World Bank Spotlights Environmental Cleanup Aid

ON the eve of the so-called Earth Summit, the World Bank has offered some suggestions for redressing the twin problems of poverty and the threat to the fragile global environment.

Its 1992 World Development Report, "Development and the Environment," could become essential reading for the 110 heads of state and thousands of others attending the June international environment conference in Rio de Janeiro.

While ecologists put a $350 billion annual price tag on what the Rio conference organizers term "sustainable development," they readily concede that international investments aren't likely to approach that amount. The $75 billion a year they seek from the well-heeled Asian and Western countries is also a long shot, given the premium placed on scarce global investment funds.

With pressing demands for development aid, the world's richest countries have assumed a collective role, deferring massive requests to multilateral organizations such as the World Bank.

The World Bank's chief economist, Lawrence Summers, is looking first for prudent government policies. "There is no reason why substantial resources and improvements can't be generated domestically," he says.

Andrew Steer, deputy director of the environmental department of the World Bank and the lead author of the report, says that individual governments can affect immediate changes in their own environments. Increased funding for female education and population control will mean less strain on financial and natural resources. Even with a doubling in the family planning spending over the next 15 years, some 3.7 billion people will be added to the planet by 2032. Market mechanisms

Market-driven prices rather than subsidies are also essential. Mr. Steer estimates that "if Eastern Europe eliminated energy subsidies, half of its air pollution would disappear." Indonesia termination of pesticide subsidies had a "dramatic impact upon the rural environment." Wasteful water consumption in China has been curbed, he says, due to a reduction in government subsidies on irrigation water. Africa's deforestation could be largely arrested, he says, if governments eliminated logging subsidies.

"The call for international financial transfers is the strongest when it's for solving problems that are in the interest of the world to solve, not any one country," Mr. Summers says. For example, he cites the difficulty in enlisting China's cooperation to burn expensive natural gas instead of cheap, highly polluting coal, without some financial incentives. "The government looks at its own financial pressures. It wouldn't opt to spend more money on energy, in response to calls for a better global environ ment. It needs support - incentives to do so."

Just how that kind of support will be summoned from the world community is the most prickly issue for negotiators at Rio and beyond.

The World Bank report highlights greenhouse gases as a global concern, because the "emission of greenhouse gases, regardless of their origin, affect climate." But the report cautions that the negotiations over how much individual governments will pay to control the gases "will be difficult and lengthy."

Developing countries heavily reliant on fossil fuels (and other sources of greenhouse gases) will be hard-pressed to eliminate them. "To secure action," the report recommends, "rich countries may sometimes need to pay poor ones" to help them broaden their energy and export base. New cleanup fund

The bank's $1.4 billion Global Environment Facility, a three-year pilot program of grants and low interest loans was established to help developing countries deal with environmental problems that transcend borders.

Eastern Europe and the former Soviet Union are the bank's most environmentally-challenging frontiers. According to Steer, the bank's environmental department has assessed conditions in each country, where 70 years of communism have left behind environmental devastation that alarms European neighbors. He says that both international lending institutions and Eastern European governments view pollution cleanup and prevention as necessities, not luxuries.