Nagoya, Japan – The World Bank announced yesterday a new global partnership that would give developing countries the tools they need to integrate the economic benefits that ecosystems such as forests, wetlands and coral reefs provide into national accounting systems.
The goal is to introduce the practice of ecosystem valuation into national accounts at scale so that better management of natural environments becomes “business as usual.”
World Bank Group president Robert B. Zoellick, in a press conference here, said the alarming loss of biological diversity around the world could be partly attributed to the lack of proper value placed on ecosystems and the services they provide.
Zoelick said the new partnership would provide the “missing information” on a country’s “natural capital” to guide leaders in decision-making.
The Philippines, Zoelick told The STAR, is one of the countries the World Bank is hoping to partner with in adopting a natural wealth accounting system.
“The natural wealth of nations should be a capital asset valued in combination with its financial capital, manufactured capital and human capital,” he said.
“National accounts need to reflect the vital carbon storage services that forests provide and the coastal protection values that come from coral reefs and mangroves.”
“Through this new partnership, we plan to pilot ways to integrate ecosystem valuation into national accounts and then scale up what works to countries around the world,” he added.
According to a forthcoming World Bank publication, the economic value of farmland, forests, minerals and energy worldwide exceeds $44 trillion, with $29 trillion of that in developing countries. This value is primarily commercial, as other value lies in the services ecosystems such as forests provide, including hydrology regulation, soil retention, and pollination — as a home to bees and other insects.
The World Bank chief further explained that cutting down a forest for its timber may have negative consequences for other sectors of the economy, such as loss of agricultural productivity, loss of capacity for hydroelectric power, and loss of water quality.
Putting a value to a country’s natural assets would help developing countries like the Philippines come up with “better and informed policy” and would, hopefully, also lead to a “more informed public debate” on investments and biodiversity concerns, Zoelick said.
Replying to Rhe STAR’s question on mining investment concerns, Zoelick adopting a natural wealth accounting would, in fact, make it easier to determine the cost of losses to the ecosystem and ecosystem services.
“It will help project the potential cost and potential gain from such investment,” Zoelick replied.
The new partnership takes the global agency’s work to the next level, developing the systems needed to bring the value of natural capital to the highest level of a country’s economic decision-making.
By demonstrating ecosystem accounting at scale for a critical mass of countries, the World Bank envisions that the approach will eventually be adopted by many countries.
Valuing ecosystems in this way would change the calculation that a country would make, for example, in clearing mangroves for shrimp farming, Zoelick said.
The calculation would no longer simply be the revenue from profit on shrimp farming minus the farming costs.
The loss to the economy of coastal protection from cyclones and the loss of fish and other products provided by mangroves would also be factored in.
The partnership would include developed and developing countries, international organizations and conservation and development non-governmental organizations as well as the global organization for legislators.
The first phase of a partnership to “green” national accounts includes Colombia and India, where feasibility studies to identify priority ecosystems will start soon.
Other countries in Africa, Asia, Latin America and Central Europe have indicated strong interest in being pilot countries under the partnership.