Report No. 11239-JM

JamaicaEconomic Issues forEnvironmental ManagementJanuary 22, 1993

Caribbean DivisionLatin America and the Caribbean Region

FOR OFFICIAL USE ONLY

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Document of the World Bank

This document has a restricted distribution and may be used by recipientsonly in the performance of their official duties. Its contents may not otherwisebe disclosed without World Bank authorization.

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FISCAL YEAR

April 1 - March 31

EXCHANGE RATES (Q4 1992)

US$ 1 J$ 22.20J$ 1 = US$ 0.045

ABBREVIATIONS

BOD Biochemical oxygen demandCFC ChlorofluorocarbonCGCED Caribbean Group for Cooperation in Economic DevelopmentCIDA Canadian International Development AgencyECD Environmental Control Division of the Ministry of HealthEIA Environmental impact assessmentFAO Food and Agriculture Organization of the UNFIDCO Forestry Industries Development CompanyGEF Global Environmental FacilityGDP Gross domestic productGOJ Government of JamaicaIDB Inter-American Development BankKMA Kingston Metropolitan AreaKRC Kingston Restoration CompanyMARPOL 73/78 International Convention for the Prevention of Pollution from Ships

(London 1973, modified by its Protocol of 1978)MJ Megajoule (a unit of heat)MOF Ministry of FinanceNGO Non-governmental organizationNRCA Natural Resources Conservation AuthorityNWC National Water CommissionOECF Overseas Economic Cooperation Fund (Japan)OECS Organization of Eastern Caribbean StatesPIOJ Planning Institute of JamaicaPSOJ Private Sector Organization of JamaicaTA Technical assistanceUDC Urban Development CorporationUNCED United Nations Conference on Environment and DevelopmentUNDP United Nations Development ProgrammeUNEP United Nations Environmental ProgrammeUSAID United States Agency for International DevelopmentUWI University of the West Indies

FOR OFFICIAL USE ONLY

Table of ContentsPage Number

EXECUTIVE SUMMARY ................................ i

I. BACKGROUND: THE COUNTRY AND THE ECONOMY ... ...... 1The Country ......................................... 2The Macro Economy and the Environment ..................... 3Private Sector Coordination .............................. 3

II. ENVIRONMENTAL INSTITUTIONS AND INSTRUMENTS ... ...... 4

III. ENVIRONMENTAL MANAGEMENT. 7Land Use and Water Resources. 9

Recommendations: Land Use and Water Resources .11Water Pollution .13

Recommendations: Water Pollution .14

IV. POVERTY AND THE ENVIRONMENT .17Recommendations .18

V. OTHER ENVIRONMENTAL ISSUES .19Disaster Preparedness .19National Parks and Protected Areas .19Biodiversity .19Overuse of Open Access Resources .20Solid and Hazardous Waste .20Jamaica's Participation in International Environmental Efforts .20Energy Demand Management .21Zoning ........................................... 21Mitigation of Existing Pollution Sites .21Air Pollution ........................................ 21Noise Pollution .22

VI. SUMMARY RECOMMENDATIONS .22

Annex I: Bibliography ................................. 25Annex II: Major Activities with External Support .26Map

This issues paper is based on the findings of an environmental mission which visitedJamaica in AugustlSeptember 1992. The mission comprised Amolo Ng'weno (missionleader), Graeme Thompson (economist); and Ricardo Katz (consultant), assisted byWinston MacCalla (CIDA consultant) in Jamaica. The Board and staff of the NRCAcontributed actively to the development of the paper.

This document has a restricted distribution and may be used by recipients only in the performanceof their official duties. Its contents may not otherwise be disclosed without World Bank authorization.

EXECUTIVE SUMMARY

i. This cnvironmental issues paper is aimed at assisting the Government of Jamaica(GOJ) and other interested parties in analyzing the crucial economic and institutional issuesaffecting the environment in Jamaica. In addition, it identifies key areas for potentialexternal assistance in the environmental sectors. The paper is based on extensive existingwork of a technical nature; a bibliography is appended. The degree of international interestin the subject was demonstrated not only by the high level of participation at the UnitedNations Conference on Environment and Development (UNCED) in June 1992, but alsoregionally at the meeting of the Caribbean Group on Cooperation in Economic Development(CGCED) (also in June 1992). This is therefore an opportune time for Jamaica to embark ona number of environmental initiatives.

ii. The GOJ has made a serious and promising start in rejuvenating theenvironmental management effort in the country. The Jamaica National EnvironmentalAction Plan is to be completed shortly, and the institutional structures for managingenvironmental issues are now in place and operative. However, recognizing that the GOJwill operate under tight fiscal constraints in the immediate future, it is particularly importantto place environmental initiatives in the perspective of the Public Sector InvestmentProgramme. In this context, changes in the economic regime are cost-effective relative toother options, such as investments and legal mechanisms.

Putting the Incentive Regime to Work

iii. Maximum mileage from the country's scarce resources can be attained by puttingthe incentive regime to work in any areas where economic tools (taxes, subsidies,information, ownership and prices) can be brought to bear. In this connection, areas forearly attention include: issuance of general policies for land and water use; adjustments inthe water rates regime to allow some discrimination for services used; and increases in thesale price of public resources. Areas for longer-term research and application include:charging efficient rates for water consumption, sewerage and irrigation services; taxing waterpolluters; taxing inputs and outputs of highly polluting small-scale industries; improving theland tenure regime and property tax system; improving agricultural research and extensionservices; and improving technical support to industry, especially small-scale industry.

Concentrating on Realizable Accomplishments

iv. Although all the partners involved in the country's economic development arekeen to see early action on a number of fronts, all agencies, including external donors,should focus resources in one or two priority areas. The broad areas identified in this paperas key priorities are land use and water pollution. Coordination of policies and resources isan immediate priority for the Natural Resources Conservation Agency (NRCA). For thisreason, a clear statement of the GOJ's priorities is warranted, and these priorities should besupported by the donor community.

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Concentrating Investment in Crucial Areas

v. Given the fiscal constraints, investment activities need to concentrate on criticalareas agreed on within the GOJ. Investments in water infrastructure and watershedprotection would probably be the most important in the short term.

Capitalizing on Private Sector Efforts

vi. The private sector can be tapped as a source of information, investment and evenfunding for environmental programs. In return, the NRCA should clearly identify partiesand agencies responsible for private sector interaction. It should also identify an interfacebetween itself and the private sector, and should provide the business community informationon Jamaican and foreign standards and regulations. Simplifying and streamliningbureaucratic requirements will assist the private sector in its environment-related activities.

Developing Longer-term Capabilities

vii. Although restricting itself at present to a few priority areas, the NRCA mustclearly develop capabilities for long-term management of the environment. Externaltechnical assistance should recognize these long-term goals. The development ofenvironmental management capability in the GOJ should include developing economicexpe.tise in the NRCA, and environmental expertise in the Ministry of Finance and thePlanning Institute of Jamaica.

I. BACKGROUND: THE COUNTRY AND THE ECONOMY

1.1 1993 finds Jamaica at economic crossroads; the stabilization program, followingthe rapid currency depreciation and high inflation starting in mid-1991, is back on track. Forthe first time in several years, Jamaica is not directly confronted with short-termmacroeconomic instability and a continuing balance of payments crisis. This time ofmacroeconomic calm gives the Jamaicans the opportunity to undertake further adjustmentmeasures necessary to consolidate the macroeconomic framework, and in this context thelong-term sustainability of Jamaica's economic base is even more important. The GOJindicated its recognition of the importance of the environment in the economy by raisingenvironmental concerns to a Cabinet level via the Ministry of Tourism and the Environment;by creating the Natural Resources Conservation Authority (NRCA) with a broad mandate ofenvironmental regulation, enforcement, policy advice and resource management; and byincluding key environmental goals in its Medium Term Policy Framework (covering the threeyears 1992/93-1994/95). This comes in the context of rising public awareness of the issues,a number of private sector initiatives on environmental protection, and a global climate inwhich the role of the environment in economic development is emphasized. The closeworking relationship between the private sector and the GOJ shows great promise for thedevelopment of a robust regulatory framework.

1.2 A number of basic environmental policies have been under development over thepast couple of years, activities which included the NRCA Act, but which continue in anumber of multi-sectoral areas. The GOJ's National Environmental Action Plan will beissued shortly, and is being revised to reflect the Public Sector Investment Programme andthe principles of Agenda 21Y.' Other areas include a water resources bill, presently underconsideration by Parliament, and a comprehensive land policy with subsidiary regulations andstandards. These policies were developed in close consultation with affected public andprivate sector agencies and local communities. The regulatory structure for environmentalmanagement is therefore at a fairly advanced stage of development.

1.3 In the environment field, Jamaica has received significant assistance fromexternal agencies, in support for the NRCA as well as for projects (a list of major activitiesis included in Annex II). In late 1992, NRCA's strategic planning process began to narrowthe priority areas for its activities and define the urgent areas for additional technical andinvestment support. This process will culminate in early 1993 with the issuance of aNational Environmental Action Plan, spelling out the GOJ's priorities and plans toaccomplish them through investments and incentives, and the institutional and regulatoryframework under which the plan will be undertaken. The National Environmental ActionPlan will form part of the economic planning process, and will be periodically revised. TheGOJ will also need to carefully define spending priorities within the budget envelope givenits limited financial resources and will thus need to speed up its accessing of specialenvironmentally-directed donor resources.

