Environmental Stewardship– the urgent need for South Asia

Prof. Haripriya GundimedaAssociate Professor

Dept. of Humanities and Social SciencesIndian Institute of Technology Bombay

Powai, Mumbai – 400076haripriya.gundimeda@iitb.ac.in

Population growth rate

Development Paradigm – some commonalities

Unifying environmental problems

• 1.1 billion do not have access to safe drinking water

• South Asian Regions have huge water stress• Air pollution• Deforestation major cause of habitat loss• 75% of natural species predicted to be lost in the

region by 2050• Solid water and Hazardous waste• E-waste

Why are benefits not explicitly recognized?

• Development strategies focus on economic growth

• Services that nature provides are often not visible

• Competing demands on nature.

• Time lags.

• Poor understanding of natural cause and effect.

• Public versus private benefits.

• Fragmented decision making

10

The problem

$$$

Photo: C.Neßhöver, UFZ

Nature‘s Interactions with Humanity

Money : today‘s Yardstick

11

The problem

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Photo: C.Neßhöver, UFZ

No Value = No Counterweight ...

? ? ?

19.04.23 12

“GDP of the Poor” is the most seriously hit by ecosystem losses

… We forget that nature is a necessary for local well-being:

Source: Gundimeda and Sukhdev, TEEB for National Policy

Indonesia India Brazil

99 million 352 million 20 millionEcosystem services dependence

Ecosystem services as a Percentage of classical GDP

Ecosystem services as a percentage of “GDP of the Poor”

Ecosystem services

Norms, Regulations& Policies

Markets

EconomicMechanisms

Recognizing value

Demonstratingvalue

Capturingvalue

Regional Planning

Legislations

PES

PA Evaluation

Certification

How to mainstream nature’s values - Applying TEEB’s Approach

…

Shrimp Farm

private profits

less subsidies

Net of public costs of restoration after 5 years

private profits

Mangroves

0

10000

NPV over 9 yrs (10% discount rate)

US$/hain 1996

private profits

5000

Most “trade-offs” go only as far as measuring private profits……

If public wealth is included, the “trade-off” choice changes completely…..

$584ha

$1220ha

$9632ha

$584ha

- $9,318ha

$12,392ha

Sour

ce: H

anle

y an

d Ba

rbie

r 200

9

After adding public benefits from mangroves

Private Profits, Public Losses…

Monetary Value

Quantitative Review of Effects

Qualitative Review

Non-Specified Benefits

Increasing up the benefits pyramid

Measuring Benefits of Ecosystem services

Answers are needed at all levels

Full range of ecosystem services from biodiversity

Type of benefits; health benefits from clean air, social benefits from recreation, income from products, security, wellbeing.

Quantitative: eg level of service, number people benefiting from wood from forests, # of avoided

health impacts; number of visitors

Monetary: eg avoided water purification costs, avoided flood damage, tourist

value, value of medicines / pharmaceuticals from natural products

Knowledge gaps The “known-

unknowns” and “unknown-unknowns”

Source: P. ten Brink: presentation at March 2008 workshop Review of Economics of Biodiversity Loss, Brussels

The Benefits Pyramid

Leuser National Park on Sumatra, IndonesiaDistribution of ecosystem benefits

Sources: van Beukering, P.J.H., H.S.J. Cesar, M.A. Janssen (2003). Economic valuation of the Leuser National Park on Sumatra, Indonesia. Ecological Economics 44, pp 43-62. and van Beukering, P.J.H., H.S.J. Cesar, M.A. Janssen (2002). Economic valuation of the Leuser Ecosystem in Sumatra. In: Conservation Dividents? ASEAN Biodiversity Vol 2. Nr. 2, 17-24.

Sources: van Beukering, P.J.H., H.S.J. Cesar, M.A. Janssen (2003). Economic valuation of the Leuser National Park on Sumatra, Indonesia. Ecological Economics 44, pp 43-62. and van Beukering, P.J.H., H.S.J. Cesar, M.A. Janssen (2002). Economic valuation of the Leuser Ecosystem in Sumatra. In: Conservation Dividents? ASEAN Biodiversity Vol 2. Nr. 2, 17-24.

Local community

“best option”

Logging industry “best option”

What is “best” depends on who you are – understanding who wins and who stands to lose

in decisions is paramount.

Environmental tools

Indicators Green public procurement Local Biodiversity Strategy and Action Plans Planning Strategic environmental assessments and Environmental impact assessments and so on.

• These tools have specific purposes and can be coordinated through an environmental management system.

