Accounting for natural wealth gains world traction: Businessweek

“Putting a price on a natural bounty long taken for granted as free may sound impossible, even ridiculous. But after three decades on the fringes of serious policymaking, the idea is gaining traction, from the vividly clear waters of the Maldives to the sober, suited reaches of the World Bank,” writes Katy Daigle for Businessweek.

“As traditional measures of economic progress like GDP are criticized for ignoring downsides including pollution or diminishment of resources such as fresh water or fossil fuels, there has been an increased urgency to arguments for a more balanced and accurate reckoning of costs.

That is particularly so as fast-developing nations such as India and China jostle with rich nations for access to those resources and insist on their own right to pollute on a path toward growth.

Proponents of so-called “green accounting” — who will gather in Rio de Janeiro this week for the Rio Earth Summit — hope that putting dollar values on resources will slam the brakes on unfettered development. A mentality of growth at any cost is already blamed for disasters like the chronic floods that hit deforested Haiti or the raging sand storms that have swept regions of China, worsening desertification.

Environmental economists argue that redefining nature in stark monetary terms would offer better information for making economic and development decisions.

That, they say, would make governments and corporations less likely to jeopardize future stocks of natural assets or environmental systems that mostly unseen make the planet habitable, from forests filtering water to the frogs keeping swarming insects in check.

If the value of an asset like a machine is reduced as it wears out, proponents say, the same accounting principle should apply to a dwindling natural resource.

‘Environmental arguments come from the heart. But in today’s world based on economics it’s hard for arguments of the heart to win,’ said Pavan Sukhdev, a former banker now leading an ongoing project that was proposed by the Group of Eight industrialized nations to study monetary values for the environment.

That study, started in 2007, has estimated the world economy suffers roughly $2.5 trillion to $4 trillion in losses every year due to environmental degradation. That’s up to 7 percent of global GDP.

‘We need to understand what we’re losing in order to save it,’ Sukhdev said. ‘You cannot manage what you do not measure.’

Using the same accounting principles, some countries are already changing policy.
The Maldives recently banned fishing gray reef sharks after working out that each was worth $3,300 a year in tourism revenue, versus $32 paid per catch. Ugandans spared a Kampala wetland from agricultural development after calculating it would cost $2 million a year to run a sewage treatment facility — the same job the swamp does for free.

But environmental accounting still faces many detractors and obstacles. Among them is resistance from governments who might lack the resources and expertise to publish a “greened” set of national accounts alongside those measuring economic growth.


Government to unveil “new environmental strategy”

The government will “not completely” reverse the former government’s carbon neutral policies outlined by President Mohamed Nasheed during his three years in office, the President’s Office has said.

President’s Office Spokesperson Abbas Adil Riza told Minivan News the government was this week expecting to unveil details of a new environmental strategy for the nation.  Riza claimed this strategy would seek to play up  national debate about sustainable practices at both an island and national level.

Riza’s comments were made as the government this month launches a number of environment-themed events to coincide with the Rio+20 sustainable development summit that is taking place in Brazil between June 20 and June 22.

Meanwhile, former President Mohamed Nasheed, who maintains he was removed from office in February under a “coup d’etat”, claimed it would be “impossible” for the present government to outline sustainable development strategies unless it had the stability of a democratic mandate.

Abbas however maintained that President Waheed would “not totally reverse” Nasheed’s environmental commitments towards carbon neutral policies.

“In the next 24 hours or so we will hope to be unveil more details of our new strategy. We will not be enacting a 180 degree change in direction to the previous government’s zero carbon strategy,” he claimed. “What we are aiming to do is to elaborate more on individual sustainable issues and subject them to national debate. Previously, these discussions on sustainability were not subjected to a national debate, such as through parliament.”

The former government conducted a number of high-profile exercises in a bid to raise the profile of its efforts to secure funding and assistance to make the country carbon neutral by 2020, such as the now internationally famous underwater cabinet meeting.

Riza added that the government was looking to establish new laws and regulations to safeguard nationwide sustainable commitments. There had been “very little” debate on environmental policy in parliament during Nasheed’s presidency, Riza said.

Destination: Rio

The Rio +20 Conference taking place later this month aims to bring together world leaders, NGOs and private sector representatives to outline new directions for political commitments on overcoming the challenges setting back sustainable development.

