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Chapter 8

Inclusive and adaptive governance

Lead Author: Louis Lebel 1 Contributors Natalja Wehmer, case studies, (Box 3) Shaswat Sapkota, case studies, (Box 2) Aksel Sundstrom, case studies, (Boxes 4,5) Adnan H. Aliani, sources, advice Hitomi Rankine, sources, advice Reviewers [Add names, institutions, specific sections contributed] Potential (not yet contacted):

Bach Tan Sinh, NISTPASS, Vietnam (5) Nikitina Elena, EcoPolicy, Russia (5) John Dore, AusAID, Lao PDR (5) Lu Xing, Kunming University, China (4) Ademolah Braimoh, Global Land Project Office, Japan (4) Daniel Murdiyarso, CIFOR, Indonesia (4) Ooi Giok Ling, Institute of Policy Studies, Singapore (3) Xuemei Bai, CSIRO, Australia (3) Rodel Lasco, ICRAF, Philippines (2,4) Anond Snidvongs, Chulalongkorn University, Thailand (2)

Version: Ch8-AdaptInclu-091102 Length: 15777/ 12000

Table of contents 1 THE GOVERNANCE CHALLENGE (630 + BX-400) .......................................................................................... 2 2 LEARNING TO MANAGE NEW CLIMATE RISKS IN AGRICULTURE (1830/2000)................................. 4

2.1 RISK MANAGEMENT: LEARNING FROM EXPERIENCE (700) ................................................................................... 4 2.2 ADAPTATION STRATEGIES: LEARNING FROM EXPECTATIONS (1010) ................................................................... 5

3 BUILDING SUSTAINABLE HUMAN SETTLEMENTS (3510/2000) ................................................................ 6 3.1 SELF-ORGANIZATION IN THE PURSUIT OF BETTER LIVING CONDITIONS (780 + BX-570)...................................... 6 3.2 INCENTIVES AT WORK: CLEANER AND HEALTHIER CITIES (930 BX-1030) ........................................................... 8

4 MANAGING VALUED ECOSYSTEM SERVICES (1930/2000)....................................................................... 10 4.1 PLANNING AND MONITORING: FROM CENTRALIZED EXPERTS TO ADAPTIVE CO-MANAGEMENT (570 BX-640). 11 4.2 REWARDS FOR SERVICES: GETTING THE INCENTIVES RIGHT (500)..................................................................... 12

5 SHARING SCARCE WATER RESOURCES (2030/2000) ................................................................................. 13 5.1 NEGOTIATION AND AGREEMENTS: SHIFTING BENEFITS AND RISKS OF PROJECTS (540 + BX700)....................... 13 5.2 MULTI-STAKEHOLDER DIALOGUES: EXPLORING ALTERNATIVES (680) ............................................................. 15

6 SYNTHESIS (1180/1000).......................................................................................................................................... 15 7 CONCLUSION (150 + BX310) ................................................................................................................................ 17 8 REFERENCES .......................................................................................................................................................... 18

List of boxes

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Box 1 Governing green growth – a conceptual framework for transitions. .......................................................3 Box 2 Sustainable Penang Initiative, Malaysia ..................................................................................................7 Box 3 Solid waste management. ........................................................................................................................9 Box 4 Participatory technology development and non-timber forest products, Yunnan, China. ..................11 Box 5 Transboundary river management of the Aral Sea Basin .....................................................................14 Box 6 Recommendations to improve the inclusiveness and adaptiveness of governance in the Asia Pacific ..........................................................................................................................................................................17

1 The governance challenge (630 + Bx-400) Across the Asia Pacific region governments, firms and communities have pursued a wide range of approaches to integration of environmental concerns into development policy. Efforts are often framed as contributions to efficiency, sufficiency, green growth or sustainable development.

A few problems of un-sustainability are primarily technical: sound science, cost-benefit analyses, and rational decision-making can lead to appropriate technology and policy choices that benefit all. Most problems, however, are not so simple. Their solution requires negotiation and evaluation of management actions to deal with large uncertainties about causes and impacts and multiple interests (Kates et al. 2005).

This chapter argues that the governance challenge posed by such problems can be tackled by adopting more inclusive and adaptive forms of decision-making (Box 1). Inclusiveness matters because, otherwise, the interests and capabilities of disadvantaged and vulnerable groups are likely to be ignored leading to unfair allocation of burdens and risks, as well as benefits and opportunities. Measures to protect forests or watershed services, for example, by excluding traditional users, if not adequately compensated, could increase their vulnerability to economic shocks by removing crucial livelihood options.

Adaptiveness is crucial because understanding is incomplete; the impacts of past decisions and interventions should be learnt from, but also new kinds of conditions should be anticipated. Increasing uncertainties about future climate, for example, implies that effective decision-making must allow for a wider range of future risks and adjustments as early assessments could turn out to have been wrong in a big way (Hallegatte 2009).

The 2005 State of the Environment Report argued for the need for more growth in the Asia-Pacific region, but through a new green growth model that decoupled economic growth from environmental impact (UNESCAP 2006). The role of poor and good governance for social development and the environment is noted in several places in the text but without much detail apart from a few examples, for instance, dealing with corporate governance (e.g. UNESCAP 2006, pg 39). Over the past decade a number of important trends matured which have created opportunities for more adaptive governance. These include government decentralization reforms, growth of civil society, and expanded access to information technology. There has also been substantial amount of experimentation in policy-making processes and policy instrument choices. Innovative policy instruments which use market-based incentives, in addition to regulations, to encourage actors to reduce pollution, conserve watershed services or change their consumption behaviors are being tried. Multinational corporations are increasingly using standards and quality assurance schemes to improve their accountability for environmental impacts including the actions of their suppliers (UNESCAP 2006, pg 30). Environmental protection and sustainability ideas increasingly enter into debates, negotiations and agreements about how to use natural resources. There are now many experiences with new governance arrangements from which countries, firms and communities could learn from each other.

Inclusive and adaptive governance, it is argued and illustrated in this chapter, is important to the pursuit of green growth trajectories, resilient social-ecological systems, and sustainable production and consumption. The argument is based on a review and analysis of experiences in the Asia Pacific region in four problem domains:

1. learning how to better manage climate risks in agriculture;

2. building healthier, productive and resource-efficient human settlements;

3. managing ecosystems so they can continue to provide valued services;

4. negotiating the sharing of scarce water resources.

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These four domains were chose to illustrate a promising transition underway (but not yet secured) towards more inclusive and adaptive forms of governance. As a set they touch on the highest priority issues in sustainability across the Asia-Pacific, while offering a diversity of guiding principles and examples of policy responses. The rest of this chapter deals with each of these in turn.

Box 1 Governing green growth – a conceptual framework for transitions.

Governance refers to the ways in which society share power, through structures and processes that shape individual and collective action (Young 1992). Governance is not the sole purview of the state through government, but rather emerges from interactions of many actors including the private sector and not-for-profit organisations. Governance includes laws, regulations, discursive debates, negotiation, mediation, conflict resolution, elections, public consultations, protests and other decision-making processes. It can be formally institutionalized or expressed through subtle norms of interaction or even more indirectly through influencing agendas and shaping contexts in which actors contest decisions and determine access to resources (Lebel et al. 2006). Important performance measures in environmental governance include effectiveness of coordination, inclusiveness of representation of interests, legitimacy of procedures, accountability of authorities, and the fairness of allocation of benefits and burdens (Agrawal and Lemos 2007). 2

Adaptive governance emphasizes learning and managing resilience or building adaptive capacity (Folke et al. 2005, Pahl-Wostl 2009). Learning may be through formal monitoring and assessment, systematic processes for learning from past interventions, anticipating future changes, and deliberation among diverse stakeholders (Pahl-Wostl et al. 2008, Armitage et al. 2009). Resilience is a measure of the amount of change a system can undergo and still retain the same controls on structure and function (Holling 2001, Walker et al. 2002). To derive useful measures we need to be specific about both the portfolio of challenges and components of the system at risk of interest (Carpenter et al. 2001). The capacity of societies to manage resilience is important, because, at certain times, a system is in a desirable configuration and aim is to enhance resilience, whereas at other times the system is in an undesirable configuration and eroding resistance may be crucial to transformation (Lebel et al. 2006).

