In its first environmental strategy to be adopted later this month, the Organization for Economic Cooperation and Development is expected to embrace a five-point plan calling for members to slash subsidies that hurt the environment and introduce incentives to stem environmental damage.

The “OECD Environmental Strategy for the First Decade of the 21st Century” is designed, as the name suggests, to set the direction for environmental policy for the OECD’s 30 members for the next 10 years.

It is a daunting task, as the plan, which includes cuts to energy, farm and other subsidies so prices more accurately reflect environmental impacts, aims to steer members toward a more sound pattern of development.

Although OECD members have given preliminary approval to the document, final agreement on the section dealing with climate change has been stalled by objections from the United States, according to OECD and Japanese government sources.

Many observers say that how the final version reads could affect another key environmental pact, the Kyoto Protocol on global warming, from which the U.S. has indicated it will pull out.

The U.S. says it cannot endorse the OECD strategy because it calls for the ratification of the Kyoto Protocol, an international accord adopted at U.N. climate change negotiations in December 1997. Washington is currently reviewing its position on climate change negotiations.

The Kyoto agreement commits developed countries to collectively cut greenhouse gas emissions by roughly 5 percent of 1990 levels by between 2008 and 2012. Japan and other countries hope to complete the accord in talks in Germany scheduled for July.

But OECD officials fear a negative impact on climate change discussions if the OECD strategy — set to be approved by OECD environment ministers at a gathering in Paris on May 16 — does not end up endorsing the Kyoto Protocol.

Also drawing fire from the U.S. — along with Japan — is the inclusion in the OECD strategy of a specific figure for carbon dioxide stabilization.

Scientists and governments generally agree on the goal of the U.N. Framework Convention on Climate Change that carbon dioxide and other greenhouse gases must be stabilized, but they have been unable to settle on a specific figure.

Environment Ministry officials question setting a concrete objective at this point, as experts on the U.N. Intergovernmental Panel on Climate Change have yet to do so. But despite these obstacles, many experts remain optimistic that the ground-breaking OECD strategy will not fall apart, given the widespread understanding for the need for sustainable development.

The strategy outlines five objectives for member nations to meet by 2010 in order to achieve more sustainable economic development.

They include protecting ecosystems through the wise use of resources, divorcing environmental degradation from economic growth, and improving information for decision making. The strategy specifically addresses climate change, fresh water and biodiversity and the threats of agriculture, transport and energy.

“OECD countries will need to remove or reform subsidies and other policies that encourage unsustainable use of natural resources, beginning with the agriculture, transport and energy sectors, and ensure the internalization of the full external costs of natural resource use,” the draft says.

Recently published OECD data indicate that scrapping subsidies and establishing an energy tax could dramatically reduce carbon dioxide and sulfur oxide emissions, and reduce fresh water pollution from pesticides by 2020 at a cost of less than one percent of the gross domestic product of OECD countries.

“It will be necessary in the next decade to not only decouple environmental degradation from continued economic growth, but to ensure that pressures on the environment are at a level compatible with environmentally sustainable development,” it says.

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