Examples : ‘Satoyama’ Landscapes75 - 100% reduction in pesticides, traditional winter flooding rice farming adopted, & White Stork rice & other certified products sold at a “premium”

Examples : ‘Satoyama’ Landscapes75 - 100% reduction in pesticides, traditional winter flooding rice farming adopted, & White Stork rice & other certified products sold at a “premium”

PESPES

2003 - 2007: farmers paid 40,000 JYen per 1,000m2 of rice paddies .Currently granted 7,000 JYen per 1,000m2 by Toyo-oka City

2003 - 2007: farmers paid 40,000 JYen per 1,000m2 of rice paddies .Currently granted 7,000 JYen per 1,000m2 by Toyo-oka City

CERTIFICATIONCERTIFICATION

Rice sold at 23 % higher rate for reduced pesticide use, and 54 % more for organic farming Rice sold at 23 % higher rate for reduced pesticide use, and 54 % more for organic farming

Konotori no Mai / Flying Oriental White StorkKonotori no Mai / Flying Oriental White Stork

White Stork habitat increased from 0.7 ha in 2003 to 212.3 ha

Extinct in 1971, now has over 40 breeding pairs

1 billion JPY annually in tourism, & municipal income raised by 1.4 %

White Stork habitat increased from 0.7 ha in 2003 to 212.3 ha

Extinct in 1971, now has over 40 breeding pairs

1 billion JPY annually in tourism, & municipal income raised by 1.4 %

Financing biodiversity conservation through sale of high value forest products

• Humla region in Northwest Nepal• A complex ecosystem and a highly contested area of

natural products. • Land was awarded to the local community to produce

high value essential oils and sales are negotiated by organisations in the partnership, thus disincentivising the use of low value raw produce such as fuel wood.

• The essential component of this is community members working together with the enterprise organizations to learn skills, help develop plans and take up formal tenure.

Innovative financing to save Elephants in Srilanka

• elephants consume 150kg of food every day: crop raiding is a serious problem in densely inhabited areas – defences cause injuries, etc..

• a survey of impacts on 480 local households and of their willingness to accept compensation.

• a second survey among Colombo city residents: their willingness to pay for the conservation of elephants exceeds the funding needed for compensating rural elephant damage.

• in 2007, Ceylinco Insurance presented a new scheme, partly CSR and partly profit driven: Ceylinco proposed a a small charge addition to the premium payments of life/vehicle policy holders. This feeds a trust for compensations payments.

Non-declining natural capital stock approaches

• Nature provides non-substitutable services

• Maintaining ecosystem services in a functioning states is a priority

• Preserve critical natural capital

• Holding constant the natural capital stock – one of the rules for Sustainable Development

Adopt precautionary principle

• Prevent reductions in the natural capital stock below the safe minimum standard identified for each component of this stock unless the social opportunity costs of doing so are ‘unacceptably’ large.

Daly’s operational principles

• Op1: Renewable resources: set all harvest levels at less than or equal to the population growth rate for some predetermined population size

• OP2: Pollution: For degradable pollutants, establish assimilative capacities for receiving ecosystems and maintain waste discharge below these levels. For cumulative pollutants the discharge should be set equal to zero.

• OP3: Non-renewable resources: Receipts from non-renewable extraction should be divided into an income stream and an investment stream. The investment stream should be invested in renewable substitutes, such that by the time period when the non-renewable resource reaches the end of its economic extraction, and identical level of consumption is available from the renewable substitute

Depletion Adjusted NSDP (ESDP) to NSDP

0,55

0,65

0,75

0,85

0,95

1,05

1,15

1,25

1,35

1,45

NorthEasternStates

HP Goa Rest ofIndia

Regions

ES

DP

/NS

DP

ESDP/NSDP using net price method

ESDP/NSDP using weighted net price method

http://hattoriforth.typepad.com/.a/6a00d83549e5d069e20120a6ebb5b0970b-800wi

Understanding and responding to the values of nature

More steps are needed to appreciate and respond to the value of nature

The whole picture of benefits and costs need to be appreciated – the here and now, the over there and over time, the private and public

…always better to look at the whole board…is this enough to work out what to do?

tools for an alternative development path

Past loss/ degradation

Predicted future loss of natural capital (schematic) – with no additional policy action

2009 2050

Halting Environmental degradation

Opportunities/benefits of ESS

Investment in natural capital +ve change

Alternative natural capital

Development path

Regulation

PAs

Restoration

Investment in natural capital: green infrastructure

Economic signals : PES, REDD, ABS (to reward benefits)

Charges, taxes, fines (to avoid degradation/damage: Subsidy reform (right signals for policy)

Better governance

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Sustainable consumption (eg reduced meat) Markets, certification/logos & GPP

Agricultural innovation

Need a portfolio of instruments, need engagement by all stakeholders; need good governance, “joined-up-thinking”

THANK YOU FOR YOUR ATTENTIONIn hope of better environmental governance across South Asia