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Introduction to the Summit - by Barry Gardiner MP

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"To restore and sustain the ability of the Earth to support human communities". These words from the Gaborone Declaration are simple, direct and uncompromising. They perfectly reflect the serious purpose with which legislators from 20 different countries met in Berlin at the beginning of June this year to bring about a transformation in the way we account for our national wealth.

The time when the Earth could support human communities without difficulty is coming to an end. We live in an age of planetary boundaries and tipping points. Natural Capital has been eroded to such an extent that the complex mechanism of ecosystem services that nature provides has been compromised and now we need to restore and sustain the earth's ability to support us. As legislators this means passing legislation that will properly value the natural capital upon which all economic wealth depends.

Yet today, as the Executive Secretary of the Global Environment Facility reminded legislators, our governments are still failing to implement the commitments that their countries signed up to three years ago in Nagoya. We are still failing to take proper account of the threats and opportunities that Natural Capital represents to our economies. Naoko Ishi reminded us that any erosion of nature's capacity to deliver products and services has a damaging effect on our economic progress. A decline in forest cover can affect everything from food security to flood protection; a decline in insect populations can affect the yield of our crops.

Juergen Voegle spoke for the World Bank to point out that whilst the global loss of biodiversity in the 50 years to 2050 has been estimated to amount to 7% of global GDP the greatest impacts are felt by the poorest. If you are living on less that $2 a day, half of all your GDP comes from your environment and its biodiversity. Properly valuing Natural Capital then, is not simply our responsibility as good environmentalists. It is not even just our responsibility as good economists. It is our responsibility as human beings. It is our moral responsibility.

Legislators listened intently to the economist who has perhaps done more than any other to promote the process of Natural Capital Accounting: Pavan Sukdhev, the author of TEEB, introduced the Natural Capital Legislation Study by asking us when we last received an invoice for pollination services from a bee? With elegance and simplicity he explained:
"We use nature because she is valuable. We abuse nature because she is free."

It is because classical economics treats the services that nature provides as externalities, that it fails to properly represent either the non-market benefits of ecosystems or the environmental costs of growth. He insisted that it was not just governments but businesses too that needed to make transparent their environmental externalities in their annual reports to shareholders.

Our German hosts - and how splendidly generous they were in providing such a wonderful setting for the launch of our work in the Bundestag - were lucid in their emphasis on the importance of Natural Capital for the work of poverty relief. Germany's Federal Minister for Economic Cooperation and Development (BMZ) Dirk Niebel, on whose behalf GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit) supports GLOBE's Natural Capital Initiative, recognised Natural Capital as the basis of economic value, whether in the form of non-renewable commodities such as minerals and fossil fuels, or in the form of finite but renewable resources and ecosystem services such as fuel wood, fresh water and provisioning. He welcomed the GLOBE Legislation Study that reviewed the progress made in eight countries (including his own) which have begun to try to incorporate the value of Natural Capital into their government accounting frameworks in some way. But he recognised clearly the enormous progress we need to make to embed Natural Capital into all governments' accounting systems by 2020.

Technical progress towards this has been much aided by the United Nation's adoption of the revised System of Economic Environmental Accounting (SEEA) as an International Accounting Standard. It has been aided too by the recommendation of the UN Secretary General's High Level Panel to include Sustainable Management of Natural Resources as a key target of the Post 2015 Development Goals. But real progress will need more than technical proficiency and high level exhortations. It will require cash to carry out the National Ecosystem Assessments at a country level that must form the basis for any technical accounting work that may take place.

The GEF is the financing mechanism for the UN Conventions and it is vital that their fifth replenishment fund is fully supported by donor countries. 

Also, a specific Natural Capital Accounting  Post-2015 Development Goal (DG) will be required. This will signal the importance of Natural Capital Accounting. It will also help attaining all other DGs which depend on maintaining the Earth's capacity to provide the flow of environmental goods and services that sustain human life.

