African nations agree to put a price on nature

Ten African nations have pledged, ahead of Rio+20, to include the economic value of natural resources in their national accounts.

Africa has taken the lead in the quest to persuade nations to include the full economic value of their natural resources in their national accounts, with the promise last month by ten of its nations to do so.

The heads of state or government of Botswana, Liberia, Mozambique and Namibia, along with ministers from Gabon, Ghana, Kenya, Rwanda, South Africa and Tanzania, signed the 'Gaborone Declaration' at the Summit for Sustainability in Africa (24-25 May), co-hosted by the government of Botswana and the nongovernmental organisation Conservation International.

The declaration undertakes to add the full value of forests, coral reefs, grasslands and other natural resources and ecosystems to the countries' national and corporate planning and reporting policies. The countries agreed to report annually on their progress.

The aim is to make financially clear the 'invisible' benefits of natural resources and ecosystems, from the pollination services of bees to the water purification services of forests, thus allowing decision-makers to consider the costs and benefits of conserving or destroying them.

The declaration also admits the continent's failure to achieve sustainable development in the past 20 years.

Seretse Khama Ian Khama, president of Botswana, told the meeting: "I challenge all other nations — developed and developing — and the public and private sectors to follow [this] example".

In the case of selling raw wood, for example, the costs to the country in terms of the soil erosion, water quality and disruption of water catchments that arise from deforestation would be included.

Ellen Johnson Sirleaf, president of Liberia, said that until these services were reflected in national accounting, forests "will be worth more dead than alive".

In an example from Thailand cited at the meeting by Rachel Kyte, the World Bank's vice president for sustainable development, a hectare of mangrove has been calculated to offer flood protection that would otherwise cost US$16,000 to provide. This figure can help influence whether to cut it down for wood worth US$850 or make US$9,000 converting it into a shrimp farm.

The World Bank's global partnership Wealth Accounting and the Valuation of Ecosystem Services (WAVES) is building capacity in countries such as Botswana, Colombia, Costa Rica, Madagascar and the Philippines so that they can implement natural capital accounting.

WAVES uses the UN's System for Environmental and Economic Accounts, an internationally agreed method to calculate the wider economic value of material natural resources such as timber, and is working on an internationally acceptable method for ecosystem services such as pollination.

Namibia, for example, already uses natural capital accounting in its environment and tourism ministries and is compiling water and mineral accounts.

In a report published last month (9 May) by the World Bank, 'Inclusive Green Growth: The Pathway to Sustainable Development', it argued that growth over the past 250 years has happened largely at the expense of fast-dwindling natural resources, putting us "in danger of undermining the basis on which growth has been achieved".

As well as accounting for natural capital, the bank argues that other policy changes are required, such as ending subsidies that promote the wasteful use of fuel and other resources.

In a further report, 'Moving Beyond GDP', the World Bank says research shows that, for 43 low-income countries, natural capital makes up more than a third of their total wealth.

"Large populations depend on forests, minerals and soil productivity for their daily existence," it said. As countries grow, pressure is put on their natural resources, making them less able to cope with degradation and loss of ecosystems, said the report.

Natural capital and Rio+20

The World Bank is now hoping to persuade 50 countries and 50 private corporations to endorse natural capital accounting at the upcoming Rio+20 meeting — the UN Conference on Sustainable Development to be held in Brazil (20–22 June).

It said it would use the Gaborone Declaration to leverage new commitments at Rio+20 where the green economy will be high on the agenda.

Pavan Sukhdev, study leader of The Economics of Ecosystems and Biodiversity (TEEB), a UNEP-led initiative that has pioneered some of the methods of natural capital accounting, and chief executive of the consulting firm Green Initiative of a Smart Tomorrow Advisory, said the declaration was well timed, occurring before the "Rio+20 summit and its stultifying politics takes over".

He said it demonstrated that the ten countries saw natural capital "as their biggest development asset" and, if the rest of the G-77 were to do likewise, "the Rio focus could finally rest on those who have really done very little for sustainable development, for example the developed nations".

Some environmentalists say that 'pricing' a freely available resource, such as wood from a forest or fish from a lake, could lead to it being purchased by an outsider, or could lead to the government — or its de facto guardians — charging for access.

Other critics say that, if natural resources acquire a financial value, poorer countries could use them as collateral for debts and thus risk losing them to creditors.

Nnimmo Bassey, a Nigerian environmentalist activist and poet, and chair of Friends of the Earth International, said: "This declaration is blind to the fact that the bait of revenue from natural capital is simply a cover for continued rape of African natural resources".

"The declaration will help corporate interests in Rio while impoverishing already disadvantaged populations, exacerbate land grabs and displace the poor from their territories.

"The significant thing those ten countries could have produced — but didn't — was a score sheet of how they have fared on the Rio Principles [27 principles of sustainable development established in the Rio Declaration at the first Earth Summit in 1992] 20 years after the first Rio Summit," he said.

At the Botswana meeting, Steiner rejected such objections: "If you don't value something in your economy it is essentially of no value".

Link to Gaborone Declaration [322kB]

Link to World Bank report, Inclusive Green Growth

Link to World Bank report, Moving Beyond GDP [11.5MB]

This article is part of our coverage on Science at Rio+20.