Controlling industrial pollution has gained increasing urgency throughout the world in recent decades. In response, cities and countries everywhere have been growing their own ideas on how to "go green." For six years, economists, environmental engineers, and policy analysts from the World Bank examined innovative ideas emerging from several developing world nations. Wheeler was the principal author of a report on their findings entitled "Greening Industry: New Roles for Communities, Markets, and Governments," released in November 1999. Wheeler was interviewed by Charlene Porter.

Question: What is the significance of urban environmental problems as they occur in larger national contexts throughout the developing world countries you examine in this report?

Wheeler: I suppose you could say the focus is national because we certainly talk about country experiences, but the truth of the matter is that all the important stories of local environmental contamination are urban stories. You have to have a certain concentration of industrial activities or other activities to get to a level of environmental contamination that's really serious for people or for ecosystems. So if you look at large scale stories of contamination of rivers or oceans, there is waterborne effluent coming down from large concentrations of population or industry.

And almost every case where you have serious damage from air pollution is in an urban context, so the overlap is very, very large.

Q: We do have an assumption that the more cities grow, the more populous they become, the more polluted they become. Does it have to be so?

A: I think it has to be a lot less so than we might suppose. People have seen that there's a lot you can do to make the problem better without bankrupting people. That's what it's all about.

We like to think of it as an issue of trade-offs that people face. There is always the potential for things to get worse. But if that happens, there are real consequences. People get sick, people die. There are huge losses to society and a lot of our work with our colleagues in developing countries has been in trying, in a systematic and hopefully quantified way, to point that out. It's not a nuisance. It's a huge cost to you, economically and in human life, and so you have it within your power, at reasonable cost, to get this problem down very, very substantially to at least keep it constant, instead of letting it grow, without bankrupting yourself. And to us, when we looked at the costs, it seems reasonable. So we don't see it as "either-or." We see it as a question of trade-offs.

Q: The Clinton administration has been active in attempting to belie the notion that environmental protection will result in economic sacrifice. How is that balance viewed in developing countries in your experience?

A: We found that people are very open to argument. They don't have strong preconceived notions. There is some myth around that says, "It's something we have to endure." But I've never seen a case where people were ideologically resistant or even personally resistant to reasoned arguments on the other side.

What's new in this business in the last 20 years is that we've learned a lot about how to order the information that's relevant, and present it to people in a way that's relevant to the decision they have to make. So we can go to China now, for example, and we can get China's own estimates of its pollution problems in cities, and we can say, "Doctors have now studied the impact of pollution at this level on human life, and we know your level of air pollution, that is, we know so many thousands of people are dying every year from air pollution. So that's part of the cost you face." That's something they haven't had presented to them in that form before.

It was a nebulous idea before. Yes, there's damage from pollution. Now, thanks to a lot of work by a lot of people, we can make it a lot more precise. We've also learned a lot about cost. So we can tell them how much each increment of cleanup will cost them. Then they have a framework for making decisions in a more ordered and political way.

Q: In many industrialized nations, development created life-threatening pollution problems and public health crises. Then pollution problems had to be reversed in an emergency situation. With the information you describe, are developing nations going to be able to avoid those mistakes?

A: I think actually we don't even have to speak in the future tense. Our experience in a variety of very large industrializing countries like Mexico, China, Brazil, India, and Indonesia, in every case, has shown us that there's a large group of people who are aware of these things. They're working very hard on these things. And in fact, in places like China, they've succeeded in pretty well curbing the problem in the sense that there's no net growth in pollution in most Chinese cities. In some it's declining, yet the economy is booming and the society is very poor, so we might even call that a leap frog. They have jumped a step. At a much lower level of income, they've succeeded in beginning to rein in the problem seriously without curbing their economic growth.

Q: How did they do that?

A: Partly, they've been very effective in applying some regulatory approaches that weren't considered to be feasible for them in the past, like pollution charges. This is an idea that is very popular in Europe. You charge people per unit of pollution, and they have to take the charge into account as an economic cost, and that has a very salutary effect on management. Once it's part of the management calculation, people take it seriously and they reduce pollution quickly.

In the past, people had a sense that the developing countries didn't have the managerial or institutional capability to do this. But China, Colombia, the Philippines, and Malaysia and a variety of other countries have shown that's not right. At a very early stage of growth, you can bring instruments like this to bear and you can have a profound impact on pollution.

For example, in Malaysia they had a huge problem from palm oil production in the 1970s. Palm oil is a very large commodity in international trade, and it is very highly polluting for water. The Malaysians did a remarkable job of cleaning that up in a period of 10 years, partly due to instruments like pollution charges.

So there's that whole set of things. But maybe more fundamentally, they're now seizing on an entirely new approach that reflects things that have also been done in the U.S. and other places. That is, to bring the public into it at a very early stage, to get the regulatory problem out of the back rooms, out of interactions between inspectors and factory managers and into the public domain, so that people know what their problems are, what the sources of those problems are, and what can be done about that. That can be very powerful.

If there is a central message in this book, it has to be with the documentation of the power that people have found in that approach of public participation and public knowledge about pollution. And that's now spreading very fast.

Q: Let's explore the whole concept of charges more. How does it contrast with the way things were done in the past?

