Environment: ‘GREEN ACCOUNTING’

NEW DELHI, India (AP) - What is a sip of clean water worth? Is there economic value in the shade of a tree? And how much would you pay for a breath of fresh air?

Putting a price on a natural bounty long taken for granted as free may sound impossible, even ridiculous. But after three decades on the fringes of serious policymaking, the idea is gaining traction, from the vividly clear waters of the Maldives to the sober, suited reaches of the World Bank.

As traditional measures of economic progress like GDP are criticized for ignoring downsides including pollution or diminishment of resources such as fresh water or fossil fuels, there has been an increased urgency to arguments for a more balanced and accurate reckoning of costs. That is particularly so as fast-developing nations such as India and China jostle with rich nations for access to those resources and insist on their own right to pollute on a path toward growth.

Proponents of so-called "green accounting" - gathered in Rio de Janeiro this week for the Rio Earth Summit - hope that putting dollar values on resources will slam the brakes on unfettered development. A mentality of growth at any cost is already blamed for disasters like the chronic floods that hit deforested Haiti or the raging sand storms that have swept regions of China, worsening desertification.

Environmental economists argue that redefining nature in stark monetary terms would offer better information for making economic and development decisions. That, they say, would make governments and corporations less likely to jeopardize future stocks of natural assets or environmental systems that mostly unseen make the planet habitable, from forests filtering water to the frogs keeping swarming insects in check.

If the value of an asset like a machine is reduced as it wears out, proponents say, the same accounting principle should apply to a dwindling natural resource.

"Environmental arguments come from the heart. But in today's world based on economics it's hard for arguments of the heart to win," said Pavan Sukhdev, a former banker now leading an ongoing project that was proposed by the Group of Eight industrialized nations to study monetary values for the environment.

That study, started in 2007, has estimated the world economy suffers roughly $2.5 trillion to $4 trillion in losses every year due to environmental degradation. That's up to 7 percent of global GDP.

"We need to understand what we're losing in order to save it," Sukhdev said. "You cannot manage what you do not measure."

Using the same accounting principles, some countries are already changing policy.

The Maldives recently banned fishing gray reef sharks after working out that each was worth $3,300 a year in tourism revenue, versus $32 paid per catch. Ugandans spared a Kampala wetland from agricultural development after calculating it would cost $2 million a year to run a sewage treatment facility - the same job the swamp does for free.

But environmental accounting still faces many detractors and obstacles. Among them is resistance from governments who might lack the resources and expertise to publish a "greened" set of national accounts alongside those measuring economic growth. Particularly in the developing world, many still struggle to produce even traditional statistics that are timely and credible.

And even practitioners are riven by debates on how to put a price on a vast range of natural resources and systems that encapsulate everything from pollination by bees to the erosion prevented by mangroves in an estuary. The single largest difficulty is that markets, which are the easiest way to value goods and services, don't exist for ecosystems.

"Since many things don't formally have a market price, how do you value them? Almost all the debate and discussion really hinges around valuation issues, and that is where it can get flakey," said India's former chief statistician Pronab Sen.

At one extreme, said Sen, are people who say natural resources should get a zero value since we don't know how to value them. Others argue that the values for such resources should be infinite, meaning they can't be touched since no one has an infinite amount of money.

Opposition is also expected from parts of the corporate world, since green accounting could make doing business or buying products more expensive.

A forest once valued by what its trees fetch on the timber exchange might instead be valued according to the carbon dioxide it absorbs, the animals it supports, the water it filters, and the firewood it provides. Or it could be revalued with future generations in mind. That might lead to higher felling fees, pricey replanting requirements or more expensive wood. Some might rethink the economic benefit of cutting it down. Science would become a more important factor in economic decision-making.

Some businesses, however, are embracing the idea to appeal to consumers demanding more accountability. Supermarkets like Britain's Tesco now offer carbon footprints on packaging alongside calorie counts.

At a national level, green accounting is already being embraced by some governments, even if still in piecemeal fashion.

India in April announced plans for green national accounts by 2015 though it's unclear if the country's chaotic bureaucracy can reach that target. Australia will soon begin taxing carbon dioxide emissions, which Costa Rica has been doing for a decade to fund forest preservation.

Late last century, a team of U.S., Dutch and Argentine researchers put a $33 trillion value a year on natural resources such as water, wood and fossil fuels and "services" such as a forest's absorption of carbon dioxide. The estimate is more than double the value of the U.S. economy, the world's largest. While admitting difficulties and uncertainties in their methods and calculations, the team's report said the $33 trillion figure was conservative.

Carbon credits, perhaps the best known example of giving a value to an environmental good, also illustrate the difficulties. Experts thought the pricing of carbon credits might have been straightforward, since emissions are easily measured and every CO2 unit is the same. But the carbon market wobbled wildly for years over estimates ranging from $5 to $500 per unit.

