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    James Cantrell / World Bank

    Gross Domestic Product (GDP) looks at only one part of economic performance—income—but says nothing about wealth and assets that underlie this income. For example, when a country exploits its minerals, it is depleting wealth. The same holds true for over‐exploiting fisheries or degrading water resources. These declining assets are invisible in GDP and so, are not measured.

    Long‐term development is a process of accumulation and sound management of a portfolio of assets—manufactured capital, natural capital, and human and social capital. As Nobel Laureate Joseph Stiglitz has noted, a private company is judged by both its income and balance sheet, but most countries only compile an income statement (GDP) and know very little about the stock side of the equation in the national balance sheet.

    The depletion of natural capital – including assets like forests, water, fish stocks, minerals, biodiversity and land – poses a significant challenge to achieving poverty reduction and sustainable development objectives. The issue is especially important in developing countries as shown in a World bank publication, The Changing Wealth of Nations 2018. Low-income countries depend on natural capital for 47 percent of their wealth. And yet, in several of these countries, natural capital is being depleted without any corresponding investments in human capital (such as education or health) or produced capital (such as infrastructure), leading to an overall decrease in wealth and a failure to improve standards of living among the poor.

    Research shows that deforestation and land use change, habitat fragmentation, encroachment, rapid population growth and urbanization multiply chances of contagion like the coronavirus.

    While nature can act as a buffer between humans and pathogens, it can also help in economic and social recovery efforts. In the aftermath of the coronavirus crisis, it is expected that the government and the development community will need to rapidly deploy stimulus packages at scale to spur economic recovery. This provides an opportunity to start defining ways in which the design of such packages can integrate longer-term sustainability considerations, including solutions that can boost the economy and deliver positive environmental outcomes simultaneously. Some examples include reduction of carbon emissions, conservation of biodiversity, and protection of ecosystem services that underpin a country’s prosperity and resilience to shocks like pandemics.

  • Our goal is a world where measuring and valuing  natural resources leads to better decisions for development. We believe that by measuring and valuing natural capital, we can support better decisions for the management of landscapes and natural assets more generally, recognizing that ecosystems and biodiversity are essential to long-term development and prosperity.

    For example, land and ecosystem accounts can help countries rich in biodiversity to design a management strategy that maximizes the contribution to long term economic growth from activities such as ecotourism, agriculture, subsistence livelihoods, explicitly taking into account the role played by ecosystem services like flood protection and groundwater recharge.

    The World Bank Group is implementing the Global Program on Sustainability (GPS), to integrate environmental sustainability into public and private decisions, by providing high-quality data, analytical tools and technical assistance for measuring and valuing natural capital and ecosystem services.

    Structured around three inter-connected pillars (global data, country level support and sustainable finance), GPS builds on the experience of the WAVES Partnership (Wealth Accounting and the Valuation of Ecosystem Services (WAVES) ) which  has been working since 2013 with over 20 countries to build natural capital accounts and use them in development decisions.

    GPS is supporting pioneering quantitative analysis that models the interaction among ecosystem services, economic systems and public policies at a global scale. This analysis is expected to inform the discussion on the post-2020 Global Biodiversity Framework.

    COVID is undoubtedly an unprecedented global blow to human health and economic stability. At the same time, the recovery from the pandemic offers an opportunity to “rebuild greener”. GPS is well positioned to make an important contribution in that direction. In particular, GPS can provide data and analytical insights to support efforts to:

    a) integrate sustainability consideration into economic recovery programs (thereby seizing the double/ triple dividend of economic growth, reduction of carbon emissions, and protection of biodiversity/ ecosystem services);

    b) contribute to future resilience to infectious diseases through improved environmental quality.

  • From a baseline in 2010 when Natural Capital Accounting (NCA) was mostly limited to high-income countries, the World Bank’s work though WAVES and now GPS has demonstrated that it is possible to develop accounts in middle-income and data-poor countries and use these accounts to inform national development plans and policies.

    WAVES engagement with BotswanaColombiaCosta RicaMadagascar, and the Philippines, the initial core implementing countries, ended in June 2016. These countries embarked on natural capital accounting programs endorsed at the highest level of their governments, have institutionalized accounts, are acting as mentors to other countries in the region, and are showing the way on using accounts for monitoring SDGs or their national plans.

    GuatemalaIndonesia and Rwanda joined WAVES as core implementing countries in late 2013. These countries have made important strides toward developing NCA and using them for decision making. For example, Rwanda’s land accounts are informing its national land management system, allowing policy makers to study trends in land use and changes over time. In Indonesia, WAVES provided the data and modeling techniques for the Low Carbon Development Initiative for Indonesia (LCDI) - a new platform for Indonesia’s development that aims to maintain economic growth through low emissions development activities, while minimizing exploitation of natural resources.  LCDI is a key input to the country’s medium-term development plan (RPJMN).

    Follow-up GPS work underway in Indonesia illustrates how the program can assist with COVID recovery. Building on LCDI, the GPS team is working with the government to evaluate the net benefits of alternative options to manage peatlands, to ensure that these unique ecosystems can contribute to social development while minimizing issues such as carbon emissions, flood risks, and health impacts from air pollution caused by peat fires. The model being developed is already capable of assessing the merits of recovery programs based on the restoration of degraded peats and can help address the resilience-building dimension of the COVID response.

    Among the more experienced WAVES countries, Botswana has produced its fourth edition of the water accounts and has  presented the use of its water accounts to the UN Commission identifying monitoring mechanisms for SDGs. With several accounts in place, Costa Rica’s new national plan has a strategic goal on environment sustainability with the expectation that accounts will help monitor the progress.

    NCA is being used in the monitoring of national plans or SDGs in many countries. The Rwanda GPS/ WAVES team was asked to contribute to the National Strategy for Transformation. In Indonesia, the information from the accounts, especially land, water, and ecosystems will feed into the system dynamics model being used by the Planning Ministry (BAPPENAS) to calculate the carrying capacity of natural systems to balance economic, social, and environmental goals.

    In 2017-2018, GPS began working with ZambiaUganda, Nepal, and Kyrgyzstan. These new countries are making steady progress. For example, Uganda is focusing on forests and wetland asset accounts, and on the development of experimental ecosystem services accounts.

    The GPS/ WAVES program also provides project-level support to four countries in East Asia (Myanmar, Lao PDR, Cambodia, and Vietnam). This work focuses on ecosystem accounts (including forests, water, wildlife) and related valuation (Lao PDR and Cambodia), and on coastal ecosystem accounts and scenario analysis (Myanmar and Vietnam).

    In March 2019, six new countries joined the program. Egypt and Morocco joined as core implementing countries. The work program for Egypt will focus on development of air emission accounts, waste accounts, and coastal ecosystems accounts. In Morocco, the priority will be forests, coastal and marine ecosystem services, climate change, and cultural services/nature tourism. GPS/WAVES will give project-level support to Nepal, Madagascar, and the West Africa Coastal Areas Management Program (WACA).


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