environment and poverty times #5

8/14/2019 Environment and Poverty Times #5

1/20

Page 23

Rich map, poor mapNatural capital constitutes one quarter o total

wealth in low-income countries. Seas and soilsare major ood actories, orests provide wood

or constructing houses, ores and minerals,

like gravel, are used or paving roads. These are

just a ew examples o the wealth o developing

nations.

Page 45

Environmental wealth of rural com-munitiesThree quarters o the poor live in rural areas.

They depend largely on natural resources or their

livelihoods. They are armers, fshermen and

small-scale miners. Each day they make decisions

on how to use their environment. In reality, these

people are stewards o the environment.

Page 67

Energizing entrepreneurs:the Bill Gateses of AfricaPeople grow out o poverty when they create

small businesses that employ their neighbours.

Call it passion, enthusiasm or fre in the belly

its what energizes successul entrepreneurs.

Green entrepreneurs can be the champions o a

sustainable economy

Page 89

Politics of natural resources useGovernment policies and politics can enable

or hamper reasonable natural resources man-

agement creating at the same time, directly or

indirectly, opportunities or economic growth

that bring benefts to the poor.

Page 1011

Go internationalThe importance o ecosystems services doesnt

stop at country borders, nor does the interest in

exploiting them. International conventions canhelp to fnd a balance or sound environmental

management and poverty reduction.

Page 1213

Sustainable consumption andproductionCan developing countries produce and consume

sustainably? This means minimizing damage to

the natural world and making use o the earths

resources in an efcient way.

Page 1415

Do you know anyone with capital?Africa needs it!When thinking about sustainable development

in Arica, what comes to many peoples mind

is development aid rather than private sector

investments with a desirable output. However,

in developing countries both the developmentand investment potential in natural resources

are enormous. What is needed now are good

investors.

Page 1617

Powering developmentEnergy is at the heart o development. Energy is

needed at the household level, or communica-

tions and or industrial processes. Developing

countries are gearing up to meet their needs or

electrifcation and uel. At the same time the fght

against climate change oers opportunities or

low-carbon economies.

Page 1819

Smiling facesNatural resources create new opportunities or

people. A job or additional income can bring a

positive change into the lives o the unemployedand the poor.

Page 20

Global forecast the climate ischangingMillions o poor people in developing coun-

tries are vulnerable to extreme weather

events and climate change impacts on water

resources, agriculture and ecosystems. While

adaptation is crucial or the whole society, it

is urgent or people in the Arctic and Small

Island Developing States.

Contents

By Achim Steiner, Under SecretaryGeneral o the United Nations andExecutive Director o the United NationsEnvironment Programme headquarteredin Nairobi, Kenya

Aricas leaders looking to economic pri-orities or the continent should be puttingthe environment high on the list. Reportater report is now demonstrating that sus-tainable management o Aricas naturalresources is one o the keys or overcom-ing poverty. Sensitively, creatively andsustainably harvested and airly shared,these resources can assist in meeting and going ar beyond the internation-ally agreed development goals.

The 20th century was an industrial age the 21st century is becoming increas-ingly a biological one. Arica, with itsnatural wealth or nature capital residingin its ecosystems rom orests to coralrees can be a leading player on thismulti-billion dollar stage. Aricas wealtho natural resources has always been anasset and has sustained its people dur-ing good and hard times. But their truevalue, the sheer scale o the wealth romAricas reshwaters and landscapes to itsminerals and marine resources, has beeninvisible in economic terms. Only now arewe getting glimpses, only now are the realeconomic gures coming to the ore.

Take the wetlands o the Zambezi RiverBasin. According to estimates outlinedin the Arica Environment Outlook-2(AEO-2), the economic value in terms ocrops and agriculture alone o these wet-lands is close to USD 50 million a year.The wetlands also have other economicimportance. In terms o sheries, nearlyUSD 80 million a year and in terms omaintenance o grasslands or livestockproduction, over USD 70 million annually.Wetland-dependent ecotourism is valuedat more than USD 800,000 annually andnatural products and medicines associatedwith wetlands on the Zambezi are worthover USD 2.5 million a year.

Aricas natural resources key topowering prosperity

And it is not just wetlands. Take biodiver-sity or example, and the gorillas o the GreatLakes Region. It is estimated that tourismlinked with gorilla watching now brings inaround USD 20 million a year. It is a pointechoed across the continent. South Aricascoastal waters and unique wildlie are generat-ing roughly USD 30 billion a year in economicand tourist-based activities. It can be a virtu-ous circle. In Madagascar, where nature-basedtourism is the second largest oreign exchangeearner, over 40 new protected areas cover-ing about two per cent o its land area haverecently been established.

Many o Aricas ecosystems are not justserving the region, but the whole world. Jo-seph Stiglitz, the Nobel prize-winning econo-mist, estimates that the carbon sequestrationor carbon-soaking value o tropical orests such as those in the Congo River Basin probably equals or exceeds the current level ointernational aid being provided to developingcountries. In other words, it is the developingworld, and some o the poorest countries, thatare helping the global community by reelyremoving large levels o the gases causingclimate change. Some developed countriesare recognizing that debt. They are turningto creative market instruments to repay thisdebt in a way that balances the need to ghtpoverty with a need to sustainably managethese income-generating natural resources.

France has signed a debt-or-nature swap

with Cameroon under which USD 25 millionwill be invested in people and nature in theCongo River Basin. This is part o the widerCongo River Basin Partnership Initiative,born at the World Summit on Sustainable De-velopment in 2002, involving the Basins sixcountries and a range o other governmentaland non-governmental actors.

Many countries in Arica, like Gambia, arenow mainstreaming environment into theirPoverty Reduction Strategy Papers. They arealso starting to turn to market instruments tobalance economic concerns with environmen-tal ones. Tanzania recently announced in itsbudget VAT exemptions or liqueed petro-leum gas in order to reduce energy production

rom charcoal and wood. Kenya has an-nounced that solar panels and relatedequipment will be zero-rated.

Countries in Arica are also becom-ing increasingly aware o the costs oinaction o the price economies payor lax environmental managementand ecological degradation. A recentstudy in Egypt has ound that pollutionand environmental damage is costingthat country alone over ve per cento its GDP.

There is also an urgent need orcountries in Arica to maximize theopportunities under the carbon mar-kets o the Kyoto Protocol and to ully

engage in the Bali Road Map thenegotiations that need to lead to a dealat the climate convention meetingin Copenhagen in 2009 in order todeliver a climate change agreement tocommence around 2012. Arica has alot to lose and a lot to gain as a resulto climate change. For example, onethird o the continents coastal inra-structure is threatened by sea-levelrise. Equally, hundreds o billions odollars o investment is starting to fowrom the North to the South under in-struments such as the Protocols CleanDevelopment Mechanism which canbe invested in cleaner and renewableenergy systems. Developed country

governments also need to step upinvestments in adaptation and climateproong economies in Arica.

The AEO-2 was compiled by theUnited Nations Environment Pro-gramme (UNEP) and researchersand scientists across Arica or theArican Ministerial Conerence on theEnvironment. But I sincerely believe itis essential reading or Aricas health,planning and transport ministers upto Aricas nance ministers and headso state. For while the report is on onelevel a state o the environment report,it is also a pre-investment document.Why? Because it underlines how littleo Aricas natural wealth is actuallybeing sustainably harvested.

One igure: Arica has numeroustourist attractions, yet it contributes onlyour per cent annually to the multi-bil-lion dollar global tourism industry. Andanother: Aricas renewable reshwaterresource is, at close to 4,000 cubickm per year, about 10 per cent o theglobal reshwater resource and closelymatches Aricas share o the worldpopulation. Yet in 2005, only about veper cent o the development potential isbeing used or industry, tourism andhydropower, notes the report.

AEO-2 is also a kind o sharehold-ers prospectus or a promising newenterprise, or it sets out choices as tohow Aricas leaders, through the New

Partnership or Aricas Development(NEPAD), might wish to develop thisnatural wealth in a sustainable way.

Arica urgently needs investmentin hard inrastructure rom roads andrailways to ports, airports, schoolsand hospitals. But it equally needsinvestment in its sot inrastructure in the ecosystem goods and servicesprovided by nature. Investment tomaintain and manage these naturalresources well: Investment to unleashtheir huge economic and developmentpotential or the benet o the 800million people in Arica today and orthe generations to come.

ENVIRONMENT&POVERTYTIMES05May 200820 pagesA periodic publication by UNEP/GRID-Arendal

,


2/20

Environment & Poverty Times 05 2008

Natural capital constitutes one quarter o total wealth in low-income countries. Seas and soils are major ood actories, orests provide wood or constructing houses, oresand minerals, like gravel, are used or paving roads. These are just a ew examples o the wealth o developing nations.

Rich map, poor map

World poverty distribution

Three quarters o all poor people still live in rural areas. They are heavily reliant on natural resources or their livelihoods soil, water, orests and sheries underpin commercial andsubsistence activities and oten provide a saety net to the poor in times o crisis. These natural resources are abundant in many developing countries and represent an importantasset and potential wealth or poor people and their communities. As many o these natural resources are renewable, i properly managed, this wealth can be long-term.