Inclusive and adaptive governance is likely to be crucial to pursuit of sustainability transitions, because these social-ecological shifts require negotiation and evaluation of management actions in the context of large uncertainties about causes and impacts and multiple interests. Deciding which configurations are desirable and which are not, for example, is often subject to politics (Lebel et al. 2006). Inclusiveness is also important for the knowledge content of deliberations, fair representation of interests, and shared learning.

Figure 1. Proximate and more distant elements of adaptive governance.3

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2 Learning to manage new climate risks in agriculture (1830/2000) Across Monsoon Asia agriculture is central to economic development and security. Policies on innovation, priorities in research agenda and investments in infrastructure and institutions like crop insurance, subsidies and other assistance can all impact on how climate risks are managed and whether learning at different levels takes place. Efforts to systematically learn about the effects of different practices as well as the consequences of interventions to modify those practices are crucial to improving productivity in agriculture and responding to environmental and socio-economic changes. In this section we focus on the management of climate risks and the consequences different institutional arrangements have for learning.

2.1 Risk management: Learning from experience (700) Climate profoundly influences what crops can be grown where and when.

Farmers who depend on rain-fed crops must be skilful at managing climate risks (Hasegawa et al. 2008). In the semi-arid region of south-east India, for example, there is a two thousand year history of harvesting water from the north-east monsoon. Through this history there is evidence of changing patterns of water storage in the landscape from cyclones, which vary in frequency over long-time scales (Gunnell et al. 2007).4

Rice farmers in northeast Thailand and Lao DPR adopt a range of strategies to deal with late-season floods that would otherwise result in serious crop losses. These include adoption of alternative varieties and diversifying income sources (Chinvanno et al. 2008). Improving efficiency and water productivity in irrigated farmland is also an important, technical, policy objective (Tanaka 2008). The social institutions that underpin water sharing in gravity-based irrigation systems have been the foundations for developing co-operative responses to climate variability and sometimes also important in agrarian change (Shivakoti et al. 2005). Diversification of land-uses and income sources and commercialization in Northeast Thailand appears to have reduced the strength of some of these ties in former rice-growing communities (Chinvanno et al. 2008). Closer relationships to markets has also constrained adaptation options as consumer preferences for particular varieties dominate cropping decisions at expense of more tolerant and varied local cultivars in Northeast Thailand, whereas in Lao PDR much more attention still given to local varieties (Chinvanno et al. 2008). The multiple ecosystem services provided by paddy landscapes, including flood control, water purification, and climate adjustment are easily overlooked in pursuit of adaptation strategies with more immediate and direct benefits (Tanaka 2008); they should also be considered in planning for future risks.

A study of low flow episodes in the Yellow River found that coping mechanisms have changed over time from attempting to secure water supplies to long-term adaptations such as water-saving practices and diversification to off-farm livelihood activities (Liu et al. 2008). Many of the actions taken were anticipatory but overall not sufficient to completely overcome water stress challenges. A similar conclusion to those reached by studies in Thailand and Lao PDR discussed above (Chinvanno et al. 2008). The authors also note the cross-scale interactions between the Yellow River Basin Conservancy Commission, local water bureaus and farmers are likely to be important for building adaptive capacity (Liu et al. 2008). 5Many livelihood systems are sensitive to climate. Societies have built a level of resilience to seasonal and inter-annual climate variability. In lowland areas adaptive measures undertaken to cope with floods and storms include raising buildings on stilts, seasonal shifts in livelihoods and even migration. There is a substantial amount of local knowledge about managing climate risks likely to be useful for adaptation (Chinvanno et al. 2008, Resurreccion et al. 2008).In general, farmers still need better access to risk-management tools.

Climate insurance is under-developed (Linnerooth-Bayer and Mechler 2006). An example is a successful World Bank pilot project in Nakhon Ratchasima Thailand for maize farmers handle risk from drought (Hellmuth et al. 2009).The project built on existence of high quality historical weather data that could be used as basis for contracts and premiums and the prior close relationships between the Bank for Agriculture and Agricultural Cooperatives (BAAC) and farmers. BAAC acted as an intermediary for nine other national insurance companies. Moreover, a significant effort was put into communication and learning activities with the initial contract designed by World Bank team modified based on feedback from farmers, BAAC, insurance companies and other stakeholders (Hellmuth et al. 2009).

Developing these requires mutual cooperation: close engagement of researchers with farmers is crucial to understanding the specific risks relevant to farmers, what information would be salient, and, conversely,

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what scientists can credibly deliver (Cash et al. 2006, Meinke et al. 2006). The experience of farmers can also be a valuable contribution to co-production of knowledge with scientists. Some research and development models in agriculture pay substantial attention to brokering, often institutionalizing, the links between farmers and researchers so that there is high quality two-way communication. The pursuit of agricultural sustainability will often require much more than the conventional pipe-line model of transferring research in linear fashion from laboratory to field station to farmers (van Kerkhoff and Lebel 2006).

2.2 Adaptation strategies: Learning from expectations (1010) Climate change poses significant risks and burdens to agriculture (IPCC 2007, Leary et al. 2008). Global assessments suggest that the impacts of climate change will be borne disproportionately by poor countries, in part, because poor countries are often already warm, and any further increases in temperature would be detrimental to agriculture (Mendelsohn et al. 2006). Changes to quantities or seasonal patterns of rainfall are often expected to exacerbate current and looming water insecurities (Bates et al. 2008). Extreme events, including flood disasters and extended droughts, can have huge impacts on agricultural production and, consequently, food security (UNESCAP 2009, pg 70-72).

Commitments to provide assistance for adaptation have been made under the United Nations Framework Convention on Climate Change (UNFCCC). As least developed countries, for example, Cambodia (2006) and Lao PDR(2009) have been funded and assisted to prepare National Adaptation Programmes of Action. Cambodia has requested and is now following up with a project on integrated water resources planning for agricultural development with a 1.8 million USD contribution from the Global Environmental Facility. Among the project aims are changes in designs of reservoirs and irrigation channels to reduce flood risks from higher peak flows (Biagani 2007). If this approach is pursued at larger scales then it could be at odds with other analyses that emphasize the value of seasonal floods to fisheries and fishers (Kummu et al. 2006, Sokhem and Sunada 2006, Baran et al. 2007). Adaptation policies in Cambodia may need to be deliberated more widely. According to Lao PDR’s NAPA report stakeholder consultation meetings were organized at central, provincial and district levels.

Funds available remain negligible relative to impacts and needs (Paavola and Adger 2006, Parks and Roberts 2006). Apart from funds international cooperation is also needed to remove barriers to adaptation that come from their trade, energy, food, military, or security policies (Pielke Jr et al. 2007). International assistance for capacity building to carry out national–local adaptation assessments could be expanded under the UNFCCC process but also developed independently by other donors.

The prevailing view of most Asian governments—as described in emerging climate change strategies and programmes—is that science and technology innovation in managing water resources and modifying crops is key to adaptation in agriculture (Bates et al. 2008, Lebel 2008).

Indonesia’s National Action Plan for Mitigation and Adaptation to Climate Change (prepared by the Ministry of Agriculture) has begun investing in research and development (Las 2007). Initially this focuses on better crop varieties, as well as water and soil management, but later expands to irrigation development (Las 2007). Learning from past experiences with, and political responses to, inter-annual climate variability could be used to refine strategies to adapt to climate change. Every few years an ENSO event delays rainfall across much of insular Southeast Asia. In these years much less rice is planted in Indonesia, thereby elevating the risks at the national level of a rice deficit (Naylor et al. 2007). Climate change is predicted to increase the risk of delays of a month or more in the onset of the monsoon from current level of 9 to 18 per cent to 30 to 40 per cent by 2050. These findings suggest that drought-tolerance, water harvesting and storage methods, and seasonal early warning systems should help adaptation responses (Naylor et al. 2007).

China’s National Climate Change Programme includes an outline of policies and measures for adapting to climate change (China's Ministry of Science and Technology 2007). This largely follows past practice of focussing on observing and assessing impacts on water resources and agricultural production (Yu 2004). Some experts, on the other hand, see the key problem of adapting to climate change in China as one, primarily, of more closely aligning existing environmental protection, economic and sustainable development strategies (Dongmei et al. 2007). Overall, very little is said about institutional and governance issues. The public, when mentioned, is presented as a group that needs to be made aware of climate change.