1.4 With this leadership from the GOJ, it will be possible to rationalize the projectsand activities with external support to get the most mileage out of the available resources.

1/ The environmental agenda agreed at the UNCED conference in June 1992.

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The World Bank attaches great importance to the outcome of this process and the specificdetails of the National Environmental Action Plan. As part of the CGCED activities, theWorld Bank is coordinating a regional effort to assist in the development of EnvironmentalAction Plans in a number of Caribbean countries by the next meeting of the CGCED (June1994). The Jamaican effort is coincident with this activity and could therefore draw upon theresources provided through the CGCED study for technical details or harmonization withother countries.

The Country

1.5 Jamaica is an island country, located in the northern Caribbean, approximately145 km south of Cuba and 160 km west of Haiti, with a population of about 2.4 millionpeople in 1992 and a land area of 11,000 sq. km. The country has had a low and steadypopulation growth rate of 1.4% for the past two decades, partially reflecting substantialemigration to Europe and North America. Life expectancy and literacy are high for acountry in Jamaica's income group, demonstrating significant commitment to socialdevelopment since Independence in 1962.

1.6 Economic growth has not, unfortunately, been as positive or steady. Until the1950s, Jamaica's economy was based principally on exports of agricultural products,including sugar, bananas, coffee, citrus and pimento. Mineral exploitation, especially ofbauxite, and tourism development flourished after the 1950s. Agriculture, mining andtourism continue to generate close to a third of Jamaica's GDP, emphasizing the continuedimportance of natural resources in the economy. In the 1970s and 1980s these activities havebeen further supplemented with other services and light manufacturing.

1.7 Annual average real GDP growth exceeded 6% during 1950-1968. Jamaica washit hard by the oil crisis of the early 1970s, which, combined with problems of economicmanagement, set off a long period of declining real GDP. The impact on its population hasbeen severe, as real per capita GDP and consumption fell, unemployment and povertyincreased and public funding for the social sectors was slashed. Since the mid-1980s, theJamaican economy has begun to grow again; growth has averaged about 3% per year since1 985 notwithstanding Hurricane Gilbert in 1988 which devastated physical infrastructure onthe island, including much of the housing stock.

1.8 Debt service payments related to excessive external borrowing in the 1980s,however, continue to hamper the flexibility of the public sector. Foreign debt stands at over100% of GDP and foreign interest payments are about 50% of GOJ revenue. Meanwhile,the public sector payroll has been sharply reduced, through declining real wages,retrenchment, and divestment. The need to continue with the tight fiscal management willimpose serious limitations on the NRCA, GOJ financing capabilities (both for recurrentexpenditure and investment), and project implementation capabilities. Thus, it is importantto have realistic and achievable goals for the short and medium term, and to build aninstitutional structure through which more ambitious activities can be achieved in the longerterm.

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The Macro Economy and the Environment

1.9 In common with many other developing countries, Jamaica faced the crises of the1970s and 1980s burdened with heavy state involvement in the economy; numerous generalsubsidies on food, water, energy and agricultural inputs; price controls including interest rateceilings; directed credit from the public sector; public monopolies on certain imports; exportrestrictions; high barriers to trade; and a policy of state direction of the economy. Many ofthese activities had dirert negative consequences on environmental management. Forexample, subsidies on irrigation water encouraged over-pumping, which resulted in salineintrusion into some aquifers. Stumpage prices on govemment-owned lands were well belowreplacement costs, aggravating deforestation. Trade barriers and subsidies encouraged over-use of pesticides (now curbed). However, in the past 5 years large strides have been madein deregulating the economy and in making it more open to both domestic and externalcompetition. The challenge for Jamaica is to keep environmental management needs acentral feature of govemment policy as the economy responds to the improved investmentand financial opportunities.

1. 10 At present very little price regulation exists in most sectors, rapid advances arebeing made in trade liberalization, and interest rates are freely floating. General subsidieshave been eliminated (with the exception of the subsidy on kerosene -- see box 3) andreplaced, where necessary, with targeted subsidies. A policy of passing on to the consumerthe full cost of production of water and energy has been instituted recently, and these utilitiesare under consideration for privatization of the enterprise as a whole or of selected services(the telephone utility was sold to the private sector).

1.11 Although many economic impediments have now been removed and guidelineshave been established for environmental management, the GOJ has so far not explored thefull range of incentives affecting environment-related behavior. For instance, governmentprices for use of public land, water and other resources are far below their true value and inmany cases are not enforced. Rental of beach rights to hotels is J$100 (US$5) per year.Squatting on and clearing of government forest land, although forbidden, is widespread.Similarly, the tax system has not incorporated the environmental costs of economic activitythrough taxes on effluents, emissions and waste production. Although there are transactionscosts involved in imposing and enforcing taxes, this option is being investigated further bythe NRCA, and could form an important element of environmental policy.

Private Sector Coordination

1.12 A fair degree of communication exists in Jamaica between private sector actorsand government agencies concerned with the environment. In fact, in many cases, businessassociations have led the GOJ in the imposition of environmental standards in industry. ThePrivate Sector Organization of Jamaica (PSOJ) has a committee on the environment whichhas started a number of initiatives to fund environmental policy and research studies, to abatepollution in Kingston harbor, and to improve the awareness of members concerningenvironmental problems. In addition, chambers of commerce have taken an active role inenvironmental protection activities, especially the Negril Chamber of Commerce, which isaffiliated with the Negril Coral Reef Preservation Society. Industry groups are active in thesetting of standards, including environmental standards, and have participated actively in a

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number of recent GOJ initiatives for environmental management and planning, frequentlycontributing to the funding or research costs.

1.13 This private sector participation has tended to focus the discussion toward taxbreaks and other subsidies to encourage industry to install clean technologies, with lessemphasis on taxation, sanctions and monitoring. Although these latter options will be furtherdeveloped by the NRCA, the cordial relationship with the private sector should be valued andnurtured. The NRCA is considering positive incentives for industry, including publicrecognition of environmentally-friendly firms or products. In addition to the public relationsbenefits, other benefits include increased powers of moral suasion, and the participation ofthe private sector in bearing technical costs and sharing information.

1.14 The private sector is keen to participate in the development of regulations, andlooks to the NRCA for leadership in setting standards and overall policy. Health, safety andenvironmental regulation have become increasingly important as price regulation is phasedout and state enterprises privatized. At the moment, monitoring and enforcement capabilitiesin all agencies are weak. In the short term, it is important for the NRCA to focus onmonitoring and enforcement efforts which are achievable and which target key sectors.

II. ENVIRONMENTAL INSTITUTIONS AND INSTRUMENTS

2.1 The Natural Resources Conservation Authority was created in 1991 as anumbrella institution for the environment, charged with the ultimate responsibility forenvironmental quality, including the drafting and amending of legislation and regulations;policy advice to the Ministry of Tourism and Environment (under which it is situated);monitoring and enforcement; and management of ecosystems and national parks. It providestechnical input to the quarterly meetings of the Inter-Ministerial Committee on theEnvironment (which, because of the high degree of interest, comprises the full Cabinet).The NRCA is also represented on environment-related committees and boards of the GOJ. Itcan delegate some of these responsibilities to other parties (such as the Bauxite Institute, theUnderground Water Authority and the Forestry Department), but expects to retain a coremonitoring and enforcement capability. The NRCA holds responsibility for coordinatingenvironmental activities by all government agencies, including project development.

2.2 In terms of changes in the incentive regime, the NRCA has power to imposefines and licensing fees, which, as a statutory body, it is able to retain in its own budget.However, with regard to changes in the macro incentive structure, such as levying taxes, theNRCA serves an advisory technical function to the Inter-Ministerial Committee and to theMinistry of Finance. The NRCA Act provides for the NRCA to inform the GOJ of the costsand benefits of environmental protection measures on an on-going basis, and, by extension,to review government economic policies, i.e., general (such as the tax regime) and specific(such as environmental incentives).

2.3 This broad mandate makes the NRCA potentially one of the more powerful unitsof the GOJ. In the present political climate, it enjoys firm support from the GOJ, and has arespected technocrat as its executive director. Its role has also been welcomed by mostgovernment and external agencies. However, it has not received funding commensurate withits expected duties, and takes over from a predecessor institution (the Natural Resources

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Conservation Department) whose powersand reputation had declined in recent Box 1: THE BAUXITE INDUSTRY AND THE

years. In the near term its abilities to ENVIRONMENT

monitor and enforce will be limited and Bauxite, one of Jamaica's main exports, is strip-

will rely largely on the staff of other mined, in many cases in poor agricultural areas. The

agencies. In practice, this implies that potential for alienating the local community is high, andthe NRCA's monitoring and the industry has been keen to keep a positive publicenforcement responsibilities will be image. This has resulted in close cooperation with the

Jamaica Bauxite Institute, a statutory body withlimited to key industries and to the regulatory and enforcement powers over all aspects of

supervision of other GOJ agencies' the industry, as well as a high degree of cooperation

monitoring activities. with local communities.

