Nature provides the conditions for a healthy, secure, and fulfilling existence. Among the many benefits people receive from nature are fresh water, food, protection from floods, and spiritual enrichment. It is hard to think of a development or investment decision that doesn’t in some way depend upon and affect nature.
The path-breaking Millennium Ecosystem Assessment has taken the first-ever comprehensive look at the condition of and trends in natural systems and the services they supply. It presents a stark account of the mismanagement of these services. Of the 24 assessed, only four have shown improvement over the past 50 years. A startling 15 are in serious decline. Five hang in the balance. But we don’t have to continue down this path. Using the Assessment as its backdrop, Restoring Nature’s Capital proposes an action agenda for business, governments, and civil society to reverse ecosystem degradation.
The authors, Frances Irwin and Janet Ranganathan, liken the Assessment to an audit – an audit of Planet Earth Ltd. In that light, ecosystems are less an array of elements – lands, waters, forests, reefs – that must be protected from harm, than they are huge capital assets, a trust fund perhaps. If properly managed using the action agenda suggested in this publication, this trust fund will provide benefits and income – economic and social – which will sustain generations to come.
If it is helpful to consider our natural resource base as capital assets, it is fair to say that the Assessment demonstrates that humanity has been squandering these assets at a quickening pace. In fact, we have treated many of these assets as if they had no value. The people who clear forests for agriculture, build dams for water retention or power, or replace mangroves with coastal development and shrimp farms generally benefit from those changes, but society at large pays significant costs associated with the loss of nature’s economic, cultural, or intrinsic values. No one in the private sector, or the public sector for that matter, would keep his or her job with a record of financial mismanagement and waste that the Assessment documents for our natural assets.
Unfortunately, national accounting systems have not done a good job of keeping track of natural assets. Economists have been preoccupied with a narrow set of economic indicators, such as gross domestic product, disposable income, and purchasing power parity. Many of nature’s services are not included in the accounts. The recent failure of businesses such as Enron should serve as a painful reminder of the potential consequences of keeping key assets and liabilities off the balance sheet.
The Assessment offers public and private sector decisionmakers a new way of seeing and valuing ecosystems from the perspective of nature’s services. In doing so, the Assessment confronts the status quo in uncomfortable but necessary ways. It forces us to acknowledge what we should have known all along – that ecosystems are a source of extraordinary wealth and value.
- Ecosystems supply provisioning services: food, water, and the wealth of materials that underpin all life on this earth. These services are perhaps the ones most easily understood and currently valued the most.
- Ecosystems provide regulating services: water filtration and purification, storm protection (barrier islands, wetlands, and reefs, for example), pollination, erosion control, and carbon sequestration. Although we are learning about these services, our ignorance of them and of their enormous economic value remains profound.
- Ecosystems offer cultural services. Recreation is the most obvious; but as important are the spiritual and aesthetic values that many find in nature.
- Ecosystems also provide supporting services such as soil formation, photosynthesis, nutrient cycling, and water cycling. These underlie all of the other services.
In the past, the changes people have made to ecosystems have nearly always been driven by a desire to increase the supply of provisioning services-those with a value in the market place. But people have mostly been blind to the resulting tradeoffs. Forests have been cleared for timber and agriculture with the loss of critical services such as climate regulation and water quality protection. Dams have degraded wetlands and their water filtration and flood control services. Without this blind spot to the value of ecosystem services, we might be investing in wetland restoration rather than flood insurance, reforestation instead of expensive water filtration plants, or paying farmers for water quality in lieu of subsidizing production.
The natural reaction in situations like this is to ask the obvious. “Why have we been so cavalier with our ecosystems? And who is to blame?” Going through that drill may make us feel better…but little else. The “who and the why” blame game of how we got to where we are today is far less important than the “what we are going to do about it.” Rather than wringing our collective hands at the accumulating harm to the earth, we need to map a path for the future.
That’s what this publication is all about. Drawing on the recommendations of 17 contributing authors, WRI’s own series of World Resources Reports, and the good work of many others, it sets out to answer the thorny question of what changes must be made to ensure that ecosystems can meet the needs of today’s and future generations.
The authors contend that governance – who makes decisions, how they are made, and with what information – is at the heart of sustaining healthy ecosystems. With this as their fundamental tenet, the authors present an action agenda for reversing degradation of ecosystems and sustaining their capacity to provide vital services for generations to come. The action agenda identifies how decisions about development projects and investments can be made in ways that lead to healthy ecosystem services. These decisions, made by local and national governments, corporations, and international financial institutions, involve billions of dollars, affect huge swaths of land and water, and affect millions of people.
Let’s be fair. No one has been making decisions with the goal of doing harm. Changes to ecosystems have fueled economic growth, and underpinned improvements in living conditions for many. But humanity now faces a vastly different set of challenges than it did 50 years ago – challenges that existing institutions and ways of making decisions are ill-prepared to handle. Farmers now cultivate most land that is suitable for agriculture. Human activities have more than doubled the amount of nitrogen and carbon released naturally into the environment. Reservoirs hold three to six times as much water as natural rivers. Fifty years ago, the costs of lost services from converting natural landscapes to production or development may not have exceeded the benefits. In this new century, the equation is likely to be reversed.
In addition, as public and private efforts accelerate to end the corrosive and destabilizing poverty that affects almost half the world’s people, a challenge in which nature’s services will play an ever larger role, it is irresponsible to continue to undermine the capacity of ecosystems to provide critical services now and over the long term.
This publication’s action agenda calls for an increase in the availability of information on ecosystem services, and a redressing of the balance in favor of local rights to resources and local voices in decisionmaking. It also calls for managing decisions across levels – local, regional, national, and international – and increasing the use of accountability mechanisms and economic and financial incentives. Everyone has a role in implementing the agenda: civil society, business, the educational and research communities, local communities, national government, and international organizations.
The agenda proposed in Restoring Nature’s Capital represents the results of the earliest concerted thinking about how to address both the stark realities and the enormous potential uncovered by the Assessment. Underlying the agenda is the realization that humanity needs a fundamentally new approach to managing the assets upon which all life depends, a paradigm shift that challenges past assumptions and practices. Implementing this agenda will be disruptive. Business as usual will not move beyond protecting nature from development to investing in nature for development.
World Resources Institute
Director, Conservation and Science Program
The David and Lucile Packard Foundation
Millennium Ecosystem Assessment