Improved natural resource management can support long-term economic growth, rom which poor people, in rural areas and elsewhere, can benet to achieve and sustainsocial progress and development.

Agricultural potential

Soils underpin the production o a wide range o agricultural andindustrial goods and services. Soil productivity is essential toagricultural activities or ood security, cash income and supportingthe livelihoods o the poor.

Agriculture is the major engine o economic growth in a majority o

developing countries, or instance low-income developing countrieshave a high share o agriculture in their GDP.

This map presents potential agricultural output rom cereals,provided proper support in equipment, seeds, practices andirrigation.

Marine productivity

The worlds most productive shing grounds are conned to a

number o hot spots, representing less than 10 per cent o theworlds oceans. These areas shown in the map as areas o highproductivity are primarily concentrated along the upwelling zoneso the coasts. Fisheries and other marine products represent animportant resource or coastal and island developing countries,providing nutrients and economic development.

More than 95 per cent o the worlds 41 million shers livein developing countries. Internationally traded values in ishproducts rom developing countries are ar above all other exportcommodities, and some countries generate up to 30 per cent otheir scal revenues through sheries. Once seen as an endlessresource, sh stocks are today dwindling under the pressure romtrawls and nets coming not only rom the near coast, but alsorom shing boats rom countries ar away.


3/20

Environment & Poverty Times UNEP/GRID-Arendal05 2008 2 3

Forest cover distribution

Approximately 240 million o the worlds poor that live in theorested areas o developing countries depend on orests or theirlivelihoods. Forests and their products provide cash income, jobs,and consumption goods or poor amilies.

Forestry provides ormal and inormal employment or an

estimated 4060 million people. The sector contributes more thaneight per cent to GDP in some developing countries. Timber may bethe most important orest product, but orests are also harvested orruits, herbs and honey, as well as or wild animals. Less visible, butno less important, are the ecosystems services that orests providesuch as or the hydrological cycle.

Nevertheless, global orest cover has dropped by at least 20 per centsince pre-agricultural times. While orest areas have increased slightlyin the past 30 years in industrial countries, they have declined by almost10 per cent in developing countries during the same time period.

According to the Food and Agriculture Organization (FAO),deorestation causes 25 per cent o greenhouse gas emissions, andreducing it is a high priority on the global agenda.

Freshwater run-oFreshwater a natural resource which was adopted as a humanright by the UN in 2002: the human right to water entitles everyoneto sucient; aordable; physically accessible; sae and acceptablewater or personal and domestic uses. People depend on thisresource or drinking and cooking, or irrigation o arms, or hygieneand sanitation and or power generation. The map ocuses onlyon one aspect o the geography o reshwater other aspects aregroundwater (including ossil water) and the water stored in soils,ice sheets and glaciers.

For the 2.5 billion people living in low-income countries,agriculture is the most important sector by employment, and byar the largest user o water. Irrigated land currently produces 40per cent o the worlds ood on 17 per cent o the agricultural land.Hydro-electricity is the primary power source or 26 Sub-Saharancountries, and the second main power source or another 13countries in this region.

Estimated mineral resources and deposits

In more than 100 countries around the world, miners dig mineralsand metals out o the ground, satisying a slow but continuouslyincreasing demand rom industrial production, agriculture,construction, high-tech sectors, and merchandise producers. Incontrast to the other natural resources presented here, minerals area nite resource, and so this resource and their prots needs to bemanaged careully to ensure sustained livelihoods ater explorationhas ceased and mines have losed.

About 1.5 billion people living on less than USD 2 a day live incountries which have potential mineral wealth. Thus, one o thekey questions or them is how they can turn this endowment intoan economic asset that will help them nd ways out o persistentpoverty. The number o people relying on mining or a living islikely to be over 200 million worldwide this includes both small-scale artisanal mining and employees under large multinationalcorporations.

Solar power potential

More than two billion people cannot access aordable energyservices today. They depend on inecient locally collected and oten

unprocessed biomass-based uels, such as crop residues, wood, andanimal dung. Because convenient aordable energy can contributeto a households productivity and income generating potential, itsavailability can help amilies and communities break out o the cycleo poverty. At the same time it also provides growing cities o theworld with the lie source that powers actories, schools, streetlightsand Internet cas.

Modern renewable energy technologies such as solar, wind,micro-hydro and geothermal power remain largely untapped, despitethe relative abundance o sunshine, wind, water and undergroundthermal heat.


4/20


1975 2003Source: USGS EROS

0N

The town of Galma

0.5 km

By Philip Angell, World Resources Institute

The development o the Fiji Locally-Man-aged Marine Areas Network (FLMMA)emerged against a backdrop o continuingdepletion o Fijis inshore sheries. Thatdepletion accelerated in the 1990s, mainlydue to increased commercial shing, aswell as larger harvests by subsistence sh-ers. The decline in marine resources hashad a signicant impact on the livelihoodso rural Fijians, most o whom depend onlocal sh and shellsh catches or some orall o their income and or their daily pro-tein. With sh stocks on the decline, some30 to 35 per cent o the households in Fijiscoastal villages ell below the poverty line.

The use o Locally Managed Marine Areas(LMMAs) to restore inshore isheries is

based on customary systems o commu-nity marine tenure supported by modernmethods o biological monitoring andassessment. Key to the LMMA approachis community involvement in designingsimple management structures. Expertsrom FLMMA partner organizations, suchas the University o the South Pacic, thePeace Corps and the Fijian Fisheries Minis-try, provide technical inormation and adviceto support community decision making.

LMMA communities set aside a portiono their traditional shing grounds as re-stricted areas to allow marine resources torecover. The location and size o these tabuareas are determined by the communitiesthemselves. As sh and shellsh speciesrecover in tabu areas, stocks also gradu-ally increase in nearby parts o the LMMAwhere shing is allowed. This spillover

Fishing or the uture in Fijieect oers substantial benets to com-munities.

Since the creation o Fijis rst LMMAin 1997 covering 24 hectares near thevillage o Ucunivanua on the east coast oFijis largest island the use o LMMAshas spread rapidly throughout Fiji and thebroader Asia-Pacic region. By 2007, thesize o the network in Fiji had expanded toinclude some 213 LMMAs, involving 279villages and covering almost 8,500 squarekm o coastal sheries, or about 25 percent o the inshore area. The programmehas been so successul that Fijis nationalgovernment has ormally adopted theLMMA approach.

The economic and environmental ben-ets are clear: in Ucunivanua itsel, averagehousehold income rose rom just over FJD

430 per month in 2002 to about FJD 990 in2006. The community o Daku in Kadavuprovince saw average incomes rise by morethan 30 per cent in one year. In addition,there has been increased consumption osh in LMMA villages. Some 75 per cento surveyed households in the Navakavucommunity reported eating more sh thanve years ago: in non-LMMA villages anequivalent drop in sh consumption wasreported. These changes were the result oincreased sh catches in restored areas.

Communities engaged in LMMA worktend to retain high levels o commitmentto the programme, indicating their senseo ownership and economic stake in theseenterprises. For example, a survey o theNavakavu community showed it consid-ered its LMMA to be crucial to its wellbeing and to that o uture generations.

Yet challenges remain. In some remotecommunities, poachers are a problem andenorcement eorts have been mixed.Remote villages also lack sucient inra-structure to access markets and so nd ithard to improve living standards. Anotherproblem is that not everyone in LMMA vil-lages can depend or their livelihoods on

the managed sheries: alternative meanso income have to be ound to support astexpanding populations. The same prob-lem exists in more remote villages.

These challenges are not minor ones but since the ormation o the LMMAsthey are being aced in a ar more con-dent, resilient and capable way.

The Equator Initiative

The Equator Prize is an international awardthat recognizes local eorts to reduce povertythrough the conservation and sustainableuse o biodiversity. The biennial prize isawarded by United Nations DevelopmentProgrammes Equator Initiative. Over thepast ve years, the Equator initiative hasattracted more than 1000 nominations or

its Equator Prize. O these, 75 communityinitiatives stand out as exemplary cases.Research shows that these initiativesare most successul under conditions ocollective understanding o the value oecosystem-derived resources, secure propertyrights to these resources, low-barriers tomarket participation, multiple beneicialpartnerships and strong eective leadership.They can be a powerul tool in internationaleorts to protect the environment andpromote human development.

More inormation at www.equatorinitiative.net.

Success in the Sahel

In 1970s and 1980s years o environmental crisis there were ew trees remaining in Niger. Wind-blown sands razedarmers young crops and they oten had to plant crops three times to succeed. Since the middle o the 1980s, in the mostdensely populated parts o Niger, armers have begun to protect and manage young trees and bushes regenerating ontheir cultivated elds. This is natural armer-managed orest regeneration.

