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Ramkumar Bendapudi and Gerard D'Souza
West Virginia University
Doctoral Student and Graduate Research Assistant
Div. of Resource Management
Professor Gerard D’Souza
Div. of Resource Management
for Discussion Roundtables 1, 4, 7, 8, 9, 22, 24, 26, 28, 33, and 53
Table of Contents|
The authors are a doctoral student and graduate research assistant and a professor, respectively, Agricultural & Resource Economics program, West Virginia University, USA.
Over the past decade or so, the underlying emphasis of U.S. farm policy has changed dramatically. The earlier emphasis was on price supports and a commodity orientation More recently, the emphasis has shifted to broader societal goals including resource conservation and environmental protection. Simultaneously, worldwide, there is increasing emphasis on decision-making consistent with sustainable development principles. This paper analyzes the extent to which U.S. farm policy is consistent with the growing emphasis on sustainable development. To achieve this objective, first an inventory of current conservation-related policies is undertaken. Next, various sustainable development measures are reviewed. Finally, the so-called Bellagio principles are used to determine consistency of U.S. farm policy with sustainability principles. The Bellagio principles, often used to conduct objective assessments of sustainable development, were articulated by an international body that convened in Bellagio, Italy, in 1996. Our analysis reveals that while current conservation policies are consistent with sustainable development principles in the short run, they appear to be contradictory in the long run.
U.S. Conservation Policies and Sustainable Development Principles: Consistency or Contradictory?
Over the past decade or so, the underlying emphasis of U.S. farm policy has changed dramatically. The earlier emphasis was on price supports and a commodity orientation. More recently, the emphasis has shifted to broader societal goals including conservation and environmental protection.
Many entities at different levels are involved in formulating and executing conservation policy. In such an environment, the goals and features of individual programs often conflict and/or overlap. Furthermore, program goals are not always consistent with long term needs, raising questions about the sustainability of the resource base that these programs are intended to address. To shed light on these issues, two elements are essential. First, an inventory of current conservation-related policies is needed. Next, one must critically evaluate the features of these policies (the "what is") against some objective measure of performance (the "what should be"). This analysis is designed with these objectives in mind.
Key Characteristics of Conservation Programs
Table 1 provides a bird’s eye view of the features of various current conservation programs. From the policy matrix it can be seen that each program consists of multiple objectives with a fair amount of overlap. For example, the objectives of the most widely studied Conservation Reserve Program (CRP) include reduction of soil erosion, sedimentation reduction, soil and water quality improvement, establishment of wildlife habitat, and enhancement of forest and wetland resources. As it turns out, the goals of the CRP, the Conservation Technical Assistance program (CTA), and the Conservation Farm Option (CFO) are almost identical and are directed to similar target groups. Lack of properly defined goals and overlapping goals complicates impact assessment and compounds administrative costs. Programs like Wetlands Reserve Program (WRP) and Wildlife Habitat Incentives Program (WHIP) are more effective since their goals are clearly defined and are oriented towards a larger end.
Another problem arises due to the fact that not all program objectives are clearly defined, which impedes quantification. For example, soil erosion and sedimentation reduction, objectives shared by several programs, are only means towards the larger objective of soil and water quality improvement. To address this problem, Potter (1996) recommends that policy makers take a more sophisticated view of the problem, for instance, focusing on preserving soil quality rather than preventing soil erosion, and, simultaneously, prioritize issues.
Some of the programs involve voluntary participation of the individuals or farmers with 10-15 year contracts. Even though such programs appear to contribute toward the specified goals, the fate of the achieved objectives during the post program period is not known. If the opportunity cost of the conserved land increases due to increased food demand, the land owner may opt to convert the land for agricultural purposes thus wasting resources that go into such programs. Osborn's (1993) observation that the expiration of CRP contracts raises concerns over the extent of conservation, wildlife and environmental reversals that would occur if commodity markets were favorable needs more research.
