Achim Steiner: Charting a green economic path

In collaboration with the government, local communities and the private sector, UNEP is assisting to restore up to 30 percent of the Mau forest complex after more than two decades of accelerating degradation.

Two landmark developments have tipped the balance in favour of the forest. Firstly, the conviction by the Kenyan coalition government that environmental ‘infrastructure’ like the Mau — sub-Saharan Africa’s largest closed canopy forest — is not a luxury but at the root of sustainable development and poverty eradication. Secondly, the integration into public debate of the economics linked with the services that the Mau provides not only to Kenya but to the region as a whole.

These include providing the source of water for more than a dozen rivers that feed key tourism sites such as the Maasai Mara; the supply of drinking water to millions of people and the generation of hydroelectric power; moisture for the nearby tea industry and soon, perhaps, payments from the newly-emerging funds linked to reduced emissions from deforestation and forest degradation which were given the green light at the UN climate convention meeting in Copenhagen. It is estimated that these services may be worth up to $1.5bn to Kenya’s economy.

Kenya is not alone in having made the link between environmental investments and more intelligent management of its natural capital and wider social and economic issues. UNEP’s Green Economy Initiative is compiling and chronicling how many developing countries are starting to link MDG 7 — ensuring environmental sustainability — with the challenges that so many face.

Some 26 percent of Costa Rica’s land area is now covered in legallyprotected forests. There has been a boom in eco-tourism creating employment and over $5m worth of park fees from visitors. Poverty and unemployment have fallen and wages have risen among those living in or near the country’s national parks according to a new report for the 65th UN General Assembly by UNEP’s Green Economy team.

The new World Atlas of Mangroves shows that around 400,000 hectares of these coastal ecosystems are now under restoration. Mangroves are nurseries for fish and robust coastal defense systems: sustainably managed they are a source of non-rotting timber for housing, can provide fuel and also store sizeable quantities of carbon.

The Economics of Ecosystems and Biodiversity study, led by UNEP and funded by governments including Germany, Norway and the UK as well as the European Commission, indicates that clearing mangroves for shrimp farms can generate returns of around $1,220 per hectare.

But an assessment from Thailand notes that this does not take into account the deficits to local communities totaling over $12,000 a hectare linked with losses of wood and nonwood forest products, fisheries and coastal protection services. Nor does the profit to the commercial operators take into account the costs of rehabilitating the abandoned sites after five years of exploitation – estimated at over $9,000 a hectare.

Uganda is another example of where addressing MDG 7 is triggering wider benefits. Here policies to promote organic agriculture have generated 200,000 certified farmers and exports growing from close to $4m in 2003 to nearly $23m now.

A survey by the UN Conference on Trade and Development and UNEP of small-scale farmers in Africa who have switched from intensive to organic or near-organic agriculture, indicates that yields have climbed by 100 percent -- in part because of longer growing periods linked with more fertile soils and improvements in water availability.

Policies and creative market mechanisms are also triggering a boom in renewable energy with health benefits in terms of reduced air pollution, generation of jobs, availability of electricity and cuts in greenhouse gas emissions.

China’s energy strategy has now made it the world’s second biggest wind power country and number one producer of photo-voltaic panels. Ten percent of Chinese households now use solar water heaters for hot water: 1.5m people are employed in China’s renewables sector with 300,000 jobs generated in 2009 alone.

While well managed forests and natural systems such as wetlands may generate water supplies, getting these to needy people can be a challenge. More creative policies and smarter market mechanisms can encourage the private sector and communities to find improved solutions. One interim report from the Green Economy work cites an innovative policy and “micro-infrastructure” development in Western Jakarta, Indonesia, where a private utility called Palyja is providing water to informal homes via community-based organisations with water connection support from the NGO MercyCorps and USAID’s Environmental Service Programme.

Our work, in collaboration with expanding network of experts and partners, is also putting to the test some of the conventional economic strategies that are undermining the MDGs and sustainable development generally. Perhaps the starkest of these is the absurdity of current fisheries policies, which are investing in the means of capture of dwindling stocks, rather than the stocks themselves. Mismanagement, lack of enforcement and subsidies totalling over $27bn annually have left close to 30 percent of fish stocks classed as “collapsed” – yielding less than 10 percent of their former potential.

Only around 25 percent of commercial stocks are considered to be in a healthy or reasonably healthy state. On current trends, some researchers estimate that virtually all commercial fisheries will have collapsed by 2050 unless urgent action is taken. Fish is the direct source of protein for over 1bn people -- many of whom are in the developing world -- and those fisheries directly and indirectly support 170m jobs and $35bn in incomes to fishing households annually.

If post-fishing activities are factored in, along with an assumption that one fisher has three dependents, then about 520m people, or eight percent of the global population, are supported by fisheries. Experts estimate that of the $27bn paid in subsidies, only around $8bn can be classed as “good” with the rest classed as “bad” and “ugly” as they contribute to over-exploitation of stocks.

Better targeting of this “good” $8bn class could trigger sustainable fisheries world-wide raising catches to 112m tonnes annually while triggering benefits to industry, consumers and the global economy totalling $1,700bn over the next 40 years.

The funds would be used to, for example, support Marine Protected Areas and establish mechanisms such as tradable quotas for fish alongside retiring vessels and retraining some of the world’s fisher folk. Currently the fishing effort is around 1.8 to 2.9 times what is sustainable.

These reductions could be achieved through careful targeting of the most ecologically damaging surplus capacity, so that of the estimated 20m vessels and 35m fishers deployed in this sector, the livelihoods of those that are artisanal and poor are treated equitably.

Achieving all the MDGs by 2015 is a challenge. But I would argue that the golden thread running through most, if not all, is achieving environmental sustainability. There are rising numbers of examples in an ever longer list of developing countries where governments, in collaboration with bilateral aid providers, regional banks and the UN are glimpsing how a greening of growth can assist with these multiple challenges in new, creative and forward-looking ways.

It is not just an opportunity for the next five years but one for a world whose population is set to double over the next 40 years where a low carbon, resource efficient Green Economic path needs to happen by design — not by default.

Achim Steiner is the UN under-secretary general and executive director of the UN Environment Programme