Some trees x nitrogen rom the air on their root system which helps to maintain and improve soil ertility. Improved soil ertilityleads to higher crop yields. The trees and bushes protect crops against wind and sand, and armers now oten need to sow onlyonce, which increases the length o the growing season. Women are perhaps the biggest winners. They spend much less timenow on the collection o rewood than they did 20 years ago about 0.5 hours per day now instead o 2.5 hours per day in 1984.They also now own 80 per cent o the goats and sheep which provides them with income. Fodder is much less o a problem nowthan 20 years ago, as the trees produce seedpods and leaves which are a major source o odder in the dry season.

The most important incentive or tree regeneration by armers was a change in perception o ownership o the trees. In1985, the perception was that trees were owned by the State, but now armers perceive an exclusive right to the trees on theirarm. Farmer-led tree regeneration has happened on at least 5 million hectares once barren, sandy soils almost devoido vegetation now have 2040 or more trees per hectare. This is a spectacular scale, unique or the Sahel and probablyeven unique or Arica. In this orm o orest regeneration is not spread evenly though it is strongest in the regions withhigher population densities.

Three quarters o the poor live in rural areas. They depend largely on natural resources or their livelihoods. They are armers, shermen and small-scale miners. Each day theymake decisions on how to use their environment. In reality, these people are stewards o the environment.

Environmental wealth o rural communities

Did you know?

In 2002, USD 58.2 billion world sh tradewas rom developing countries, exceedingthe value o the combined net exports o rice,coee, sugar and tea.

In Guinee, one third o the vessels wereillegally shing in a prohibited zone, largelytaking catch rom the area designated orartisanal shers leading to a probable loss oUSD 84 million shrimp, sh and octopus.

Sources: FAO. 2007. The State o World Aquaculture2006; MRAG. 2005. Review o Impacts o Illegal,Unreported and Unregulated Fishing on DevelopingCountries.


5/20

Environment & Poverty Times UNEP/GRID-Arendal05 2008

MOKUBA

Nsebende

Boyombe

Ngenzembo

Bokwankoso

Milembe

Mansinga

Keboku

Mpa 2

Mpotokodi

Mansembe

Makaso

Mongondo

Nkunkasa

Nkokebokaa

Dwanga

Iwuta-Mbata

Mikau

Mowan

kayi

Nduwu-

Intondo

Iwuta-Mbata

Mak

aso

Mb

embekombe

Ifunza

nk

it

a

ManyateNkokiba

Nko

ngoN

aNkong

o

Mandondo

Mapeke

Nzale

Diam

ba

Esoko

Manbundu

TowardNtandembelo

TowardNgomo

TowardMikanga

TowardMpole

Administration

Community territory

Part of the territory being g iven asa forest concession to SODEFOR

Village Camps Farms

Infrastructure

Roads

Footpaths

Water

Important rivers

Small rivers

Streams

Water sources

Forest logging

Forest logging area

Log storage area

Traditional activities

Cultivated fields

Harvest area for non-wood

forest products

Hunting area

Fishing area

Sacred site

0 1.000 2.000 3.000 metres

KinshasaBURUNDI

UGANDA

RWANDA

TANZANIA

CENTRAL AFRICAN

REPUBLIC

CONGO

DEMOCRATICREPUBLIC OFTHE CONGO

ANGOLA

ZAMBIA

SUDAN

BANDUNDU

PROVINCE

Mpa 2

After a map created by Matthieu Yela Bonketo andBarthelemy Boika Mahambi in September 2007.

By Marianne Fernagut, UNEP/GRID-Arendal

Access to land and natural resourcesis the premise or all ecosystem usesproviding livelihoods, shelter and so-cial saety rom arming to shing,rom berry picking to mining.

Sustainable use o natural resourcesrequires clear and enorced access orproperty rights. These rights provideincentives or long-term investmentsand sound management o the re-sources. Increased local control onatural resources motivates long-terminvestments and avours managementaccountability and perormance.

Fallow ields, orests, ishinggrounds, pasturelands and wetlandsare oten common property. Common

pool natural resources imply open ac-cess to virtually anyone and that it isnot easy to exclude users. However,common pool natural resources can-

Right to accessnot be used endlessly. Non-excludabil-ity tends to be an incentive to overuse aresource to improve individual welare

without bearing the costs.The rural poor, whose lives are in-

tricately linked with local ecosystems,are positioned to be most aected byhow access and property rights aredened and realized. For these people,common pool natural resources arean important source o ood, odder,uel, building materials, medicinalplants, and income. In India, it hasbeen estimated that common propertynatural resources provide about 12per cent o household income to poorhouseholds. In general, the poorer thehousehold, the more important is theincome contribution through commonproperty resources. In addition some

natural resources, like water or marinesheries, are mobile and diuse sothat property rights are dicult, i notimpossible to attribute.

World Resources 2008: Roots o Resilience Growing the Wealth o the Poor(WRR 2008) isthe 12th volume in the World Resources Reportseries published jointly since 1984 by UnitedNations Environment Programme (UNEP),United Nations Development Programme(UNDP), the World Bank and the World

Resources Institute (WRI).WRR 2008 argues that properly designed

enterprises that address the reality o the poor that almost hal the worlds population liveson less than USD 2 per day and that some75 per cent o them, almost 2 billion, livein rural areas largely dependent on naturalresources or their livelihoods can improvethose livelihoods and, in the process, createresilience economic, social, environmental that can cushion the impacts o climatechange, can keep communities rooted, and canhelp provide needed social stability.

The report builds onWorld Resources 2005: TheWealth o the Poorthat showed that ecosystemscan become the ocus o a powerul model ornature-based enterprise that delivers continuing

economic and social benets to the poor, evenas it sustains the natural resource base. Evidenceshows that poor rural amilies empowered withsecure resource rights can increase their incomestream rom nature signicantly with prudentecosystem management.

WRR 2008 explores what is necessaryto allow such nature-based enterprisesto scale-up so as to have greater impact geographically, economically, politically. Itidenties three critical elements: communityownership and sel-interest; the role ointermediate organizations (in providingskills and capacity); and the importance onetworks ormal and inormal as supportand learning structures. It outlines specicactions that governments at all levels can take

to encourage and support such change.When these three elements are present,communities can begin to unlock the wealthpotential o ecosystems in ways that actuallyreach the poor. In doing so they build abase o competencies that extends beyondnature-based enterprises and supports ruraleconomic growth in general, including thegradual transition beyond reliance on naturalresource income alone.

They also acquire greater resilience. It isthe new capacities that community membersgain how to conduct a successul business,how to undertake community-based projects,and how to build unctional and inclusiveinstitutions that give rise to greater socialand economic resilience. It is the insight thatecosystems are valuable assets that can beowned and managed or sustained benetsthat builds the oundation o ecologicalresilience. Together, these three dimensionso resilience support the kind o ruraldevelopment whose benets persist in the aceo a wide variety o challenges, environmentaland otherwise, that poor communities aresure to ace in the uture.

WRR 2008 illustrates its thesis with detailedcase studies o successul enterprises: Thetransormation o a desert landscape inNiger; the restoration o reshwater sheriesin Bangladesh; and the role o community-managed orest concessions in GuatemalasMaya Biosphere Reserve.

Roots o Resilience

Mapping communities

This map shows a logging concession and an area traditionally used by a community in Bandundu Province, DemocraticRepublic o Congo (DRC). There is overlap between the logging concession area used by a timber company and the areathat villagers use or hunting, shing, arming and timber exploitation, and also has a sacred site.

A community mapping project in eastern DRC, implemented by the non-governmental organization OCEAN, providesorest communities including pygmy communities with the know-how and technology to produce accurate geo-reerenced maps o their villages and land and orest use. These maps provide a tool or the communities to negotiate withthe government, logging companies and other groups who may be interested in using the communitys orest.

Source: www.dd.gov.uk/countries/arica/congo-Growth.asp

4 5

Rural poverty is strongly associ-ated with poor access to land eitherthrough landlessness or because o

insecure and contested land rights.Pressure on land is set to increase overuture decades, given the impacts ocontinued population growth, global-ization o markets and activities, tradenegotiations and climate change. Asa resource becomes scarcer and morevaluable, those with weak rights toaccess this resource will tend to loseout. In the case o land, particulargroups tend to be more vulnerableto such dispossession, including thepoor and those relying on commonproperty resources.

Secure property rights are importantor sustainable economic growth.Protecting and expanding the rights

to access natural resources which areo particular importance to the poor isthereore an important way to supportgrowth that benets the poor.


6/20


Natural ResourceForests, fisheries,

agriculture,

mineral resources,

freshwater and

many more

Rural PoorCommunities, subsis-

tence farmers, small-

scale fishermen,

artisanal miners

Entrepreneurs and

investorsSmall, medium and large

enterprises, sustainable

production, value added

services, innovation

and markets

Actions, interventions and opportunities

Threats and pressures

International actionsConventions

Clean developmentMechanism (CDM)

Open markets

Internationalinvestment streams

Aid policies and programmes

National actionsProperty and access rights

Pro-poor governmentexpenditures

Enabling policies for SMEdevelopment

Technology promotion

Access to credit

Increased access to markets

Infrastructure development

Fiscal reform

Resource depletion

Natural disasters

Conflict

Competition (including from

developed countries)

Market fluctuations and financial instability

Benefitsfromnaturalresources Busine

ssoppo

rtuni

ties

manag

ementSust

ainable

Economicgrowth

povertyalleviation

Economicdiversification

By Peter Fries, United Nations EnvironmentProgramme

In rural Senegal, a disused wind pump

stands as a stark reminder o the challeng-es o sustainable development. Installed aspart o an aid project, the wind pump wasclearly seen as an advantage over haulingwater by hand. But without spare partsand trained people to service it, the windpump along with 90 per cent o similarpumps in the country ell into disuse,unable to provide water needed or cook-ing, washing and irrigating the vital ruitsand vegetables in the village garden.

