# **Endnotes**

## 1 Such as in China and Indonesia.

2 Among other sources of information on the rationale of public disclosure programs, see World Bank (2000). 3 An extensive list of references is provided to which the interested reader may access.

4 On April 6-7, 2006, the World Bank and the Asian Environmental Compliance and Enforcement Network (AECEN) cosponsored the _International Workshop on Environmental Performance Disclosure for Developing Countries_ in Beijing, China. In the course of this international workshop, participants suggested to have a simple review of the programs in order to guide the design of an effective environmental performance rating and public disclosure program. A first draft of this work was presented at AECEN’s _Annual Regional Forum_ in Beijing on December 15, 2007. We sincerely thank workshop participants as well as those individuals who have provided comments and suggestions on earlier versions of this document. The authors retain the sole responsibility for any error or omission.

5 In most countries, pollution charges have been adopted as a complement to long-standing regulatory standards and not as a substitute to those standards.

6 It may be argued that these particular MBIs are also of a ‘command-and-control’ nature. Indeed, with these instruments, the ‘command’ is not to comply with regulatory standards but instead to pay a charge (or fee or tax) per unit of pollution discharged, or in the case of permits, not to pollute above the quantity of permits in the hands of the facilities. The ‘control’ requirements with these MBIs remain more or less of a similar nature as with regulatory standards. Nonetheless, we use here the generally accepted way of referring to ‘command-andcontrol’ and ‘market-based instruments’.

7 It should be noted however that this purported advantage is significantly reduced when MBIs (in particular pollution fees or taxes) are used in combination with, and not instead of regulatory standards. In such cases, regulated facilities still have to comply with regulatory standards thus undermining the possibility for pollution control efforts to be distributed across industrial facilities in a cost-effective manner.

8 This approach is also gaining increasing popularity in developing countries. The Laguna Lake Development Authority (LLDA) in the Philippines has adopted a system of environmental user fees since 1997. This (amended) system has been implemented throughout the Philippines with the adoption of the Philippines _Clean Water Act_ in 2004. Vietnam has adopted a system of wastewater discharge fees, effective January 1, 2004. Sri Lanka is nearing the adoption of a similar wastewater discharge fee system. China has been using pollution discharges fees for more than two decades.

9 This is mostly because the traditional enforcement tools such as company shut-down and financial penalty cannot be easily established or enforced, especially in developing countries where economic development and employment are still of the first priorities.

10 A number of countries have set-up web-accessible pollution release transfer registries. While not necessarily being exhaustive, this list includes Austria, Australia, Canada, Chile, the Czech Republic, Denmark, England, France, Germany, Hungary, Italy, Japan, Mexico, the Netherlands, Norway, Scotland, South Korea, Spain, and Sweden. One challenge with this approach is how information on volumes of releases of different substances can be translated into degrees of absolute or relative risks resulting from these releases.

11 Among the concerns about public disclosure, terrorism has been one in some developed countries. But as an EPRD program only discloses the performance ratings, terrorism should not be a significant concern. 12 The Guangzhou Green Watch Program in China uses three categories while Indonesia’s PROPER now cover seven categories.

13 For example, it has empirically been demonstrated that market valuation of enterprises (listed on stock markets) is significantly reduced following the disclosure of inferior environmental performance. 14 The Green Rating Project in India is an exception, but this program is run by an NGO rather than a government agency. Colors are also used by the EPRD programs implemented in Ghana and Ukraine.

15 Mostly due to the leadership changes, the Hohhot program only conducted performance ratings for two years, even though it was perceived as an effective program by the environmental officials.

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