2.4 It is important for the The major environumental problem caused by theindustry is the disposal of the tailings, which form an

NRCA to make concrete accomplish- alkaline mud. These have been disposed of in largements in the first years of its operation, mined-out limestone pits. These 'red mud lakes' have

and to establish its position in the GOJ leached sodium into the underground aquifers in local

and vis-a-vis other environment-related areas. Because of its genetic makeup, the Jamaicaninstitutions. In addition to other population is particularly subject to hypertension, which

can be aggravated by high levels of sodium; this,environmental agencies of the GOJ, the therefore, can present a greater problem in Jamaica than

NRCA will be the leading government in other countries. Recently, one mine devised a new

counterpart for external agencies system of drying the mud in shallow beds; the residuesinvolved in environmental projects, and can then be used for construction material or as an input

in cement production, although there remain somewill review all externally-supported questions about the residues' concentrated use. The

projects as part of the GOJ's project process, invented in Jamaica, is now being used in other

pre-selection committee. The NRCA mines around the world.

also has public education functions, andis well placed to carry out the dialogue inteOther environmental problems include changesin the water regime. The Mining Act of 1947 requireswith NGOs and the private sector as the mines to remove topsoil before mining, and restore

representatives of both sit on its Board it as part of the reclamation process. However, because

of Directors. By building on its early of the increase in surface area after mirning and thestrengths, the NRCA will be in a better removal of hundreds of feet of bauxite, the waterposition to take on the evolving retention capabilities of the soil are reduced. Where

formerly annual crops were grown, now only tree cropscomplexities of natural resource and pasture are possible, and water reaches the aquifersmanagement. more quickly. The companies also provide extension

services to farmers on the reclaimed land.

2.5 The problem of monitoring Noise and dust are localized problems; theand enforcement becomes especially companies relocate people or compensate them for theiracute in the light of the high proximity to haul roads.expectations that are placed on theNRCA from both the private sector andthe other government agencies. Although general legislation is issued by the Parliament onthe advice of the NRCA and other agencies, the NRCA has been charged with theresponsibility of issuing subsidiary regulations, and may modify regulations issued by otheragencies, subject to affirmative resolution by Parliament. High expectations are resting onthe NRCA both to create reasonable regulations and enforce them within a fairly short timeperiod. At the same time, the private sector and other agencies seek to be involved in theprocess of regulatory development, which would ultimately produce better regulations butwill slow the process. The NRCA must be careful to keep regulations simple and clear,

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enforcement mechanisms realistic, and penalties appropriate. The NRCA is receivingassistance from external agencies for the development of regulations. Enforcement is likelyto be a greater problem, and it is therefore important for the agency to recognize itslimitations, delegate to other agencies, and set a task commensurate with existing human andfinancial constraints. In the short term, it will enhance the reputation of the NRCA tochoose a small set of regulations and enforce them well (and visibly) rather than to enforceall poorly. A number of cases are presently before the courts, which will provide the NRCAwith the opportunity to demonstrate its seriousness. As its staff develops, better overallenforcement will be possible.

2.6 Other environmental institutions include: the Environmental Control Departmentof the Ministry of Health, which is responsible for air and water quality measurement andenvironmental health; the Ministry of Agriculture, including the Forestry Department, whichmanages rural land use (private and public), irrigation, agricultural extension and agriculture-related infrastructure; the Ministry of Public Utilities, Transport and Energy, which overseesthe energy sector; the Ministry of Production, Mining and Commerce which oversees themining industry, including zoning and environmental quality control; the National WaterCommission, which is the water and sewerage utility for domestic and industry use, and itstwin, the National Irrigation Commission; and the Town and Country Planning Departmentof the Ministry of Tourism and Environment, which is responsible for physical planning andzoning in urban areas. Local governments also have environmental responsibilities,especially for zoning and physical planning. There are numerous statutory bodies includingthe Underground Water Authority, which has responsibility for planning permission andwater quality; and FIDCO and CIDCO (Forestry and Coffee Industrial DevelopmentCorporations), responsible for commercial forestry and coffee development on governmentlands. There are also advisory bodies, including the Watershed Protection Commission, andthe Land Policy Commission, which have important policy missions but are temporary inactivity. The University of the West Indies (Mona Campus, on the Kingston outskirts) alsoprovides support for environmental research and training.

2.7 Given the large number of agencies involved in the environment, the task ofinter-agency coordination is extremely important, and is part of the NRCA's mandate. TheNRCA would provide an interface point for the private sector, NGOs, external agencies andother outsiders to approach the GOJ on environmental issues, and would coordinate inter-sectoral project activities. The NRCA would also coordinate the responsibilities of thevarious agencies in each sector, helping to ensure that all aspects are covered and thatduplication is minimal. The support shown by the other government agencies at the NRCAstrategic planning workshop in September 1992 indicates that some inter-agency coordinationis already taking place, and that agencies recognize the NRCA's role in this area. As part ofthe NRCA's strategic planning process, mechanisms of coordination are being defined, butthe development and refinement of coordination will remain an important activity. At thesame time, the GOJ should review the need for such a large number of agencies involved inthe environment, with a view to the possibility of merging some agencies to concentrate theuse of scarce technical personnel.

2.8 NGOs in Jamaica are mostly grassroots and concerned with environmental andcommunity development activities at local levels. Some of these organizations have had asignificant impact on local zoning, permits, public awareness, protection and cleanup,

especially in the tourist corridor on the North Coast. Major national players include theJamaica Conservation and Development Trust, and the National Environmental SocietiesTrust, which is an association of environmental NGOs. A number of internationalenvironmental NGOs are also active in Jamaica, notably the Nature Conservancy, which isworking on debt-for-nature swaps. The close working relationship between NGOs and theNRCA encourages sharing of information, community ideas and participation, and has ledNRCA to delegate the management of national parks to the Jamaica Conservation andDevelopment Trust. With the financial support of donors such as CIDA and USAID, it isexpected that NGOs will play an increasingly important role in environmental education,management and policy in Jamaica.

III. ENVIRONMENTAL MANAGEMENT

3.1 Jamaica's largest environmental problems, from the point of view of affecting thelargest number of people's lives and livelihoods, are related to water. Pollution of surfaceand sea water threatens human health and tourism revenues. Clean water for domesticpurposes has frequently been short in the Kingston Metropolitan area (KMA), and ispresently facing a significant deficit. Due to degradation of watersheds, flooding isbecoming more frequent and more severe, and pollution of ground water is raising the costof infrastructure, eroding agricultural productivity and posing health risks. Topsoil loss inthe watershed areas is harming agricultural productivity and causing marine siltation.Although a number of other environmental problems do exist, the water issue is by far themost serious. It must be recognized that action is required on a number of fronts and islikely to be of fairly long duration, with significant improvements only likely in the late1990s. Realizing that these problems will not be solved in short order implies makinginterim arrangements as well as planning for permanent and sustainable solutions.

3.2 In Jamaica as with other island countries, there is an extremely close inter-relationship between the terrestrial and marine ecosystems; in addition the varied andmountainous inland terrain supports a number of ecosystems unusually rich in biodiversity.Water provides the link that ties the terrestrial ecosystems with lowland urban areas andmarine habitats. The close proximity and interaction of these ecosystems and the relativelyhigh population density (216 persons per square km; 1.6 km of paved road for every squarekm of land) means that economic activities are rarely local in effect; effective environmentalmanagement becomes especially important. Selected environmental indicators are presentedat Table 1.

3.3 Water resource management is the responsibility of a number of agencies.According to Jamaican law, water is owned by the holder of the property under which it isfound. For practical purposes, however, water has belonged to the person capturing it.Thus, it has not always been clear what the rights and responsibilities of individuals arerelating to effects that they might have on the water regime and downstream users.Legislation is presently before Parliament which will provide for a unified organizationalframework for the administration of all surface and underground water resources, with oneAuthority having overall responsibility.

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Table 1: ENVIRONMENTAL INDICATORS: THEN AND NOW

Resource How it used to be hlow it is now

Fisheries production (million kg) 10.5 (1960) 4.1 (1991 est,)

Aquaculture production (million kg) negligible (1960) 3.4 (1991)

Number of fishermen 16,000 (1982) Thought to haveincreased 20-30%

____________________________________________________by 1992

Forest cover (sq km) 2,100 (1960-65) 1,860 (1985-90)

% of land forested 19% (1960-65) 17f (1985-90)

Agricultural land (sq km) 44,400 (1960-65) 41,800 (1985-90)

% of population in agriculture-related work 40% (1950) 30% (1990)

Index of sugar exports by volume (1985 = 100) 218 (1970) 95 (1989)

Per capita food production index (1979-81 = 100) 107 (1960-65) 95 (1988-90)

Fertilizer use (kg per Ha of arable land) 87 (1970/71) 115 (1989/90)

Index of volume of bauxite exports (1985 = 100) 364 (1970) 197 (1989)

Value of bauxite exports (constant 1985 1$ m) 781 (1970) 497 (1989)

Index of charcoal price per MJ (kerosene = 100) 130 (Ql 1980) 205 (Q2 1992)

Real price of charcoal per tin, KMA (constant 1985 JS) 4.95 (Ql 1977) 9.96 (Q2 1992)

Tourist arrivals 532,000 (1978) 1,236,000 (1990)

Population living in dwellings they neither own nor rent (mainly 8.3% (1989)squatters)

Population below poverty line 33 % (1989)

Percent of poorest quintile obtaining drinking water from 14% (1989)rivers/lakes

Percent of poorest quintile using pit latrines 86% (1989)

Percent of population with no toilet facilities 3 % (1989)

Number of informal industries 13,000 (1989)

Inflation (CPI) 13% (avg 1965-80) 15% (end 1992 atannual rate)

Exchange rate (JS/USS) 0.8 (1972); 8 (Ql 1991) 22 (Q4 1992)

Growth rate of earnings per employee -0.2% (1970-80) -0.8% (1980-89)

Source: Govemment of Jamaica documents; Jamaica National Report on the Environment and Development,Govemment of Jamaica, 1992; International Financial Statistics, IMF, 1991; Social Indicators ofDevelopment 1991-92, World Bank; Survey of Living Conditions, November 1989, Planning Institute ofJamaica; World Bank documents; World Development Report 1992, World Bank.