Other resources open worlds of debate. Water - frozen, liquid or gas, it's found just about everywhere from vast oceans or tropical mist to mountain glaciers and underground aquifers. It's used for drinking, bathing, growing plants, processing sewage, powering hydroelectric plants, driving weather systems and more. So not all water is created equal.

But should one lake be worth more than another? Does it matter if people depend on it, or if it supports schools of tasty fish? Should it even matter what it's used for now? Or is it more important to consider if it can be replenished?

Some argue such questions make it clear that subjecting the natural world to free market ideology is immoral and counterproductive.

"The result would be the further privatization of essential elements of our planet to which we all share rights and have responsibilities," writes Hannah Griffiths from the World Development Movement, a UK-based anti-poverty campaigning organization, in a recent essay for the Guardian.

Still some experts in the field say the world is on track to having comprehensive green accounts within 10 to 15 years.

A crucial advance has been the United Nations' quiet adoption in April of a framework of agreed concepts and definitions for green accounting that can be applied in any country. It took two decades to develop but stops short of valuing complex ecosystems.

"The accounting is not pie in the sky anymore," said economist Peter Bartelmus, who led the original U.N. effort.

The World Bank, meanwhile, is backing projects in Botswana, Colombia, Costa Rica, Madagascar and the Philippines that are looking for ways for national accounts to include the value of natural resources.

"Doing something is better than doing nothing. We shouldn't even aim for perfection, either," said Sen, the former statistician.

"It is much more important to come up with a methodology that people find intuitively acceptable rather than looking for hard commercial truths. If at a gut level people find it fair, then I think we can run with the idea."

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Catholics organize to promote pope's climate change message

    NEW YORK (AP) — There will be prayer vigils and pilgrimages, policy briefings and seminars, and sermons in parishes from the U.S. to the Philippines. …

  • Forgotten for decades, fallen NY soldier finally honored
    Forgotten for decades, fallen NY soldier finally honored

    ALBANY, N.Y. (AP) — Carroll Heath didn't have it easy growing up in the Great Depression. His father wasn't around, his mother was a patient in a mental hospital and he kept largely to himself. Soon after graduating high school, he enlisted in the Army and wound up in the Philippines, where he's believed to have died sometime in 1942. …

  • APEC ministers to endorse Boracay Action Agenda
    APEC ministers to endorse Boracay Action Agenda

    Trade ministers at the Asia-Pacific Economic Cooperation (APEC) meeting in Boracay, Aklan agreed yesterday to endorse the proposed Boracay Action Agenda to the member countries’ leaders, presenting opportunities for global trade for micro, small and medium enterprises (MSMEs). In a press conference following the conclusion of the APEC Ministers Responsible for Trade Meeting, Trade Secretary Gregory Domingo, who also served as chairman, said ministers agreed to recommend the adoption of the …

  • Talks with China over sea row urged
    Talks with China over sea row urged

    The Philippines should engage China in bilateral talks in its efforts to maintain peace and order at the disputed West Philippine Sea, Sen. Francis Escudero said yesterday. Escudero supports the government’s move to bring the issue before international arbitration but also stressed the need for the Philippines to pursue talks with China. Escudero made the statement after UN Secretary General Ban Ki-moon on Friday called for a peaceful solution to territorial disputes in the South China Sea. …

  • House panel tackles bill on regular disaster drills
    House panel tackles bill on regular disaster drills

    The House committee on national defense is deliberating on a measure mandating the regular conduct of disaster risk reduction drills in educational institutions nationwide. Authored by Camarines Sur Rep. Rolando Andaya Jr., the bill mandates that risk reduction drills be held annually in all educational institutions throughout the country in coordination with the schools’ respective local government units. “The Philippines’ location along the Pacific Ring of Fire and close to the equator …

  • PCSO running out of funds
    PCSO running out of funds

    Philippine Charity Sweepstakes Office (PCSO) chairman Ireneo Maliksi has admitted that the revenue-generating agency is running out of funds as it continues with its mandate to provide financial assistance to indigent Filipinos. Aside from providing financial help to individual recipients, Maliksi cited at least 13 laws that mandates the PCSO to provide mandatory contribution to different government agencies. Just last week, PCSO released P100 million to the Commission on Higher Education as …

  • Cops receive mid-year bonus
    Cops receive mid-year bonus

    Active duty uniformed and non-uniformed personnel of the Philippine National Police (PNP)have received their mid-year bonuses. The PNP has released P1.9 billion for the mid-year bonus of the 155,000 active duty uniformed and non-uniformed personnel. The Directorate for Comptrollership released P1,933,664,893.50 through the Finance Service and subsequently credited to the individual ATM payroll accounts of active duty uniformed and non-uniformed personnel. …

  • APEC trade chiefs vow to speed up work in WTO

    MANILA, Philippines (AP) — Trade ministers from 21 Asia-Pacific countries on Sunday issued strong support to the World Trade Organization's efforts to boost global trade amid a flurry of regional free trade agreements. …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options