Mr Michel Tine, a ormer manager othe aid project, wasnt a businessman buthe saw the opportunity to create an enter-prise repairing and servicing deunct windpumps. He ound that there was demandor the pumps but quickly realized that inorder to succeed, his new company VEV needed both to learn business skills andsecure start-up capital. Such needs weremodest by US or European standards thecapital required was roughly equivalent tothe amount o an average US corporationspends on its annual report.

In another part o Arica, Mr BambaCoulibally was also struggling to put intoaction his business idea. In Mali, a coun-try short on rerigeration but long on hotdays, Mr Coulibally was trying to preservestocks o local oods using a solar dryingtechnology developed under a previous aidproject. Like Mr Tine, he was well awareo the opportunities o his business butrealized that without being able to putorward a good plan and having collateral,

there was little hope o obtaining capitalrom local banks.

Enter an unlikely trio: the United Na-tions Foundation, an organisation calledE+Co headed by an innovative banker,and the United Nations Environment Pro-gramme (UNEP). This group have com-bined to orm the Rural Energy EnterpriseDevelopment Initiative or REED whichaims to help entrepreneurs like Mr Tineand Mr Coulibally, interested in renew-able and ecient driven energy projects,to raise small amounts o start-up capitaland increase skill levels. Instead o simplythrowing more appropriate technologyinto an area which, in the past, has seen

Open or businessseveral high-tech ascoes and ailures, thetrio embarked on a ar more ambitiousand dicult task that o creating newtypes o enterprises capable o delivering

clean energy to the people who actuallyneeded it.Its an organizational concept that the

sustainable development sector has beenwaiting or.

Technology is not the problem, says MrPhil LaRocco, head o E+CO, known as thebanker wearing the development cap.

Business models are not the problem.Demand or the product is not the prob-lem. Ability to pay is not the problem. Theproblem is a shortage o seed nance thatallows entrepreneurs the reedom andfexibility to innovate and take risks, saysMr LaRocco a man who reuses to be in-timidated by the problems associated withideas o sustainable development.

Mr LaRocco says that though the mo-tives behind the many billions investedin the development o various energyprojects and associated water schemesover the past two decades were otenwell-intentioned, this lavish spendingwas ultimately unable to break the cycleo poverty. Wind pumps have been let torust all over Senegal. Mr LaRocco says thepoverty cycle has a direct link to the lack oaccess to modern orms o energy.

You dont give away you invest, hesays. Its a philosophy Mr LaRocco hasapplied to investing more than USD 170million in 173 enterprises operating in 34developing countries, which in the processhas delivered sustainable energy to overour million people.

Mr Mark Radka, the coordinator oUNEPs energy programme, says develop-ment agencies and investors have otenignored the potential capacities o localenterprises to innovate in essential energyservices. This is because enterprises suchas Mr Tines or Mr Couliballys were toosmall; they operated in remote, rural areasand did not practise any ormal kind obookkeeping. Development agencies andgovernments oten clung to the belie thatonly centralized agencies and programmescould deliver energy services eectively.

REEDs rst investment stop was Arica the programme is called AREED, www.areed.org where they enlisted the help o

a number o local development organiza-tions who were attuned to commercialpractices. These country partners are a keypart o the AREED programme, delivering

enterprise development services in the eldto help entrepreneurs create and expandtheir clean energy businesses.

Dr Abeeku Brew-Hammond, director oGhanas Kumasi Institute o Technologyand Environment (KITE) AREEDs localpartner organization in the country saysthe term rural can have a very dierentmeaning in countries like Ghana. Thereare no telecoms, no email and a typicalrural person may not have the educationto even write a business plan, says DrAbeeku. But he says people oten do havethe money to pay or improved energyservices, especially i the cost o systemscan be nanced over extended periods.

To get the message out in Arica, localcountry partners such as KITE togetherwith E+Co literally take the concept to thestreets, putting AREEDs ideas directly toentrepreneurs through seminars in Ghana,Mali, Senegal, Tanzania and Zambia. BothMr Coulibally and Mr Tine attended theseminars and subsequently were amongthe rst entrepreneurs to emerge rom theAREED pipeline through a process oone-on-one mentoring, rening their busi-ness ideas into solid business plans. Onlythen, when viable business plans had beennalized, were Mr Coulibally and Mr Tinegiven start-up capital.

For Mr Tine, a USD 17,000 loan romAREED means he can create and expandan inventory o spare parts to provide abetter service to more communities. Mr

Coulibally is investing his USD 8,000loan in additional solar dryers in order toexpand his business.

A key actor in the REED approach todevelopment is that it treats risk and risk-taking as an integral element in the entre-preneurial approach to projects and seesrisk as a tool or leveraging greater returnsin the long-term. In a traditional develop-ment programme, the same money wouldbe used to buy and install equipment amounting to a ew wind pumps andsome solar dryers. By contrast, a REEDprogramme uses unds to launch a busi-ness which might eventually be capableo installing and maintaining hundreds

o pumps or solar dryers.Assisting entrepreneurs to take risks,

to innovate in the way they deliver goodsand services, and to continuously rene

their business models, is an eective wayto gain public trust while att racting com-mercial investment into the sustainableenergy sector, says Mr Radka.

REED nancial support is typically inthe range o USD 20,000120,000 andsometimes might be used to take up anequity position in essence, buying parto the company. However, a REED pro-gramme usually does not provide all o thenance an enterprise may require and theterms o the nancing package are usuallydesigned with a second stage investor inmind a person or group that will investonce the business model is proven. Onceother partners nancially commit to a newcompany, REEDs role diminishes.

REED is also not just concerned withseeking nancial returns on its invest-ment. The potential benets o each in-vestment include not just direct nancialreturns but also indirect returns such asjob creation, lower pollution levels andimproved rural livelihoods. The VEV in-vestment is a good example. In one villagewhere a wind pump has been repaired,the extra water is now irrigating a villagegarden which supports 20 amilies withboth extra income and better nutrition.

REED has branched out into Brazil(B-REED, www.b-reed.org) and China (C-REED, www.c-reed.org). The programmehas now successully unded more than45 enterprises that deliver clean energyto more than 300,000 people.

All the REED partners agree that smallenergy enterprises and the enterprise-centered development model are not aquick x or a panacea capable o deliveringall the sustainable energy that is required tothe rural poor. It is, says REED one moreapproach that, in many circumstances,can cost eectively deliver energy services oten in ways that complement the moretraditional centralized utility model.

For the rural village in Senegal andthose associated with Mr Tines businessproject, that approach simply means waterin the elds and ood on the table. Andthat, says REED, is the right combinationor sustainable development.

People grow out o poverty when they create small businesses that employ their neighbours. Call it passion, enthusiasm or re in the belly its what energizes successulentrepreneurs. Green entrepreneurs can be the champions o a sustainable economy.

Energizing entrepreneurs: the Bill Gateses o Arica

The natural resources path to poverty reductionDo you know?

Q1: Small and Medium Size Enterprises (SMEs)comprise o what per cent o the private sector?a) 19%b) 49%c) 69%

d) 99%

Q2: Why are SMEs important?a) They represent the backbone o global economic

activity.b) They generate signiicant employment oppor-

tunities.c) They contribute to local community development

and capacity building.d) They have a signicant environmental impact.e) All o the above.

Answers:Q1:d)Bangladesh:99%ofcompanieshavelessthan100employees

accountingfor58%ofnationalemployment.

Ecuador:99%ofcompanieshavelessthan50employeesaccountingfor55%ofnationalemployment.

Q2:e)Thekeytopovertyalleviationiseconomicgrowththatisinclusiveand

reachesthemajorityofpeople.

Source:WBCSD.2008.PromotingSMEsforsustainabledevelopment.


7/20


By Natalie ShriberandLiesbet Peeters,both ormerly with the Grassroots BusinessInitiative o the World Bank/IFC, a longstanding partner o Gone Rural

As a poor, land-locked country, Swaziland 70 per cent reliant on subsistence agri-culture is plagued by drought, soil deg-radation and erosion. As a result o recentdroughts, GDP growth remains low at 2.3per cent while high oil and ood priceshave led to infation increasing to 7.5 percent. Its estimated that 40 per cent o thepopulation is unemployed and nearly 70per cent live below the poverty line. Withthese poor economic indicators, coupledwith an HIV/AIDS rate o more than 38per cent o the population, the eects oclimate change and environmental degra-dation on economic development and onthe population only add to the countrysproblems.

