
George Guess
8 Pueblos Indigenas y Desarrollo en America Latina December 1993 Jorge E. Uquillas
Jean-Carlo Rivera
9 Prospects for Improved Management of Natural December 1993 Robert Kirmse
Forests in Latin America Luis Constantino
George Guess
10 Assessing the Conservation Potential and Degree February 1994 David M. Olson
of Threat Among Ecoregions of Latin America and Eric Dinerstein
the Caribbean: A Landscape Ecology Approach (World Wildlife Fund)
(Available in English and Spanish)
11 People's Participation in Environmental Assessment November 1994 William L. Partridge
in Latin America: Best Practices
(Available in English and Spanish)
For back issues of the Environmental Unit (LATEN) Tel. (202) 473-9379
above, please contact: Latin America and the Caribbean Fax. (202) 676-9373
Technical Department
The World Bank
1818 H Street, N.W.
Washington, DC 20433
U.S.A.