Pruning the money-tree to ensure sustainable growth: facilitating sustainable development through market-based instruments

Abstract

South Africa’s pristine landscapes and natural resources are under significant threat. This is not subject to debate, but what is, is how to implement a regulatory regime to deal effectively with these environmental realities – a challenge complicated by competing socio-economic imperatives; significant capacity and resource constraints and the need to redress past inequalities, efforts to increase access to land and natural resources as well as perceptions that the environment is an elitist concern. Many countries are exploring alternative ways of providing for effective environmental management such as: co-opting civil society participation; creating markets for environmental goods and services; and using market-based instruments (MBI). The latter form the focus of this article as the National Treasury recently released a draft policy paper for discussion titled A Framework for Considering Market-Based Instruments to Support Environmental Fiscal Reform in South Africa 2006 (Draft Policy Paper).