CAPÍTULO IV: MARCO PROPOSITIVO
4.5 Plan Financiero
4.5.17 Tasa interna de retorno:
As highlighted in Chapters 7 and 8, the water consumption of flower farms is very intensive. There is also the risk of discharge of chemical and pesticide residues to surface and ground freshwater resources. Moreover, green waste disposal can adversely affect neighbouring smallhold farmers and the environment at large. Flower growing that uses soil as medium rather that hydroponics has adverse impact on the sustainable fertility of the soil as discussed in Chapter 8. Although the good practices of hydroponics and substituting pesticides by Integrated Pest Management (through predatory mites) in some farms are commendable, the magnitude of success towards sustainable floriculture depends upon scaling them up in all farms.
Initially, Environmental Impact Assessment was not a precondition for the issuance of licence because it was relegated as an issue that can be addressed by the Ethiopian Environmental Protection Authority and the investor.101 As the interview with Ato Legesse Geleta (Oromia Investment Commission) indicates, events have developed in the right direction
and Environmental Impact Assessment is required before the issuance of investment permits.102
The interview with the head of the region’s environmental protection agency also verifies this fact. Ato Mohammed Ibrahim notes that “although earlier practices were loose, land has not been granted for any economic activity without prior Environmental Impact Assessment during the last two years”.103
____________
As highlighted in Chapters 1 and 2, the twin objectives of investment promotion in Ethiopia, i.e. development and rising standards of living clearly transcend economic growth and include social wellbeing in the context of environmental sustainability. The balance benefits from the framework of the three interdependent (economic, social and environmental) pillars of
sustainable development and the underpinning factor of good governance104 (which is an equally
important foundation for the pillars) because it represents (public and private sector) governance, institutional capabilities (formal and informal) and resource mobilization in course of the economic, social and environmental pursuits of sustainable development. Chapter 3 examines the factors and methods that can inform the balance, and the fourth chapter deals with the institutional and governance aspects of the balance under Ethiopia’s legal framework.
60 The Investment Promotion and Environment Protection Balance in Ethiopia’s Floriculture
Notes
1
Robert E. Gallman (2003), Dictionary of American History, <http://www.encyclopedia.com/doc/1G2- 3401804013.html>, Accessed: 10 Feb. 2012.
2
Arthur C. Pigou (1932), The Economics of Welfare, Fourth Edition (London: McMillan & Co.). Part IV, Chapter XII. 3 Ibid. 4 Ibid. 5 Ibid. 6
Amaarty Sen (1985), The Standard of Living, Tanner Lectures on Human Values, Delivered at Cambridge University (March 11 -12, 1985).
7 Ibid. 8 Ibid. 9 Ibid. 10 Ibid 11
It is the notion that alcohol (as tranquilizer) can reduce the stimulant effects of khat so that the user can have sound sleep.
12
Sen’s Footnote 27 in The Tanner Lectures on Human Values: See Resources, Values and Development (Oxford: Blackwell, and Cambridge, Mass.: Harvard University Press, 1984), Introduction and essays 13-20.,
13
Sen elaborates functionings and capabilities as follows:
A functioning is an achievement, whereas a capability is the ability to achieve. Functionings are, in a sense, more directly related to living conditions, since they are different aspects of living conditions. Capabilities, in contrast, are notions of freedom, in the positive sense: what real opportunities you have regarding the life you may lead. [FN 33].
(Tanner Lectures, pages 48-49).
14
In Footnote 15 of the Tanner Lectures, Sen cites John Dewey Lectures, Journal of Philosophy 82 (1985).
15
Sen’s Footnote 16 reads: “I am grateful to Bernard Williams for suggesting this way of clarifying the distinction between well-being and living standard (though he would have, I understand, drawn the boundaries somewhat differently).
16
Sen, Tanner Lectures, supra note 6.
17
Ibid.
18
Ibid.