In the midst o such tough economicand social circumstances, Gone Rural,a small grassroots social enterprise, isgenerating much needed income or ruralwomen and, at the same time, promotingthe sustainable use o one o Swazilandsmore unknown natural resources SwaziLutindzi grass.

Gone Rural set up by the late JennierAnn Thorne, an entrepreneur who rstwent to Swaziland rom England as atrainee nurse in the late 1960s assists lo-cal women in producing handicrats, rang-ing rom tableware to foor mats, gits andaccessories and clay pots. These are thensold to tourists, thereby putting a stop tothe food o handicrats that are imported

into Swaziland rom other parts o Aricaand marketed as native produce.

For its production, Gone Rural utilizesan outsourcing model through whichrural Swazi women are engaged by thebusiness to grow lutindzi grass. GoneRural purchases the grass rom thesewomen, dyes it into a range o rich coloursat its workshop and sells it back to themto weave and plait in their homes andcreate the artistic products as requestedby Gone Rurals design and volumespecications.

When the women have nished theirproducts, Gone Rural sells the merchan-dise through its sales and distribution net-work. Gone Rural also trains the women in

latest ashion trends in handicrat produc-tion and only purchases merchandise thatmeets the highest quality standards. Whiletraining is primarily ocused on the skillsand techniques required to produce spe-cic Gone Rural products, more broadlyapplicable skills and handicrat techniquesare also taught.

Gone Rural

The employment created through GoneRurals business operations which pro-

vides vital income and stability to respec-tive production communities is at thecore o its operations. The company iscommitted to increasing its sales so as togenerate employment or more women inSwaziland and thereby encouraging localeconomic growth and enabling the womento deal with such problems as increasingnumbers o orphaned children. The busi-ness has grown to the extent where thecompany employs over 20 people in itsworkshop at Malkerns in Swaziland andworks with more than 770 rural women,80 per cent o whom rely on Gone Ruralas their sole source o income.

Gone Rural is a highly successul busi-ness and now operates at the prestige end

o the market in 35 countries. Its productscan be ound in stores in London, Paris,Tokyo and New York and have been ea-tured in numerous home ware magazines,including Elle Decoration, a top-rated USmagazine covering home improvements.

Additionally in Swaziland, Gone Ruralhas created a not-or-prot organization,

Gone Rural BoMake, which providesvarious social training, literacy, and

health programmes designed to improveand enhance the womens lives, therebyachieving three things: proitability,social/development impact and envi-ronmental sustainability. It also pursueseducational and social initiatives thatocus on increasing the lie expectancyo women, the primary victims o povertyand HIV in the region.

Through Gone Rural BoMake, theparticipating Swazi communities re-ceive HIV/AIDS awareness/educationprogrammes as well as basic treatments/products and prevention skills. Peoplealso learn various methods o capturingdrinkable water, training and support inthe development o trench gardens and

unemployed young men are given supportin trying to nd jobs. In addition, 660AIDS orphans within these communitieswill receive schooling that would not bepossible otherwise youth and womenacross these communities will also receivetraining in entrepreneurship, general lit-eracy, nutrition and womens rights.

Gone Rural is now one o the top vehandicrat producers in Swaziland and has

received several awards or its products anddevelopment impact. Having proven itsworth as a social enterprise over the lastdecade, successully trading in both the do-mestic as well as export markets and havingmade strong advances in product qualityand innovation, Gone Rural is now hopingto expand its operations in order to improverevenues and so increase employment andincome levels within Swazilands rural andmost disadvantaged communities. Centralto Gone Rurals commitment as a socialenterprise, is the belie that through astrong and robust business, it can continueto provide sustainable jobs, training andrenewed hope to its rural Swazi producersand their communities.

As such, Gone Rural is an excellentexample o how creative and innovativegrassroots solutions, combined with envi-ronmental sustainability, can provide helpin promoting economic growth and allevi-ating poverty, thereby reversing the nega-tive trends o environmental degradationin one o Aricas poorest economies.

6 7

The big signicance o small orestryenterprises

It is estimated that exported timber onlyrepresents ve per cent o the wood cut intropical orests. Ten per cent o timber used

locally and the majority 85 per cent o woodis or uel.

While exports are generally the realm olarge-scale enterprises, the domestic marketis dominated by small orest enterprises. Inmany countries, the orest sector constitutesmainly small orest enterprises employingrom 10 to 100 ull-time employees. Theycreate more than hal o the jobs in the orestsector and are responsible or over 50 percent o the government revenues. Whilesmall and medium enterprises are importantor local wealth creation, they can have astrong environmental accountability as theirmanagers belong to the local community andsocial control is more personal.

0 50 100% 0 50 100% 0 50 100%

India

Guyana

Brazil

Uganda ?

China

South Africa

Number of SMEs Employees Government revenues

Share, out of total enterpr ises Ratio in SMEs, out of totalforest workforce

Revenues, out of total inforestry

Lighter shade signifies range low to high estimate

Source: Mayers and Macqueen 2007

(Photo: Gone Rural)

(Photo: Gone Rural) (Photo: Gone Rural)


8/20


By Richard M. Auty, Emeritus Proessor oEconomic Geography, Lancaster University

Mining can limit environmental damageand achieve sustainable growth at bothlocal and national levels. The principal ob-stacle to this outcome remains the elitesabuse o political contacts to siphon minerevenue to enrich themselves.

Critics o the mining industry haveargued that developing countries mightbe best served i their minerals were letin the ground. They claim mining is notsustainable because it entails a once-or-all depletion o environmental capital.

Moreover, most mines are highly capital-intensive so they generate little directemployment per unit o investment andmuch o the export revenue goes abroadto service oreign capital. In addition, lo-cal mining communities claim that whilethey have to bear the environmental, socialand economic costs o mining, the cashbenets fow out o their region.

The mining industrys recent historywould seem to support these views insome respects: using rent1 as a measureo the capital generated by mineral exploi-tation, World Bank gures available or1994 only show that mineral economiesgenerated the highest rent as a share oGDP, but achieved the worst economicgrowth, and the higher the rent the worsethe outcome.

In act, mining can and should substan-tially benet developing economies in-cluding the poorest i host governmentseectively deploy mining revenues. Onthe broader macro-economic ront, min-eral exports can generate extra revenue orinvestment, which i eciently appliedcan accelerate the national economicgrowth rate, plus the infow o oreignexchange increases the capacity to importgoods required to build the inrastructureo a modern economy. The depletion othe resource can also sustain increasesin per capita welare i a raction o therent is invested in alternative orms ocapital like education, inrastructure and

production goods.At a more local level, benets to local

communities in the area are maximised

Environmentally sustainablemining or pro-poor growth

i companies switch their corporate socialresponsibility policies rom supportingor building up social inrastructure arole which should be ullled by nationalgovernments concentrating insteadon encouraging the ormation o newenterprises, whether linked to mining(supplying goods and services or process-ing the ore prior to export) or to activitiesoutside the sector. The mine inrastruc-ture acilitates accessibility to nationaland global markets and the mining rmscan assist local people to establish busi-nesses by providing loans, skills training(including business management) and

legal assistance. The business expansionwill diversiy the local economy and buildhuman and private nancial capital. It cangenerate employment, improve local skilllevels and harness tax revenues to sustainthe mining region long ater mineral ex-traction has ceased.

To date, the main weakness o mineral-driven development has been the inabilityo host governments to eectively utilizemine revenue. Governments have otenbeen over-optimistic about the duration oprice booms and instead o careully allo-cating nancial resources, have absorbedtoo much revenue too quickly into thedomestic economy. In many cases, suchill-advised moves have been encouragedby elites who seek to use the sudden infowo unds to their advantage.

This not only means valuable invest-ment unds are not used properly; suddenrevenues infows can also cause seriousinlationary pressures and distort theeconomy with revenues oten beingchannelled into non-productive sectorssuch as the bureaucracy or protectedindustries and services and away rommore important sectors like competitiveagriculture and manuacturing. Conse-quently, ater perhaps an initial surgein non-productive growth, the economyslows and is increasingly vulnerable toprice shocks. However, despite the adversecircumstances, the elite resists economicreorm because it shrinks its capacity to

capture rent. Thereore governments ndit politically expedient to sustain rent en-titlements by extracting some o the return

on capital rom the mine as well asthe rent, typically by nationalization.This results in under-investment, in-adequate maintenance and eventuallya growth collapse rom which, as thecase o the mining industry in Zambiashows, recovery is dicult.

Such problems can be avoided imining companies, international -nancial institutions and donor govern-ments can encourage governments touse mineral revenue to achieve solideconomic growth rather than distrib-ute revenues to the elite. This requiresstrengthened institutional checks

and balances, such as the rule o law,stronger civil society, political account-ability and budget transparency. Amineral revenue stabilization undcan help boost transparency whilealso slowing domestic absorption omineral revenues and maintainingthe competitiveness o agricultureand manuacturing. A und also a-cilitates adjustment to trade shocksand the conversion o the once-or-allore depletion into a revenue streamto benet uture, as well as present,generations. The elite remain thebiggest obstacle to this outcome andunortunately the current commodityboom, plus the signicant growth andexpansion o developing country min-ing companies weakens the capacity owestern agencies to nurture benecialmineral-driven growth.

