The economic policies of the former Central and Eastern European countries serve as a stark reminder that environmental protection cannot be sacrificed (or severely degraded) for immediate economic goals. Unemployment in many regions is the direct result of factory closings initiated because they could not operate efficiently without massive government subsidies. Estimates of health care costs from pollution reached 11% of GNP in the Soviet Union in 1987 (US$330 billion); Poland is paying 10 to 20% of its GNP each year because of pollution;3 and Czechoslovakia 5 to 7% ($192 million annually on crop damage alone). Out of Czechoslovakia’s economic and environmental deterioration grew revolution and the possibility to substantially improve “the quality of the living environment through a permanently sustainable development. Polish experts concluded that sustainable development could solve its country’s ecological crisis, and that Poland’s challenge is to “invent those institutions that promote a sustainable society: a society that effectively blends economic development, environmental protection and political freedom for the present populations and future generations.”
The EBRD is the first multilateral development bank to commit itself in its articles of agreement to “environmentally sound and sustainable development.” To become meaningful, the EBRD must define the term and create provisions to achieve it. Conceptually, sustainable development is not difficult to understand. In simplest terms, present generations must not consume more than they provide or leave for their heirs. It discards the common economic practice of giving natural resources value only in the very short term in favor of a method which manages and values depleting finite natural resources for future generations.
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