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Land Use and Water Resources

3.4 The problem. Soil erosion is part of the natural cycle of geologicaldevelopment. However, human activities, especially in agriculture, have led to increasing,and unsustainable, rates of erosion in watershed areas. The results are widespread and mayin time endanger human health. At the point at which it occurs, erosion reduces agriculturalproductivity and increases the need for chemical fertilizers. Downstream, increased silt loadsin rivers shorten the lives of dams, block watercourses, choke marine habitats, and increasethe cost of water infrastructure and treatment. Associated with the increased erosion isreduced retention of rainwater by the soil; this means there is faster runoff with moreflooding and river seasonality, and less infiltration into groundwater.

3.5 Jamaica is particularly susceptible to watershed degradation, as approximately80% of the land surface is hilly or mountainous with more than 50% having slopes of greaterthan 20 degrees. Highland soils, such as are found in the Blue Mountains, have low fertilityand are easily erodible. As a result of deforestation, improper land use and poormanagement, vegetative cover has been lost on many hilly areas, resulting in an excessivelevel of topsoil erosion. Of the 33 watersheds, 19 are badly eroded. In the past century,more than 60 rivers have ceased to flow year round. The area of land classified as arablehas decreased by about 10% over the past three decades, as has the area classified as forest.

3.6 The situation in Jamaica, as with other countries in the Caribbean, is exacerbatedby the frequency of natural disasters, especially hurricanes. A serious hurricane can beexpected every 5-15 years, and tropical storms occur every summer. Hurricane Gilbert in1988 cost 50 lives, rendered half a million people homeless and caused over $1 billion ineconomic damage, much of it to housing, agriculture, forestry and tourism stock.Furthermore, Jamaica lies on the San Andreas fault (which passes through Kingston), makingit susceptible to earthquakes. The alluvial fans of rivers, on which much coastal settlementlies, are subject to soil liquefaction in earthquakes or flooding. As forests and coastalwetland vegetation are degraded, their protective value is lost, increasing the severity offlooding in natural disasters. In 1692, much of the Port Royal settlement near present-dayKingston sank in an earthquake, costing hundreds of lives.

3.7 The causes. The causes of watershed degradation are principally agriculture,charcoal production and infrastructure development. Even some lands owned by the NationalWater Commission (NWC) are degraded, as public agencies have lost their ability to defendthe land against clearing by squatters and deforestation for charcoal production. Recently,the Forestry Department has increased stumpage fees to commercial rates, but these will bedifficult to enforce or collect due to the shortage of staff and other resources.

3.8 About half of the land area of Jamaica is put to agricultural use. The past 15years have seen a decline in both the number and size of farms, as the role of agriculture inthe economy has declined. Nonetheless, agriculture-related activities still employ about 30%of the workforce, and agriculture constitutes an important source of domestic strength andexport growth. The majority of hillside farms are small (70% under 2 Ha and 95% under

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4 Ha).2 ' In order to spread risk, mostfarmers cultivate a mixture of annual, semi- Box 2: PERVERSE INCENTIVES IN COFFEE

perennial and perennial crops; coffee is PRODUCTION

especially important. A few farmers grow Cultivation of tree crops is widely used as

timber, but the number is small. There is a a method of soil conservation. However, not alllow level of input use and cultivation areas are suitable for cultivation of any crops,practices are mostly manual and frequently including tree crops. Certain agricultural projectscontribute to degradation. Productivity in have been focused on increasing the acreage under

cultivation, and so have encouraged the clearing ofhillside agriculture is already low and is unsuitable areas with adverse effects on

declining. Although farmers have made productivity, as well as contributing to deforestationefforts at soil conservation, especially on and erosion. By contrast, projects aimed at

their own land, technical support from increasing production may not require additionalagricultural extension agencies has not been land and may result in better conservation practiceson land already under cultivation.sufficient, so that many of the measures arenot applied and those which are applied For instance, the Blue Mountain Coffeemay be ineffective. Clearing of new plots Project included a marketing effort in Japan, where

now comes mostly through encroachment it has become extremely popular. Despite fallingoo b ld yrwho coffee prices on the world market, Blue Mountain

onto public lands by illegal cultivators, who Coffee retails for as much as US$12/lb in Jamaicado not have incentives to conserve the land, and fetches higher prices abroad. The

and who are amongst the poorest and least extraordinary profitability of the product, and itseducated of the rural population. limited growing area arising from the registration of

Government incentives are directed toward the name as an appellation of origin, hasencouraged farmers to clear land on excessivelythe cultivation of annual crops and steep slopes with thin soils. Although the farmers

livestock, which are not compatible with earn one-time income from the sale of timber onhillside agriculture; government efforts to clearing, and may have adequate returns in the firstencourage livestock production by small few years, the soils quickly become eroded andfarmers may have contributed to soil depleted of nutrients, and yields begin to fall. Evenerosion. at the height of production, yields are commonly

low, as is typical of hillside agriculture in Jamaica.This project is now under evaluation for

3.9 Exacerbating these problems is reformulation, with more emphasis to be put oncharcoal production, mostly for household increasing the productivity of coffee in the projectcooking. Trees are harvested mainly on area.

poorly defended land (including public landand private land owned by sugar estates orbauxite companies), often clearing hilly land with soil that is shallow or unsuitable foragriculture. Charcoal is mostly produced on a small scale; the kilns are dug out of theground and, although not very efficient, require virtually no capital investment. Charcoaluse nearly tripled in the 1980s, and may have increased substantially in 1990-92 because ofinflation and rising prices for petroleum fuels and other household purchases. About half theJamaican population uses only wood fuels (including firewood) for cooking, althoughcharcoal is also used by higher income groups, as it imparts a pleasant taste to food and isnot smokey.3'

2/ FAO/World Bank, proposed Watershed Protection and Small Farmer Development Project, report ofpreparation mission, 1991.

3/ Survey of Living Conditions, 1989.

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3.10 Another cause of increased siltationis poorly planned and executed infrastructure Box 3: DEALING WITH CHARCOAL

development, including the creation of roads, DEMAND

mines and watercourses that disrupt the natural In order to preserve forest stocks, thedrainage systems and affect the patterns of energy utility has cross-subsidized kerosene

siltation and aquifer recharge. Coastal prices, equivalent to about 35% of the end-userwetlands serve as nurseries for many ocean price. In early 1992, this measure reduced the

species, as well as filtering silt from sea water. price of kerosene to J$0.05/MJ, just over halfspeies,pmens on hee etans nceae heof the J$0. I0/MJ cost of charcoal--a gap thatDevelopments on these wetlands increase the has widened by 50% over the past two years.silt levels in the water, cutting photosynthesis However, at this price there is a strongand thereby the productivity of marine incentive to adulterate gasoline and diesel withecosystems. Some of these developments kerosene, a practice which has been curtailed(especially basic infrastructure) have taken since 1990 by prohibiting the sale of kerosene

in bulk or through service stations. Instead,place in the public sector, and are subject to kerosene is now sold through retailers and in

regulation by the government planning process. small drums, increasing the costs of

Others, such as the unplanned growth of distribution and transactions.

squatter settlements on marginal land onfloodplans and hllsides,require oncertedDemand reduction is being attemptedfloodplains and hillsides, require concer-ted through the Improved Charcoal and Kerosene

government action on the causes of poverty Stoves Project, assisted by the World Bank and

rather than regulation (see Chapter IV below). UNDP. This project is trying to develop more

However, some development consists of luxury efficient stoves, and potential savings could be

housing and tourist resorts (with their in the order of 20-30% of household charcoalaccompanying access roads) on steep slopes and consumption. However, if the cost to the

consumer of using charcoal were to beerodible coastlines. These should be amenable reduced, a potential outcome could be one of

to zoning regulation and careful environmental higher total charcoal consumption as new usersimpact assessment before construction. may be induced to enter the market. A related

study is currently ongoing, as are experiments

Recommendations: Land Use and Water with charcoal made from other sources (such asRecommendations: Land Use and Water agricultural waste).Resources

3.11 Economic actions. A nationalpolicy on land use would greatly assist in the conservation of watershed lands, by clarifyingownership and thereby providing an internal conservation incentive for land owners. Inaddition to making further and quicker progress on land titling in rural areas, the GOJ wouldneed to review the structure and rates of property taxes. At present there is a low anduniform property tax structure (J$20 per year per parcel), with fairly high collection rates(75% of rural households paid property taxes in 1989, according to the Survey of LivingConditions). It may be possible to adjust property tax rates to improve incentives for landuse, including charging higher rates on hillsides and unsuitable coastal lands. To improveadministration of property taxes, the development of a national fiscal cadastre (registration ofall lands on an approximate basis) should be considered.

