The implications of :- The Millenium Ecosystem Assessment

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The implications of -The Millenium Ecosystem
Assessment The State of the Environemnt Report
in Asia and the Pacific in 2005for Economic
Development in the region -and the need for
Environmental Fiscal Reform

• Martin Hollands
• The Cambridge Centre for Conservation Policy

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The relationship between conservation and the
economy is changing.

• Traditionally
• Conservation happened in Protected Areas
• Business outside
• There is a growing realization that Conservation
  cant deliver if just in Protected Areas we
  need a sustainable relationship between people
  and the environment outside Pas as well as people
  and businesses are dependent on biodiversity
• There is a shared need for sustainable
  development
• Sustainable profits for business
• Sustained natural systems and biodiversity
• Sustained Livelihoods

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This has led to an evolution in the relationship
between conservation and the business sector

• No understood relationship
• Business as the damagers
• Government philanthropic support
• Responsible operations risks opportunities
  recognized by companies and investors - brand
  value, new markets
• Internalisation of environmental factors into
  business and economic systems
• Environmental Policy Changes
• Fiscal environmental reform

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So what has brought about the change ?

• Conservationists have for a long time said the
  environment is important, its being damaged -
  and we need to look after it better
• But the justifications have only been effective
  with a small group of people
• The issues are not seen as comparable with the
  main policy drivers especially economic
  development
• Conservationists have argued that people need
  the environment but their views are seen as
  self serving
• The UN asked the scientific community to test the
  claims that were made so that policy makers knew
  how to respond for genuine human well-being
• They focused on the importance of Environmental
  Services in delivering the MDGs

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The Millennium Ecosystem Assessment

• The most comprehensive analysis to date of the
  many and complex ways in which people depend on
  and affect the natural environment
• Prepared by 1360 experts from 95 countries,
  review comments from 850 experts and governments
• The central focus is human well-being and
  ecosystem services
• Looked at how changes in ecosystem services have
  affected human wellbeing, how changes may affect
  people in future decades, and response options
  that might be adopted.
• Called for by UN Secretary General in 2000,
  authorized by governments through 4 conventions
• Partnership of UN agencies, conventions,
  business, NGOs
• It will influence investments, the regulations
  and public opinion
• The WBCSD are showing strong interest in the need
  to address the recommendations of the MEA.

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MEA Conclusions

• Human livelihoods and well-being are dependent on
  a range of ecosystem services
• Ecosystems are being damaged to the extent that
  their ability to provide these services is being
  compromised
• 60 are being degraded / used unsustainably
• The degradation of ecosystem services often
  causes significant harm to human well-being and
  represents a loss of a natural asset or wealth of
  a country
• Only 4 services have been enhanced in the past 50
  years, three of these involve food production
  crops, livestock, and aquaculture. The fourth is
  carbon sequestration.
• Ecosystem services that are freely available
  today are under threat because the very fact that
  they are freely available has often meant that no
  funds have been released to maintain them, so
  they will disappear or become more costly in the
  future.
• Loss of ecosystem services will also affect the
  attitudes of customers, shareholders, investors,
  policy makers and regulators.

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Direct drivers growing in intensity

• Most direct drivers of degradation in ecosystem
  services remain constant or are growing in
  intensity in most ecosystems

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What are the changes that will have an economic
impact ?
Water scarcity Climate change Habitat change
Biodiversity loss and invasive species
Overexploitation of oceans Nutrient overloading.
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State of the Environment in Asia and the Pacific

• Although regional consumption pressures are
  smaller, per person, than the global average, the
  biologically productive area required to support
  current consumption levels already exceeds the
  available area, in at least 18 countries of the
  region.
• Ecological deficits in many countries across
  the region show quantitatively that many are
  over-exploiting their own natural resource base,
  and/or through trade, are using the natural
  resource base of other countries to support their
  consumption patterns and economic growth.
• Because the natural resource endowment remains
  relatively constant or declines under
  environmental pressure, the size of the human
  population that can be sustainably supported
  based on the current consumption patterns and
  prevailing technologies, is decreasing.
• UNESCAP 2006

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What are the underlying causes of the problems ?

• Loss of wealth due to ecosystem degradation is
  not reflected in economic accounts
• The environment is treated as an externality in
  economic systems
• Environmental services are seen as Public Goods
  and are not paid for
• This means they do not generate the funds for
  their management
• We do not make planning decisions at a Systems
  level
• As they do not generate income to resource owners
  almost any alternative is seen as better when any
  are seen Developments are allowed that include
  significant residual impacts

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Required Responses

• Institutions
• Integration of ecosystem management goals within
  other sectors and within broader development
  planning frameworks
• Increased transparency and accountability of
  government and private-sector performance
• Economics
• Elimination of subsidies that promote excessive
  use of ecosystem services (and, where possible,
  transfer these subsidies to payments for
  non-marketed ecosystem services)
• Greater use of economic instruments and
  market-based approaches in the management of
  ecosystem services (where enabling conditions
  exist)

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• So lets think of this as an economic not an
  environmental issue

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Most business runs on a simple model
Inputs / materials
For the model to work it requires funds to flow
to balance the flow of goods
Factory

Business

Taxes will flow from all of these to governments
but for public services NOT to subsidize
components of the model
Consumer

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Why doesnt this work for the environment ?
Inputs / Materials
Water Food Landscape for recreation Pollination F
uel Soil nutrient cycling Flood erosion
control
Factory
Environment
Business
Clearly it wouldnt make sense for businesses to
destroy factory environment Responsible
Operations should be a given
Consumer
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We want the products for nothing and hope others
will pay the costs
Inputs
Does that look like a viable model ?
Factory
How should Society respond ?
Environment
Government NGOs Donors
Business
Consumer

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There are many ways to rectify the problem
Inputs
1. Corporate donations ( CSR )
2. Direct payments for Environmental
Services
Factory
3. Taxes
Environment
4. Tightened planning control
Government NGOs Donors
Business
Consumer

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• The Business sector is already realizing the
  risks and opportunities this presents
• Business simply cannot function if ecosystems
  and the services they deliver like water,
  biodiversity, food, fibre and climate regulation
  are degraded or out of balance.
• Björn Stigson, President, WBCSD
• The awareness that your business is
  fundamentally
• dependent on the ecosystems around it for its
• livelihood is crucial for starting to address
  these
• issues. Without that, you are really only
  scratching
• on the surface.
• Edmund Blamey, Interface Europe
• Commitments to Net positive RioTinto
• Offsets - BBOP
• Governments seem a little slower..

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How can ( green ) taxes help ?

• Current taxes frequently include perverse
  incentives
• Taxes can be restructured to reduce practices we
  want to discourage
• Taxes systems can encourage sound practices
• Key targets Transport / Energy / Waste
• Taxes can encourage RD in alternatives
• Tax deductions for environmental investment

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Governments as surrogate purchasers of
environmental services

• If governments dont want to force users to fully
  internalize the environmental costs and benefits
  they can act as intermediate or surrogate
  purchaser through increasing taxes
• Businesses pay higher taxes on goods that depend
  on the environment
• BUT this only covers half the need governments
  would also have to increase the budgets to ensure
  that environmental systems can be managed
  sustainably

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Thank you for listening.

• Martin Hollands
• The Cambridge Centre for Conservation Policy
• martin.hollands_at_conservationpolicy.org