Nature has always been a route to wealth, at least for a few. Profit from harvesting timber and fish stocks, from converting grasslands to farm fields, and from exploiting oil, gas, and mineral reserves has created personal fortunes, inspired stock markets, and powered the growth trajectories of nations for centuries. But this scale of natural resource wealth has been amassed mostly through unsustainable means, and the benefits have largely accrued to the powerful. It is the powerful who generally control resource access through land ownership or
concessions for logging, fishing, or mining on state lands; who command the capital to make investments; and who can negotiate the government regulatory regimes that direct the use of natural resources. The poor, by contrast, have reaped precious little of the total wealth extracted from nature. But that can change.
Natural resources are a key determinant of rural wealth
Even though they do not currently capture most of the wealth created by natural systems, the livelihoods of the poor are built around these systems. Indeed, natural resources are the fundamental building block of most rural livelihoods in developing nations, and not just during lean times. Chapter 2 offers many examples of the environmental income that both the poor and rich derive from nature.
The ability to efficiently tap the productivity of ecosystems is often one of the most significant determinates of household income. For example, studies show that the key variable explaining income levels for rural households in Uganda is access to land and livestock. In Ugandan villages near Lake Victoria, the key variable explaining wealth is access to fishing boats and gear. Income-wise, these are found to be even more important than other wealth-associated factors such as access to education (Ellis and Bahiigwa 2003:1003).
Beyond subsistence: Natural endowments as capital for the poor
Ecosystem goods and services – the natural products and processes that ecosystems generate – are often the only significant assets the poor have access to. These natural endowments, if managed efficiently, can provide a capital base – a foundation for greater economic viability, and a stepping stone beyond mere subsistence. Yet the potential of these assets is often overlooked.
Typical commercial evaluation of natural resources tends to undervalue the total array of ecosystem goods and services, which includes not just the crops, lumber, fish, and forage that are the usual focus of exploitation, but also a wide variety of other collectibles, agroforestry products, small-scale aquaculture products, as well as services such as maintenance of soil fertility, flood control, and recreation (Lampietti and Dixon 1995:1-3; Pagiola et al. 2004:15-19). One of the consequences of the difficulty of assigning a monetary value to ecosystem benefits is that it has led to the systematic undervaluation of the assets of the poor and the underestimation of the potential benefits of improved environmental management.
But the potential for strategic management of ecosystems to raise the incomes of the poor is real. In fact, good ecosystem management can become one of the engines of rural economic growth more generally. Experience shows that the poor use several strategies to make their ecosystem assets a stepping stone out of poverty.
Where ecosystems are degraded, it limits their potential as a source of environmental income. Many communities have found that restoring the productivity of local forests, pastures, or fisheries has the opposite effect, raising local incomes substantially. Often this entails a community effort to more carefully control the use of common property areas and even private lands. For example, the village of Sukhomajri in Haryana, India, has gained widespread recognition for its success in raising village incomes through community efforts to restore and maintain the productivity of local forests and farmland. Careful land management and rainwater harvesting produced large gains in agricultural production, tree density, and available water, increasing annual household incomes by 50 percent in five years (Agarwal and Narain 1999:16).
Many other watershed management projects in India have also reported benefits to village residents, including poor families who do not own land. In the Adgaon watershed in Maharashtra, annual days of employment (wage labor) per worker increased from 75 days at the project