GLOBE believes that by implementing a programme of National Ecosystem Assessments in just 50 countries around the planet, the GEF could unfold a strategic vision for Biodiversity that would materially change our capacity to meet the Aichi targets by 2020 and would place government accounting for Natural Capital at the heart of global understanding of the true nature of wealth.

The strength of the final communiqué shows a quite extraordinary determination on the part of legislators to drive this agenda in their own jurisdictions. From sixteen different countries we pledged unanimously to promote awareness and understanding of natural capital accounting in our legislatures and to hold our governments to account for the quality and quantity of support that they provide to international bodies such as the GEF and to development banks and agencies. We promised to scrutinise the management of Natural Capital in our own countries and to ensure that the appropriate policies, legislation and budgetary support are in place.

Finally we have called upon our fellow legislators from around the world to join us in Mexico City in June 2014 for the 2nd GLOBE World Summit of Legislators. There we will bring together 500 legislators from over 150 countries to report on their progress in valuing Natural Capital in pursuit of the objectives set out in the UN Conventions and "to restore and sustain the ability of the earth to support human communities".

 

Barry Gardiner MP
Chairman of the Board - GLOBE International
Session Chair at the GLOBE Natural Capital Summit
 
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Hon. Khatuna Gogaladze - Cabinet Minister for Environment and Natural Resources of Georgia

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Keynote speech

As delivered by the Hon. Khatuna Gogaladze - Cabinet Minister for Environment and Natural Resources of Georgia at the 1st GLOBE Natural Capital Summit

I understand that we are very short in time and I will try to make very short and brief presentation. First of all I would like to mention that it is my pleasure to be her during these days to discuss such an interesting topic as natural capital and evaluation of ecosystem services, because I see this approach as crucial for sustainable development for the countries and I would be very happy to have this system already introduced and widely applied in Georgia. But I think that we are on the correct way and I hope that after some time I would have much more to say about involvement and engagement and achievements in this regard in Georgia.

First I would like to give some country profile. Population of Georgia is 4.6 million; area is about 70,000 square km. This is a lower middle income country with GDP in 2012 $15bn, and GDP growth rate is 6.1%. This is very general information about Georgia. We have a very beautiful and nice country. If you have not been you are all invited to come to Georgia. This is a mountainous country with two-thirds of Georgia is mountainous. Average height is 1,200 metres. The highest point is Mount Shara – 5,184 metres. We have a very diverse landscape in Georgia, starting from arid and semi-arid places to wetlands. We have forests, flat plane forests, sub-alpine, alpine zones and very diverse habitats. Georgia is rich in flora and fauna. Just some information: 4,100 species of vascular plants have been recorded in Georgia, and out of this, 300 species are endemic. As for fauna species, we have 109 species of mammals, 300 species of birds, more than 1,000 species of invertebrates, so it's really worth coming to visit Georgia. By the conservation international, Georgia is one of the 34 global biodiversity significant hotspots.

The main economic sectors in Georgia are mining of manganese, copper and gold, agriculture, hydropower tourism and nature based ecotourism. In this situation where we have diverse and beautiful and rich ecosystems, this approach is really important for us. Why are we interested? Economic development is one of the priorities for us and there is nothing unusual in that. On the other hand, economic development puts pressure on the environment and on natural capital because very frequently we want to benefit as soon as possible. This is why long-term thinking is very important for us and I believe that incorporation of non-market values in developing policies and decision-making when we are deciding what to do and how to do develop the county. What sectors should be motivated, etc? From that stand point it's very important to know what are the non-market values of our ecosystems, of our natural capital. And I hope that after this approach is introduced in Georgia it will promote the sustainable development in Georgia in the long-run easily.