Assessments are social processes (Social Learning Group 2001, Nowotny 2003, Rayner 2003). Strategic assessments bring together people with technical and policy-making understanding together for joint fact finding (Karl et al. 2007). More participatory assessment processes may also involve resources users and

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other affected groups even if they do not bring specialist management knowledge to the table. If the process is balanced findings may be seen as simultaneously legitimate, salient and credible by all parties (Cash 2000, Social Learning Group 2001). Joint fact finding can help stakeholders reach a better and shared understanding of technical issues including uncertainties and may make it more likely that findings are seen as having value and will be used (Karl et al. 2007).

New frameworks, policies and programmes are needed to ensure successful adaptation to climate change in the agricultural sector across the Asia Pacific (Lebel 2008). Anticipatory adaptive measures are expected to be led by public sector, for example, through development planning (UNESCAP 2006, pg 109-110). Market responses will often be too slow. A focus on adaptive capacity is also warranted and would be served by general strategies like: raising public awareness, more research, better coordination across sectors and levels of government, and more financial resources (ADB 2009: 92-95). Mainstreaming climate change adaptation into various other aspects of development, will take a shift in perspective: Government conventionally has seen climate change as a discrete issue rather than an additional consideration in managing risks in development. In doing so it is imperative that vulnerable peoples are consulted more in exploring and formulating adaptation policies. The objective should be empowerment which expands the options, opportunities, and quality of local adaptation (Paavola and Adger 2006). Poor farmers need social, economic, and political space in which to exercise their expertise and rights in order to adapt (Thomas and Twyman 2005)6. Past experiences suggest that effective adaptations will be undertaken for a variety of reasons not exclusively as responses to climate change (Smit and Wandel 2006).Finally, monitoring and evaluation of adaptation strategies will also be important because of the large uncertainties associated with both climate change and the impacts of newly formulated policies and projects.

3 Building sustainable human settlements (3510/2000) Across the Asia Pacific physical, social and institutional development in urban areas has often not kept pace with economic and demographic development (Sheng and Lebel 2009). One problem has been that central governments have often maintained tight control over cities preventing them from taking over management over their own affairs. In addition, plans and regulations necessary to ensure that efficient and fair urban development are weakly enforced because of ambiguous procedures and agencies with discretionary powers coming under too much influence of powerful groups (Sheng and Lebel 2009). Competition for foreign investment has led to overlooking the needs of lower income groups and the environment (Marcotullio and McGranahan 2007, Ooi 2007)7. As a consequence air and water pollution have often had serious impacts on health before they were addressed (Bai 2003, Marcotullio 2003). At the same time the level of experimentation with new policy instruments across Asia is high with often important implications for environmental quality and development opportunities for those living in cities (Rock and Angel 2005a, Mol 2009). Decentralization that enables local communities, not just authorities, and flexibility of institutional responses are key elements and are explored further in the following two sections.

3.1 Self-organization in the pursuit of better living conditions (780 + Bx-570) Urban residents have responded to ineffective governance by taking matters into their own hands forming forums and through civil society organizations addressed problems directly or pressured local government into doing so (Evans 2002, Sheng and Lebel 2009). In this section we look at several examples (see also Box 2).

The Urban Resource Centre (URC) in Karachi, Pakistan has developed an information base through which it can critique government plans and planning processes (Hasan 2007). Members have been particularly active in pointing out how government plans fail to serve interests of low income groups, including those in the informal sector, and has also proposed alternative measures and policies. An early and significant action by URC was challenge the Karachi Mass Transit Project objecting to its impact on historical buildings in the inner city and the high number of evictions it would cause, among others. Public forums were well supported by print media. URC also promoted an alternative: refurbishing and expanding the Karachi circular railway –originally planned in 1962. The original mass transit project was first adjusted then eventually abandoned in 2001. Plans for the circular railway were revised to include double-tracks that again would result in eviction or relocation of more than 20,000 households (Hasan 2009). URC worked with residents of informal settlements along the old railway track areas to map locations and histories of settlement – improving the bargaining positions with the government. URC has also been involved in several other issues related including solid waste and water management and supporting rights of people living in informal housing and working as street sellers (Hasan 2007). The creation of alternative sources of information to the official one

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along with careful attention to communication issues has widely expanded deliberation on important issues affecting the future of Karachi.

The “Baan Mangkong” national slum upgrading program in Thailand supported efforts by community organizations to come with their own solutions to land and housing problems (Boonyabancha 2009). It was launched in 2003 and implemented by Community Organizations Development Institute (CODI). CODI is under the Ministry of Social Development and Human Security. Through the slum upgrading program many organizations founded savings groups and negotiated with landowners to obtain and secure land for collective use. CODI acted as an important broker working with many other stakeholders, including local NGOS, local government and NGOs to do surveys and help select and finalize project and then oversee infrastructure subsidies and housing loans provided directly to communities. CODI operates a revolving fund from which it can make soft loans. As of March 2008 512 projects had been financed in 1,010 communities affecting about 54,000 households for US$ 98 million (Boonyabancha 2009). Some projects were about refurbishing existing sites whereas other involved relocation and reconstruction and thus more opportunities for new collective planning and infrastructure. CODI, for example, was able to successfully insert itself between government authorities who owned land and informal settlements on canal waterfronts in Bangkok to help resolve conflicts and improve living conditions (Usavagovitwong and Posriprasert 2006). Local NGOs and their strong local community networks also played a crucial role in securing tenure and implementing upgrading projects. Where relocation is involved compensation and security of tenure are important to project success, but also need to be followed-up with support for social welfare and community development (Viratkapan and Perera 2006). The overall process was a significant step towards decentralization to local authorities and empowerment of local communities as the projects are largely planned and implemented locally. The creation of more flexible financing mechanism was also important to the projects success. The slum upgrading program was the result of a learning process with local community organizations that had spanned at least thirty years (Boonyabancha 2009).

In many other cases multi-stakeholder activities have helped improved environmental management and decision-making in urban areas, but with limitations arising from not fully engaging grass-root or disadvantaged communities or lack of trust. Even the rightly applauded Sustainable Penang Initiative (see Box 2) faced such constraints (Leng 2005). Another study of the differences in how sewerage system projects were set up in Alandur and Palvaram in south India found that despite substantial stakeholder engagement in both places outcomes were substantially different as a result of diverging levels of resident’s trust in political leadership (Baud and Dhanalakshmi 2006).

A recurrent theme in these and many other examples of sustainability initiatives in urban areas is the importance of informal networks to learning and securing progressive social and environmental change. Intriguingly participatory urban governance has been able to emerge even in a national context where democracy itself is often quite constrained. In part this may reflect the dynamism and complexity of cities themselves – where markets and various forms of self-organization are continually emerging and linking to shape future development.

Box 2 Sustainable Penang Initiative, Malaysia

The Sustainable Penang Initiative in Malaysia (SPI) is a good example of how decentralized and participatory methods can be used as a basis for formulating environmental policies (ADB 2000). The decision making process was inclusive of all major stakeholders using dialogue processes and had mechanisms to encompass the results of the discussion into the formation of new policies (Fazal 2009). 8

Penang is one of the 13 states of Malaysia and has a population of around 1.28 million. George Town is the most important cultural and economic center of Penang and also houses Penang’s government. During the period from 1992 to 1997, Malaysia’s economy grew at a rate of around 12 percent. This high growth rate of its economy posed several environmental challenges to Penang. First, water catchment areas were encroached due to development programs. Second, with an increase in economic activity, pollution of river systems increased and the air quality decreased. Also, there was a shortage of open space and recreational areas.

After the Rio Summit, both the government of Malaysia and the state government of Penang have put increasing emphasis on environmental issues. This increased environmental awareness coupled with the aforementioned concerns led to the formation of SPI. It was led by a newly instituted think tank called the Socio-Economic Environmental Research Institute (SERI). The objective of SPI was to develop broad series of indicators for assessing sustainable development in Penang. These indicators would take into account social, cultural and environmental aspects besides the traditional economic ones. More importantly, SPI wanted to incorporate public opinion to influence development

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planning and environment policy formulation in the State.

