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Tuesday, June 5, 2012

Pricing Natural Assets Key to Africa’s Growth

The United Nations Conference on the Human Environment held in Stockholm in 1972 was the first to draw attention to the need to preserve natural habitats to produce a sustained improvement in human wellbeing.

In the same year, 1972, the Club of Rome published its report on The Limits to Growth, pleading for proactive, societal innovation through technological, cultural and institutional change in order to avoid an increase in the ecological footprint of humanity beyond the planet’s carrying capacity.

In my view, the most profound pronouncement of the 1972 Stockholm Conference was the principle that;  “The natural resources for the earth, including the air, water, land, flora and fauna and especially representative samples of natural ecosystems, must be safeguarded for the benefit of the future generations through careful planning, as appropriate”.

This principle inspired Our Common Future, also known as the Bruntland Report of 1987 and the oft-quoted definition of sustainable development – “development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”

The Bruntland Report laid the framework for the 1992 Earth Summit in Rio de Janeiro. The World Summit on Sustainable Development held in Johannesburg in 2002 recognized that eradicating poverty, protecting and managing natural resources for economic and social development are requirements for sustainable development.

On June 21 2012, the world will converge in Brazil at the Rio + 20 Summit on Sustainable Development. The goal of the Summit is to seek renewed political commitment to sustainable development and address new and emerging challenges.

 National delegations and technical experts are already poring over and negotiating the text of the document that will be produced at end of the three-day Summit. This unwieldy document covers everything from sustainable food strategies to codes of corporate responsibility to technology transfers to a green economy and poverty eradication.

But the Rio+20 Summit could be mired in the rhetorical sprawl of innocuous and non-binding commitments. The Summit is in danger of being eclipsed by the dark financial clouds over Europe, economic stagnation in the US and the stalling of China’s economy. This is not the time to talk about new financial commitments and technology transfers to the so-called poor countries to achieve sustainable development.

In Africa we must not think of sustainable development as a destination. Sustainable development must be a path we seek through a dynamic process of adaptation, learning and action. Sustainable development must be about understanding and acting on interconnections between the economy, society and natural capital.  Natural capital includes resources such as minerals and energy, timber, agricultural land, fisheries, and water.

The vital services arising from Africa’s natural capital are imperceptible, especially policy makers. Moreover, the value of nature’s goods and services are not readily captured in markets, so their contribution to Africa’s economy and livelihoods remains largely unaccounted for. Consequently, governments do not know what it would cost the economy if these services were lost. Imagine how much a bee would invoice for pollination services or a wetland for water filtration or upland forests for urban water supplies?

It is important to change the way GDP is used to measure economic progress. We must put a value on currently “free natural assets” like clean water and standing forests, soils, insects and the benefits they provide. Africa needs tools for taking natural capital into account for improved economic decision-making.

Joseph Stiglitz, Nobel Prize-winning economist and Columbia professor, believes that GDP is outdated and misleading. Stiglitz argues that GDP must take into account the depletion of natural capital and that “Net” National Product (NNP) be adjusted for the depreciation of natural capital.

Africa’s natural capital is threatened by powerful drivers of change, including, rapid population growth, growing inequality, urbanization, climate change, land degradation and climate change. The problem for a majority of poor smallholder farmers is not unsustainable choices, but lack of choices in the first place. Real and sustainable choices are feasible once the basic needs and stable livelihoods are guaranteed.

African leaders must stop wringing their hands and looking to the West and China for massive cash and technology transfers. African governments, business and civil society leaders must scale up efforts to empower people to make sustainable choices. These efforts must be achieved through:
·      Adopting “natural capital accounting” and assigning a value on the functions of protected forests, including their role in curbing erosion, providing clean water to cities, supporting wildlife and regulating the rain cycle to ensure enough rainfall for crops;
E Enabling a twenty-first century green revolution that accounts explicitly for Africa’s women led smallholder farming systems and vulnerability to the impacts of climate change. 
·      Scaling-up access to quality post-primary and secondary education, emphasizing knowledge and skills to ensure that the youth can contribute to solutions that address today’s challenges and capitalize on emerging opportunities.

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