3.12 If land use practices are to be sustainably improved, watershed dwellers shouldreceive some benefit from land conservation. Suggestions include allowing them to directlysell water to the NWC, with prices related to the quality, quantity and reliability, and to thecost of conservation efforts. This has the advantage of providing an internal incentive forconservation measures. However, it might be difficult to administer where large numbers ofsmall farmers are involved; the Hillside Agriculture Project has shown that the initial

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response to incentive schemes may be disappointing until their benefits are proven to farmerson a close and personal basis.4' Another option, perhaps suited for higher-incomeinfrastructure developers, is to charge "pollution" taxes to activities affecting water regimes.Both these options would be efficient from an economic point of view, as the prices forwater resources would be related to the NWC's demand for clean and reliable water, and tothe costs incurred or imposed by the person in the watershed area. Other variants includecharging a watershed management fee to consumers, which would then be used to fundpublic agencies concerned with watershed management, although this would only enjoypopular support if results were clearly forthcoming over a short time period.

3.13 The precise level of incentives and charges would have to be set after examiningthe costs involved (including NWC's water infrastructure development, obtaining water fromother sources, conservation works, operating the water system, and other relevant costs) andincorporating other social objectives. The planned privatization of some NWC operationsshould facilitate the adoption of a more efficient water purchase and sale pricing policy.

3.14 Significant improvements in agricultural extension will be necessary for farmersto manage the resources under their control, even if a good incentive system were to be inplace. FAO's surveys showed very rare visits from extension workers, and poor techniquesleading to the deterioration of existing conservation works.5' Incentives for the productionof annual crops and livestock on unsuitable land should cease or should be replaced withincentives for proper management (not simply with incentives for growing tree crops -- seeBox 2). Research and extension should be re-oriented to serve the needs of hillside farmersrather than continuing to focus on lowland agriculture. The agencies primarily responsiblefor extension, the Jamaica Agricultural Society (a private body) and the GOJ's RuralAgricultural Development Authority, have both been cut significantly in recent years as aresult of budgetary stringency, and now operate in a poor and disjointed manner. The Inter-Ministerial Committee on the Environment provides a forum for cross-sectoral issues such asthis to be raised by the NRCA for the attention of the relevant Ministry (in this caseAgriculture).

3.15 The GOJ will also have to maintain and enforce charges for the use ofgovernment resources, including leasing and stumpage fees, which should be maintained atcommercial rates and adjusted, where necessary, for inflation. As the production, sale andtransport of charcoal occurs on a very small scale and mostly in the informal economy,directly taxing any of these activities would seem difficult to accomplish. For the moment,the maintenance of the cross-subsidy on kerosene would seem warranted.

3.16 Institutions. Among environmental institutions, the institutions for watershedmanagement seem particularly weak, as the Forestry Department has been split several timesin the past decade, with a below-critical mass of technical staff and enforcement agents inany one institution. Responsibilities are split between (at least) the Forestry Department,

4/ The project, supported by USAID, is widely regarded as successful; however, the widespread adoptionof better farming techniques (which also improved yields) took much longer than expected in projectplanning.

5/ FAO, op. cit.

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NWC, the Underground Water Authority (Ministry of Public Utilities), and the ForestryIndustries Development Company (FIDCO), each with its own areas of specialization, andnone knowing exactly what others are doing. Agricultural extension may fall under one ormore additional agencies (see para 3.14). One urgent task facing the NRCA is to clarify andrationalize these responsibilities so as to be able to develop adequate implementation plans.Attrition of technical experts from all the agencies has been high, and training and humanresource development needs are significant.

3.17 Investment. A number of hillside agriculture and watershed managementprojects are ongoing with assistance from various external donors. Most of these are in afairly limited area and do not represent major investments in capital works, althoughtechnical assistance components are significant. The GOJ's efforts in this area have provedweak, technical and financial resources are spread thin, and public awareness of the problemis low. In an effort to rationalize use of the Government's scarce technical staff, UNDP'sHydrology Project coordinates a number of existing projects to maximize the use of technicalexpertise within the government.

3.18 Although major investments are planned in agricultural areas, forested areas,both private and public, are receiving less attention. In the medium term, the GOJ may wishto consider major projects for forest conservation and management, and watershedmanagement, in conjunction with interested donors. CIDA is presently providing technicalassistance in forestry, and much technical work has already been done under the auspices ofthe Tropical Forestry Action Plan. Without these measures in the watershed areas, otherwater sector investment will be seriously affected as flooding and siltation becomeincreasingly severe.

Water Pollution

3.19 The problem. Jamaica's needs for reliable water supplies for domesticconsumption, irrigation and industry will continue to grow through the coming decades.Meanwhile, ground, surface and marine water resources are becoming increasingly polluted;this is a major hazard to important natural habitats (especially coastal wetlands and coralreefs) and reduces productivity in agriculture, increases the cost of infrastructure andpotentially threatens human health. There have been a number of localized typhoid outbreaks(in the Roaring River area) which have heightened public concern over the issue. Thepossibility of a cholera outbreak (due to contacts with Latin American countries where thedisease is prevalent), with devastating effects on tourism, also underscores the urgency ofsolving the water pollution problem.

3.20 The causes. The single largest source of water pollution is sewage. Theproblem is especially acute in urban areas but also poses hazards in other parts of the tourismcorridor. According to the Survey of Living Conditions (1989), publicly-provided sewerageconnections are only available to about 24% of the population, while more than half use pitlatrines (over 70% of the rural public); the remaining quarter use indoor water closets notlinked to the public sewerage system. There is no tertiary treatment of sewage (removing

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biological pathogens'), most of which is pumped into the sea from public or privatesewerage systems. Most sewage reaching the sea (including Kingston harbor) is untreated orhas had only primary treatment. Sewage wastes are mostly biodegradable nutrients; theprocess of breaking these down depletes dissolved oxygen in the water and leads to highconcentrations of nitrates and other plant nutrients. Biological pathogens (bacteria, flukesand amoeba) are also present in sewage waste, although they do not live long independent oftheir hosts and do not penetrate ground water. High nitrate concentrations are recorded inthe Liguanea Plains alluvial aquifer near Kingston, and the concentration of nitrates inKingston Harbor is extremely high. Several wells have been closed in this area. Althoughhuman health consequences from recreational use have not been observed, this is a potentialproblem. Coral reef destruction is already measurable and there is an ever-present possibilityof algae blooms (and consequent fish kills) in and around Kingston Harbor.

3.21 Industrial pollution is the other major source of pollution in Jamaica, includingagro-industry pollution, and marine pollution from near-shore industry and off-shore sources.Agro-industry, like domestic sewage, produces mainly biodegradable wastes from sugarproduction and fruit washing and processing. Other industries produce chemical wastes thatdo not degrade or that may be toxic; in particular the minerals industries pose a number ofpotential problems. Water in some aquifers has been contaminated by sodium which hasleached out of the red mud lakes where aluminum tailings are disposed (see box 1). Thecountry has been able to place regulatory emphasis on the major industries; smallerindustries, which have not received as close govemment environmental supervision, are agrowing source of pollution, especially in urban areas.

3.22 The final major source of pollution is agriculture, especially run-off and leachingof agricultural inputs into ground and surface water. Although the use of toxic pesticides hasbeen restricted in the past decades, fertilizer and pesticide pollution have been implicated infalling productivity in marine fisheries. Over-pumping of irrigation water has led to salineintrusion into coastal aquifers; in some areas, land in the sugar estates has been abandoned asa result. Saline intrusion has proven difficult to reverse in other countries.

Recommendations: Water Pollution

3.23 Economic actions. There are still a number of public resources whose costs aresubsidized, especially sewerage and garbage services. Recent increases in water rates shouldraise water prices to about cost levels, but this must be maintained against inflation. Ifsewage coverage and treatment is to be improved the full costs must be returned to the NWC(or its privatized/commercialized successors), water losses must be reduced and rates ofcollection improved. Standards for effluent quality will be set and charges for acceptingpolluted water will be related to the cost of cleaning and amount of pollutant produced. Thisis the efficient method of charging, as it puts the true cost on the polluter regardless of whodoes the treatment. Although probably not practical in the short run, this method should beapplied to small firms, hospitals and public enterprises as well as to large industries.

6/ This is typical of most countries; except where excessively high concentrations of biological pathogensexist, tertiary treatment is not considered necessary.

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3.24 To accomplish the most efficient provision of potable water, irrigation water, andsewerage, it is necessary to charge separately for consumption of each. Furthermore, inorder to rationalize the provision of these services, a rates structure must be evolved withsome differentiated rates for locations where the provision is more expensive. The presentuniform rate structure provides inefficient signals to developers and investors as well as, insome cases (such as the Mandeville water supply), subsidizing the wealthy while the poorsuffer water shortages.