No mining projects should proceedunless they both provide an adequatereturn on the capital investment butalso cover the environmental and socialcosts o their operations. The latterwould include pollution abatement andappropriate restoration o the minedarea when production ceases. Mostleading mining companies these daysembrace such world class environmen-tal standards i not, shareholder andbank pressures will mean they will notreceive capital loans.

1. Rent is dened as the surplus ater deduct-ing rom the revenue all costs o productionincluding a risk-related return on capital andnormal taxation.

Mining in Botswana

Since its irst diamond mine wasestablished in 1967, Botswanaexperienced strong and sustainedgrowth that led it rom being one o thepoorest economies in Arica to one othe rare success cases on the continent,avoiding the problems experienced byother resource-rich countries.

The recipe or this success hasbeen a set o policy rules grounded inavoiding scal decits. The governmentuses a Sustainable Budget Index (SBI)in order to ensure sustainability.This measures the ratio betweenconsumption expenditures and non-resource revenues. As long as the SBI

is less than one, the government canbe sure that natural-resource capitalis not being consumed.

This achievement has not beeneasy. Public investment has otengone into low-growth sectors, suchas deense and agriculture, while ithas crowded out private investmentslowing economic diversiication.However, the overall scal strategyhas worked. The government hasavoided excessive spending in thegood times and drastic spending cutswhen diamond prices have allen, asin the early 1980s and 1991.

Source: World Bank 2006. EnvironmentMatters.

Government policies and politics can enable or hamper reasonable natural resources management creating at the same time, directly or indirectly, opportunities or economicgrowth that bring benets to the poor.

Politics o natural resources use

Diamonds working or liveli-hoods mining in Sierra Leone

In 2004, the government o SierraLeone saw a total o USD 5.2 million

in revenues rom diamond relatedactivities. This comes in the orm omining, dealer and export license eesand rom export taxes. To direct some othe revenues back to poor communities,the Diamond Areas CommunityDevelopment Fund (DACDF) was setup, with an annual commitment o 25per cent o revenue rom export taxes.The intention is that this money will bededicated to community inrastructure,agricultural improvements and training,but the actual distribution o the undshas been problematic.

From licenses

From taxes

25% of the revenuefrom export taxes to goto a fund for thedevelopment ofdiamond miningcommunities

0

1

2

3

4

5

Government revenue

from diamond exports, 2004(million USD)

SierraLeone

Source: Diamonds and Human Security Project 2006

Did you know?

At the global level, 84 per cent o orestlands and 90 per cent o other woodedlands are publicly owned. The areao orests owned and administeredby communities doubled rom 1985to 2000, reaching 22 per cent indeveloping countries and that isexpected to urther increase.

Source: FAO. 2007. State o the WorldsForests 2007.

The Cullinan mine in South Arica here the largest uncut diamond ever was ound.(Photo: Marianne Fernagut)


9/20


0 20 30 USD 40 million

One-off values

Sugarcane plantation rotation

Benefit streams

Benefits from agricultural development of the Mabira reserve USD 29.9 million

Benefits from continued conservation of the Mabira reserve

Timber stock

Other ecosystemservices/benefits

Domestic water supply

Watershed protection values

Carbon sequestration values

Timber

USD 45 million

Source: Moyini et al 2008

By Moses Masiga, ENR Arica Associates

In 2006, the Sugar Corporation oUganda Limited (SCOUL) asked the

Government o Uganda or an alloca-tion o 7,100 hectares o Mabira CentralForest Reserve to expand its sugarcaneproduction operations. The area requestedrepresents about 24 per cent o the totalarea o the reserve.

SCOUL believes it will be able to in-crease sugar production and save oreignexchange between USD 20 million andUSD 25 million each year. The corporationplans to produce between 1 and 12 MWso electricity cogenerated rom bagasse the residue o sugar cane ater extrac-tion. SCOUL says that in the course othe project 3,500 jobs will be created anda new road network o 300 km will bedeveloped, plus the corporation will be

paying additional taxes to the government.The sugar company pledges to preservethe ecology o the remaining part o theMabira reserve and to participate in treeplanting programmes in the areas unsuit-able or sugarcane production.1

Pro-conservation groups opposed to theSCOUL plan believe the Mabira reserve is anarea o unique biodiversity, with bird, plant,primate, butterfy and tree species that needto be conserved. The reserve also containsimportant medicinal plants. They also eelthe orest has great potential as an ecotour-ism destination and reuge, as the orest islocated close to large urban centres. The or-est also brings long-term benets, not onlyin terms o timber and orest products, butalso as a repository or water resources andas a carbon storage acility. The pro-conser-vation groups say the SCOUL project couldendanger the reserves delicate hydrological

Forest or sugarcycle and a considerable number o peopleliving around the reserve who are dependenton orest products or their incomes willlose their livelihoods. They say the Ugan-

dan public is opposed to any change in thereserves status.

While SCOUL has stated the potentialbenets o its plan on which it basesits request or allocation o reserve lands these benets have neither been quanti-ed nor claried. Pro-conservation groups,led by NatureUganda, commissioned thiseconomic evaluation on what to decide.The Sugar corporation SCOUL says theannual stream o net benets o sugarcanegrowing represent a better land use op-tion than the conservation o the Mabirareserve as it exists now: it calculates netbenets o USD 3.6 million per year romsugarcane as opposed to USD 1.1 millionper year rom conservation.

However, such a calculation by SCOULis based only on a short-term gain as theeconomic lie o a sugarcane stand is atthe most ve years. The economic lie othe natural tropical orest stand can stretchover a 60-year period. When the presentvalue o the standing crop o timber alone(excluding other uses) was compared tothe present value o net benets rom sug-arcane growing, conservation o the orestyielded a greater long-term benet thansugarcane o USD 35.5million comparedwith USD 29.9 million rom sugarcanegrowing. When the value o ecologicalservices was added to that o the stand-ing crop o timber, conserving the orestreserve as it exists registered a ar highernet present value o USD 48.8 million.

The National Forestry and Tree Plant-ing Act o Uganda have provisions orcompensation i previously reserved lands

are degazetted. Also, Ugandas social andenvironmental policies are clear on com-pensation. Thereore i the authoritiesdecide to allow SCOULs project despite

the argument o pro-conservation groupsthat conservation o the Mabira is a betteralternative than sugarcane growing thedeveloper must grant compensation, esti-mated at USD 48.8 million. Also, beorethe change in land use, an EnvironmentalImpact Assessment (EIA) process shouldtake place in order to satisy legal, socialand environmental policies o the govern-ment o Uganda.


For countries which own and controlorests, revenues rom timber and or-est products can oten be a vital sourceo income to be used or investment inschools, health care, inrastructure and

Illegal logging costs millionsthe environment. Countries such as Cam-eroon and Ghana are raising substantialrevenues rom timber auctions and timbertaxes. In Cameroon, orestry now pro-vides as much as 25 per cent o total taxrevenues. However, a number o studiesindicate that in many countries with con-siderable orest resources, income rom

timber and orest products is low.Low revenue returns rom orest re-

sources not only have a negative impact ontotal government expenditures but also re-sult in the wrong signals being sent to themarket concerning the value o orests andwood products. In turn, this is damagingto sustainable orest management: otenlow prices lead to overexploitation o or-est resources the result is deorestationand orest degradation. In some cases, lowrevenue collection is a deliberate policy ogovernments that want to subsidize woodconsumption in the orm o wood uel,or example or social reasons.

However i taxes and charges on timberresources are set at an appropriate level,this can contribute to sustainable com-mercial logging. Governments will havea vested interest in sound orest manage-ment, ensuring that logging and otheractivities are carried out sustainably andthereore do not threaten uture revenue

fows. Once a air and properly adminis-tered tax regime on orest products hasbeen established, the authorities keen tocapture all possible revenues will wantto put a stop to illegal logging activities.Loss o revenues as a result o illegal log-ging can cost governments and economiesmillions o dollars each year.

A air level o tax on orest resourcescan also lead to improved compliancewith various environmental directives andgenerate revenues which can be used tostrengthen environmental monitoring andenorcement. Taxes can also act as a controlmechanism on logging activities, reducingover investment in the sector and manag-

Forest versus agriculture the case o the Mabira orest reserve

The Mabira orest reserve, on the shores o Lake Victoria in Uganda, hosts valuablewildlie, serves as a timber resource, provides ecosystem services or the waterbalance, and the rainorests represent a tourist destination. Following a proposed

plan or clearing one third o the reserve or agricultural use, the values o the orestwere calculated by local researchers. This economic evaluation o the orest showsthat, rom a short-term perspective, growing sugarcane would lead to more economicbenets than maintaining the orest reserve, with a return o USD 3.6 million per yearin contrast to USD 1.1 million per year or conservation. However,sugar cane production is only optimal during a short time spano ve years. When comparing both land use alternatives overthe lietime o the timber stock, 60 years, the benets rom theorest, and the ecosystem services it provides, exceed thoseo the sugarcane planting.