SPI indicators were created through five consultative roundtable discussions consisting of participants from the government, academia, business and industries, youth groups, community groups and NGOs. In the discussions, the participants systematically explored the topics of ecological sustainability, social justice, economic productivity, cultural vibrancy, and popular participation. The roundtables generated huge local interest (Leng 2005). With deliberative discussions, the participants arrived at 40 indicators of “Sustainability and Livability in Penang”. These indicators created a common framework which was accepted by all stakeholders as a tool to assess environmental sustainability in Penang. Moreover, a common framework would allow for more effective debate concerning environmental issues by all concerned stakeholders.

The most important impact of the discussion was that the recommendations and the inputs gathered through the workshop would be used in the formulation of the Penang strategic plan for the next decade (2001-2010). Similarly, to influence policy making, SPI organized a forum consisting people from the State government and the public to look at a “report card” of the 40 indicators that affects sustainability and livability in Penang. It was also presented to the chief minister of Penang. Additionally, several other organizations have been formed. These organizations, for example Water Watch Penang, are contributing towards advocating environmental awareness in the State (Leng 2005).

There were several reasons why SPI was successful (ADB 2000). First, Penang is a relatively developed and urbanized State with necessary infrastructure resources to handle initiatives like the SPI. Penang also had a legacy of NGO and other voluntary organization activism. Similarly, the State Government of Penang was open-minded to be involved in a participatory process and use the results from it for its strategic plan.

3.2 Incentives at work: Cleaner and healthier cities (930 Bx-1030) Manufacturing industries are often a major source of concern for environmental health in rapidly urbanizing and cities in industrializing economies (Rock and Angel 2005b, Marcotullio and McGranahan 2007). Regulations are important, but in absence of effective implementation, are often inadequate to ensure clean and healthy cities. An alternative to regulations and penalties for getting firms to produce with less impact is to require organizations to disclose to the public their environmental performance and let public sentiment and media pressure stimulate improvement (Lebel and Lorek 2008). The 2005 State of the Environment Report reviewed several such programs (UNESCAP 2006, pg 36-39). Here we look at several examples focusing on their governance dimension and how it led to progressive improvement.

The Program for Pollution Control Evaluation and Rating (PROPER) was introduced by the government of Indonesia in mid-1995 as a follow-up to the Clean River Program (Afsah and Vincent 2000). The scheme uses public disclosure to reward and shame firms according to their environmental performance using color-coded ratings (Afsah and Vincent 2000). The biological oxygen demand emission standards that are the basis for ratings were developed in consultation with industry, environmental nongovernmental organizations (NGOs), and other government agencies. Performance relative to regulations at the firm level was coded by BAPEDAL, the environmental impact management agency. The criteria for assigning colors (gold, green, blue, red and black) were kept simple. Multiple sources of data were used to reduce risks of errors or manipulation (Rock 2002b). In the first round of ratings, high-rating plants were rewarded by being identified, and those with low scores were not named but counted. Low-scoring firms then had six months to improve performance before they were re-rated and findings made public. On reason for improvements in compliance was that the program had the high-level political support it needed to give black ratings to the worst polluters. The scheme was also simple enough to be appealing to media, community leaders, and environmental NGOs (Rock 2002b). A re-launch of the program in 2003 further reduced facilities with worst ratings over a two year period (UNESCAP 2006, pg 38).

A second example operated at the level of cities rather than firms. The Urban Environmental Quantitative Examination System at the city level was introduced in China in the early 1990s (Rock 2002b). Under the scheme, each year, major cities were rated and ranked by their environmental performance using the system developed by the State Environmental Protection Agency. Environmental protection bureaus and commissions were responsible for implementation. The findings were publicized in yearbooks, newspapers, and on television. Evidence from management actions, improved trends in ambient environmental quality and consideration of other plausible confounding policies, imply that the scheme has been working (Rock 2002b). City mayors, it is argue, have a strong incentive to get involved because they are responsible for meeting targets to improve their city’s scorecard and rank (Rock 2002a). 9Local leaders continue to strive to

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achieve the status of National Environmental Model City as it helps attract foreign investment and events (Economy 2006).

The need to meet environmental standards in national regulations or to participate in some international markets can lead key firms to set standards and introduce other measures to improve the environmental practices of their suppliers. In principle there are many possible combinations of private and public processes in strengthening environmental governance in supply chains. 10For example, the multinational corporation Motorola introduced global firm-based environmental standards for its plants and also applied these to subsidiaries and suppliers in the mid-1990s (Rock and Angel 2005b). The institutional changes included various internal reporting procedures, covering toxicity indices for products, to encourage continuous improvement in environmental performance. In addition tools were introduced to handle products and components that are later assembled. As a result of these reforms Motorola Penang in Malaysia was able to substantially reduce use of lead and other toxic metals in product processes and products (Rock and Angel 2005b). It should be noted that these organization and supply chain based reactions were, in part, a reflection of governance changes in major markets, in particular, EU directives such as the European Waste in Electrical and Equipment Initiative (WEEE) and the Restrictions on Hazardous Substances Directive. 11The notion of key producers taking responsibility for greening their supply chain can also be extended in the opposite direction, towards use and disposal of products with appropriate institutional measures (Lebel and Lorek 2008). A good example, are the extended producer responsibility laws in Japan which from the outset were explicitly designed to be reviewed and adapted (Ogushi and Kandlikar 2007). Concerns with hazardous materials in wastes have been an important driver of policy innovation in Japan. Take-back legislation that requires producers to collect products at the end of their life is a core idea in new waste-management strategies. A framework of general laws and more specific regulations have been introduced (Ogushi and Kandlikar 2007) with responsibilities are explicit and shared between producers and consumers. Under the Home Appliances Recycling Law of 2001, for example, consumers of home appliances pay, retailers collect, and producers recycle. Costs for recycling are paid at different times depending on product: at purchase time for computers and cars, but at disposal time for home appliances (Ogushi and Kandlikar 2007). 12

Community-based initiatives to make cities cleaner and healthier places to live can also make use of incentives – for example to link waste disposers with re-users (see Box 3). Decentralized and flexible environmental governance allows more scope for taking into account local contexts in responses, but work best when there is monitoring of performance and accountability mechanisms in place (Mol 2009).

Box 3 Solid waste management.

Case Study of adaptive governance in Matale, Sri Lanka, on decentralized solid waste management13

Source: Sustainable Urban Development Unit, ESCAP, 2009

When the landfill site in Matale, a town of 40.000 people in Sri Lanka, was full, local authorities managed to secure funding to create a new open dumpsite 30 km outside the city boundaries. However, fearing the pollution, the villagers around the new dumpsite protested and the project had to be abandoned. This left Matale municipality desperate for an alternative solution to dispose of the city’s waste.

Having already successfully worked with the NGO SEVANATHA on other issues, the mayor approached them for help. Given that 80% of the solid waste in Matale is organic SEVANATHA proposed individual barrel composting and the creation of a recycling centre. The municipality provided the barrels to households and built a recyclable goods processing centre and SEVANATHA showed households how to separate waste. The organic waste would go into the barrels for composting (to be used in kitchen gardens), people would take the recyclables to the recycling centre and the left-overs would be picked up by the municipality and taken to the dumpsite.

Although this approach significantly improved the waste management situation, it was not ideal. Over time some households became careless about separating waste or stopped doing it altogether. They also did not bring lower value recyclables, such as plastic cups, to the recycling centre. Also, the municipality still had to spend resources on collecting the left-overs.

In 2004, ESCAP organized a regional workshop under the Solid Waste Management Cluster of CityNet, where SEVANATHA was exposed to the neighbourhood-based composting approach pioneered by Waste Concern, an NGO from Bangladesh. Under this approach, waste is treated as a resource, transportation costs are minimized, waste collection services are improved and waste pickers provided with better income and working conditions. Instead of eating up local government budgets, this approach to waste management is actually generating profit! Moreover, it is

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ecologically sound as it reduces emissions of the potent greenhouse gas Methane and through the compost returns organic matter to the soil. Inspired by the new ideas, SEVANATHA convinced Matale municipality to replicate the practice with assistance from ESCAP and Waste Concern. A second successful pilot replication was implemented in parallel in Quy Nhon, Vietnam.

A project steering committee was established. It was headed by the mayor and included both executive and legislative branches of the local government, in the persons of the health official and councillors (including the opposition party!), as well as representatives from SEVANATHA. Committee members went on study visits to Dhaka to see the approach in operation and to learn the daily tasks of operating the plant and Waste Concern and ESCAP periodically came to Matale to provide technical and managerial advice.