Hence, programs like Environmental Quality Incentives Program (EQIP) where the soil, water and other resource concerns are addressed through the implementation of a conservation plan which includes structural, vegetative and land management practices are more effective and have sustained benefits even after the expiration of the program. The importance of knowledge of such management practices during the post program period can be seen from the results of a study conducted by Gilley et al. (1997) where it was shown that once an area was tilled and left in fallow condition, the conservation and soil quality benefits derived from the CRP may rapidly decline and that a no-till management maintained levels of soil quality similar to those of CRP by reducing losses of soil organic matter associated with tillage.
In the case of highly erodable land, the participating land owners can enter into conservation easements on permanent basis similar to Wetlands Reserve Program. Therefore depending on the type of land and problem, the programs need to be re-designed.
Sustainable Development Measures
Dickstein et al. (1997) note that the concept of sustainable development explicitly raises preservation of natural resources and environment to an equal status with the other goals of the developmental process. They further state that equity and social justice issues underlie sustainability which is concurrent with Campbell’s (1996) statement that sustainable development expands the concept of equity by forcing us to consider development that is compatible across nations, generations and even species. Toman, Lile, and King (1998) propose the concept of safe minimum standard which posits a socially determined dividing line between moral imperatives to preserve and enhance natural resource systems and the free play of resource tradeoffs. To satisfy the intergenerational social contract, the current generation would rule out in advance actions that could result in natural impacts beyond a certain threshold of cost and irreversibility. This concept depends more on society’s value judgement rather than on the estimated benefits and costs of using a natural resource system.
Some of the questions that are difficult to answer include: Which side are we of this line? Do the conservation programs that are being implemented indicate that we have crossed the threshold point? Are we in a position to satisfy this intergenerational social contract?
A Cross Section of Sustainability Definitions
According to Farell & Hart (1998), a good working definition of sustainability seems to be the one given by World Conservation Union, which considers sustainability as "improving the quality of human life while living within the carrying capacity of supporting ecosystems." They chose this definition as it brings together the two conflicting conceptions about sustainability, the critical limits view and the competing objectives view. The former concerns the preservation of ecosystems and consideration of the limits that they impose on the number of people in the world and their mode of living. The latter focuses on balancing social, economic, and ecological goals and thus aims at meeting a broad range of human needs and aspirations, including health, literacy and political freedom as well as purely materialistic needs. Toman, Lile, and King (1998) consider sustainability to involve not just the conditions in the economy, but the underlying ecological and environmental systems in which economic activity is embedded, and the larger social system of which the economy is a part. Crosson (1992) states that concern about sustainability reflects a sense of intergenerational obligation.
For example, sustainable agriculture has (a) a temporal dimension (i.e., the indefinite future); (b) a spatial dimension (i.e., the world as a whole); (c) a quantitative dimension (i.e., the demands placed on the system now and in the future); and (d) a normative dimension (i.e., the need to meet those demands over time at economic and environmental costs that society deems to be acceptable).
The Brundtland Commission report defined sustainable development as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs" (WCED, 1987). Ikerd (1990) considers sustainability by definition as a long-term concept. According to him sustainable systems must be resource conserving, environmentally compatible, socially supportive and commercially competitive.
Finally, Farell et al. (1998) summarized the concepts that were reflected in most of the definitions as follows: (a) that natural resources are finite and there are limits to the carrying capacity of the earth’s ecosystem; (b) that economic, environmental and social goals must be pursued within these limits; and (c) that there is a need for inter and intragenerational equity.
Environmental Decision-Making Tools
Arguments for modification of national income accounting systems to include environmental goals have been gaining support over the years. As pointed out by Hecht (1999), exclusion of the imputed value of non-marketed environmental goods and services in environmental accounts would result in accounts that reflect only the costs of protecting the environment without in any way reflecting the benefits. This brings into focus whether investment in conservation programs should be treated as a liability or cost to be borne by the present generation for depleting the existing resources or, alternatively, as an investment to reap constant returns in future by reducing further irreversible losses of the current resources.
While there are a number of tools in environmental decision-making vis-à-vis the private-sector management, extension of such tools for application to preservation versus development decisions has many limitations. Many problems exist in assessing such programs like conservation or preservation programs. Defining the objectives of such programs, evaluating the benefits, assessing the impact of the benefits on the society, intergenerational decision making which includes the problem of the discount rate choice and identification of the true societal preferences from the individual preferences have always posed a daunting task for resource managers.