3.25 A difficult question arises with regard to environmental standards for smallerfirms. At present, unlike in large industries, neither the firm nor the GOJ knows whatpollution may be contained in effluents and leachates. Although the NRCA is requiringenvironmental impact assessments (EIA) for all new firms, these costs may pose aninsurmountable hurdle to small-scale entrepreneurs. While standard sources of credit wouldcount the EIA requirements in the cost of start-up, the GOJ must consider what level ofdampening of formal-sector activity might occur from stringent EIA requirements. It wouldtherefore be important to have simple, short and clear EIA forms, with perhaps technicalassistance available from the NRCA to help entrepreneurs with their assessments. Subsidizedcredit for this purpose would tend, as for other purposes, not to reach the intendedbeneficiaries and would impose unnecessary expense on the GOJ. The Private SectorOrganization of Jamaica (PSOJ) may be developing a revolving fund which would providecredit for EIAs, perhaps to groups of small companies in the same industry.

3.26 Similarly, tax breaks for industries that install "green" technologies must berecognized as a subsidy and evaluated accordingly. In particular, tax breaks for importationof cleaning technology work against local ingenuity and research into ways to produce abetter product more cleanly. The GOJ might provide a more useful service by makinginformation available on international standards and technologies. Much of this informationis available through UNEP; government efforts could concentrate on dissemination. Thiswould be of particular service to smaller firms, that might not have existing connection withinternational information sources. It would also build on the existing goodwill betweenindustry and the GOJ and would not penalize those who went green earlier (before subsidieswere granted). Acceptable environmental standards are increasingly important in trade; tradearrangements with major importing countries might be jeopardized if environmental standardsare not observed. Also, foreign consumer interest in Jamaican products might be enhanced ifthe products and/or the country had a good environmental reputation. The NRCA ispresently considering a program of public recognition for firms or products that areenvironmentally friendly. The exact form of the recognition is not yet decided, but it mayconsist of public awards, stamps of approval or other positive recognition. This wouldprovide an incentive for companies through advertising, and would result in betterinformation dissemination on the methods and experiences of Jamaican companies.

3.27 However, small firms and the informal sector are at present difficult for theNRCA or any other government agency to interact with. Over the short run, it would beuseful to identify which small-scale activities are major polluters and their inputs and outputs.Acknowledging that regulation will be ineffective and expensive, the best method of reducingthis pollution would be to tax inputs and outputs. Again, the level of this taxation must bebalanced against the cost of pushing certain small-scale enterprises out of business. In allcases, it is important to note that someone in Jamaica pays or will eventually pay for the

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environmental costs of pollution through increased costs of health care, water treatment,social services etc.; recognizing and apportioning the cost is the role of government.

3.28 Institutional strengthening. Existing monitoring and enforcement agencies dohave powers and abilities to deal with large firms. Although legislated fines are small inmany cases, agencies have other recourse, including moral suasion and civil suits fordamages by affected persons. With assistance from the IDB, the University of the WestIndies (UWI) is developing technical capabilities for monitoring environmental quality in theair as well as the water, so the NRCA will be in a position to identify major problems andtheir sources. This monitoring and enforcement capability will be strengthened as the agencytakes on its full complement of technical staff. Privatized public enterprises can thereforeexpect that they will be monitored and will be among the likely targets of enforcementactivities. In the development of regulation, the NRCA is putting the onus on the companyto monitor its environmental situation, and will only make spot checks. This relieves theNRCA of heavy technical duties.

3.29 Investment. The first phase of a study assisted by the World Bank and CIDA,defining the technical components of a decade-long clean-up effort for Kingston Harbor hasjust been completed. The indications are clear that the priority lies with making the existingsewerage system work and providing treatment facilities. Another, much cheaper, priority isto reduce the solid waste currently reaching the harbor by requiring contractors to cleandrainage gullies as well as streets (this was previously the case but has been suspended).Implementing both options should greatly reduce biochemical oxygen demand (BOD) loadingin the harbor, and would postpone the need for additional investment in harbor clean-up forseveral years. Further expansion of sewage connections is not seen as urgent, with thepossible exception of areas of clay soil around Spanish Town.

3.30 The World Bank will assist the Government with the proposed Water andSanitation Project, which will develop an open-pond treatment system in the western part ofthe KMA. Technical details are yet to be finalized; options include using treated effluent asirrigation water in the St. Catherine plain (the open ponds do not smell and would not pose ahazard to housing developments). In addition to recharging aquifers and freeing other watersupplies for industrial and domestic use, this option has a number of advantages. It wouldcapitalize on the layout of the existing sewerage infrastructure, and would save foreignexchange as the effluent is high in plant nutrients and would fertilize crops. It would alsoallow the sedimentation of heavy metals and other toxins, reducing the need for significanttoxic and hazardous waste disposal activities in the next couple of decades. It has lowmaintenance costs and few moving parts, although there would be costs of pumping, andtertiary treatment might be necessary for the project to be acceptable to the public.

3.31 Water supply and sewerage investments are also under way in the North Coastarea, where further tourist development is constrained unless sewerage connection andtreatment is greatly improved. The North Coast Development Project, supported by USAIDand OECF, is a comprehensive approach to water and sanitation issues in the area. Withoutcontinued investment in sewage treatment and water supply infrastructure and maintenance,one cannot exaggerate the threat to an economic growth strategy based on tourism.

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IV. POVERTY AND THE ENVIRONMENT

4.1 The problem. Although many environmental problems are general in theireffects, others have more intense local results. As in many other countries, the poor inJamaica bear more of the immediate pressures of environmental degradation. They are leastlikely to be served with public water, sewerage and garbage services, tend to live in crowdedconditions where indoor air pollution is high, and may live in close proximity to disposalsites for solid and hazardous waste. Urban slums are unplanned and usually occupied bysquatters; they are frequently built on unsuitable land subject to flooding or landslips.Problems that are not major on a national scale are acute in slums, and the poor are not ableto escape these areas.

4.2 In addition, poverty is a cause of environmental degradation, as the poor mustmeet their urgent survival needs. This is particularly true in hillside agriculture, artisanalfisheries and settlement of marginal lands in forests, coasts and floodplains. It is also true inthe cities, where informal sector enterprises operate without the benefit of health, safety orenvironmental regulations. The social tensions engendered by continued or worseningpoverty have negative effects on Jamaica's ability to attract long-term investment (domesticor foreign) and may serve to concentrate investment in exclusive enclaves, thus limiting theimpact of much-needed investment activities.

4.3 The causes. Jamaica's low Box 4: COMMUNITY ENVIRONMENTAL

economic growth (and several years of ACTIVITIES

negative growth in the early 1980s), The Kingston Restoration Company (KRC)

recently accompanied by inflation and is an NGO that is restoring Kingston's historic

falling real wages, have created poverty waterfront area. Part of its activity is communitywhile reducing the Government's ability to organization and development, under which KRC

deal with it. Urban employment has worked with local youth to identifyenvironmental problems in the community and to

opportunities and higher wages have created start to address them. Identified problems include

growing shanty towns in urban areas, on the litter, smelly water from overflowing sewage lines,North Coast as well as in the KMA, with a noise pollution and garbage dumps in empty lots.

consequent increase in social problems. Inaddition Kingston includes areas of urban The youth have taken up a weekly project toremove trash from the waterfront. The group isdecay in the heart of the city. About now forming a 'watchdog' committee, which will

700,000 people in Jamaica (one-third of the alert local businesses and government agencies if

population) live beneath the poverty line. they are polluting in their area; the press might benotified as well.

4.4 The GOJ has a long tradition ofconcern for poverty and has been relativelysuccessful in covering basic needs for health care, education and nutrition despite adverseeconomic circumstances. However, the GOJ has been unable to undertake criticalinfrastructure investments in urban areas, exposing the poor to environmental hazards arisingfrom inadequate sanitation and waste disposal. In addition, the GOJ has been unable toreduce the pressure on natural resources caused by poverty.

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Recommendations

4.5 Economic actions. It is important to take interim measures that improve thelocal environmental quality in low-income areas. One of the most powerful ways to do thisis to give the people incentives to conserve and upgrade their surroundings; this can be doneby improving the security of their tenure. As many poor communities, both rural and urban,consist largely of squatters, the GOJ must take rapid action to regularize landholding.Although land titling projects are on-going in rural areas, progress has been slow. Urbansquatting has not yet been addressed in any concrete policy, although the problem has beendiscussed under the land policy committee, and action is expected. No significant gains canbe expected from other actions, whether incentives, regulation or investment, unless peoplefeel sufficiently secure to make decisions for the longer term. A land tenure policy thatclearly spells out land settlement rights would also assist government investment decisions, asthe GOJ would have a realistic idea of the population density and uses of land.

4.6 Providing information to poor communities is another important interim measure.This includes information on housing construction, pit latrine design, and other minimallyacceptable infrastructure standards. These standards are under development and will assist inimproving existing structures pending major infrastructure investments. This activity wouldbe supported by strategic investments (see below) and incentives for private sectorinvolvement and development of "blighted areas."

4.7 Institutional strengthening. Although the NRCA is not the major entity involvedin combating poverty, it should see poverty alleviation as part of its role and should functionas an environmental watchdog for the poor, ensuring that poor communities are not unfairlytargeted for noxious or toxic waste disposal, directing infrastructure investments towardneedy communities, coordinating with NGOs, and disseminating information. Close liaisonwith the staff of the Human Resources Development Programme and other governmentagencies responsible for poverty reduction and economic development should be part of theNRCA's function.