Improving on the Waste Concern model, Matale decided to integrate its recycling centre and with seed funding from ESCAP built the new plant on the adjacent piece of land, which the municipality leased for that reason from the Railway Department.

Designed to serve about 1,000 households and to treat 3 tons of wastes per day, this decentralized solid waste management approach is based on simple technology, which is easy to operate and maintain. Households, already used to separating at source thanks to the prior initiative, separate the waste into wet and dry waste, which is collected by hand carts. At the plant it is sorted for a second time and the organic waste is composted using the aerated box method under strict scientific monitoring. The result is high quality compost whose demand by spice gardens from around Matale outstrips supply.

The plant became operational in 2007 and as waste collection was now, for the first time, provided door-to-door, residents were willing to pay a collection fee. With additional incoming coming from the recycling centre and the sale of compost, the plant quickly started meeting its operational costs. The plant is a public-private partnership, where the facilities (i.e. the land and the plant) are owned by the municipality and SEVANATHA is given the management contract. Being an NGO, SEVANATHA could not engage in profit-making activities and therefore set up the Matale Enriched Compost Plc. or MEC. MEC has also taken over some of the municipal waste collecting staff.

Involving knowledge transfer and adaptation of the approach from one country to another and planning and implementing the project through a multi-stakeholder steering committee of course had its challenges. However, many of the “teething problems”, such as delays in land transfer, collection routes, staffing, the respective roles of the municipality and MEC, sale strategies for the compost etc. were solved through discussions in the Mayor and the project steering committee. One important factor throughout was strong political support from the mayor and from the broad membership of the steering committee. Once the plant was operational, the steering committee became dormant, but could be activated in case there were any issues or complaints.

In a next phase, starting 2009, and as part of multi-year Asia-wide initiative generously supported by the Bill and Melinda Gates Foundation, Matale municipality, SEVANATHA, Waste Concern and ESCAP are planning to further develop the approach into decentralized ‘Integrated Resource Recovery Centers’ (IRRCs) and by building several of them, scale the approach up to city-wide level. Besides composting, IRRCs will have bio-digesters, recyclable material processing centers and trucks to collect sludge from septic tanks and pit latrines. While the IRRCs will be operationally self-financing, investment for their capital costs will come from carbon financing. Certified Emission Reductions (CERs) for the Greenhouse gases reduced by the IRRCs will be sold in the open market through a Solid Waste Management Revolving Equity Fund (SWERF) to provide local partners with the necessary start-up capital. The beauty of SWERF is that the money would keep on revolving and increasing, so more and more cities can be reached to solve their solid waste and sanitation problems.

Preliminary ideas for governance arrangements for the next phase in Matale foresee that the project steering committee is reactivated, opened up to other citizens groups and that it either becomes its own special standing committee on solid waste management or a working group under the public health committee.

4 Managing valued ecosystem services (1930/2000) Ecosystem services are the benefits people obtain from ecosystems (Millennium Ecosystem Assessment 2005). Upper tributary watersheds, for example, apart from being a possible source of timber also provide a range of non-timber forest products and services, such as water purification, pollination and sites for cultural activities, flood protection important to the well-being and livelihoods of upland farmers or other further downstream (Lebel et al. 2008, Lebel and Daniel 2009). Maintaining mature stands of tropical forests is also one of the best ways to secure carbon stocks, a global service, in the fight against global warming. Critical ecosystem functions are frequently vulnerable to climate change, invasive species, infrastructure development, habitat conversion, over-use and other human activities (Millennium Ecosystem Assessment 2005). Governments and communities therefore must consider not just managing forest areas for timber or wetland areas for flood protection but for the full range of ecosystems services they provide. One of the

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challenges is that particular services are valued differently by stakeholders reflecting uses and interests (Lebel and Daniel 2009). Societies have approached the governance challenges of fair and effective integration among multiple uses in diverse ways (Chopra et al. 2005). In this section we look at conventional land-use planning, co-management and payments for ecosystem services.

4.1 Planning and monitoring: From centralized experts to adaptive co-management (570 Bx-640) Building awareness of the services provided by ecosystems, in general, is important to garner public support for their conservation (Patterson and Coelho 2009). One common approach to managing the complex set of services from upland watersheds is through spatial land-use planning by experts. Thus many conservation policies and strategies of governments have been founded on the notion of separating people from their environments (Chopra et al. 2005). Vast areas of the tropics, for example, were declared as protected areas for conserving biodiversity and ecosystem services between 1980 and 2005 (Naughton-Treves et al. 2005). Although protected areas may be effective at reducing deforestation within their boundaries they often have not contributed much to poverty alleviation (Naughton-Treves et al. 2005). Moreover, in some areas conflicts over land-use and access to forest resources persist, in part, because protected areas were declared over and adjacent to existing farms and settlements (Roth 2004).

Another approach has been to carry out planning and zoning with users and other stakeholders. Such approaches recognize that local knowledge is often crucial and usually only available if agencies allow space for meaningful local participation in land-use planning (Thomas 2006).Participatory land-use mapping and monitoring facilitated by non-government organizations and researchers in the Mae Chaem watershed in northern Thailand is a good example (Saipothong et al. 2006). Involvement of multiple stakeholders, including scientific and local experts, can help lead to a better understanding of underappreciated services and maybe also opportunities to improve livelihoods (see Box 4). In Flores, Indonesia, for example, researchers correlated forest cover in sub-watersheds of a protected area with incidence of diarrhoea in villages of indigenous residents, demonstrating the importance of another, but locally less well known service from forests – purification of drinking water (Pattanayak 2007).14 Direct involvement of stakeholders in analysis of ecosystem services as a basis for informed negotiations and decision-making is not common practice (Fisher et al. 2008). More participatory and deliberative methods for accounting and evaluation of ecosystem services are being developed and will be increasingly demanded (Spash 2007).

Participatory assessment may lead to, or be part, of adaptive co-management arrangements; but expert knowledge from whatever sources is rarely sufficient or static. Learning and collaboration are the main pillars of adaptive co-management (Armitage et al. 2009). In dealing with complex problems where cause-and-effect relationships and future dynamics are uncertain trust needs to be developed among stakeholders so that when new understanding appears to demands changes in practices there is a willingness to deliberate and negotiate the next steps (Berkes 2009). Linkages between stakeholders at different levels and domains is often crucial (Adger et al. 2005). Not all problems of over-exploitation or unsustainability are likely to be amenable to the long-term processes of trust-building, social learning and collaboration that adaptive co-management requires (Berkes et al. 2006, Plummer and Armitage 2007).

Projects and policies that hope to successfully improve the management of ecosystem services should seek to and expect to learn from past interventions and be flexible enough to update rules to fit new knowledge (Berkes 2009). Obtaining adequate information about specific ecosystem services at the various scales relevant to decision-making can be difficult, especially for supporting services (Turner and Daily 2008). In practice many projects and policies are pursued in absence of detailed understanding of ecosystem functions and services (Carpenter et al. 2009, Daily et al. 2009). On-going environmental changes make the need for adaptive responses even more critical (Chopra et al. 2005).

Box 4 Participatory technology development and non-timber forest products, Yunnan, China. 15

Experiences from forest restoration in Southwestern China show that the integration of local and scientific knowledge through participatory methods is a way towards more adaptive and inclusive conservation policies (Jun et al. 2009). Including concerned stakeholders and trying new approaches as well as sharing and evaluating the results in cooperation between officials and farmers is crucial to successfully merge local knowledge into ‘top-down’ conservation and development programmes.

This case illustrates how indigenous knowledge can be incorporated into the development of an agroforestry model with non-timber forest products by using a participatory approach. With the objective to find species of non-timber forest

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products for cultivation on slopes which is both economically and ecologically acceptable a pilot project was carried out in Baoshan Prefecture in Yunnan Province. By integrating indigenous and scientific knowledge, both in policy formulation and in implementation, the project show a positive impact on biodiversity conservation and development of livelihoods

In the implementation of the state-led reforestation initiative Sloping Land Conversion Program, the pilot project introduced participatory methods for cooperation between local farmers and professional researchers. By undertaking participatory technology development the aim of the project was to promote the farmer’s involvement in the agricultural research, to adapt the implementation to local specific needs. By finding contextually tailored management practices the project strived to provide local people with satisfactory livelihoods and deliver environmental services downstream.