Despite recent pronouncements romthe Government o Uganda, it is not en-tirely clear that the issue o degazettingMabira Central Forest Reserve has been

put to rest. The debate continues to re-surace in Uganda.

Reerences:1. The Monitor Newspaper, 2007; and New Visionnews Paper, 2007.

From Yakobo Moyini, Moses Masiga, AchillesByaruhanga and Paul Ssegawa (2008) EconomicEvaluation of the proposed degazettement of part ofMabira Central Forest Reserve.

ing sustainable exploitation o resources.A careully calibrated tax system plus a

long term orest management plan are,in this case, particularly important. I thetax regime and other government policieshave the eect o encouraging overexploi-tation o orest resources, then revenuesrom orestry are unlikely to be sustained.Yet trying to implement scal reorms inrelation to orests and the environmentis ull o challenges. Political and publicsupport must be secured, which otenrequires strong advocacy.

At present, in countries around the worldwhere the state has control and ownershipo the orests, it is generally the privaterather than the public sector which ben-ets rom revenues raised rom orest re-sources. Society in general nds it benetslittle rom the exploitation o the orests.In particular, poorer groups in societyoten nd their access to orests and theirresources curtailed as a result o actions by

private companies and groups.I revenues rom orest resources are

properly monitored and administered,the poor are likely to see that the man-aged exploitation o orests can resultin improvements in living standards,with money spent or example on healthand education acilities. In addition,some orest revenues can be allocateddirectly to local authorities in orestedlow-income areas. For example, in Boliviamunicipal governments keep 25 per cento revenues raised rom the exploitationo orest resources, while in Guatemalathe municipalities control 50 per cent osuch revenues.

Corruption and illegal orestry

Where government ocials are keen to turn a blind eye or a share o the prots,the more the orests suer. About USD 5 billion per year is estimated to be lost duecorruption in uncollected taxes and royalties on legally sanctioned timber harvests.A majority o the illegal timber comes rom Asia, with China and Indonesia as themain sources.

8 9

Indonesia

Canada

USAEU 15

Japan

Malaysia

Brazil

Russia

Other LatinAmerica

OtherAsia

China

West andCentral Africa

AccedingEU (2004)

Corruption

Ratio of suspicious timber supply

The size of thebubbles reflectsestimated volume ofsuspect roundwood,including imports

Widespreadcorruption

Nocorruption

0% 40% 80%

Source: Seneca Cree Associates 2004


10/20


By David Huberman, International Union or Conservation o Nature, andLeoPeskett, Overseas Development Institute

Deorestation and land degradation are es-timated to account or around 20 per cento global anthropogenic greenhouse gasemissions and are thereore major driverso global climate change. These actors,combined with growing global concernsabout catastrophic climate change, haveuelled international interest in develop-ing nancial mechanisms to slow deor-estation and degradation rates.

Most proposals or such mechanismsto Reduce Emissions or Deorestationand Degradation (REDD) are still on thedrawing board but they are all based on theidea that developed countries would pay de-veloping countries to reduce deorestation

rates by implementing policies and projectsaimed at preserving the orests. By linkingsuch payments to carbon markets (i.e. put-ting a value on the carbon storage capacitieso orests and the value o halting emissionsrom such areas) under the United NationsFramework Convention on Climate Change(UNFCCC) regime, substantial amounts omoney could be transerred to developing

Making REDD work or the poorcountries: some estimates suggest morethan USD 15 billion per year would beavailable, a gure which dwars existing aid

fows to the worlds orest regions.But whilst the theory is relatively simple

and the environmental and nancial ben-ets are potentially massive, putting REDDinto practice is no easy task. First and ore-most in the international debate at presentare the technical and political hurdles how to monitor and measure emissions,how to establish baselines against whichto assess perormance and how to build asystem that can be readily adapted to theneeds and interests o countries with verydierent orest sectors. These questionshave to be answered in order or REDD tobecome a reality. But equally important, arequestions about the social implications othese nancial incentive mechanisms or

poor people. The benets could be large, ithey are designed with the interests o thepoor in mind. The concern is that these arealready being overlooked and that REDDwill pose risks or the poor.

The benets that REDD oer or poorpeople centre around the potential i-nancial value o carbon stored in tropicalorests. Even in areas with modest carbon

Forests working or the global climate

Carbon trading o credits rom avoided deorestation could yield billions o dollars or tropicalcountries, according to an analysis by Rhett A. Butler, ounder and editor rom Mongabay.com, a leading tropical orest web site. The proposed mechanism Reducing Emissionsrom Deorestation in Developing Countries (REDD) will enable these countries to maintaintheir orests as a global resource.

Using conservative estimates on carbon storage in tropical orests or the 17 developingcountries in this gure, a reduction in the annual deorestation by 10 per cent would generatemore than USD 600 million per year with carbon prices at USD 5 per ton. A higher estimate

on the carbon prices, at USD 30 per ton, would generate USD 2500 million in income rom theproposed programme. Due to dierences in the orest composition and climate, the carboncontent can dier greatly rainorests in French Guiana has an estimate o ve times as muchcarbon content compared to the orests o Indonesia.

Foreign countries shing or the Mauritanian sh

Marine sheries represent a signicant, but nite, natural resource or coastalcountries. The majority o the catches, in some coastal areas, are not primarilydone by the coastal country, but rather by other countries. For example in thiscase, where countries rom Europe and Asia (Japan and South Korea are in theothers group) represent the majority. According to this estimation, Mauritaniaonly landed about 10 per cent o the total catch in 2002, with The Netherlands asthe nation with the largest catch (23 per cent) in this zone.

stocks, the value at current market pricesor carbon would oten ar exceed the valueo land or other uses, such as conversion

to agriculture. In an ideal world, landowners could thereore stand to gain romdirect nancial payments or preservingor sustainably managing orests. Theremay also be indirect benets creation olocal employment opportunities, improve-ment in local environmental quality and astrengthening o local institutions.

In reality, the risks may be much greater,given the practical challenges involved insuccessully channeling beneits to thepoor. Experience with similar incentivemechanisms to do with orest conservation,such as payments or ecosystem services(PES), indicates that diculties accessingmarkets due to technical complexities,high implementation costs and insecurity

o land tenure, can lead to benets beinginequitably distributed. The poor might nothave a say in the negotiation o contracts onimplementing REDD type schemes: theyalso ace losing the use o orest resources.Another consequence o implementingREDD might be that political elites, seekingto gain nancially rom REDD, would puta stop to certain land uses such as shiting

cultivation which could be designatedas a orm o degradation even thoughsuch activities are oten vitally important

or poor people.Clearly crucial to the success o REDD

is a clear understanding o the context inwhich the regime is being implementedand o the potential risks that could ariserom even the most careully designedsystems. Transparent and accountable gov-ernance structures and clear standards willneed to be in place to increase participationin the design o REDD. There will also needto be ready access or all parties involvedto processes such as dispute resolutionmechanisms in the event o problems. Atthe same time, in order to maximize ben-ets to the poor, such systems will need tobe simple and cost-eective.

It remains to be seen whether all o

these requirements can be met, andwhether REDD can be made to work inavour o the poor. Keeping the poor atthe oreront o the REDD debate, at thiscrucial phase in the international process,will increase the chances o developingsystems which are sustainable in the longrun, both in terms o climate and the or-ests and also o people.

The importance o ecosystems services doesnt stop at country borders, nor does the interest in exploiting them. International conventions can help to nd a balance or soundenvironmental management and poverty reduction.

Go international

0

20

40

60

80

208

0

-2000

-1600

-1200

-800

-400

Proceeds from a 10% reduction in

deforestation rate, at carbon 5 USD per ton

(million USD)

Annual forest loss 1990-2005(1000 ha)

DR C go

Ec

Brazil

Ind

DR C goDR C goDR C go

Ec

BrazilBrazilBrazil

IndIndInd

Proceeds from a 0% reduction in

deforestation rate, at carbon 5 USD per ton

(million USD)

Annual forest loss 1990-2005(1000 ha)

D

o

o

o

o

o

o

o

I

I

I

I

I

I

I

Source: Mongabay 2008

MauritaniaEEZ

Fish catches (1 000 tons)

1970 1975 1980 1985 1990 1995 20001950 1955 1960 1965

250

500

750

0

Others

Ukraine

Netherlands

Senegal

Spain

Russia

Soviet Union

Mauritania

Source: Seas Around Us/UBC 2006


11/20


Not presented in the barto the left:

1 000 Medicinalplants

11 000 Ornamentaland medici-nal plants

68 600 Fisheriesfood

products

(excludingaquaculture)

9 500 Non-woodforest

products

154 000 Timber

239 500 Total tradein wildlifeproducts,2005

All figures in million euro

Edible snails60

Frogs legs40

Game meat365

Natural pearls57

Ornamentalcorals andshells

85

Reptile skins255

Mammal fursand fur products

4 000

Ornamental fish257

Reptiles and birdsof prey

36

Cage birds38

Primates75

Liveanimals

Animalfoodpro

ducts

Animalproductsforclothing/ornamental

Source: TRAFFIC 2008

By Karen Landmark, UNEP/GRID-Arendal

Imagine living in or being leader o acountry with a stagnant economy, copingwith severe poverty and general chaos. Yetyour country has wealth potential: it hasan extended coast line and, under the seasurace, a seabed and a continental shel.According to international law, it could bepossible to extend rights over that area,

thus giving your country access to valuableresources like oil, gas and minerals and,i managed in a sustainable way, thesecould then oer the potential o boost-ing the economy and liting hundreds othousands o people out o poverty. Thebig problem is that the process involvedin gaining these rights is a costly business also submissions on establishing theouter limits o such continental shelveshave to be put orward by May 2009.

