The notion of capacity development (CD) has been receiving increasing atten
tion as a way to assist the South in its environmental management. Conseque
ntly, there has been an exploration of various facets of the capacity issue
in the literature and an incorporation of CD in environmental programs of
donor agencies. Yet, many of these discussions have remained rather broad,
and efforts to develop environmental capacity have shown only limited succe
ss. Based on an examination of the capacity needs for environmental managem
ent in agriculture and industry, and for dealing with climate change, this
review suggests that strengthening domestic capabilities for policy researc
h and innovation as well as for managing technological change may be partic
ularly critical to allow for adaptation of policies and technologies for lo
cal conditions and needs. Examination of innovative local experiments on en
vironmental management in developing countries can also provide useful less
ons on how to develop and utilize capacity that works under the constrained
conditions often found in developing countries. Furthermore, it is importa
nt to stress that improving the environment in developing countries also re
quires capacity in the North to examine and reorient Northern policies that
impact the environment, as well as capacity for the environment, in the po
orer parts of the world. Ultimately, though, the development of sustainable
and appropriate capacity for the environment will require not merely donor
-driven programs but a systematic effort driven by Southern governments and
organizations.