A crucial aspect in project was to involve multiple stakeholders in a discussion on the consequences of the implementation process. Since farmers often are left without income as an effect of the first phase in forest restoration there was a need for finding alternative sources of livelihood through cultivation. Initially it was agreed that participation would benefit farmers and provide them with sustainable livelihoods.

The project initiated a team of local foresters and researchers to work with village ‘experts’ to put together an inventory of indigenous knowledge of useful plants, biological resources and land use. After scientific inquiry, scoring and ranking for these species were carried out using participatory methods to identify the most promising medicinal plants for cultivation in the area. Importantly, the farmers themselves carried out on-farm experiments, assessing the impact of different species. Through a ‘field-school’ the farmer’s experiences were pooled and new ideas for experiments developed. A lesson learned is that the project was keen to try new things out and sharing its results.

The integration of indigenous and scientific knowledge began with species’ selection. The basic criteria for selection were that plants selected were native, naturally occurring species that could be domesticated, were economically valuable, and could be used for extension. By investigating the economic, ecological, social and technical aspects of different species, farmers’ interest group evaluated a number of species. With good possibilities on markets, cultivable with little technique needed and a short period for harvesting a medicinal plant was finally chosen that met multiple requirements, well adapted to local needs.

Apart from field experimentation a central aspect in the participatory approach of the project was learning through monitoring and evaluation. This process gave a good understanding of the economic returns of the different species to farmers and forestry officials learned about the ecological benefits of different cultivation patterns. It was noted that except the economic benefits, cultivation of the chosen medicinal plant contributed to biodiversity conservation and helped to prevent overharvesting of wild plants.

The project linked indigenous knowledge to policy planning and implementation. One major lesson is that a participatory process of reforestation that involves local farmers, native species and indigenous knowledge, cooperating with forestry officials, can benefit all stakeholders concerned. The process of participatory technology development also strengthened communication between stakeholders and the interface of their different types of knowledge, enabling the community to respond and adapt to changing environment.

4.2 Rewards for services: Getting the incentives right (500) Payments for environmental, or ecosystem, services (PES) complement spatial planning and regulatory approaches to conservation (Wunder 2007, Engel et al. 2008). PES schemes involve voluntary transactions in which an environmental service is bought by a buyer from a provider if and only if the provider secures service provision (Wunder et al. 2008b). They share characteristics with other incentive-based mechanisms, like environmental taxes or subsidies and certification schemes (Engel et al. 2008, Jack et al. 2008). In invoking markets they provide some flexibility to supply-demand relationships that narrow government regulations cannot provide. Nevertheless enabling government policies are important for success of PES schemes, for example, to facilitate and encourage buyers and link them to providers, as well as integrate such schemes with more conventional regulatory approaches (Prasetyo et al. 2009).

To date only a few such schemes have been operating for a significant period in developing countries. Wunder et al. (2008b) found user- as opposed to government-financed programs were better in terms of fit to targeted beneficiaries, local conditions and needs, and monitoring. Who runs a project is another crucial feature of PES schemes (Corbera et al. 2007, Wunder et al. 2008b). Reliability of the organization and the ability to build trust are crucial (Koellner et al. 2008, Neef and Thomas 2009). Non-governmental organization may be helpful where farmer’s groups (as providers) are not formally recognized or buyers unfamiliar with negotiating directly with farmers (Neef and Thomas 2009).

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Common challenges include clarifying property rights, getting prices right and linking actions to compensation (Fisher et al. 2008).Payments must be based on what can be monitored: often this is just land-use, although in case of carbon sequestration more precise accounting may be possible (Wunder et al. 2008b). A related problem is how to ensure ecosystem services continue to be protected, especially after payments from a particular program or policy end (Wunder et al. 2008b).

Rewards or compensation does not have to be direct cash payments to individuals. Other methods could be having payments made to groups or in the form of privileged access to services or even other resources like training (Leimona et al. 2009, Neef and Thomas 2009). 16 Not all services are equally amenable to PES schemes.

Others have noted that introducing new markets for ecosystem services needs to consider carefully existing access rights and other processes which may exclude involvement in projects (Corbera et al. 2007, Mollinga et al. 2007). Poor, marginalized and otherwise vulnerable groups are often more dependent on ecosystem services and have relatively low opportunity costs than others (Jack et al. 2008) but their capacities to engage may also be limited. For example, poor farmers in Vietnam uplands with small holdings were unlikely to join reforestation schemes unless compensation was adequate to cover loss of food production (Jourdain et al. 2009). Non-participants may also be impacted adversely, for instance, when landless farmers lose access to common pool resources (Wunder 2008). The evidence about welfare impacts remains modest and suggests PES schemes are unlikely to become central to poverty alleviation efforts (Wunder 2008). 17

5 Sharing scarce water resources (2030/2000) Increasing water scarcity – seasonal and inter-annual – is a well recognized problem across many parts of Asia. Over-exploitation of ground and surface waters combined with often poor management has created a challenge that now goes well beyond simple technological fixes. The prospect of further changes to flow regimes arising from changes in land- and water-use as well as climate change imply that much of the design logic for infrastructure and institutions may no longer hold. In this section we explore how various initiatives to promote closer collaboration and dialogue among stakeholders might represent and contribute to adaptive governance.

5.1 Negotiation and agreements: shifting benefits and risks of projects (540 + Bx700) Adapting to the profound changes in hydrology already underway and anticipated is going to be a major challenge for Asian societies. Current withdrawals are already creating huge problems. Barrages in the Ganges already divert as much as 60% of flows to large-scale irrigation. The Farakka Barrage built in India in 1975 just 18km from the Bangladesh border greatly reduces average monthly discharges. As glacial melting proceeds water flows in the Ganges in the long-term, for example, could drop by two-thirds (Sharma and Sharma 2008). The 1996 Ganges Water Treaty –includes provisions for releases to Bangladesh which remains vulnerable to changes in allocation policy and climate change (Rahaman 2009): the current basis for sharing, for example, is based on 40 year historical flow record (Rahaman 2009). The details of water sharing agreements may need to be adjusted.

Further infrastructure-based solutions in both India and Bangladesh, sometimes also involving Nepal, are have also been proposed (Faisal 2002, Mondal and Wasimi 2007, Bhaduri and Barbier 2008). More broadly India’s National River Linking Project is a particularly ambitious scheme: it proposes a total 30 river linkages and 3000 storage structures and 14,900 km of canals to shift water to western and southern India including water from the Ganges and Brahmaputra to the Mahanadi basin (Amarasinghe et al. 2008). The impacts of such large-scale interventions on the environment and social development (e.g. displacement) are already complex (Amarasinghe et al. 2008) without even considering likely shifts in rainfall and glacier melt. Adaptive approaches that support learning (Pahl-Wostl 2007) and reversible or flexible options (Hallegatte 2009) are likely to be crucial in such settings. Unfortunately, most water management at national levels in South Asia has been strongly supply rather than demand oriented and as consequence basin closure is well on its way in the Ganges and Indus (Molle 2008b) leaving the water system as a whole much less resilient to further disturbances. Institutions and planning procedures, for example, could give more scope for small-scale, locally-controlled, infrastructure (Bandyopadhyay and Gyawali 1994). At the international level cooperation related to water may show the way forward in other areas (Fisher and Huber-Lee 2006) especially if focus is oncreating support for enabling institutions rather than hard bargaining on allocation of flows between two states (Nishat and Faisal 2000).

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As the uncertainties involved are large planning processes that attempt to bring climate change considerations into water or disaster management should treat policies, projects and strategies as experiments. Mechanisms to make observations, get feedback from diverse stakeholders, and adjust implementation as you go – literally, learning by doing, -- should be incorporated from the start (Pahl-Wostl et al. 2008). Uncertainties about climate change impact make information exchange very important; but sharing of water data is seen as a national security issue by many governments in Asia and thus highly restricted. Institutionalization of learning loops may be necessary to ensure it is sufficiently systematic that it can lead to adaptive behavior without excluding more ad hoc contributions that may also be important, for example, in identify previously unknown risks or groups at risk. Multi-stakeholder deliberation that can help reduce conflict and forge agreements depend on knowledge inputs and or only likely to become more critical as climate change compound seasonal water stresses.

