Alleviation of poverty
Economic incentives for improved environmental management

3.1 Alleviation of Poverty
Objective:

To improve human welfare and effective environmental management through poverty alleviation.

Poverty is one of the root causes of environmental degradation in Malawi and is at the core of the government's development agenda for the foreseeable future. Its alleviation is critical to natural resource conservation, protection and sustainable utilization.

3.1.2 Improve and expand human resources through increased public expenditures for education, health and other social services.

3.1.3 Expand employment opportunities through an enabling environment for private sector entrepreneurship and initiative.

3.2 Economic Incentives for Improved Environmental Management

Objective:

To ensure that individuals and economic entities are given appropriate incentives for sustainable resource use and environmental protection.

(a) Economic incentives can often induce changes in the behavior of people and economic entities more effectively than enforcement.

(b) Priority will be given to establishing an enabling economic environment in which market prices provide appropriate incentives for sustainable natural resource use and environmental protection.

(c) Implementation strategies will focus more on establishing an appropriate economic environment to promote sustainable natural resource use and less on traditional government-run development projects.

(d) Prices should reflect opportunity costs and externalities.

(e) Market failure with regard to the pricing of natural resources will be corrected through the assessment of user fees and taxes or the use of tax reductions and other incentives.

(f) Government departments and local communities shall have the right to revenue generated from sustainable utilization of natural resources on public and customary lands in order to provide positive incentives and self-finance for such continued use.

(h) Once the private sector has acquired land, they shall liaise with appropriate ministries/departments in the sustainable utilization of natural resources on the land.

3.2.1 Establish the economic values of natural resources so that incentives can be introduced to equate market prices or user fees with these economic values.

3.2.2 Ensure that the opportunity cost of using natural resources and the economic values of conserving natural resources are reflected in market prices or non-market mechanisms used to allocate or regulate their use and conservation.

3.2.3 Offer land users (private sector, government departments and local communities) a reduction on their land or property taxes or rents for soil and water conservation methods, agro-forestry techniques, good husbandry practices, development and maintenance of tree plantations or woodlots, or use of appropriate livestock stocking rates.

3.2.4 Improve the capacity of the tax and land administration to effectively collect land rents and property taxes and to handle the proposed incentives.

3.2.5 Develop the capacity in all government departments for natural resource management to formulate and implement pricing policy that equates the market prices or user fees for natural resources to their economic values (opportunity costs).

3.2.6 Establish the price of inorganic fertilizer, by carefully weighing the tradeoff between its contribution to soil fertility and macro-economic constraints.

3.2.7 Establish and manage an Environmental Fund generated from sustainable utilization of natural resources and any other sources, and utilize the Fund to facilitate environmental management at the local level.

3.2.8 Ensure that the penalty for non-sustainable use of natural resources exceeds the financial benefit accruing to the user.

3.2.9 Define property rights of natural resources on customary and private land.