3.0 Macro-Economic Policy Issues and Instruments
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.
Guiding Principles:
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.
Strategies:
3.1.1 Enhance agricultural productivity for smallholder farmers in
order to promote sustainable use of natural resources.
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.
Guiding Principles:
(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.
Strategies:
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.
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