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Economic Growth Comes With A Price Tag

“A country could cut its forests and deplete its fisheries, and this would show up as a positive impact on gross domestic product, without registering the corresponding decline in assets.”


Avisitor from Mars might observe that despite their appearance of extreme cleverness, humans as the dominant species on this planet have invested heavily in developing capacity for poisoning air, polluting water, denuding the landscape and ruining soil.

While a bird knows better than to foul its own nest, modern man has instead devised a means of describing this process in glowing terms: growth in GDP.

“Ecosystem services, as well as resources such as mineral deposits, soil nutrients and fossil fuels, are capital assets,” said Matt McCandless, a project manager with the International Institute for Sustainable Development, at an Ecological Goods and Services (EG&S) brainstorming session hosted by the Manitoba Conservation Districts Association (MCDA).

“Howeve r, t r a d i t i o n a l accounting does not include natural resource depletion in the calculation of national wealth. A country could cut its forests and deplete its fisheries and this would show up as a positive impact on gross domestic product without registering the corresponding decline in assets.”

McCandless was referring to the conclusions stated in the Millennium Ecosystem Assessment. Conducted in 2000, it combined the work of 1,300 scientists from over 85 countries, and an 800-member review board and was completed in 2005.

The United Nationssponsored study looked at the value of ecosystem “goods” such as nutrient cycling, soil formation, primary production, and “services,” which includes food, fresh water, wood, fibre and fuel.

Further value in terms of climate regulation, disease prevention, and water filtration were also considered, along with cultural and social benefits derived from healthy ecosystems.

It found that humanity has benefited greatly over the years from resource consumption. For example, food production has doubled since 1960.

But that only reflects one side of the ledger. The losses in natural capital and the future costs of a degraded environment are universally ignored in the pursuit of personal, corporate and national riches.

Two-thirds of the world’s temperate and boreal forests have been cut, and up to 50 per cent of the rainforests, with most of the cleared land sown to crops.

“More land was converted to cropland in the 30 years after 1950 than in the 150 years between 1700 and 1850,” he said. “Right now, food-growing areas cover over a quarter of the Earth’s surface.”


Nutrient cycles have been greatly altered, too. Flows of biologically available nitrogen have doubled in the past 50 years, and half of all the synthetic N ever made has been used since 1985, even though the Haber-Bosch process was first discovered in 1913. Flows of phosphorus have tripled.

Sixty per cent of all the carbon dioxide released into the atmosphere since 1750, the start of the Industrial Revolution, has occurred since 1959.

Twenty-two per cent of the world’s people work in agriculture, representing half of the world’s labour force. Agriculture averages 24 per cent of the GDP of low-income countries. All those workers create “tremendous” wealth, about $1 trillion per year. The global timber harvest is worth $500 billion per year, and marine fisheries $80 billion.

“In the U. S. alone, hunting and fishing account for $75 billion in spending each year,” said McCandless. “This is the wealth that we derive from ecosystems.”

A few years ago, the IISD looked at the benefits of small dams in terms of preventing flood damage, and found that retaining a million litres of water was worth $62 per year, while the cost of building and maintaining them was only $30 per year.

Putting land in permanent cover was worth $150 per year, if the calculation was based on reductions in phosphorus and sediment loading to waterways, as well as carbon sequestration.

The benefits of taking care of the landscape are real, but convincing the landless to pay the landowners, who in most countries are the richest members of society, can be a tough sell.

In the 2008 U. S. Farm Bill, US$1.58 billion was allocated for EG&S, and $2 billion in funds from the sale of communications giant Telstra in Australia was diverted to that country’s National Heritage Trust.

The public is demanding fair value in exchange for such payments, he noted, but accounting using traditional methods for each dollar spent can be a challenge.

Canada’s own Environmental Farm Plan came under fire in the auditor general’s 2008 report, which stated that “the department does not know to what extent its environmental programs have improved the environment.” [email protected]

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