Box 5 Transboundary river management of the Aral Sea Basin18

Experiences from Central Asia show that cooperation building is crucial to manage transnational waters (Dukhovny and Sokolov 2003). Following independence from the Soviet Union the countries around the Aral Sea Basin needed to agree upon new structures for management of rivers. In creating institutions and maintaining a dialogue challenges arising from the management over national borders has been met and slowly a new cooperation has evolved.

Illustrating the potential tragedy of commons the Aral Sea Basin is renowned for how its ecological state of crisis has severely affecting the five nations of Tajikistan, Turkmenistan, Uzbekistan, the Kyrgyz Republic, and Kazakhstan. The historical record of large scale development in the region has given severe ecological consequences. The most important one is the shrinking of the Aral Sea and the disruption of its ecosystem, but effects has also been a loss in biological productivity, degradation of river deltas and lowering of water levels.

The current management of the Aral Sea basin is much colored by the abrupt disruption of ties between these countries when independent from The Soviet Union. The steps towards cooperation over rivers since then have been slow but carefully, moving in the right direction. An important feature in this development has been the process of a dialogue between these countries and the setting up of institutions for collaboration.

Following independence in the region new interrelations between countries needed to be established based on cooperation rather than conflict. To integrate the water resource management between the countries two organizations were eventually set up for this purpose in the late 1980’s, later turned into the Interstate Commission for Water Coordination (ICWC) in 1993. This collective body for managing transboundary rivers is responsible for water allocation between the countries in the two major basins, Amu-Darya and Sur-Darya. In 1993 a body for funding the projects to manage the waters, the International Fund for Saving the Aral Sea (IFAS), were also created.

Importantly, in the body of ICWC the member countries are included in issues of coordination and monitoring. The board members of IFAS are the deputy prime ministers of the five states. Compared to the Soviet era the management organizations are today more open for public participation and under influence from local bodies of water allocation, though to different degrees in the five nations.

The water authorities of the five countries facilitate cooperation under the umbrella of the ICWC. The ICWC has to a big extent avoided conflicts in water management between the countries of the region, preparing and submitted a range of important legal, financial and institutional proposals for consideration by governments of the states. Two of these have been signed by the heads of states as international agreements.

The five states are working together in planning, but also in operating and managing transboundary rivers in real time. In this process the role of knowledge and information has been important. A commonly run database and Geographical Information Systems (GIS) together with scientific cooperation ensures that development is monitored and evaluated to ensure adaptation when needed. Close collaboration of professionals working with water related issues in these countries is also credited to have created an “Aral Sea Spirit”, promoting an understanding of the need for a common solution of the river management.

The progress of the water management in the Aral Sea Basin is dependent on a deeper cooperation between the five countries, again illustrating the challenge of environment issues that transcends national borders and challenges national sovereignty. The inclusion from local users and integration of knowledge and practice through partnership of science with water users and water organizations will be relevant issues for policymakers to discuss.

Since independence from the Soviet Union the dialogue between these nations have made it possible to organize a smooth transition from previous command style of water management to new and more democratic water collaboration on a regional basis. The cooperation is progressing in spite of complexities and differences in the social, political, and environmental conditions in the different states and their different levels development. It carries the promise of future success, giving objective appraisal to achievements and setbacks as well as finding ways of survival.

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5.2 Multi-stakeholder dialogues: Exploring alternatives (680) Changes in allocation are a likely source of conflict and easily exacerbated by climate change related changes in flows. Multi-stakeholder dialogues, by creating and supporting spaces for meaningful conversations, have the potential to play a significant role in improving governance of regional and trans-boundary waters (Warner 2006, Dore 2007b). Dialogues may, for instance, contribute to reducing water conflicts, ensure equitable and fair allocation, and ecological sustainable use and management. Dialogues may also inform, and help shape, more formal negotiation and decision-making processes, by bringing in a wider range of perspectives on needs, impacts and options, and having them deliberated openly (Dryzek 2000, Dore 2007a).

Over the past decade dialogues around water resource infrastructure programs and management policies have sprouted around the world at many different levels of governance. They very hugely in how strongly they are driven by water management agencies within states and consequently the tightness of links to decision-making and investment processes.

In Vientiane, Lao PDR, in July 2006, for example, an alliance of actors in the Mekong Region came together to publically discuss The World Bank’s Mekong Water Resources Assistance Strategy, the Asian Development Bank’s Greater Mekong Sub-Region Programme and the Mekong River Commission’s draft Strategic Plan, were used as departure points for discussion at the Dialogue. An ambition of the facilitators is that the Dialogues will lead to constructive analysis and adaptation of these strategies as they are implemented.

Another areas where improved capacities could yield multiple benefits are in the conduct of adaptation assessments themselves as in the coming decades such skills are likely to be in demand in a wide range of sectors and often those best at carrying them out with an ultimate aim of mainstreaming are those already involved in policy-making and strategizing in those areas. One example of such an initiative at the regional level in which Thailand could be a key player is the Mekong River Commissions proposal as part of its Climate Change Adaptation Initiative to form an independent expert body known as the Mekong Panel on Climate Change (MRC 2009). The proposal is for the Panel to analyze and report on the state of climate change and adaptation in the Mekong region every three years.

There is now substantial experience around the world in partnerships or coalitions for management of small and intermediate sized watersheds (Wittayapak and Dearden 1999, MacPherson and Tonning 2002). In Thailand for example the Department of Water Resources has been pursuing its goals for integrated water resources management through a consultative, multi-level, planning process coordinated by river basin and sub-basin organizations (Thomas 2005). Although not often called dialogues there is potential at lower levels for them to function in this way. At higher levels they appear to be trapped by political expediencies and grand rhetoric (Molle 2005). Successful partnerships or coalitions for larger watersheds that across national borders and for which are subject to serious water conflicts may be more difficult (Richards and Singh 2002, Medzini and Wolf 2004).

Meaningful, multiple stakeholder participation, it turns out, is critical to exploring alternatives and making good decisions about water resource development and management in complex situations; but achieving this level of mutual engagement is often hard given institutional and cultural norms and differences in political influence and power. Stakeholder partnerships are also important to moving from exploring to implementing and monitoring plans and strategies.

6 Synthesis (1180/1000) Conventional governance, as found widely in the Asia Pacific region, can be characterized as centralized, expert-driven, compartmentalized and change-averse. It assumes, and forecasts, influence, order and stability. Ecosystems are seen as separate from society. Failures to achieve objectives are attributed to lack of resources.

Adaptive governance, on the other hand, focuses on learning and managing resilience (Box 1). It accepts uncertainty, partial control and complexity of outcomes. When forward-looking it is concerned with being

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prepared for the unexpected. Social and ecological systems are seen as intricately inter-connected and dynamic.

In different problem domains the pursuit of sustainability has benefited from governance experiments which result in more inclusive and adaptive decision-making processes.

Farmers often have substantial experience with managing familiar risks, for example, arising from natural climate variability, and know which factors constrain their responses. Bringing together such practical knowledge with scientific understanding, about likely future changes in risks to co-produce new, actionable, knowledge requires changes to attitudes, normal forms of communication, and how policy and research agendas are set (Cash et al. 2003). National climate change adaptation policies for the agricultural sector, for example, often still appear remote from practice because they were not prepared with sufficient inputs from farmers’ perspectives. The linear research to extension to practice model focussed on crops and farming techniques is often insufficient for dealing with many current problems in agricultural sustainability (van Kerkhoff and Lebel 2006). Communication with land managers has to be in terms that are salient to them as users of climate information which usually can’t be achieved by simply passing on the findings (Cash et al. 2006)19. Farmers’ associations and rural banks often play important intermediary roles.

