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10.9 MARKET INFLUENCE

Market behavior of a policy is usually guided by the economic and trade balance relationship. Environmental consequences are seldom considered in the market analysis of resources. Thus, if the domestic/ microeconomic policy efforts to manage resources do not go right, the sustainability issues are likely to be affected invisibly and negatively by market behavior. To face such negative impacts, domestic policy on the resource sector seeks solution mainly in the following ways:

•providing protection (subsidy),

•pricing products (taxation), and

•negotiation.

The domestic response to market influence may include one or all of the above measures depending on the requirement of the country. Unsustainability triggers when such measures benefit a group of people only. Eventually, those people may become almost controllers of resources or players to the government.

In a usual situation, governments sacrifice resources for protecting the job, for earning hard cash or for other state emergencies. Governments may have to accept a lower global price or may need to protect the exporters to compete in international markets (Grainger, 1993). If market prices fail to account for indirect use values and future nonuse values (Rees, 1990), they might be lost or degraded by direct consumption of forest produce. When forest users fail to appropriate environmental values, they will tend to ignore them. Logging companies, for example, may neglect the impact of logging on wildlife and tourism. When such external costs are consistently ignored, prevailing market prices of those goods tend to fall below the social optimal limit leading to excessive exploitation (Eckersley, 1993).

The market prices of the traded resource, products, and services may also be distorted by other public policies, including economic policies, public investments, and institutional arrangements (Wilson and Bryant, 1997). Barbier et al. (1992) observed that it is often difficult to disentangle the linkages between domestic macroeconomic, sectoral, and trade policies as they affect forestry. Economic policy interventions at various levels can alter the profitability of the forest-based activities vis à vis other domestic sectors and thus their market

competitiveness. Capistrano (1990) and Capistrano and Kiker (1990) explored the international and domestic macroeconomic factors on tropical deforestation. They revealed that the export value of the tropical wood was a major factor explaining the depletion of closed broad leaf forests between the years 1967 1971. Barbier et al. (1992), Grainger (1996a), and Johnson (1999) revealed that in Thailand and the Philippines, once net exporters of timber are now net importers, due to such failure of pricing forest products.

Grainger (1993) suggested that the import and export policies influencing resource trade flows can themselves be a source of major environmental impacts in the resource sector. Protection of resources and resource-based industries, whether explicit or implicit, can encourage inefficient expansion of domestic industries that leads to excessive resource depletion. Producer countries that are unable to penetrate protected international markets may be discouraged from developing value-added processing, even though a comparative cost advantage may exist in these countries for such industries. It is conceivable that the loss in value-added process leads to a higher rate of resource exploitation in order to increase earning from raw material and semiprocessed exports. However, overexpansion of processing capacity and inefficient operations could result in greater resource loss.

10.10 HISTORICAL FACTOR

The sustainability of a policy increases if the policy is formulated on the basis of evidence. Consideration of historical issues is important for establishing policy evidences because of social criteria like poverty, social structure, and tradition; administrative criteria like organizations and institutions are historical elements of the society. Historical constructs of environmental crises have largely influenced the present policies of most developing countries (Bryant, 1997; Guha, 1989; Jewitt, 1995). Bryant (1998) cited an example on such historical construct that the introduction of scientific forest management in Asia by the British rule was not intended to benefit the forest but to promote the longterm commercial timber production of special categories like teak and deodar. One of the targets of the scientific forest management was the production of key species by eliminating forests of other species and to remove the resistance of local people or to restrict the alternative indigenous practices like shifting cultivation (Bryant, 1994; Gadgil and

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Guha, 1992; Jewitt, 1995; Peluso, 1992). The legacy of scientific forestry in India subsequently brought many changes in forest land use and gave a shape to the forest management and administration different from local appreciation. In doing so, the organization of forestry staff was fabricated in a form of policing power, which is still continuing, and resulted in the separation of people from the forest administration. Thereby, a discourse of forestry practices developed in which appropriate forest use was defined largely in terms of commercial extraction, which was asserted to be scientific and also financially remunerative to the state. As a consequence, the local practices disintegrated, were marginalized, and in some cases were criminalized (Bryant, 1996). Thus, historical issues merit evaluation for the sustainability of forest resources.

10.11 OTHER FACTORS

From the above section, it is understandable that the roots of many factors of policy climate are in the past policy processes of the society. Houghton (1994) indicated a particular period of the past when major forest degradation took place,

though the settled agriculture has been practised by mankind from more than 10000 years ago, major changes in the land use had happened in the last 100 years, and particularly for developing countries in the last 50 years.

Therefore, it can be assumed that there are some other factors blended with the past processes of 50 100 years bringing the present change in forest land use. The vital component of sustainability research in developing countries is usually directed to the population explosion and its consequences on forest resources (Bryant, 1998). This form of research partly reflects the nonusefulness of neo-Malthusian notions in developing countries, because of the limitation of such proposition to explain the circumstances of the environmental crisis. During the 1980s, the discussion was prevalent and was reflected in the work of Buchanan (1973), Darden (1975), and Lowe and Worboys (1978) asserting that technological innovation is not effective in developing countries. The study of the people environment relationship has been taken farther in research influenced by household studies and ecofeminism to examine how power relation within the household influenced the control of land, natural resources, labor, and capital. Subsequently, policy can start to draw social structuralism and social

discourse to integrate the power and knowledge for a successful incorporation of environment and sustainability within the social policy (Bhaba, 1994; Peet and Watts, 1996).

The issues of sustainability assessment of policy thereby look at the magnitude of the following attributes to see how they have been established in policy formulation:

•defining a clear overreaching objective,

•mapping the policy context,

•identification of key stakeholders and addressing issues related to them,

•identification of behavioral changes,

•development of strategy,

•analyzing internal capacity to influence desired change, and

•establishing a monitoring and learning ability.

If we look at the above attributes, we see that each of them may require multiple tools (not discussed here) and has the potential to induce changed over the period of policy cycle. Sustainability of policy thereby remains in the tools considered for ensuring those attributes and options are kept within the policy to deal with the changes in a beneficial manner which is usually known as policy flexibility.