ANSA Merchant Bank believes that the private-public partnership (PPP) model of project development has significant merit in advancing the goals of national development.
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Measuring nature’s wealth
If you fly over the Northern Range, you can see large scars in the forest where quarrying has destroyed life and gouged out the mountain’s body to extract aggregate for various construction projects elsewhere. Much of this is done with little consideration of what our resource strengths actually are, exactly what we may be destroying in the longer term, and whether better options and choices exist to proceed with development projects in a more intelligent and balanced way.
The impacts of quarrying and unregulated mountainside constructions have included flooding, massive soil erosion and a disruption of watersheds, as well as the silting up of rivers as the soil is washed downhill, and destruction of property due to floods every year. Indeed, back in September 2012, Planning Minister Dr Bhoe Tewarie suspended all development on the Northern Range after serious flooding in the western part of Trinidad.
Tewarie had said then that the country’s development policy would now exclude all access above and below the usual 300-feet contour line. Tewarie said the authorities would also crack down on illegal quarrying and other developments in order to preserve the Northern Range. Because T&T has not previously assessed the value of ecosystem services, it’s easy for anyone to disrupt or even destroy these services for future generations, for private business gain.
That may be about to change. ProEcoServ is the Project for Ecosystem Services, which for the first time in T&T, aims to actively consider and include the measured value of environmental services in our financial decision-making process at a governmental level.
The project will measure various ecosystem services that nature provides—such as water retention, water purification, protection against soil erosion, and even the value of pollination of crops—to produce useful data that can be mapped. Such information can then help identify our ecosystem “hot spots” and be part of a more intelligent decision-making process to assess options in natural resource use, ecosystem integrity and the needs and impacts of development projects.
Dr Carol James: Project is much needed
Dr Carol James, biologist and environmental policy specialist with more than 30 years experience in Caribbean, African and Pacific countries, welcomes this project:
“The project is much needed. A lot of planning and land use decisions are being taken without valuable information on impacts of developments in the Northern Range,” she said. She noted that quarrying in the Arima valley has disrupted flora and fauna there. She said quarrying was also destroying parts of Santa Cruz and the Maracas Valley ecosystems. She cited flooding issues in certain Maracas Valley developments, due to cutting down forests for housing.
She also cited flooding in Morvant through upland housing developments, and impacts on watersheds in the Orange Grove/Tacarigua/ Aranguez Savannah areas due to recent planned developments, which, she said, would affect the link between the recharge of the aquifer and the Northern Range.
Dr James also pointed to “severe loading” of watercourses in Diego Martin, due to deforestation in the hills and subsequent soil erosion, watershed disturbance and resulting floods. All of these are examples of diverse human developments which have not sufficiently assessed—or in some cases, totally ignored—natural ecosystem needs; creating more expensive problems down the road.
ProEcoServ may help here. It is a project to develop “environmentally adjusted national accounts”—or, to put it another way, to identify and economically value the services we get from nature and our environmental ecosystems, which underlie all our economic activity. This important data can then be factored into saner development decisions.
Should we chop down a major forest on a hillside, for instance, to quarry the hill for aggregate for road-building, if we have data that shows this would lead to massive soil erosion and a destroyed watershed? Should we remove mangroves to make way for concrete complexes, if this would lead to more expensive flooding issues? What are the true trade-offs? Do we even know where our important ecosystem “hot spots” are?
Carl Obst, editor of the UN System of Environmental-Economic Accounting (2010-2013), is an Australian economist who recently visited T&T (March 17-21) as part of the ProEcoServ project. The project manager for ProEcoServ is John Agard, Professor in the Department of Life Sciences at UWI. Carl Obst spoke with the Sunday Business Guardian on March 19 about ProEcoServ and why he’s passionate about this accounting approach to the environment.
From GDP to Natural Capital Accounting
Obst’s background is in economics. He is an honorary fellow at the University of Melbourne, and an international consultant on Natural Capital Accounting projects. He worked with the Australian Bureau of Statistics for 19 years on many projects, including quarterly national accounts, GDP measurement and capital stock analysis. So he’s familiar with conventional theories of how to measure an economy. He came to believe that GDP measurements alone were too narrow: that people needed to expand their measurements to take environmental considerations into account for a true sense of reality—an approach called Natural Capital Accounting.
Obst said he’s had a longstanding interest in sustainable development. “That notion that there’s a broader system of measuring—a broader picture—has always been a fascination for me,” he said.
So: why measure ecosystem services?
“An emerging model is one of the economy embedded in society, embedded in nature,” said Obst. “These dependencies are things we should really think about in a much more active way. Because it’s easy to take them for granted.” He suggests that if you don’t put a value on the environment, it’s easy to imagine that it will be there forever. And it’s also rather easy to allow it to become destroyed—or used unwisely, with long term future consequences.
“You have a forest and you can cut a tree down, and another will grow. So you can get the impression that it will just keep on producing. And for a long time, that’s what keeps on happening. But as you gradually pick away at it, the amount that reproduces and regenerates becomes less and less. So you have a declining natural capital base with more and more people trying to take services from them. Scarcity arises. That’s where it starts to get interesting.”
“You can go back to the early 1800s in England; a similar thing was happening… they were running out of land for farming…but they had a natural release point: they discovered Australia and the US—and suddenly they had all these resources; they had boats going everywhere. They didn’t need land in the UK anymore; they had the industrial revolution, which meant they didn’t need agriculture as much… so the scarcity problem essentially disappeared in a sense, by finding out where all these resources were elsewhere. We’ve now grown a bit since then.”
