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Industry & Economy - Environment
World Bank launches ‘green' national accounts initiative

Mony K. Mathew

Kozhikode, Nov. 1

A new global partnership to help developing countries integrate the economics of ecosystems into national accounting systems has been launched by the World Bank.

The initiative stems from the fact that the alarming loss of biological diversity around the world is attributable to the lack of proper valuation of the ecosystems and the services they provide. The valuation and its integration into national accounts are expected to lead to better management of natural environments.

According to Mr Robert B. Zoellick, President, World Bank Group, the natural wealth of nations should be a capital asset valued in combination with its financial capital, manufactured capital and human capital. The national accounts should reflect the vital carbon storage services that forests provide and the coastal protection values that come from coral reefs and mangroves, he said at a Convention on Biological Diversity held in Nagoya, Japan.

First phase

The first phase of the partnership to ‘green' national accounts has been launched starting with India and Colombia, which will be in a group of six to 10 countries. A forthcoming World Bank Publication, titled ‘The Changing Wealth of Nations', states that the commercial value of farmlands, forests, minerals and energy worldwide is more than $44 trillion, of which, the developing countries account for $29 trillion. But, there is more value in the services provided by ecosystems such as forests, like hydrology regulation, soil retention and pollination.

In such a scenario, the cutting down of forest trees for timber may have negative consequences for the other sectors. These include loss of agricultural productivity, inability to generate hydro-electric power and loss of water quality.

UN programme

The partnership initiative builds on ‘The Economics of Ecosystems and Biodiversity' (TEEB) project of the United Nations Environment Programme (UNEP). It will include developing and developed countries, non-governmental organisations and the global organisation for legislators.

During the initial five-year pilot period, the programme will focus on how countries can quantify the ecosystems and their services in terms of income and asset values; developing ways to incorporate these values into policies on wealth and economic growth; and evolve guidelines for implementation of the valuations worldwide, according to a World Bank report.

The feasibility studies to identify priority ecosystems will start soon in India and Colombia, while many other countries in Africa, Asia, Latin America and Central Europe have evinced interest to become partners in the pilot programme.

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