Cities are the epitome of dynamic self-organizing social-ecological systems. Markets and incentives play a huge role in the development of most places with regulatory agencies struggling to keep and planning agencies often relegated to historical roles of description and corrective actions. Self-organized networks of residents and firms have often played an important role in improving living conditions; but strengthening competitiveness in a constructive race requires decentralization reforms that give municipalities and other local government some flexibility and independence from national policy-making. Across Asia-Pacific national top-down efforts to control urbanization and its effects have largely failed before they have succeeded – driven by sheer weight of environmental and social problems (Marcotullio 2003). For industries in the peri-urban matrix or located more rurally and around which urban settlements are forming, standards, public disclosure of performance, community monitoring and protest and other diverse mechanisms beyond just regulations are often important for creating the incentives to addressing air and water quality pollution problems. Nudging transitions away from unsustainable socio-technological regimes towards more efficient resource use, lower pollution intensities and ultimately more sustainable production-consumption systems requires attention to how the niches for innovative technologies are constrained by incumbent systems (Smith et al. 2005). Re-directing attention to behaviour of consumers as part of production-consumption systems provides another set of leverage points and policy options for progressively reducing environmental loads (Lebel and Lorek 2008).

Despite a recent history of state-led initiatives to develop protected area systems and other land-use regulations to pursue conservation objectives across much of developing Asia local management of natural resources remains an important element of maintaining resilience of local social-ecological systems (Lebel and Daniel 2009). Community-based natural resource management remains crucial to maintaining ecosystem services because state agencies don’t have the resources, reach or skills adapted to particular places to be as effective as those with long-term stake in sustainability. But as economic development proceeds and technological opportunities for rapid exploitation expand some balance between top-down and bottom-up governance initiatives is often needed to adaptively cope with new dynamics and pressures (Berkes 2006b, Lebel et al. 2008) . Adaptive co-management has emerged as one of the more promising place-based approaches to integrating conservation objectives with sustainable use of natural resources in ways that enhance local social-ecological resilience (Berkes 2006a, Armitage et al. 2009). The intersection between decentralization reforms and creation of state and self-organized decision-making bodies less tightly bound to administrative hierarchies and area jurisdictions, or polycentric governance models, has created much needed flexibility to deal with change and surprise (Folke et al. 2005, Pahl-Wostl 2009). Market and other incentive-based instruments like payment for ecosystem services expand even more widely the mixture of possible responses to challenges of maintaining valued services (Wunder et al. 2008b).

Water bureaucracies have a long history built on highly technical, top-down, approaches to management that emphasize large-scale technologies (Molle et al. 2009, Pahl-Wostl 2009). This has made the introduction of more adaptive and inclusive procedures a slow and difficult process in most countries – agencies are simply not skilled at, or aware of the benefits of, meaningful participation of stakeholders in their planning and decision-making procedures (Gyawali and Dixit 2001, Pahl-Wostl 2007). Commitments to integrated water resources management has open some opportunities for wider engagement, for example, when consultation processes are now mandated as part of normal business of basin organizations, but in practice much decision-

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making remains behind closed-doors (Molle 2008a). Changes in flow regimes resulting from rapid socio-economic development and associated shifts in water and land-uses, compounded by realized and anticipated changes in climate, have made the needs for more adaptive water management paramount.

Across domains, climate is invariably a relevant confounder to be taken into consideration, but hardly ever likely to be the sole reason for an adaptive response or manageable in isolation of other sources of change. Thus, when exploring policy options it may be best to begin with existing alternative policies many of which were not formulated with adaptation to climate change in mind (Dovers 2009).

What the examples in this chapter show is that change is possible. Doing things differently, more broadly and consistently, will depend on institutional reform. Many transitions and final forms appear possible – adaptive governance is not narrowly prescriptive agenda: there are no panaceas (Meinzen-Dick 2007, Ostrom et al. 2007). Nevertheless, can suggest that attention to informal networks and knowledge systems is important.

Networks are critical to learning processes and the emergence of adaptive governance (Pahl-Wostl 2009). Informal or shadow networks are often crucial for preparing a governance system for change (Olsson et al. 2006); unburdened by conventional hierarchies and bureaucratic norms such networks allow leaders and others with power or influence to pursue shared understanding and explore alternatives . Outside conventional policy network actors are not restricted to representing organizational interests and bargaining with others similarly confined (Pahl-Wostl 2009). Key individuals may take on roles of brokers or boundary-spanners (Olsson et al. 2006). Networks are issue-oriented and may enable the creation of more institutionalized structures that secure the changes they have sought, for example, in form of boundary organizations (Guston 2001, Folke et al. 2005, Berkes 2009).

One reason network ties are so important for adaptive governance is the diverse forms of knowledge they can bring to bear on a problem. Preserving and documenting diverse sources of knowledge gives a larger foundation of ideas from which actors can draw on. In some instances it may be possible to build knowledge of ecological processes directly into institutional designs (Berkes and Folke 1998, Berkes et al. 2003). Monitoring and assessing frequently can be continuously testing the relevance of that knowledge to latest understanding of status of the environment and resources (van Kerkhoff and Lebel 2006). Diverse knowledge systems are another key dimension of adaptive governance.20

7 Conclusion (150 + Bx310) The quality of governance has been and will continue to be central to the pursuit of sustainable development. In many problem domains complexity and uncertainty imply that governance will itself need to be adaptive if it is to effectively support the adaptation process, maintain social-ecological resilience and build adaptive capacities to novel portfolios of challenges. Fortunately, the last decade has also seen a huge diversity of innovative policies, projects and other types of initiatives tried in the Asia-Pacific Region. Cases in point being the green growth framework promoted by UNESCAP and related or similar initiatives pursued by other actors in the Asia-Pacific region. Although there are no panaceas and generic development models remain elusive much valuable experience has been gained and should be learned from by governments, civil society and the private sector. Some of the initial example of policy options that should help make governance more adaptive are summarized below.

Box 6 Recommendations to improve the inclusiveness and adaptiveness of governance in the Asia Pacific

• Recommendations for local officials and community leaders

o Assess and monitor the local impacts (beneficial and adverse) of national-level adaptation policies. o Strengthen local initiatives to improve the resilience of diverse ecological sub-systems. o Engage at multiple levels and build informal networks with diverse stakeholders

• Recommendations for the private sector o Invest more in building capacity of employees and suppliers to adopt and refine innovations that

support sustainability o Partner with public agencies and citizens to design and develop new products and services that fit

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consumer needs, are profitable and cause less environmental damage o Strengthen entrepreneurial and business management skills with special emphasis on managing risks

and handling uncertainties, including those arising from variable and changing climates

• Recommendations for national leaders o Expand opportunities for meaningful participation in policy process paying particular attention to

vulnerable groups o Reduce institutional barriers to collaborative initiatives across Ministries and Departments o All open and transparent access to plans, information and assessments o Encourage partnerships with civil society and private sector actors o Acknowledge diverse and unusual interests, capabilities and needs by continually seeking their inputs

into policy formulation

• Recommendations for regional leaders o Support cooperation among governments, business and civil society to establish principles, identify

good practice, spread financial risks from climate and water disasters, and reduce adverse trans-boundary impacts of individual adaptation policies

o Encourage sharing of hydrological, meteorological and other information critical to adaptation efforts

• Recommendations for donors o Strengthen capacity for national and local adaptation assessments in developing countries, ensuring

that adequate efforts is given to assess diverse needs and opportunities for wider inputs are provided o Provide adequate technical and financial support to initiatives by least-developed countries to

integrate adaptation into economic development strategies.

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Yu, H. 2004. Knowledge and climate change policy coordination in China. East Asia 21:58-77. 1 All notes in this chapter are temporary reminders to author for revisions; they will be removed in final version! 2 Refer to UN publications on good governance; maybe emphasize environmental governance 3 Draft figure – needs to be improved. 4 Governance-angle needs to be more explicit 5 Bit more on local irrigation , self-organization and adaptive management (Ostrom 1990, Ostrom 1999) 6 Double check ref; not same scope “nat res dependent”

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7 Check citation 8 To bring this box up-to-date a copy of this article would be very useful to have a copy of this article (not yet sighted in full!) 9 Update 10 Extra/updated information in manuscript from Rock et al. in press not yet included 11 If room could expand treatment of consumers – consumption (GoodGuide Inc) or cite chapters in SPACES book or review: (Lebel and Lorek 2008) 12 Needs a final paragraph drawing adaptive/inclusive lessons 13 Not yet edited. Must be condensed 50% 14 Consider tonle sap fisheries/wetlands example 15 Edited and Condense 20-30% 16 See also (Wunder et al. 2008a) 17 Earlier versions of this chapter had included a boxed example of a PES scheme. No longer appears to be enough room to warrant such detail. 18 Edit and condense 40% 19 Double-check this ref 20 Insert short paragraph to end section?