Today, this is the reality or many coastaldeveloping states and so-called SmallIsland Developing States (SIDS). Whilesome countries have already handed intheir claims or are in the process o doingso, many will struggle to meet the 2009

deadline and thereore end up with theirrights over potential resources undened,missing the chance o radically changingtheir economic circumstances.

Extending rights on a continental shelcan have a huge impact on a state. Atpresent the most immediately attractivenatural resources or coastal states areoil and gas. With recent developmentsin oshore exploration and extractiontechnology, exploitation o deep marinehydrocarbon reserves is becoming eco-nomically viable, says Morten Srensen,Manager o UNEPs Shel Programme.The Shel Programme, coordinated by

Extending the maritime rightso states to battle poverty

UNEP/GRID-Arendal in Norway, wasestablished speciically to help SIDScomplete the various tasks required inorder to delineate the outer limits o theircontinental shelves and meet the 2009application deadline.

In addition to hydrocarbons, marine min-erals and metals including gold, silver anddiamonds, as well as industrial minerals,are also becoming an important source o

revenue or coastal states, says Srensen.Srensen says science is only justbeginning to discover the extent o liv-ing resources that exist both on thecontinental shel and on the deep oceanfoor resources which can be used toprovide considerable economic benets.Apart rom the sheries potential o shal-lower waters, the biodiversity presentin cold waters o the deep ocean and itshydrothermal systems may also becomevital economic resources in the uture.Such resources might include valuableingredients or the pharmaceutical andmanuacturing industries. The scienceand technology or extracting beneitsrom these resources is now in its inancy

but beore too long their worth might beproven remarkable.Working or an environmentally-o-

cused organization, Srensen points to theimportance o sustainable management oany resources ound.

Protecting the environment by properlymanaging sustainable development canlead to economic benets in its own right.Mitigating and preventing maritime pol-lution on sensitive ecosystems is also ovital importance. Marine Protected Areas(MPA) are an excellent example o the wayin which economic benets can be gainedthrough protection measures. MPAs

are becoming increasingly commonaround the world and serve to bothpromote eco-tourism and help lead toproductive ecosystem recovery. MPAsthat exist on a states extended conti-nental shel can infuence the healthand productivity o shing groundswithin a states jurisdiction.

The process o delineating the outerlimits o a countrys continental shel

comes under the jurisdiction o TheUnited Nations Convention on theLaw o the Sea (UNCLOS). Article 76o UNCLOS deals specically with therights o coastal nations and islandstates over the seabed and sub-seabedbeyond their 200 nautical mile exclu-sive economic zones.

Perhaps the most important actor indelineating the outer limits o the con-tinental shel relates simply to a statessovereignty. Article 76 has mechanismsthat allow states to deine the ullextent o their maritime jurisdictionand responsibilities. Regardless o theresource potential o the continentalshel, a state has an obligation to ensure

all its territorial rights are secured oruture generations. The right to activelymanage both the environment andnatural resources is an inherent com-ponent o statehood that extends romland to marine territory.

Srensen concludes that the Article76 process o delineating the outerlimits o the continental shel is oproound historical signiicance: itstrives to be inclusive o all coastal andisland states, seeking in the processto oer much needed assistance tooten poverty-bound and economicallystagnant countries.

The economy o legal wildlie trade

Managed wildlie trade can be benecial to species and habitat conservation, as well as contributing towards livelihoods and socialdevelopment.

While the eect o trade in wild species upon local economies can be substantial and can increase signicantly to rural incomes,the high value o wildlie products and derivatives can also provide positive economic incentives to provide an alternative to otherland use options or the local people to protect wild species and their habitats, and to maintain the resource or sustainable andprotable use in the medium and long term.

Legal international wildlie trade, according to one estimate, was worth around EUR 240 billion (USD 300 billion) in 2005, most oit accounted or by timber and sheries. Illegal trade is big business too. By its nature, the scale o illegal wildlie trade is impossible toknow precisely. One guess puts the value o illegal caviar trade at many times that o legal commerce itsel worth EUR 244 million.

International trade restrictions such as CITES the Convention o International Trade in Endangered Species o Wild Fauna and Flora seem to be insucient to address the harmul orms o wildlie trade. A better understanding o the trade dynamics, the incentivesor better management o wildlie under threat and the engagement o stakeholders at all levels and places are needed to avoid people,previously dependent on the trade, deciding to trade wildlie illegally in order to maintain their income.

10 11

Forthcoming: Natural Resources and Pro-Poor Growth

Natural capital constitutes a quarter o total wealth in low-income countries. For thepoorest in these countries notably those living in rural areas soil, water, sheries, orestsand minerals are the principal sources o income. Thus, to achieve pro-poor economicgrowth, low-income countries should build on the natural resource assets o the poor.

Natural Resources and Pro-Poor Growth, orthcoming under the DAC Guidelines andReerence Series, demonstrates that the management o natural resources is critical to poverty

reduction and highlights the contributions o natural resources to growth, employment,exports and scal revenues.

It is divided into two parts: Part I provides an overview o the economics and politicso natural resources. It describes the unique eatures o natural resources and resultingmanagement challenges, the role o sustainable natural resource management insupporting pro poor growth, and the politics and governance o natural resources. Itthen oers recommendations or policy makers on how to support the approachesadvocated in the paper. Part II examines these issues with respect to seven specicnatural resource sectors: sheries, orests, wildlie and nature based tourism, soil productivity, water security, minerals,and renewable energy.

Natural Resources and Pro-Poor Growth is o interest to a wide audience and is specically tailored or policy makers andeconomic decision-makers rom development co-operation agencies and ministries o nance and planning in partner countries.It highlights the importance o policies encouraging the sustainable management o these resources. Moreover, it emphasisesthe need to address the political challenges o natural resource management or long-term pro-poor economic growth.


12/20


13/20


By Fiona Lambe, Stokes ConsultingGroup/Gaia Association

Worldwide, more than three billion peopledepend on solid uels including biomass

in order to meet their everyday cookingneeds. Burning these uels produces ex-tremely high levels o indoor air pollution,exposure to which can lead to chronic re-spiratory illnesses: its estimated that suchillnesses lead to about 1.6 million deathsaround the world each year. The widespreaddependence on such solid uels in manypoorer countries means that women andyoung girls who are usually responsible orcooking and uel collection have little timeor other activities, including education ornding sources o income generation.

In addition, the harvesting o uel woodor cooking destroys ragile ecosystems,while the burning o traditional uelsreleases greenhouse gases which contrib-ute to climate change. Gaia Association,an Ethiopian NGO, is promoting locallyproduced ethanol as a clean alternative totraditional cooking uels.

Ethiopia currently produces 8 millionlitres o ethanol annually rom sugarcane molasses; a waste by-product o thestate owned and managed sugar industry.Previously such residues were dumped inrivers due to the lack o any viable domesticmarket or the product. In the near uturethe Ethiopian government will begin uelblending or the transport sector and plansare in place to expand national productioncapacity to nearly 130 million litres o etha-nol by 2012. I this target is met, ethanoloutput will surpass local demand romthe transport sector: its estimated that 128

million litres o ethanol will be produced in2012 while the demand rom the transportsector will only be 30 million litres. Giventhis supply scenario, the domestic andcommercial cooking market will be the onlylocal outlet or surplus ethanol.

A successul pilot test o the ethanol-burn-ing CleanCook (CC) stove was recently car-ried out in 850 Ethiopian households. TheCC stove, manuactured by Domestic AB oSweden, is a non-pressurised, clean-burning

Cooking on ethanol

alcohol stove, adapted or use in the develop-ing world. The pilot study demonstrated thatthe CC stove is an appropriate technologyor Ethiopian households in terms not onlyo health and saety but is also ecient, easyto use and cheap to run.

Those who used the CC stove reportedthat instead o spending time, as previ-

12 13


A community o Himalayan orest dwellers,ater two years o intensive work learning

environmental concepts and negotiationskills, succeeded in getting payments oUSD 54,000 per year rom the local hydro-power company or environmental servicesthat the community maintained by adjust-ing their agricultural practices; thereby, pro-tecting the water supply or the hydropowerplant and increasing the companys prots.This activity is known as a Payment orEcosystem Services programme.

Such payments or environmental ser-vices can be seen as similar to the polluterpays principle, but in this case, instead opeople being punished or doing harm tothe environment, they are rewarded orollowing good practices. For the rural

Payout rom the biosphe

environment and poverty times #5

Documents