A tool for assessing hidden costs
What kinds of key ecosystem services will be given an economic value? “It’s situationally specific,” explained Obst. “So in T&T, you’d probably divide it into different types of ecosystems—forests, agricultural land, wetlands or swamps, coral reef areas—and in each of those, you’d probably get a different mix of ecosystem services that would be provided. So it’s a matter of assessing for each one what are the relevant services.
“For the Northern Range, for example, a key service would be water. Carbon storage and sequestration would be another (carbon stored in trees and in the soil). Another would be protection by trees against soil erosion; by keeping forest intact, you can have degrees of flood mitigation. A coral reef may be useful for protecting a coastal area from impacts of larger waves.”
“Part of the point of doing this is not so much to say: that because it has a value, you should never choose a development option,” said Obst, “… but to say that if you are choosing a particular development option, there are some hidden costs that you should be aware of.
If you got rid of all the pollination services of the Nariva Swamp, for instance, these farmers are going to need to pollinate their crops somehow, and they would need to pay for it in some way. Similarly, if you damaged the ability of the Northern Range to supply water, you would need to find some alternative way of delivering that water.
“One way of looking at it is as a system of natural ecological infrastructure. You don’t have to build a water filtration plant, because the forest is doing that for you. You don’t need to put up large barriers to stop floods, because you’re using the natural systems there. And often it’s a lot cheaper to maintain the environment and the ecosystems than to build something man-made.
“The idea of the accounting is to give you a broader sense of the costs and options, so that when you’re making planning decisions and other economic choices, you’re got a better sense of the alternatives, and the trade-offs.”
What is ProEcoServ?
ProEcoServ is the Project for Ecosystem Services. It will measure some services that nature provides—such as water retention, water purification, protection against soil erosion, and even the value of pollination of crops—to produce useful data that can be mapped. The whole idea is to provide measured values for some of nature’s services, as a tool to enable wiser and more balanced decisions regarding use of our environment and natural resources.
The project is part of a global four-year initiative to integrate ecosystem assessment and economic valuation of ecosystem services into sustainable development planning. It was launched in 2010 by the United Nations Environment Programme. It is being rolled out in four countries—T&T, Chile, Vietnam, and South Africa. The national coordinator for the T&T project is Prof John Agard, through UWI (the lead institution for ProEcoServ here).
ProEcoServe T&T is doing studies at three sites: the eastern Northern Range, Nariva Swamp and Buccoo Reef. The project will produce data on the linkages and trade-offs between preserving ecosystems and development processes. Although this particular project ends in December 2014, it’s intended to trigger an ongoing commitment to environmental accounting at governmental level.
A key goal is to develop GIS-based ecosystem service maps for T&T. These geospatial maps will be included in the next National Physical Development Plan. The maps use GIS and overlays, based on data fed into models, to show where different ecosystem services exist in an area.
One model, for instance, showed that the Northern Range forest helped to reduce erosion rates by as much as 95 per cent, especially on steep slopes, according to a ProEcoServ team member. In the Northern Range project, there will be the option to overlay the soil erosion maps onto the water purification maps—so one can actually see where different services lie in relation to each other, and which parts of the watershed need protection, said project participants.
Such maps would be a vital, important tool to allow planners to identify ecosystem service “hot spots,” for better decision-making.
ProEcoServ has been endorsed by the Ministry of Planning and Sustainable Development as a national project. “We would like T&T by the end of this year to be a pilot WAVES (Wealth Accounting and Valuation of Ecosystem Services) site with the World Bank,” say ProEcoServ staff—a move that would have to be government-led.
(project Web site: http://www.proecoserv.org)
What are ecosystem services?
An ecosystem is a dynamic complex of plant, animal, and microorganism communities and the nonliving environment, interacting as a functional unit. Ecosystem services are the benefits people obtain from ecosystems. These services are many; they include providing food and fresh water; regulating flooding through preventing soil erosion; pollination services for crops; and services such as nutrient cycling that maintain the conditions for all life on Earth.
GDP is the recognised measure of economic growth. Why change it?
GDP only measures gross output. It tells us nothing about income for the long term. It does not answer questions like: Are income and growth sustainable? Will the same level of income be available for our children? That’s because GDP looks at only one part of economic performance—output—but says nothing about wealth and assets that underlie this output and the generation of income. For example, when a country exploits its minerals, it is actually depleting wealth.
The other major limitation is the poor representation of natural capital. Important contributions to the economy of forests, wetlands, and agricultural land are not fully captured in national accounts or may be hidden. Forestry is an example—timber resources are counted in national accounts, but forest carbon sequestration is not included. Other services like water regulation that benefits crop irrigation are hidden and the value is (wrongly) attributed to agriculture in a country’s GDP.
By incorporating natural capital into national accounts, countries can make better economic choices. Ecosystem accounts can help biodiversity-rich countries design a management strategy that balances tradeoffs among ecotourism, agriculture, subsistence livelihoods, and ecosystem services like flood protection and groundwater recharge. (https://www.waves partnership.org/en)
What is Natural Capital Accounting?
Natural capital includes the resources from nature we easily recognise and measure, such as minerals and energy, timber, agricultural land, fisheries and water. It also includes the vital services that ecosystems provide that are often “invisible” to most people—such as air and water filtration, flood protection, carbon storage, pollination for crops, and habitat for fisheries and wildlife.
These values are not readily captured in markets, so we don’t really know how much they contribute to the economy and livelihoods. We often take these services for granted and don’t know what it would cost if we lose them.
Recently, the UN Statistical Commission adopted the System for Environmental-Economic Accounts (SEEA). The SEEA provides an internationally agreed method to account for material natural resources like minerals, timber, and fisheries. Some countries started ten to 20 years ago on this path; notably the Netherlands, Norway, Sweden, Denmark, Australia, and Canada. (https://www.waves partnership.org/en)