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 significantthreat. This is not subject to debate, but what is, is how to implement aregulatory regime to deal effectively with these environmental realities – achallenge complicated by competing socio-economic imperatives; significantcapacity and resource constraints and the need to redress past inequalities,efforts to increase access to land and natural resources as well as perceptionsthat the environment is an elitist concern. Many countries are exploringalternative 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-BasedInstruments to Support Environmental Fiscal Reform in South Africa 2006(Draft Policy Paper).