Hon. Khatuna Gogaladze - Cabinet Minister for Environment and Natural Resources of Georgia


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.