Clearly that was no flash in the pan. Last week, I chaired a high-level ministerial dialogue on the margins of the IMF-World Bank Spring Meetings where government ministers and senior representatives of more than 40 countries came together to compare notes on how natural capital accounting is working for them.
Country after country – represented by finance, development, or environment ministers – talked about how natural capital accounting fit their countries’ priorities and how it could be a tool to address some of their key policy challenges. With each statement from the floor, it was clear that natural capital accounting is no longer an academic concept. It is alive and well and being utilized across the world in developing, middle, and high-income countries.
Botswana wants to manage its scarce water resources. The Republic of Marshall Islands wants to deal with dwindling fish stocks. Rwanda wants to integrate natural capital accounting into its national poverty reduction strategy. These countries see the link to the bigger challenges they are facing – particularly climate change and poverty. Because of climate change, water in some countries is becoming more scarce and unreliable, agricultural productivity is becoming more volatile and biodiversity is threatened. Natural capital accounting is therefore more and more vital to national planning.
Costa Rica’s minister talked about the need to balance his country’s forest conservation with development. France wants to manage greenhouse gas emissions while still growing its economy. India wants to know more about the valuation of its natural capital stocks. This is where natural capital accounting comes in – a country can improve its understanding of its natural assets and how they contribute to growth. As the minister for development from France said: “What is not counted doesn't count. We want to change this situation.”
For the World Bank, natural capital accounting links to our core mission – ending poverty and boosting shared prosperity. Equity is an important part of this equation. We need intergenerational equity, in which we are not using the planet in a way that compromises the quality of life for our children. Natural capital accounting will help define our planetary boundaries as we embark on growth and poverty reduction.
Natural capital accounting has even greater importance now as we seek to build a strong basis for how we will measure success of a new set of Millennium Development Goals (MDGs) and Sustainable Development Goals (SDGs) in the post-2015 debate. The World Bank Group believes strongly that we need one set of goals focused on ending poverty, but that we can only do that in the context of sustainable development. For that to happen, the contribution of the work on wealth accounting and valuation of ecosystem services is paramount. How else can we know that achievement of goals will build prosperity sustainably for today's generations and tomorrow’s? For this reason, we will need to redouble our technical work and keep building the partnership among countries leading on this issue.
There is now a diverse community working on this. I was recently at the WAVES Third Partnership meeting and met some of the people who are already making natural capital accounting happen at the country level. I was impressed to see this vibrant community of around 100 economists, policy experts, statisticians, communicators, and business representatives learning from each other. I saw senior government officials from Botswana and Australia discussing the best approaches for compiling water accounts; I saw Kenya and Colombia swapping ideas about forest accounts.
This, for me, was proof of concept. After almost three decades of talking about it, natural capital accounting is now happening and making a difference to the way economic decisions are being made. This is the stuff that counts.
Vice President for Sustainable Development