Why you should care
Because nature is good for countries and businesses, and that’s worth a lot. Like $33 trillion a year.
For over a decade, I have been involved with Conservation International, a global nonprofit organization that has an ambitious mission to support human well-being by ensuring the health and resilience of Earth’s vital ecosystems. A major challenge facing conservationists today is getting decision makers in government and corporate boardrooms to appreciate that sustainable development is not just about protecting the environment or biodiversity for its own sake. It’s also about ensuring the long-term survival of those nations and companies themselves.
Assigning a real economic value to nature is a vital piece of building a sustainable global economy.
A large part of that challenge depends on measurement. In both the public and private sectors, planning decisions are only as good as the measures used to inform those decisions. That is why helping government and business leaders develop and adopt measures that appropriately quantify the economic value of nature is critical to fostering long-term sustainability strategies.
Conventional economic metrics like GDP do not take into account the value of “natural capital”—the ecosystems and natural resources that sustain human life and economies—until the resources manifest themselves as a domestic product. For example, if you are focusing on GDP, then a tree is worth nothing until it is cut down and turned into a product like lumber or paper. But there is no question that trees have tremendous value when it comes to improving air quality, reducing erosion and sustaining ecosystems in general.
Assigning a real economic value to nature is thus a vital piece of building a sustainable global economy. But the real leadership on the issue is not coming from the G-20, the nonprofit world or anywhere you might expect. It’s coming from Africa.
Last year I attended the inaugural Summit for Sustainability in Africa in Gaborone, Botswana. Heads of state and ministers from 10 African nations convened with leaders from Africa’s rising private sector and civil society’s thought leaders to address the vital question: How can Africa achieve economic and social development for its people while ensuring the sustainability of its life-supporting natural wealth? I was privileged to have a front-row seat to discussions, which took place over two days and combined inspiring speeches with closed-door working sessions between business and government leaders.
Central to Africa’s effort is a commitment to measuring natural capital and integrating its value into governmental and corporate planning. The summit was hosted by Botswana president Ian Khama, in partnership with Conservation International. The son of a former Botswanan president and a white English mother, Khama was born and educated in England before returning to a military and political career in the midsized south African nation. Khama is a bold and thoughtful leader, part of a new generation of African leaders who are seeking not to extract or exploit their nations’ natural resources but rather to preserve them for the benefit of all citizens, including those yet to be born. And Botswana is leading the way in Africa on a number of fronts, from sustainable ecotourism to eliminating mother-to-child HIV transmission.
Khama and Botswana are spearheading an international effort focused on the value of natural capital to long-term development in Africa and across the globe. Sustainability is a huge issue for Botswana and other African nations, because economic growth and the natural environment are so closely intertwined. Already home to over a billion people and likely to see population triple by the end of this century, Africa is developing rapidly, and a large majority of its inhabitants live directly from natural resources.
Central to Africa’s effort is a commitment to measuring natural capital and integrating its value into governmental and corporate planning and accounting methods. Natural capital accounting basically involves developing green GDP indicators that take into account the economic value of natural resources, biodiversity and other natural goods and services, like soil fertilization and fresh water.
Such measures provide a more accurate and complete picture of a nation’s or company’s wealth. But valuing natural capital does more than that. What leaders in Africa and elsewhere are attempting is nothing less than the first step toward ensuring that natural ecosystems go from being “worthless” to being “priceless” or priced.
Things that are valued at $0 are treated very differently from things that only royalty can afford. Think about the most valuable treasures in the world: the Mona Lisa, the Hope Diamond, the Constitution. What do they have in common? Not only are they cherished as cultural treasures, but they are also worth so much money that endless sums are invested to preserve, restore, and guard them.
Nature deserves no less. And valuing natural capital is not just about accounting for costs; it’s also about using the price mechanism to set an acceptable level of natural degradation and to prevent an intolerable level—the point at which the price should become essentially unaffordable or priceless, because we have reached a level of pollution or degradation that we are unwilling to cross as a society. As those wearing face masks in Beijing can attest, you don’t realize just how priceless clean air, water and food are until you lose them.
“It can be easy to forget how vitally connected and dependent each one of us is on the goods and services that nature provides our families, our businesses and our societies,” says Peter Seligmann, Conservation International founder and chair. “However, nature’s benefits are very real, providing at least $33 trillion dollars’ worth of renewable services every year.”
Building on the momentum of the summit in Gaborone and last year’s Rio+20 U.N. Conference on Sustainable Development, the push is on now to get additional business and world leaders from across the globe to sign on to the movement. As of June, more than 66 countries and 90 companies – from Germany to Brazil, Coke to Citibank – had already endorsed natural capital accounting.
As with most reforms, there are winners and losers with natural accounting. Groups with a vested interest in the status quo, from the oil and gas industry to forestry, push to keep conventional economic indicators in place. There are also those – ranging from indigenous peoples to civil-society groups – who believe that such valuations undermine nature’s intrinsic worth and only help to commoditize it further.
“I understand these concerns, which are valid and vital to consider,” says Seligmann. “But this value should be balanced with data that also communicates the economic value of healthy ecosystems. That way, businesses and governments can make smart decisions about how landscapes, wetlands, forests and marine ecosystems are best used to support their people.”
It can be easy to forget how vitally connected and dependent each one of us is on the goods and services that nature provides…
Not only Africa will benefit from moving to more transparent economic indicators that promote the sustainable use of nature. Properly valuing ecosystems and natural resources is a vital step toward making nature visible and even priceless when it comes to economic development in any part of the globe.
In Botswana, natural capital is not yet part of its national income accounting. However, as part of the Gaborone Declaration, Khama has banned big game hunting, committed to a moratorium on all trade in ivory until the African elephant population has rebounded, and is leading a training program for other African nations on wildlife protection strategies.
Both nations and businesses will need to make a conscious effort to adopt more sustainable and eco-friendly development paths. In doing so, they would do well to follow the lead of Africa and leaders like Ian Khama.