How to Kick-Start the 21st Century Eco-Economy

Toward a Green Economy
By Stephen Leahy*

May 31 (IPS) – Humanity is facing historic and truly unprecedented challenges from climate change and the rapid decline of ecosystems that sustain life.

This article is final part of a three-part series published by IPS on natural capital and how future global prosperity and equity can be achieved through the preservation of ecosystems. See Part One: Like Enron, Earth Inc. Sliding Into Bankruptcy and Part Two: Global Warming is Real But I didn’t Do It 

The 2005 Millennium Ecosystem Assessment (MA) found that 83 percent of the planet’s natural systems are in serious decline or on the brink. Adding to this already dire situation are the twin pressures of population growth and increasingly consumptive lifestyles.

Global population is expected to soar from today’s 6.6 billion to 9 billion by 2050. Even though we crossed the point of sustainable use of natural resources in the mid-1980s, many of the 2.4 billion people living in China and India are striving mightily right now to approach the materialistic lifestyle of the average North American.

So how can we find our way around the global calamity the human race seems to be hurtling towards?

“Humanity needs a fundamentally new approach to managing the assets upon which we all depend,” said Janet Ranganathan, director of the People and Ecosystems programme at the World Resources Institute, an environmental group based in Washington.

“We need new ways of making decisions at all levels that fully value ecosystems and the services they provide us,” she said.

Farming and forestry in nearly all countries is only about maximising food or lumber production, but that has to start including maximising the ecological goods and service those ecosystems also offer. And since they are extremely important services, the stewards of these lands to ought to compensated so these services will be preserved and enhanced.

“Healthy ecosystems are our best insurance to buffer us from the impacts of climate change,” Ranganathan told IPS.

Funds to pay for such services should come from taxes on polluters, including a carbon tax, cap and trade or other financial mechanisms, she said.

In Ecuador, a Water Conservation Fund (FONAG) collects user fees from those who benefit from the water in the Condor Bioreserves — a 5.4-million-acre network of public protected areas, farms, ranches and indigenous territories. It uses these funds to support watershed management projects, according to a new report called “Restoring Nature’s Capital: An Action Agenda to Sustain Ecosystem Services”, co-authored by Ranganathan.

In Brazil, states allocate some revenues from taxes on goods, services, energy and communications to municipalities to help them support protected areas for forests and other resources. With massive deforestation threatening the viability of the Panama Canal, insurance and shipping companies are helping finance a major reforestation effort.

“At the very least we should stop subsidising economic activities that degrade ecosystems,” Ranganathan said.

Since humanity is facing unprecedented challenges in a markedly changed world from 50 years ago, there is a vital need to create new institutions. One idea is the creation of Ecosystem Service Districts to protect and maintain natural capital at the local level in ways that support human need.

To read complete story see Toward a Green Economy.