Current tools in environmental decision-making include: (1) Environmental Impact Assessment (EIA); (2) Environmental Management Systems (EMS); and (3) Life Cycle Assessment (LCA). These tools are briefly described in the Appendix.
Sustainability Criteria in Environmental Decision-Making Tools
Assignment of monetary values to non-market uses and existence values has always challenged resource economists. Perhaps, assessment of the true benefits of conservation programs needs a different perspective. To enable sustainability indicators to better capture the true benefits (and costs) of these programs, they should incorporate the following principles.
Cummings and Norton (1974) in their discussion of irreversibility criteria outline the difficulties associated with conceiving irreversible investment options, except for extinct species, which they do not consider as useful. The importance of incorporating the extinction of a species or resource in benefit evaluation was illustrated by Chavas (1993). The author posits that the possibility of extinction has a negative (positive) impact if and only if the expected future benefits are positive (negative). This implies that the possibility of extinction has the undesirable characteristic of decreasing the expected present value of benefits whenever future expected benefits are positive. It indicates the importance of preservation of a species or resource which has no current benefits but has potential for positive future benefits. This proposition, through its extinction theory, embodies the critical limits view of sustainability, which concerns the preservation of ecosystems and respect to the limits that are imposed on their use.
Cross Disciplinary Approach
Common and Perrings (1992) developed a dynamic model through a cross disciplinary approach by combining economic and ecological concepts of sustainability. They conclude that if a self-regulating economic system is to be ecologically sustainable, it should serve a set of consumption and production objectives that are themselves sustainable, which is against the principle of consumer sovereignty that privileges the existing preferences and technologies. They suggest that an ethical shift away from the values that privilege consumer sovereignty may be a necessary feature of an ecological economics of sustainability.
This leads to the deontological approach (or Kantian approach) according to which rational action places moral duties – including duties to future generations – before the fulfillment of one’s own personal desires. Howarth (1995) applied the deontological approach to the question of intergenerational fairness and suggests that sustainability criteria should be imposed as prior constraints on the maximization of altruistic preferences concerning the distribution of welfare between present and future generations. This approach is similar to the Safe Minimum Standards approach as both imply a stronger presumption against risky actions than standard models of decision making under uncertainty.
Bellagio Principles and Sustainability Issues
The so-called Bellagio principles were developed in November 1996 by an international group of measurement practitioners and researchers at the Rockefeller Foundation’s Study and Conference Center in Bellagio, Italy. These principles serve as guidelines for the whole assessment process including the choice and design of indicators, their interpretation and communication of the result. They are intended for use in starting and improving assessment activities of community groups, non-government organizations, corporations, national governments and international institutions.
These principles were built on four basic concepts: First, those developing a set of indicators must have a vision of sustainability that is appropriate for the particular place and people involved. Second, the indicators should reflect a holistic view of the linkages between the economic, environmental, and social aspects of development; in addition, they should consider both inter- and intragenerational equity, together with the ecological conditions that life depends on, and address long-term effects but in a practical way. Third, the process of developing indicators should be open, inclusive, and take advantage of existing techniques and technologies for effective communication. And fourth, the developers need to conduct ongoing assessments of the quality of the indicators in the set. Although the exact process has varied, many of the sustainability indicator projects undertaken to date have relied on these general principles.
The Bellagio principles bring together all the definitions of sustainable development into one body and the social indicators developed by these principles represent a measure towards sustainability. The three assessment tools mentioned previously do not appear to be based on the Bellagio principles, and, hence, are inadequate for use in programs concerned with preservation versus development. In particular, they fall short in making the long-term assessments (or "adequate scope") required by the Bellagio principles. Figure 1 illustrates the essential features that constitute the Bellagio principles, contrasting them with the current assessment tools.