19
Thomas Pogge (2007), “Severe Poverty as a Human Rights Violation”, in Freedom from Poverty as
Human Rights, T. Pogge, Editor (Oxford University Press), p. 11. 20
Ibid, p. 52.
21
Polly Vizard (2006), “Pogge -vs- Sen on Global Poverty and Human Rights”, Ethics and Economics. 3(2). 22 Ibid, p. 8. 23 Ibid, p. 3. 24 Ibid, pp. 3, 4. 25 Ibid, pp. 10, 11. 26 Ibid, p. 11. 27 Ibid, p. 18.
Chapter 2. “Wellbeing” as an Objective of Ethiopia’s Investment Promotion 61
28
Peter Dauvergne (2008), Shadows of Consumption: Consequences for the Global Environment (The Cambridge & London: MIT Press) p. 222.
29
E. K. Hunt & Ralph C. d’Arge, “On Lemmings and Other Acquisitive Animals: Proposition on Consumption”, Journal of Economic Issues, Vol. VII, No. 2, June 1973, pp. 337, 338.
30
Leslie Sklair (1997), “Summary of the Culture-Ideology of Consumerism in the Third World ” in The
Consumer Society, Goodwin et al (eds), Island Press, p. 320 . 31
Ibid, page 322.
32
Leslie Sklair (1997), “Summary of The Culture-Ideology of Consumerism in Urban China” in supra
note 145, p. 323. 33
John Kenneth Galbraith, [in the Consumer Society], supra note 145, page xii.
34
Richard Wilkinson and Kate Picket (2009), The Spirit Level: Why More Equal Societies Almost Always Do Better (Allen Lane). p.4.
35
Ibid, 6.
36
Sammy Adelman and Abdul Paliwala (1993), Law and Development in Crisis (Hans Zell Publishers, Published for the Centre of Modern African Studies, University of Warwick) p. 7.
37
Vandana Shiva, (1988), Staying Alive: Women, Ecology and Development (London: Zed), p. 10, in Jan Nederveen Pieterse, “After post-development,” Third World Quarterly, Vol. 21, No. 2 (2000) p. 177.
38
Ibid.
39
Gregory Clark (2007), Farewell to Alms: A Brief Economic History of the World (Princeton University Press), p.16.
40
Ibid.
41
Martin E.P. Seligman (2002), Authentic Happiness (N.Y: Free Press) p. 49.
42
Ibid.
43
Daniel Kahneman, Ed Diener, and Norbert Schwarz (1999, Paperback edition 2003) Well-being: The
Foundations of Hedonic Psychology (NY: Russel Sage Foundation), p. 14. 44
Daniel Nettle (2005, Reprinted 2009), Happiness: The Science Behind Your Smile (Oxford University Press) p. 176.
45
Jeanne Nakamura & Mihaly Csikszentmihalyi, “The Concept of Flow”, in Handbook of Positive
Psychology (2004), C. R. Snyder, & S. J. Lopez, Editors (New York: Oxford University Press), p. 89. 46
M. Csikszentmihalyi (1975), “Play and Intrinsic Rewards” Journal of Humanistic Psychology 5(3) at 43. In Bloch, infra note 50.
47
Ibid.
48
M. Csikszentmihalyi (1993), The Evolving Sense of Self (New York: Harper Collins Publishers), pp. 178, 179 in Bloch, infra note 50.
49
J. M. Rist (1977), “Zeno and Stoic Consistency”, Phronesis, Vol. 22, No. 2 (Brill), p. 161.
50
Charlotte Bloch (2000), “Beyond Fluidity and Rigidity. A Phenomenological Investigation”, Human
Studies, Vol. 23, No. 1 (Springer), p. 45. 51
T. W. Adorno (1993) [1951], Minima Moralia, London: Verso, p. 156-57, [in Cowen, M. P. & Shenton, R. W. (1996), Doctrines of Development, London & New York: Routledge, page 476].
