Developing investment strategies for national environmental action plans

As with other aspects of environmental concern (i.e. biodiversity conservation), it is widely recognised that an important aspect of intervention strategies is to find and support means for increased private and public sector investment in environmental issues. A central aspect of a National Environmental Action Plan (NEAP) is the current and future environmental investment strategy. Investment in environmental management depends to a large extent upon government incentives and dis-incentives to business and industry. Beyond this point, new forms of relationship between government agencies and private sector business are required which enable flexible and creative market responses to current environmental situations, whether phasing out old polluting industries or providing new incentive schemes to encourage business development in new environmental technologies.

Environmental financing must come primarily from domestic sources. Economic instruments should play a more important role in terms of motivating the polluters to reduce pollution at their own costs (the polluter-pays principle), as well as promoting sustainable development and integration of environmental concerns into sectoral policies and raising revenues for national environmental funds and other forms of public and private financing.

External financing will remain very important in those countries that have limited domestic funding sources. Donor countries and international financial institutions (IFIs) should take a more proactive approach and expand their support to these countries, especially in contributing to financing pilot and demonstration projects in response to the increasing demand. External financing will also be important to help countries to achieve global transboundary environmental objectives.