Extraction, processing, use, recovery/recycling and final disposal of natural resources have significant environmental effects. Producers, manufacturers and consumers are only likely to introduce environmentally less harmful or least-damaging production and consumption methods if they get the correct incentives, including appropriately priced natural resources and supportive government regulation. This encourages resource preservation and discourages squandering of materials along the processing chain, including material collection and recovery at the end of product life. The transition to sustainable natural resource management in commodity producing developing countries is however complicated by the important role such resources play as generator of employment, government and export revenue. Conversely, the rapidly industrializing (developing) countries generally have material-intensive growth patterns, making such countries prime consumers and importers of primary and secondary material.

Our work aims at conducting analytical activities and building capacity in developing countries on the use of suitable regulatory and economic instruments for encouraging environmentally sound and economically viable management of natural resources. For the time being, this work focuses on two clusters:

(a) The use of economic instruments and supportive government regulation for internalizing environmental costs and benefits in prices of natural and synthetic rubber and products made thereof. Since 1997, three joint workshops of UNCTAD and the International Rubber Study Group (IRSG) on the opportunities and constraints for internalizing environmental costs and benefits in prices of rubber and rubber goods have been held (in Manchester, UK, in June 1997, in Bali, Indonesia, in October 1998, and in Vera Cruz, Mexico, in October 1999. Discussions at the workshops have focussed on two issues:

• The use of payments for carbon sequestration services pursuant to the Kyoto Protocol of the UN Framework Convention on Climate Change for enhancing the competitiveness of natural rubber, encouraging the use of environmentally friendly production methods and the preservation of eco-balance and bio-diversity.
• The use of economic and supportive regulatory instruments for enhancing sustainable management of scrap tyres, including their re-use and recycling, with particular emphasis on developing countries.

(b) A series of seminars on the requirements for encouraging environmentally sound and economically viable management of natural resources, including secondary material recovered from waste, in rapidly industrializing (developing) countries. The seminars review material- and country-specific environmental and economic effects of the trade restrictions of the Basel Ban Amendment and identify and analyse distortions affecting the sustainable management of natural resources and environmentally sound management of waste. Furthermore, the seminars discuss preventive, pro-active government policies and the use of economic instruments to reduce economic and social adjustment costs of the Basel Ban Amendment with a view to reconciling the developmental needs of the countries and the environmental objectives of the Basel Convention. The seminars also explore ways and means of inter-developing country co-operation on suitable pro-active policy approaches for limiting distortionary effects and encouraging the use of environmentally sound technologies, including for the reduction of waste generation.