52
Erick Thorbecke (2007), “The Evolution of the Development Doctrine, 1950 – 2005”, in Advancing
Development: Core Themes in Global Commons, Mavrotas & Shorrocks Editors (New York: Palgrave
Macmillan), p. 13.
A number of empirical studies generated hypotheses that “highlighted the complex nature of the causal relationship between population growth and economic development” and explained migration to urban centers “as a function of urban--rural wage differentials weighted by the probability of finding urban employment.” (Thorbecke, p. 13).
62 The Investment Promotion and Environment Protection Balance in Ethiopia’s Floriculture
53
Yujiro Hayami and Yoshihisa Godo (2005), Development Economics: From the Poverty to the Wealth
of Nations, 3rd Ed. (New York: Oxford University Press), p. 63.
54
Ibid, 64
55
Debraj Ray (1998), Development Economics (New Jersey: Princeton University Press), p. 326.
56
Ibid, p. 326.
57
Hayami and Godo, supra note 53, p. 53.
58 Ibid. 59 Ibid. 60 Ibid. 61 Ibid, p. 226. 62
J. E. Meade (1967), “Population Explosion, the Standard of Living and Social Conflict”, The Economic
Journal, Vol. 77, No. 306 (Jun., 1967), p. 236. 63
Ibid.
64
W.T.S. Gould (2009), Population and Development (London & NY: Routledge), p. 63.
65
Ibid.
66
“Ethiopian farmers are less likely to plant trees and build terraces to protect against erosion – and more likely to increase use of fertilizer and herbicides – if their rights to land are insecure.” World Bank,
World Development Report 2005, A Better Investment Climate for Everyone (New Your: World Band
and Oxford University Press), p. 81.
67
Karl Marx (1887, 1890), Capital, A Critique of Political Economy, Volume 1, (Moscow: Progress Publishers, 1954, 1977), p. 505.
68
Ibid.
69
John Stuart Mill (1985) [1848], Principles of Political Economy, Harmondsworth: Penguin, pp. 115-17 (in Cowen, M. P. & Shenton, R. W. (1996), Doctrines of Development, London & New York: Routledge. page 41.)
70
Thorbecke, supra note 52, p. 11.
71
Ibid.
72
As UN Secretary-General Ban Ki-moon stated in his opening remarks to the United Nations Climate Change Summit Plenary (on 22 Sept, 2009), Africa is the most vulnerable continent where “climate change threatens to roll back years of development gains.” He also expressed his concern that climate will “increase pressure on water, food and land, reverse years of development gains, exacerbate poverty, destabilize fragile states and topple governments.”
UN News Center <http://www.un.org/apps/news/infocus/sgspeeches/statments_full.asp?statID=582#> (Accessed: 20 December 2009).
73
Jeffrey Haynes (2008), Development Studies, (Cambridge, UK: Polity Press) p. 158.
74
Ibid.
75
Ibid.
76
David Hunter et al (2007), International Environmental Law and Policy, Third Edition (NY: Foundation Press) pp. 32, 33.
77
Ibid, p. 44.
78
Paul R Ehrlich and Anne H. Ehrlich (2008), The Dominant Animal: Human Evolution and the
Environment (Washington, Covelo, London: Island Press) p.205. 79
J. Russell Whitaker, Geographical Review, Vol. 44 No. 4 (October 1954) p. 610.
80
Donella H. Meadows et al. (1972), The Limits to Growth: A Report for the Club of Rome's Project on the Predicament of Mankind.
Chapter 2. “Wellbeing” as an Objective of Ethiopia’s Investment Promotion 63
81
Herman Kahn, William Brown, and Leon Martel (1976), The Next 200 Years: A Scenario for America
and the World (New York: William Morrow). 82
Lyuba Zarsky (1997), “The Asia-Pacific Economic Cooperation Forum and the Environment: Regional Environmental Governance in the Age of Economic Globalization” Colorado Journal of
International Environmental Law and Policy, Volume 8) p. 329. 83
John Passmore, “Attitudes in Nature”, in Environmental Ethics (1995), Robert Elliot, Editor (Oxford University Press) p. 137.