4.8 Investment. The problem of poverty will obviously not be solved in short order.However, investments in water and sanitation, as well as health care and education, can havedramatic effects on the quality of life of the poorest groups of the public. The plannedinvestments in sanitation infrastructure should ensure that the poorest areas of the KMA(which are also the most densely populated) are properly served. The World Bank anddonors will continue their support for the GOJ's Human Resources Development Programme.World Bank support will continue for the further development of trade, and othergovernment restructuring, providing more opportunities for growth in the Jamaican economy.

4.9 In the Medium Term Policy Framework, the GOJ stated its intention toundertake a Community Environment Project, which might attract significant externalassistance if it focused on poverty and environment issues. Some areas for possibleconsideration for the GOJ might be: slum upgrading in the KMA; rapid advances on the landtenure program (including in urban areas); small-scale recycling technologies and incentives;and financing, marketing and distribution support to micro-enterprises. Creative cooperationwith NGOs and community groups could support the development and implementation ofsuch a project.

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V. OTHER ENVIRONMENTAL ISSUES

Disaster Preparedness

5.1 Jamaica's susceptibility to natural disasters, including hurricanes, flooding andearthquakes, increases the importance of environmental management. Most businesses,export agriculture and middle- and upper-income housing are insured in Jamaica's well-developed financial markets. The prevalence and coverage of insurance has risen after thelesson of Hurricane Gilbert, but many smaller farms and poorer housing areas remainuninsurable due to their flimsy construction and/or dangerous location. In addition to theselower-income groups, tourist developments are often built close to the sea on land prone toflooding, storm surge, and wind and wave erosion. The uninsurability of these developmentsresults in public subsidies when they are later demolished in a disaster. Other areas that maybe impossible to insure include coral reef resources (which were badly damaged in HurricaneGilbert but have largely recovered), beaches and shorelines, and natural forests, despite theirhigh value in the national economy.

5.2 Disaster preparedness is well-developed, and is coordinated through UNDP inKingston. A geographical information system keeps track of schools and other evacuationcenters throughout the country. Weather information comes from the U.S. Coast Guard,which provides information at intervals throughout the day. There are monthly meetings ofthe agencies involved in disaster preparedness (government and external) to coordinate rolesand communications.

National Parks and Protected Areas

5.3 Jamaica opened its first national park, the Montego Bay Marine Park, in July1992, within the framework of the Specially Protected Areas and Wildlife protocol of UNEP,which takes a regional approach to the preservation of species. This is the first of a series ofnational parks, which will be followed in 1993 with the Blue Mountain National Park, onceagreement has been reached with private owners of land in the proposed park area. Theestablishment of the parks is supported by USAID, and by the Nature Conservancy (aninternational NGO); several additional parks are planned for the coming decade. The NRCAhas the responsibility of managing the parks, but is likely to delegate this responsibility tolocal NGOs and community groups. Mechanisms are not yet worked out for how the parkswill raise funds, but they are expected to charge fees for services rather than for entry. Theexistence of the parks, and their use by the public, will serve to strengthen public interest inand commitment to environmental issues. In addition, the tourist industry is starting todevelop eco-tourism as a new product in Jamaica, and this activity should support the firmestablishment of the national parks system and the development of other protected areas.

Biodiversity

5.4 Jamaica has an unusually high level of biodiversity, with more than a quarter ofits 3,300 plant species found nowhere else, and three quarters of its frogs, toads and lizards.The preservation of this biodiversity should form part of the environmental agenda. Underits Caribbean Environmental Program, UNEP provides technical assistance and a regionalapproach that attempts to coordinate the efforts of the countries in the Caribbean in the

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preservation of unique habitats. The otheractivities already under way or Box 5: SELF-DESTRUCTIVE DEVELOPMENT

recommended in this paper have positive The 'Glistening Waters' lagoon in

effects on the maintenance of biodiversity. Falmouth was identified as a possible major tourist

However, additional efforts may be required attraction due to its unusual bioluminescence.

in localized areas to save a particular habitat A planned tourist resort (later abandoned) drained

or ecosystem. a mangrove swamp at the head of the bay. Thealtered drainage patterns resulted in thedisappearance of the glistening character, which

Overuse of Open Access Resources now appears only rarely.

5.5 Some natural resources by theirvery nature are openly accessible to all comers. These include the beaches and the seas. Itis impossible to assign a clear right to any individual to own or police these resources.When the resources have economic value, there is an incentive for everyone to take as muchof it as they can, because they cannot prevent anyone else from doing so. The beaches andthe fisheries in Jamaica have suffered from this problem, despite good legislation by theGOJ. Sand mining, although illegal, continues to create erosion problems. Fisheriesproductivity has been declining and the number of fishermen has increased over the past twodecades despite licensing and regulation by the GOJ. Further efforts at regulation andenforcement, including pricing of permits at levels that impart a genuine cost to naturalresource exploitation, are the only practical way to reduce the pressure on these resources.However, this will not be easy in the budget-constrained near future.

Solid and Hazardous Waste

5.6 In addition to sewage, solid waste is another major source of biodegradablewaste. Solid waste also includes non-biodegradable elements, such as glass, buildingmaterials, plastics and other permanent objects. At present, solid waste collection in urbanareas is fairly well organized by the local authorities' Departments of Parks and Markets,with most services provided by private sector contractors. Soft drinks are, for the most part,sold in glass bottles that are recycled. The noticeable problem in the KMA is the failure ofMetropolitan Parks and Markets to require garbage contractors to clean drainage gullies aswell as streets (see section on water pollution, above), although garbage collection in certainareas is also inadequate. For ultimate disposal, however, appropriate landfills do not exist,and waste is deposited in dumps and many other unsuitable sites, including empty lots and inthe sea. There are no facilities on the island specifically for the disposal of hazardous andtoxic waste, which is presently exported or disposed of in an ad-hoc manner or in ordinarydumps, sewerage systems or in the sea. With assistance from the IDB, the GOJ is planninga major solid waste management project, and the GOJ has also received assistance fromCIDA in developing regulations for hazardous and toxic waste.

Jamaica's Participation in International Environmental Efforts

5.7 Jamaica is signatory to a number of important international environmentalefforts, in particular the MARPOL 73/78 convention on marine pollution, which designatesthe Caribbean as a special area for reduction activities. The World Bank, together withUNEP and UNDP, is coordinating a regional effort to reduce solid waste pollution, startingwith ship-generated wastes. With support from the Global Environmental Facility (GEF),

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the countries of the Organization of Eastern Caribbean States (OECS) have started thedevelopment of port reception facilities for ship-generated waste. Jamaica is now consideringhow to implement its participation in this regional effort. Similarly, Jamaica is signatory to(but has not ratified) the Montreal Protocol, which aims to reduce chlorofluorocarbons(CFCs) in the atmosphere. Although Jamaica is not a producer nor a major consumer ofCFCs, air conditioning and refrigerating units now in use contain CFCs that will have to bereplaced. Plans for phasing out the use of CFCs and disposing of existing CFCs will have tobe included in longer-term environmental planning.

Energy Demand Management

5.8 The use of energy in Jamaica, although quite low by world standards (and fallingthrough the 1980s) remains a major source of domestic and commercial spending, a majorforeign exchange need and a contributor to local and global pollution. Demand managementmust therefore form part of the environmental and economic strategy of the GOJ. The GOJhas recently concluded an agreement with the GEF to develop a demand managementstrategy that would include the production and dissemination of energy-saving techniques fordomestic and commercial energy uses, particularly for electricity and oil.

Zoning

5.9 Zoning in urban areas is the responsibility of local governments, with theclearance of the Department of Town Planning required for larger developments or majorchanges in zoning regulations. As part of the permit process, NRCA representatives evaluatethe environmental soundness of the proposal. However, outside the city limits, no agency isclearly responsible for zoning; this means that for many building proposals there is nophysical planning management. The NRCA has the situation under consideration, andimprovements in the zoning administration are also under study by the land policycommittee. The GOJ must pay particular attention to the regulation of tourist developments,especially along the coast. The pressure on environmental resources (including the sea,reefs, beaches, forests, and public services such as water, energy and sewerage) must not beallowed to overcome the natural beauty that attracts tourists in the first place.

Mitigation of Existing Pollution Sites

5.10 Although most of government policy must concentrate on reducing the furtherproduction of pollution, some areas are already polluted and might require prompt action toavoid further degradation. For instance, some mitigation may be needed to avert furtherleaching from existing red mud lakes or urban dump sites. As the legal framework becomesestablished, it will become clear who must pay for this clean up, as well as who will do itand in what time frame. As with impact assessments, the cost of clean-up in small-scaleindustries would have to be carefully apportioned. Such activities would form part of theGOJ's longer-term agenda.

Air Pollution

5.11 Air pollution, especially in Kingston, may become a problem in the future as thenumber of cars and industries in the area increases. Early indications are that air quality is

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acceptable, although in certain localized times and areas (such as near the Riverton dumpsite, especially during the monthly burning of the dump) standards are certainly contravened.At present, air quality is monitored under the UWI's Environmental Monitoring Project(supported by IDB technical assistance grants), and a permanent monitoring system will be inplace shortly. Unleaded gasoline is widely available, and large-scale industries have not beenimplicated as major polluters. However, small-scale industry and public enterprises andfacilities (such as hospitals) have not been the target of close monitoring. Indoor airpollution is not being monitored and is expected to be a problem given the high consumptionof smokey fuels such as charcoal and kerosene. Monitoring, regulation and enforcement ofair quality standards is shared between the Environmental Control Division (ECD) of theMinistry of Health and the UWI, under the NRCA's overall responsibility.

