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Role of Economic Policies in Protecting the Environment: The Experience of Pakistan

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  • Rashid Faruqee

    (Agriculture and Natural Resource Division of the World Bank, Washington, D. C.)

Abstract

Economic policies that ensure efficient allocation of resources is a necessary, but not a sufficient condition for creating appropriate environmental incentives. Environment-specific policies are also needed to correct market failures leading to environment problems. Two types of policies can be used to deal with environmental problems—command and control policies and incentive- or market-based policies. Command and control policies involve government mandating of environmental quality standards on emissions, technology type, or input use. Incentive- or market-based policies use prices to try to affect pollution and resource use. Despite the advantages of marketbased approaches, Pakistan, like many other countries, mostly followed control policies. But these policies have often failed to achieve results because regulating institutions lack the financial and technical resources to implement these policies effectively. Pakistan’s brown environmental problems include industrial waste water pollution, domestic waste water pollution, motor vehicle emissions, urban and industrial air pollution, and marine and coastal zone pollution. Economic policy failures are contributing significantly to many of these problems. Green environmental problems affect irrigated agriculture, rainfed agriculture, forests, and rangelands. In irrigated agriculture, economic policies, such as subsidies on irrigation water, have provided incentives for farmers to over use water in their production practices, thereby exacerbating the problem of waterlogging and salinity. Deforestation and rangeland degradation have resulted, in part, due to lack of property rights in communal forests and lack of incentive for local communities to participate in forest management decisions.

Suggested Citation

  • Rashid Faruqee, 1996. "Role of Economic Policies in Protecting the Environment: The Experience of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 35(4), pages 483-506.
  • Handle: RePEc:pid:journl:v:35:y:1996:i:4:p:483-506
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    File URL: http://www.pide.org.pk/pdf/PDR/1996/Volume4/483-506.pdf
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    References listed on IDEAS

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    1. Ahmad, M. & Kutcher, G.P., 1992. "Irrigation Planning with Environmental Considerations. A Case Study of Pakistan's Indus Basin," Papers 166, World Bank - Technical Papers.
    2. Munasinghe, M., 1993. "Environmental Economics and Sustainable Development," Papers 3, World Bank - The World Bank Environment Paper.
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    Cited by:

    1. Wichelns, Dennis, 1999. "An economic model of waterlogging and salinization in arid regions," Ecological Economics, Elsevier, vol. 30(3), pages 475-491, September.
    2. Wichelns, Dennis, 2003. "Enhancing water policy discussions by including analysis of non-water inputs and farm-level constraints," Agricultural Water Management, Elsevier, vol. 62(2), pages 93-103, September.

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