84
Simms, Andrew et al (2010). Growth isn’t Possible: Why we need a new economic direction. London: New Economic Foundation, p. 8 <http://www.neweconomics.org/publications/growth-isnt-possible>
85
Ibid.
86
David Woodward and Andrew Simms (2006), Growth isn’t Working: The Unbalanced Distribution of benefits and costs from economic growth (London: New Economic Foundation), p. 25.
http://www.networkideas.org/doc/feb2006/New_Economics_Growth.pdf.
87
Duncan K. Foley (1997), Notes on the Theoretical Foundations of Political Economy, p. 6. <http://homepage.newschool.edu/~foleyd/poleconprint.pdf>, Last accessed: 21 September 2011
88
Ibid.
89
David Ricardo (1815), Essay on the Influence of a Low Price of Corn on the Profits of Stock (London: Printed for John Murray).
90
Peter Huber (1999), Hard Green: Saving the Environment from the Environmentalists, A Conservative Manifesto, (N.Y: Basic Books), p. 140.
91
Ibid, p. xxvi.
92
Ibid, p. 101.
93
Wilfred Beckerman (2003), A Poverty of Reason: Sustainable Development and Economic Growth (Okland, California, The Independent Institute), p.13.
94 Ibid. 95 Ibid, p. 14. 96 Ibid, p. 18. 97
Daniel A. Farber, Eco-Pragmatism: Making Sensible Environmental Decisions in an Uncertain World, (1999) Chicago and London: The University of Chicago Press, p. 35.
98
The World Bank (1992), World Development Report 1992: Development and the Environment (Washington DC: World Bank) p. 36.
99
Ray, supra note 55, p.123.
100
Hayami & Godo, supra note 53, p. 349.
101
Mulugeta Getu (2009), “Ethiopian Floriculture and Its Impact on the Environment: Regulation, Supervision and Compliance”, Mizan Law Review, Vol. 3, No. 2, p. 256.
102
Interview with Ato Legesse Geleta, Oromia Investment Commission, 28 November 2011.
103
Interview with Ato Mohammed Ibrahim, Oromia Rural Land and Natural Resource Administration Authority Vice Head, Environment Protection Core Process Leader, 07 June 2012.
104
Although this factor is not a new theme in academic and policy discourse (for example, “Governance for Sustainable Development: Five OECD Case Studies” OECD, 2002), it is currently gaining more attention.
Chapter 3 64
3
Factors, Challenges and Methods in the Investment, Development
and Environment Balance
Chapters 1 and 2 address the WHY aspect of the investment-environment balance. This chapter takes the discussion further and deals with the factors, challenges and methods that can inform the inquiry as to HOW the investment promotion and environment protection balance can be determined. Section 3.1 deals with the key factors in sustainable investment promotion and examines the issue whether social and environmental compliance standards discourage domestic and foreign investment in sustainable floriculture. Section 3.2 briefly explores the economic opportunities and environmental risk involved in the process of determining the investment- environment balance in economic activities. The challenges in cost-benefit analysis of environmental assets, the role of environmental mainstreaming and the schemes of impact assessment that can inform the efforts toward balancing the promotion of investment with environmental protection are briefly addressed in Sections 3.3 and 3.4. The last section forwards a brief synthesis regarding the transition from ‘trading off’ environmental compliance towards greener ‘codes of practice’.
____________
3.1. Factors in Sustainable Investment Promotion
Low-income economies at times tend to tolerate low environmental compliance standards in the course of their attempts to ‘encourage’ investment (both local and foreign). However, whether the ‘race to the bottom’ (towards weak environmental compliance standards) can bring about viable investment in sectors such as sustainable floriculture needs to be carefully examined. This necessitates a closer look at the major factors that are conducive to sustainable investment promotion, productivity and national competitiveness.