Noise Pollution

5.12 Noise pollution has been identified as a problem in urban areas, and in ruralareas near bauxite mines (see boxes 1 and 4). In urban areas, the pollution arises mainlyfrom loudspeakers in neighborhood bars and music stores. Safe standards for noise have notyet been developed and noise levels are not monitored.

VI. SUMMARY RECOMMENDATIONS

6. 1 Putting the Incentive Regime to Work. The maximum mileage from thecountry's scarce resources can be attained by putting the incentive regime to work, in anyareas where economic tools (taxes, subsidies, information, ownership and prices) can bebrought to bear -- almost all, that is. Economic tools can supplement and complementregulations. External support may be available to assist in the development and applicationof these tools, drawing on the experiences of other countries. In this connection, areas forearly attention include: issuance of general policies for land and water; adjustments in thewater rates regime to allow some discrimination for services used; and increases in the saleprices of public resources to commercial rates and the maintenance of those prices(stumpage, land). Areas for longer-term research and application include: charging efficientrates for water consumption, sewerage and irrigation; taxing water polluters; taxing inputsand outputs of highly polluting small-scale industries; improving the land tenure regime andproperty tax system; improving agricultural research and extension services; and improvingtechnical support to industry, especially small-scale industry.

6.2 Concentrating on Realizable Accomplishments. In order for the NRCA to fulfillits mandate, it is important to establish the credibility ^f the agency. In difficult economictimes and as a new organization with relatively few staff, it is therefore imperative to choosea few goals that are realizable in the short term, and concentrate on building capacity forlonger-term and more complex tasks. Although all the partners involved in the country'seconomic development are keen to see early action on a number of fronts, all agencies,including extemal donors, should focus resources in one or two priority areas. The broadareas identified in this paper as key priorities are land use and water pollution.

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Table 2: MATRIX OF POLICY AND INVESTMENT RECOMMENDATIONS

Issue/Area government project(s) Short-term policy Long-term policy Investments requiredtargeting the problem recommendations recommendations

ENVIRONMENTAL 0 land titling 0 issue land policy * improve agricultural * major watershedMANAGEMENT: 0 Blue Mountain document extension protection works

Land Use and Coffee development * maintain 0 reward farmers for and managementWater Resources 0 hillside agriculture commercial rates quality/quantity of efforts

projects for use of water through * Forestry* national parks Government land purchase mechanism Conservation and* forestry and (lease and stumpage * charge pollution Management Project

hydrology TA charges) taxes to developers needed in mediumprojects affecting water term

regime* review system of

property taxes* strengthen forestry

department

Water Pollution 0 Kingston Harbor 0 re-introduce * charge efficient 0 wastewaterclean-up study drainage gully prices for water, treatment in

* North Coast cleaning to sewage and garbage Kingston; someDevelopment contracts for solid services further sewerageProject waste collection in 0 institute water development

Kingston pollution taxes* allow for 0 provide technical

differentiated rates support andfor water services information to the

private sector

POVERTY AND 0 Human Resources 0 accelerate * control polluting 0 urban communityTHE Development regularization of activities of small- environmentalENVIRONMENT Programme covers land tenure for scale enterprises projects; proposed

basic needs urban and rural through taxes and World Bank Urbansquatters economic incentives Environmental

* ensure minimally Project; encourageacceptable participation ofinfrastructure in grant providingurban slums, agenciesincluding throughinformationdissemination

GENERAL 0 TA for NRCA 0 issue National 0 beef up enforcementENVIRONMENTAL Environmental and monitoringINSTITUTIONS Action Plan capabilities ofAND AGENCIES 0 clarify responsi- NRCA and agencies

bilities between to which it delegatesagencies for key * disseminateareas, including information tozoning and water farmers and firmsmanagement on environmental

* improve economic standards andskills at NRCA; technologies bothenvironmental skills domestic andat MOF and PIOJ foreign

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6.3 Coordination of policies and resources should be an immediate priority for theNRCA, with the possible reduction or elimination of some activities (whether foreign-fundedor not). It is hoped that the National Environmental Action Plan will contain a clearstatement of the GOJ's priorities, and that these priorities will be supported by the donorcommunity. One area of particular concern is monitoring and enforcement; the need to setpriorities and concentrate efforts on limited achievable goals is especially important in theshort term. Priority should be placed on visible achievements, for instance, stopping apublicly-known source of pollution.

6.4 Similarly, the number of agencies involved in the environment is large, theirmandates overlap, and the total number of technical staff is small. It is therefore crucial forthe GOJ to, in the short term, concentrate resources on those institutions that serve agreedpriority areas. In the longer term, the GOJ might wish to consider consolidation of some ofthese agencies.

6.5 Concentrating Investment in Crucial Areas. The task of making sure thatprojects are coordinated and complementary to one another will be an important function ofthe NRCA. Given the fiscal constraints, investment activities need to concentrate on criticalareas agreed on within the GOJ. At the same time, planning for longer term activities musttake place. Investments in water infrastructure and watershed protection would be the mostimportant in the short term. The coordination of externally-funded projects within thepriority framework will also fall on the NRCA; this function would include ensuring thatexternally-funded projects are compatible with the overall action plan and with governmentpriorities in the environment.

6.6 Capitalizing on Private Sector Efforts. The private sector can be tapped as asource of information, investment and even funding for environmental programs. In return,the NRCA should clearly identify parties and agencies responsible for private sectorinteraction. It should also identify an interface between itself and the private sector, andshould provide to the business community information on Jamaican and foreign standards andregulations, as well as information on its own activities. Simplifying and streamliningbureaucratic requirements (such as environmental impact assessments, planning permits, etc.)would assist the private sector in its environment-related activities.

6.7 Developing Longer-term Capabilities. Although restricting itself at present to afew priority areas, the NRCA must clearly develop capabilities for longer-term managementof the environment. External technical assistance should recognize these longer-term goalsas well as short-term objectives. The development of this capability in the GOJ shouldinclude economic expertise in the NRCA, and environmental expertise in the Ministry ofFinance and the Planning Institute of Jamaica. With both economic and environmentalagencies having the capacity to share analysis and policy response, environmental aspects canbe fully incorporated into the national development agenda.

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ANNEX I

BIBLIOGRAPHY

Basic Public Policy Documents

Jamaica National Environmental Action Plan (draft)Jamaica National Report on the Environment and Development (UNCED submission),1992CARICOM Regional Environmental Programme

Key Surveys of Technical Issues

Jamaica Country Environmental Profile, NRCD and USAID, 1987Watershed Protection and Small Farmer Development Project, Preparation mission

report, FAO/World Bank, 1991Survey of Living Conditions, STATIN, Govt. of Jamaica, 1989Tropical Forestry Action Plan, 1990

World Bank Documents

Project and lending documents for:Water Supply and Sewerage Technical Assistance and Rehabilitation Project (on-

going)Second Sugar Rehabilitation Project (on-going)Second Trade and Finance Adjustment Loan (on-going)Environmental Waste Pollution Control Study for Kingston Harbor, World

Bank/CIDAEnergy Sector Management and Planning Study (ESMAP), World Bank/UNDP,

1991

Other Policy Documents

World Development Report, World Bank, 1992Handbook and Guidelines for Environmental Management and Sustainable

Development, UNDP, 1992Sustainable Development: Changing Productivity Patterns, Social Equity and the

Environment, UN-ECLAC, 1991

Other Strategy and Project Documents

Jamaica Environmental Strategy: A review of opportunities for Canadian assistance inenvironmental management, CIDA, 1989

Jamaica Environmental Strategy, USAID, 1991North Coast Development Support, Project Paper, 1991

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ANNEX II

MAJOR ACTIVITIES WITH EXTERNAL SUPPORT

Activity Agencies

Land use Hillside Agriculture Project USAID

PARC Project; DEMO Project (national parks and protected areas projects, USAIDinclude protection for watershed areas).*

Forestry TA Project UNDP

Hydrology TA Project UNDP

Land Titling Project IDB

Hillside Farmers Support Project IFAD/Netherlands

Trees for Tomorrow Project for forestry/watershed management CIDA

Water pollution Kingston Harbor study World Bank/CIDA

Solid Waste Management Project (proposed) IDB

North Coast Development Project (water and sanitation) USAID/OECF(Japan)

KMA Water and Sanitation Project (proposed) World Bank

Poverty Human Resources Development Programme (GOJ's prioritized program for Worldsocial sectors investment and development) Bank/Netherlands

Community Environmental Development Project (proposed) World Bank/others

Other maior initiatives Proposed Second Trade and Finance Sector Adjustment Loan* World Bank/IDB

Enterprise for the Americas Initiative (conversion of PL480 debt into fund USAIDfor environmental activities primarily by NGOs and local communityorganizations)

Green Fund (creation of a fund for support for environmental activities CIDAprimarily by NGOs)

Number of regionally-focused initiatives, including TA to reduce land-based UNEPsources of marine pollution

Energy Demand Management Project GEF (WorldBank/UNDP/UNEP)

Development of regulations in support of the NRCA* CIDA

Includes institutional support for the NRCA

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