According to the Maldives government, the conference will focus on bolstering green economies to relieve poverty, as well as improving coordination between various international bodies and national authorities.

In the lead up to the event, the Maldives has launched a new social media service on Facebook, the Future of Maldives Sustainable Development, which details work presently being conducted by authorities towards eco-friendly commitments.

In the next few weeks, a number of sustainability themed events will be held around the country. These include a no-vehicle day in Male’, which will see non-emergency traffic banned from the capital’s roads for several hours next Tuesday (June 12), a renewable energy exchange at schools, and the launch of a Climate Change Trust Fund.

Presidential promotion

During his inaugural address in March, President Waheed claimed that like former President Nasheed, he would remain an internationally outspoken proponent on the plight of small nations facing the destructive impacts of climate change.

“The government will encourage the voice of small island nations to be heard in the global arena with regard to climate change,” stated the president. “The Maldives will always participate in voicing the concerns of small island nations.”

The president was heckled on multiple occasions whilst trying to give his constitutionally mandated address to parliament by MPs of the Maldivian Democratic Party (MDP), which continues challenge the legitimacy of Dr Waheed’s government and demand early elections.

Waheed eventually delivered a truncated speech in April during a rescheduled Majlis session, amid loud protests in the parliament chamber and violent clashes between civilians and police in the capital.

Former President Mohamed Nasheed has meanwhile remained an outspoken advocate for the Maldives’ efforts to adopt wide-scale carbon neutral practices.

In an interview prior to the screening of the Island President at the Hay Festival in the UK, the former president said the lack of a stable government in the Maldives would set back efforts to promote its sustainable policies and interests internationally.

“It is going to be very difficult for us to adapt to climate change if we do not have a solid and secure democratic government,” Nasheed told the UK Daily Telegraph newspaper.

In the months following his controversial resignation, Nasheed visited the US to raise awareness on the current political upheaval in the country, as well the documentary film, “The Island President” in a tour that saw him appearing on prime time TV and at talks across the country.

The documentary film chronicles his government’s ambitious pledge to become a carbon neutral nation by 2020, and has received increased global coverage since Nasheed was removed from office.

Speaking to Conde Nast Traveler to promote the film at the time, Nasheed expressed hope that the country would continue to work towards becoming carbon neutral, even as he challenged the legitimacy of Dr Waheed’s government.

“We were making real progress. I hope the government will continue our policies. But you can’t have good policies without democracy. And you won’t address the climate change crisis without good policies,” Nasheed told journalist Dorinda Elliott. “All democratic movements must talk about both climate change and human rights.”

In March, local environmental NGO Bluepeace claimed that ongoing political uncertainty in the country and questions over the legitimacy of the current government had set back the country’s commitments to sustainable development.

Bluepeace Director Ahmed Ikram said discussions on domestic environmental commitments were being sidelined by increasingly partisan political thinking throughout the country.

Ikram claimed that the national media was also not providing much coverage or promotion to climate change adoption in the Maldives. He alleged this was in part due to sections of the media favouring the former president’s political opponents, reflecting the politicisation of environmental commitments.

“We support [former] President Nasheed. Yes there are times when we may have disagreed with his policies, but we still supported him as our president,” said Ikram. “What we are experiencing today – with Maldivian businesses making use of solar panels – are the benefits of Nasheed’s work on the environment.”

Despite his personal criticisms of the current government and the long-term prospects for democracy in the country, Ikram said Bluepeace fully supported the present government’s role in supporting projects such as the World Wildlife Fund’s (WWF) Earth Hour initiative.

Asked if he felt that Maldivians were committed to long-term conservation beyond one-off annual events such as Earth Hour, Ikram said the Maldivian public were generally committed in adapting to climate change.

“I believe that the Maldivian people are the ones who will serve as climate change champions in the end,” he said.

International perspective

Despite Nasheed’s high-profile climate activism, Greenpeace in 2010 told Minivan News that the Maldives acted more “as a symbol than a practical demonstration” of how national development and fighting climate change can be mutually exclusive.

“The Maldives can become a strong proponent of a paradigm shift in the World Bank and in developing countries whereby it is recognised that fighting climate change and promoting development go hand in hand,” said Wendel Trio, Climate Policy and Global Deal Coordinator for Greenpeace International.