Now, about our experience. As I have mentioned, we are not very experienced in the application of this methodology. We are on the way of developing this approach and there are a couple of examples of evaluations of ecosystems services and the practices that are used in Georgia. In 200 there was a World Bank project, and within this project it was assessed the revenue generation potential of the national parks, which were supposed to be established under this project. Three national parks were evaluated, and contingent evaluation methodology was used for that, and some calculations were made. It was found that establishment of these parks can generate pretty significant income for the country. It's not really that much, about $2mn it was calculated the country would gain from the establishment of these parks. And it was a good sign, and after these parks were established we can say that it was proved by the practical revenues from these national parks as an entrance fee and spending around in the park in guest houses, etc.

Another project was again implemented by the World Bank, the same period 2000-2001, "Benefits and costs of establishing the X Park", another national park. And the analysis showed that establishment of this national park might cause some net losses to the local communities. Again this was a very practical output of this evaluation and some amendments were made to the loss, and according to those amendments some flexibility was given to the population to use some resources from this national park, and some suggestions and recommendations were made to the management plan of this national park, and again it was very useful from the practical point of view.
The other studies were again about protected areas. The first one was through UNDP project and the other one was through WWF caucuses, and both of these studies aimed to illustrate on the example of selected protected areas, the contribution of ecosystem services to the economic development and human well-being. These studies explore how ecosystem degradation lowered output and discussed the associated costs. Sector scenario analysis methodology was applied and two scenarios were compared. Output and practical result findings of these studies were also very useful.

Now about the economics of ecosystems and biodiversity – TEEB initiative. Georgia became a pilot country for TEEB in 2011. Government of Georgia took this initiative in relation to the importance that we accord the ecosystem services and of their evaluation. A project advisory board was established with members from line ministries and academia. For this moment a coping study was prepared for full national TEEB. And WWF was coordinating the initiation of this study. Four major economic sectors were identified for this study: hydropower, tourism, forestry and agriculture. This study highlights the critical relationship to biodiversity and ecosystem services, formulates important questions that may be answered by a full TEEB study in the context of these four sectors. One of the main outcomes of this study is a roadmap for undertaking a full study in Georgia. This roadmap includes very detailed steps to be undertaken, timelines, institutions that have to be involved and their responsibilities in this process. I think this report is already a good step forward to undertake the full scale study in Georgia. We think to have a pilot study for some specific regions, which would be evaluated from different perspectives, and we're already committed to undertake a full national study as I have already indicated, but we can start I think from the pilot region, and we are looking for opportunities from various international organisations and institutions to secure some funding for this initiative.

I would also like to mention that TEEB related issues are reflected in the Georgia Biodiversity Strategy and Action Plan (BSAP) which is drafted and supposed to be approved by the Government by the end of this year. It will be an official declaration of the Government also that we need to work on this issue and I believe this mechanism is crucial, is very important for our future planning.

And just very briefly, why we are here? What's my interest, my interest as a minister? We have lots of constraints at national level. We have little experience in valuation of ecosystem services. I mentioned some studies but it's not enough, it's just a droplet in a sea. We have little experience in valuation and environmental accounting. We have poorly developed legal framework in this direction and it needs lots of changes from this perspective. We have limited institutional and human capacities. But we have willingness; we have political will to do this. What are the objectives? We want to incorporate natural capital into national accounts and to take more enlightened environmental decisions.

We need and we want to strengthen our capacities in this direction. And I see this meeting, conference, initiative as very important for sharing our experience. It was so motivating and inspiring in the morning when there was different discussion on this; how it could be introduced at national level. It was very interesting and I would like to thank all participants and to thank the organisers for inviting and giving us the opportunity to be involved in this process. I am very happy in this meeting that we have delegates from the parliament of Georgia, from the ministry of Finance and I think this is also a good sign to have support from other ministries and from the legislators.

I hope and I think that the other economic bloc ministries – ministries of energy, economic development, agriculture – should also be involved very actively in the process in order to ensure the final goal of the country: the sustainable and long-term development of Georgia. Thank you very much.