Bellagio Principles and Conservation Programs
It is easier and less costly to protect high quality habitats than it is to expend energy and funds to restore these areas once they become degraded (Van Haveren et al., 1997). This statement implies the consideration of extinction principle in the decision making process. The holistic perspective underlying the Bellagio principles encompasses this extinction concept by incorporating both the positive and negative consequences of human activity in a way that reflects the costs and benefits for human and ecological systems, in both monetary and non-monetary terms. This principle also implies the need for an inter-disciplinary approach to consider the social, ecological and economic well being of the subsystems, their state and direction and rate of change of that state. Most of the current programs have multiple objectives. But despite the politically attractive list of multiple objectives, eligibility criteria for the CRP program are largely based upon soil erodability (Young et al., 1994). They observed that the cost ineffectiveness of the 1985 CRP was due to lack of erosion targeting and an overwhelming emphasis on meeting acreage enrollment targets at the expense of other objectives while the 1990 program was more cost effective as it was mainly targeted to areas vulnerable to water- as well as soil-quality damage. One could argue that an inter-disciplinary approach is needed for proper identification of site-specific objectives as well as for cost effectiveness.
Both, intergenerational equity and intragenerational equity are based in part on concerns about the morality of some people living well at the expense of others (Farell et al., 1998) (reflecting the deontological approach). Even though conservation programs take intragenerational equity into consideration, under the present contractual method of implementation of some of the schemes, the question of intergenerational equity still remains. The ‘adequate scope’ principle dictates that the adoption of a time horizon should be long enough to capture both human and ecosystem time scales to respond to needs of future generations. The time horizon of most of the contracts range from 10-15 years and, hence, even if the programs meet the objectives of profitability in the short run, the expiration of the contracts and uncertainty for the continuation of the ‘program gains’ in the post-program decision making period makes long run sustainability a suspect.
The paper draws attention to some of the long term implications of various conservation programs. It was observed that most of the programs have overlapping objectives. In addition, selection of a target area is often based on a single criterion like soil erosion (in case of the CRP, for instance), and is not tailored to meet unique location-specific characteristics. An inter-disciplinary approach is needed to identify the target areas based on the specific locational problem. Hence, program implementation should be flexible in terms of targeted objectives along with priority areas identified (consistent with the Bellagio principles). Another issue is whether the benefits accrued from present conservation programs under the contractual method of land retirement are sustainable over the long run. Consolidation of the achieved objectives in the post-program period should also be considered. This would necessitate that the time horizon for program assessment be expanded to include the post-program period.
The various conservation programs reflect the awareness of sustainability concepts, that natural resources are finite, that there are limits to the carrying capacity of the earth’s ecosystem and that economic, environmental and societal goals need to be pursued within these limits. However, the incorporation of intergenerational equity into the program objectives seems to be inadequate. Thus, while current conservation policies are consistent with sustainable development principles in the short run, they appear to be contradictory in the long run.
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Figure 1. Development of Sustainability Measures for Assessment of Conservation Programs
Table 1. Characteristics of Current Conservation Programs
Brief Description of Current Environmental Assessment Tools
Environmental Impact Assessment (EIA)
It establishes a systematic procedure for incorporating environmental considerations into decision making.
The procedures created by EIA enable the information about the environment to be provided to the decision-making authority and the public in a clearly defined way.
it should happen at the earliest opportunity in the decision-making process and before a consent decision is made.
- Iterative- the information it provides feeds back into the EIA process and the design process of the activity concerned.
Environmental Management System(EMS)
-It is systemic in providing the corporate management with stable system elements to increase the protection of the environment.
-It is priority driven
-It is procedural in the systematic, objective and periodic evaluation of the EMS.-It is iterative since the audit enables an evaluation of the achievements against objectives and imposes corrective actions in a continuous improvement process.
-It is informational for both internal (management decisions) and external decision-making (especially in EMAS)
-It is also third party reliant as accredited independent verifiers (EMAS) have to check that the system is valid and that the data generated are reliable.
Life Cycle Assessment (LCA)
- Goal definition and scope: This involves clearly defining the purpose of the LCA study and delineating scope consistent with that purpose.
- Inventory analysis: This step involves compilation and quantification of relevant inputs and outputs for a given product system throughout its life cycle.
- Impact assessment: This aims at understanding and evaluating the magnitude of the potential environmental impacts of a product system using the results of step two.
- Improvement assessment or interpretation: It evaluates the results of the impact assessment process to look for opportunities for environmental improvement.
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