A: Let's take the U.S. case. The tradition in the U.S. was to have a rule about emissions. It might be a rule about a particular factory and how much pollution that factory could emit. Any emission below that standard was legal. Any emission above that standard was illegal, so it became an enforcement issue in the U.S. The Environmental Protection Agency (EPA) has been pretty effective in monitoring and enforcing what is really a pretty complicated system.

So when the Philippines, Indonesia, Mexico, and Brazil got into this game in the 1970s and '80s, their first instinct was to adopt what had been used in places like the U.S. So they put in the rules. They very quickly ran into some problems. They didn't have an EPA. They didn't have an effective enforcement apparatus. The courts were frequently corrupted. There were no effective fines. So the rules were there, but enforcement was practically null. They realized after some time that they didn't have the whole package, and they couldn't make it work.

Charges are very different. A charge says basically we're not treating this as a criminal problem. We're saying that you're costing the environment by polluting. You're costing us by polluting, and that's something you're going to have to pay for. The more you cost us, the more you're going to pay. Every unit of your pollution, you'll pay for.

So every factory manager, every business person is then faced with this fact every month. "I'm polluting, I'm paying, there's a cost stream, and there's something I can do about that." They simply treat it as a management decision. It's a bottom line issue.

Good government agencies that have good technical advice can go to them and say, "Look, you've got expenses, and there are ways to get those expenses down. Let us suggest different ways in which you can abate your pollution at a reasonable cost, and then you can dispense with a lot of this cost." That's a good relationship between the agency and the business person. Business people understand that.

We found remarkable changes of posture almost overnight. It's really quite phenomenal. In Colombia, in a case documented in this book, in the Rio Negro basin, near Medellin, there's a very nice operation by the local pollution control agency that does charges. Within the first six months of serious implementation of charges, they got something on the order of magnitude of a 50-percent drop in the serious organic -- meaning oxygen-depleting -- contamination of water from local industries. Once they saw that this cost would be there forever, they started acting seriously to do something about it. So, our conclusion, this works well.

Q: It seems that to assess those charges would be a more complex regulatory process than determining if a factory crosses the legal limit. You said earlier that many countries had a difficult time establishing a strong regulatory apparatus. So how is it that they are able to make these pollution assessments?

A: Over time, people are finding all sorts of ingenious ways to solve some of the administrative problems. For example, in Colombia, Tomas Black-Arbelaez, the national leader of the pollution charge program, faced the problem that many of the local agencies that are implementing charges have very little experience with handling funds.

So Tomas and his colleagues made a deal with one or two of the largest banks in Colombia to serve as collection agencies. For a small percentage of the surplus cash, they're given the information from the agencies about who should be billed. They present the bill. They use their collection facilities to get the money. Then they keep the money on account just like they do other people's accounts. They put it out at interest in the market to get more money for that. And if companies then resist the billing, they lose some of their private credit rating. So from the point of view of the government, it economizes on administrative resources, and it also turns out to be pretty efficient.

Q: Let's return to the mention you made earlier about public involvement in the environmental regulatory process as another tool to contain pollution in an effective manner. How has that worked?

A: This is a community struggle. It's a story about balance and local environments. In developing countries, what's been lacking in the past on the part of most people in communities in poor countries is that they've had no good information about what's going on. They've had no way to understand what the stakes were. Of course, there were obvious cases, such as people sickening and dying from very severe pollution. But the slow insidious daily stuff that can affect your life long-term was largely invisible. Now, we have a proliferation of programs that very clearly identity the sources of serious pollution and the damages from that pollution in ways that local communities can absorb. What people are revealing is the normal human tendency to want to defend themselves and their families. But because they do value the economic side of it, they're willing to talk. It's very rarely the case that they're going to assault the sources of local employment, but they're certainly willing to bring pressure to bear to find the middle ground.

So in Indonesia, for example, which is cited extensively in "Greening Industry," we find the story of the PROPER (Program for Pollution Control, Evaluation and Rating) program, which is a program that rates factories on the degree of their pollution. It rates good performance as well as bad performance. The story of the implementation of that is really a story of local action, local negotiation, and local improvement in response to the information that's been put out. No one wants to be poisoned by pollution, so I think it's a very important component of this.

Q: Are you saying that there are two factors increasing public involvement -- a greater availability of information about environmental pollution, and a greater dissemination of information?

A: You're looking at a huge change in tradition, a move toward transparency. It's really quite remarkable. Technologically and economically, it's much more possible now to disseminate information, to analyze information in the information economy. Those effects are there in Mexico and Brazil and China as well as in the U.S. So it's partly a question of the feasibility of doing it, and partly it's a change of consciousness that's occurring everywhere. People have a sense that the government is not the sole player here, and that people's own concerns should be at the table directly, not through some agency, and the balance is shifting.

It's really quite heartening to see to what an extent some of these measures that have basically opened it up have really improved people's lives and in very short order. If we had to say one thing about the satisfaction of having done this work in the World Bank, that's been it -- to see that rapid change in such a short time that clearly reduced problems for people.

The World Bank report can be viewed at http://www.worldbank.org/nipr/greening/full_text/index.htm.

Charlene Porter writes on global issues for the Office of International Information Programs, U.S. Department of State